U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
USETHEEXPERTS.COM
(Name of Small Business Issuer in its charter)
Nevada 454390 88-0422071
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
or organization) Classification Code Number) Identification No.)
3601 West Sahara Avenue, Suite 201, Las Vegas, Nevada 89102;
(888) 244-8886
(Address and telephone number of Registrant's principal executive
offices and principal place of business)
Shawn F. Hackman, Esq., 3360 West Sahara Avenue,
Suite 200, Las Vegas, Nevada 89102; (702) 732-2253
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If this Form is filed If this Form is a post- If this Form is a post-
to register additional effective amendment effective amendment
securities for an filed pursuant to Rule filed pursuant to Rule
offering pursuant to 462(c) under the 462(d) under the
Rule 462(b) under the Securities Act, check Securities Act, check
Securities Act, please the following box and the following box and
check the following list the Securities list the Securities
box and list the Act registration Act registration
Securities Act statement number of statement number of
registration number of the earlier effective the earlier effective
the earlier effective registration statement registration statement
registration statement for the same offering. for the same offering.
for the same offering.
If the delivery of
the prospectus is
expected to be made
pursuant to Rule 434,
check the following
box.
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
each class be maximum maximum registratio
of registered offering aggregate n fee
securities (1) price per offering
to be unit (2) price
registered
Common 15,500,000 $0.10 $1,550,000 $456.00
Stock
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
(1) Pursuant to Rule 416, such additional amounts to prevent
dilution from stock splits or similar transactions.
<PAGE>
PART I. INFORMATION REQUIRED IN PROSPCTUS
<PAGE>
PROSPECTUS
USETHEEXPERTS.COM
15,500,000
Common Stock
Offering Price $0.10 per Share
USETHEEXPERTS.COM, a Nevada corporation ("Company"), is hereby
offering up to 500,000 shares of its $0.001 par value common
stock ("Shares") at an offering price of $0.10 per Share pursuant
to the terms of this Prospectus for the purpose of providing
working capital for the Company. In addition, the company is
registering 15,000,000 outstanding shares in behalf of the holder
of such common stock. All costs incurred in the registration of
these shares are being borne by Usetheexperts.com.
The Shares offered hereby are highly speculative and involve a
high degree of risk to public investors and should be purchased
only by persons who can afford to lose their entire investment
(See "Risk Factors").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Underwriting Proceeds to
Public Discounts and Issuer
Commissions
Per Share $0.10 $0 $0.10
Total Maximum) $50,000 $0 $50,000
Information contained herein is subject to completion or
amendment. The registration statement relating to the securities
has been filed with the Securities and Exchange Commission. The
securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective.
This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
Subject to Completion, Dated ________________, 1999
<PAGE>
THE SHARES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OF THE SUBSCRIPTIONS BY THE COMPANY AND APPROVAL OF
CERTAIN LEGAL MATTERS BY COUNSEL TO THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OPEN OFFER TO BUY INTO SECURITIES OFFERED HEREBY A
STATE IN WHICH, OR TO A PERSON TRUE, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION
CONTAINED HEREIN SUBSEQUENT TO THE DATE THEREOF. HOWEVER, IF A
MATERIAL CHANGE OCCURS, THIS PROSPECTUS WILL BE AMENDED OR
SUPPLEMENTED ACCORDINGLY FOR ALL EXISTING SHAREHOLDERS, AND FOR
ALL PROSPECTIVE INVESTORS WHO HAVE NOT YET BEEN ACCEPTED AS
SHAREHOLDERS IN THE COMPANY.
THIS PROSPECTUS DOES NOT INTENTIONALLY OMIT ANY MATERIAL FACT OR
CONTAIN ANY UNTRUE STATEMENT OF MATERIAL FACT. NO PERSON OR
ENTITY HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION
OR MAKE A REPRESENTATION, WARRANTY, COVENANT, OR AGREEMENT WHICH
IS NOT EXPRESSLY PROVIDED FOR OR CONTAINED IN THIS PROSPECTUS; IF
GIVEN OR MADE, SUCH INFORMATION, REPRESENTATION, WARRANTY,
COVENANT, OR AGREEMENT MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
EACH PERSON WHO RECEIVES A PROPSECTUS WILL HAVE AN OPPORTUNITY TO
MEET WITH REPRESENTATIVES OF THE COMPANY, DURING NORMAL BUSINESS
HOURS UPON WRITTEN OR ORAL REQUEST TO THE COMPANY, IN ORDER TO
VERIFY ANY OF THE INFORMATION INCLUDED IN THIS PROSPECTUS AND TO
OBTAIN ADDITIONAL INFORMATION REGARDING THE COMPANY. IN
ADDITION, EACH SUCH PERSON WILL BE PROVIDED WITHOUT CHARGE, UPON
WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE INFORMATION THAT IS
INCORPORATED BY REFERENCE IN THE PROSPECTUS AND THE ADDRESS
(INCLUDING TITLE OR DEPARTMENT) AND TELEPHONE NUMBER TO WHICH
SUCH REQUEST IS TO BE DIRECTED.
ALL OFFEREES AND SUBSCRIBERS WILL BE ASKED TO ACKNOWLEDGE IN
WRITING THAT THEY HAVE READ THIS PROSPECTUS CAREFULLY AND
THOROUGHLY, AND UNDERSTOOD THE CONTENTS THEREOF, THEY WERE GIVEN
THE OPPORTUNITY TO OBTAIN ADDITIONAL INFORMATION; AND THEY DID SO
TO THEIR SATISFACTION.
TABLE OF CONTENTS
PROSPECTUS SUMMARY __
RISK FACTORS __
USE OF PROCEEDS __
DETERMINATION OF OFFERING PRICE __
DILUTION __
PLAN OF DISTRIBUTION __
LEGAL PROCEEDINGS __
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS __
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT __
DESCRIPTION OF SECURITIES __
INTEREST OF NAMED EXPERTS AND COUNSEL __
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES __
ORGANIZATION WITHIN LAST FIVE YEARS __
DESCRIPTION OF BUSINESS __
MANAGEMENT'S DICUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS __
DESCRIPTION OF PROPERTY __
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS __
MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS __
EXECUTIVE COMPENSATION __
FINANCIAL STATEMENTS __
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE __
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by detailed
information appearing elsewhere in this prospectus
("Prospectus"). Each prospective investor is urged to read this
Prospectus, and the attached Exhibits, in their entirety.
THE COMPANY
History and Organization
Usetheexperts.com, formerly known as NV Expert Management, Inc.,
(the "Company") was organized as a Nevada corporation in January
1999. Its principal office is currently located at 3601 West
Sahara Avenue, Suite 201, Las Vegas, Nevada 89102. The telephone
number is (702) 252-8813. The fax number is (702) 220-7592.
The Business
The Company was formed to provide local businesses an avenue to
market in their community through various forms of media, as well
as, assist in developing strategies to increase their customer
base for these local businesses. Usetheexperts.com provides
these services through an entirely new marketing product by
combining traditional television, radio, and mailer marketing
with the ever growing presence of the internet e-commerce. This
new marketing product is accomplished by forming and establishing
partnerships with television and radio stations, and the
effective utilization of the Information Superhighway. These
local businesses will be able to inform and reach potential
clients of their products, services, and qualifications within
their local community and abroad. Furthermore, these local
businesses will benefit from the kind of exposure previously
reserved for those companies with high marketing budgets. The
Company believes it will be known as an Innovator and Leader in
Internet Marketing by combining the use of traditional
advertising with the internet e-commerce.
Effective September 1, 1999, the Usetheexperts.com consummated a
Stock Transfer Agreement with Cybertech, Inc. (Cybertech), and CA
Experts, Inc. (CA) (collectively referred to as the "Acquired
Companies"), whereby Usetheexperts.com acquired all the
outstanding capital stock of Cybertech and CA in consideration
for the simplification of the corporate structures of
Usetheexperts.com, Cybertech and CA.
Usetheexperts.com and the Acquired Companies (collectively
referred to as the "Combined Entities") are related entities
under common management and controlling ownership. Accordingly,
the business combination between the Combined Entities has been
accounted for as a reorganization of entities under common
control. The reorganization reflects the combined financial
statements of the Combined Entities. Usetheexperts.com is
considered the accounting acquirer in the business combinations
with Cybertech and CA.
Business of the Company
Usetheexperts.com considers itself as an innovator in internet
marketing through the effective combination use of traditional
advertising (i.e., television, radio, etc.) and internet e-
commerce. Usetheexperts.com will market this new marketing
strategy through a program it has developed named "Ask the
Expert". This program provides a broad category of businesses,
whereby a business would be considered an expert in each
category. As an example, "Joe's Automobile Mechanics" would be
considered the sole expert in the category of automobile
mechanics. Additionally, Usetheexperts.com intends on
capitalizing internet traffic generated on its internet websites
due primarily to the "Ask the Expert" program. Usetheexperts.com
will actively seek in negotiating advertising and e-commerce
agreements with selected merchants.
"Ask the Expert" Program
The "Ask the Expert" program is an 8 point marketing tool that is
the direct result of the utilization of the "Ask the Expert"
campaign incorporated for the purpose of providing local
businesses with a distinct edge over their competition while
providing a much needed community service. The "Ask the Expert"
program provides the distinct edge for local businesses through a
blend of traditional marketing (i.e., television, radio, etc.)
and the emerging internet e-commerce marketing.
The "Ask the Expert" program designates a business to be an
expert in its respective category. Consumers having questions
pertaining to a particular product service, or health related
questions could now turn to businesses participating in the "Ask
the Expert" program designated as an expert in their respective
category to provide such answers. Accordingly, each business
designated as an expert in its respective category will have an
opportunity to interface with potential customers through e-
mailed questions regarding matters and issues relating to its
products or service further enhancing corporate image, name
recognition, instant lead generation, increase market share,
customer loyalty and increased profits. Each business category
will have one designated expert with exclusive rights to the "Ask
the Expert" program within its respective category.
The "Ask the Expert" program has received and continues to
receive success through the blending of traditional marketing and
the emerging internet e-commerce marketing, and the unique
designation of businesses as an expert in the respective business
category.
Traditional Marketing
Usetheexperts.com has formed strategic alliances with television
and radio stations. Strategic alliances with television
broadcasters such as CBS and ABC have provided Company clients to
take advantage of television marketing typically reserved for
companies with large advertising budgets. Each television
station airs an "Ask the Expert" program within it's daily
programming. Each spot highlights a business and its products or
service and make the public aware that they are the designated
experts in their business category. This type of exposure
provides an avenue for businesses to interact with the public by
answering questions through a telephone or e-mail medium.
Ustheexperts.com strategic alliances with radio stations provide
another avenue for businesses to reach potential consumers.
Lastly, Usetheexperts.com further completes the triangulation of
traditional marketing through the effective use of mailer packs
that offers coupon saving offers for these businesses.
Internet E-Commerce Marketing
The Internet has become the latest, hottest, fastest growing
medium for communication and advertising. Current estimates are
that the Internet is growing at a rate of 20% percent a month,
and that there are currently over 60 million Internet users
worldwide. Over 40% of all US households are estimated to now
have a PC, with up to 30% of those owners using the Internet on a
regular basis. The Internet's pace of growth accelerates each
month. It is spreading faster than cable television, VCRs,
cellular phones, and fax machines-faster than any
telecommunication product in history. Current projections
indicate that by the year 2000, 187 million host computers will
be connected to an Internet constituting 4.1 million networks
dispersed around the globe.
Usetheexperts.com has capitalized and effectively used the ever-
growing internet e-commerce to reach consumers where traditional
marketing has missed. Usetheexperts.com have and continue to
create internet websites unique to each market (i.e.,
metropolitan city or cities). These internet websites provide a
listing of local business to target markets, who are designated
as an expert in their business category. Furthermore, each
internet website is linked to the local television stations'
internet website that Usetheexperts.com has an alliance. The
local television internet website have the unique "Ask the
Expert" banner which provides a link to the Company's internet
websites for that local market. Since the initial launch of the
"Ask the Expert" program, the local television stations' internet
website have benefited from increased traffic of consumers
searching for businesses considered to be an expert in a product
or service.
Advertising and E-Commerce
An important strategy to the Company's overall growth includes
advertising and e-commerce revenues, which the Company believes
are increasingly important to its growth and success. The
Company will actively seek to establish a wide variety of
relationships with advertising and e-commerce partners in order
to grow and diversify its non-local businesses marketing revenues
and to provide consumers accessing the "Ask the Expert" internet
websites access to a broad selection of competitively priced,
easy-to-order products and services. The Company will offer its
advertising partners a variety of customized programs, which may
include guaranteed numbers of impressions (internet traffic hits)
and select sponsorship of particular online areas for a
designated time period. As merchants recognize the value in
reaching the Company's large internet traffic through its
internet websites, Usetheexperts.com will be have the ability to
earn additional revenues by offering selected merchants exclusive
rights to market particular goods or services within the
Company's internet websites. Usetheexperts.com will provide its
internet e-commerce partners certain marketing and promotional
opportunities and in return seek cash payments, the opportunity
for revenue sharing, and competitive pricing and online
conveniences for internet users. Certain transactions may
include an equity component for Usetheexperts.com. The Company
will also seek to offer these relationships across the United
States and abroad.
Market
Currently, there are 130 major markets that Usetheexperts.com
will seek to penetrate in the future. Usetheexperts.com
currently operates in the San Francisco Bay Area, California,
Sacramento, California and Las Vegas, Nevada. The Company
anticipates accessing and penetrating approximately 36 major
markets by the end of the year 2001. These markets include: Los
Angeles, California, New York, New York, Miami, Florida, etc.
The Company anticipates having an average of two "Ask the
Expert" programs per market, depending on the geographic size of
the market. The Company also intends to offer the "Ask the
Expert" program internationally.
Competition
There are companies offering business marketing through
television, radio, mailers, or internet e-commerce. However,
none that blends the traditional marketing and internet e-
commerce effectively as Usetheexperts.com. Furthermore, the
effective campaign of the "Ask the Expert" program adds the
unique edge over other marketers. The combination of these
marketing tools gives Usetheexperts.com a market with very few,
if any, competition offering such avenues for marketing
businesses.
Management
The directors and executive officers of the Company are as
follows:
Name and Address Position
D. Gary McDonald President
Chairman of the Board of
Directors
Treasurer
Gregory N. McDonald Member of the Board of
Directors
Secretary
Joan S.Golden Member of the Board of
Directors
The directors named above will serve until the bi-annual meeting
of the Company's shareholders. Thereafter, directors will be
elected for one-year terms at the annual shareholders' meeting.
Officers will hold their positions at the pleasure of the Board
of Directors, absent any employment agreement, of which none
currently exist or are contemplated.
The directors and officers initially will devote their time to
the Company's affairs on an "as needed" basis, the amount of
which is undetermined at this time. Such time could amount to as
little as ten percent of the time they devote to their own
business affairs.
There are no other persons whose activities are material to the
Company's operations.
Resumes
D. Gary McDonald- President
D. Gary McDonald, Age 35, is in charge of negotiating the contracts
for advertising as well as hiring and training of the sales
staff. Gary has over 12 years of sales and sales training
experience.
Prior to founding Cybertech in April of 1998, Gary was a partner
in McDonald & Associates which was a Las Vegas internet design
firm. From June of 1996 until March of 1998 McDonald & Associates
built over 100 websites in the Las Vegas area. Some of their
clients were the Henderson Chamber of Commerce, St. Rose
Dominican Hospital, and Sprint Telephone of Nevada.
Before becoming involved with the internet Gary McDonald was a
senior account executive with the United States Chamber of
Commerce from 1992 to 1996. Gary has a bachelor of science with a
major in finance from the University of Florida.
Gregory N. McDonald- Treasurer
Gregory N. McDonald, Age 38 is responsible for running the day to
day operations of the company as well as handling the media
relations between the stations and the clients, since 1998.
Gregory N. McDonald was also a partner in McDonald & Associates
from 1996 to 1998.
Prior to McDonald & Associates Gregory N. McDonald was the
President of Educated Office Services from 1993 to 1996. Greg
has attended Florida State University as well as the University
of South Florida with an emphasis on Finance.
Joan S. Golden - Secretary
Joan Golden, Age 53 is responsible for the design and
implementation of all internet material. Joan has over 22 years
experience working with computers with the last 7 years focusing
on the internet.
Prior to being a founder of Cybertech, Joan Golden was the owner
of Quik Internet Inc., this is a franchise Internet Service
Provider. Quik Internet was started in 1994 and is still owned by
Joan Golden. Joan Golden graduated from San Francisco State
University in 1968 with a degree in Business.
Market Summary
The focus and purpose is to create an effective presence in each
market, as well as the internet online community. Through a
structured program, designed to be all encompassing for the
business and internet community.
Usetheexperts.com, is a company dedicated to assisting businesses
both locally and through e-commerce expanding their presence
through a blend of traditional marketing and internet e-commerce
marketing. In addition the Company will expand services to
include advertising and e-commerce. This service will establish
a common place for consumers utilizing the "Ask the Expert"
program to shop and share information.
The Offering.
The Company is offering up to 500,000 shares of its common
stock at $0.10 per share on a best efforts basis.
SELECTED FINANCIAL DATA
As more fully discussed in accompanying financial
statements, Usetheexperts.com consummated a Stock Transfer
Agreement with Cybertech, Inc. and CA Experts, Inc. (the "Merged
Companies") and was accounted for as the reorganization of the
Merged Companies into Usetheexperts.com on September 1, 1999.
The following table sets forth selected financial data of
Usetheexperts.com and subsidiary for the nine months ended
September 30, 1999 and 1998. The selected financial data has
been derived from the unaudited consolidated financial statements
and notes thereto of Usetheexperts.com and subsidiary's thereto
which are included elsewhere in this prospectus. The selected
financial data for the year ended December 31, 1998 has been
derived from the consolidated financial statements of the
Usetheexperts.com which are included elsewhere in this
prospectus. The operating data for interim periods are not
necessarily indicative of results for subsequent periods or the
full year. The following information should be read in
conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and with the
financial statements of Usetheexperts.com and the Merged
Companies appearing elsewhere in this prospectus.
CONDENSED RESULTS OF OPERATIONS DATA:
FOR THE NINE FOR THE YEAR FOR THE NINE
MONTHS ENDED ENDED MONTHS ENDED
SEP-30-1999 DEC-31-1998 SEP-30-1998
Revenues $ 888,322 $521,771 $399,353
Cost of revenues 269,686 41,481 16,874
Operating expenses:
General and administrative 297,239 204,905 50,775
Income before provisions
for income taxes 321,397 275,384 331,604
Provisions for income taxes(a) 80,349 68,846 82,901
Net income 241,048 206,538 248,703
Basic and diluted income
per common share $ 0.02 $ 0.01 $ 0.02
Weighted average common
shares outstanding(b) 15,500,000 15,500,000 15,500,000
(a) Adjusted to record provisions for income taxes using a
federal tax rate of 25%.
(b) Adjusted to record contemplated issuance of 500,000 shares
related to this Registration Statement.
CONDENSED BALANCE SHEET DATA:
SEP-30-1999 DEC-31-1998 SEP-30-1998
Current assets $ 178,366 $ 71,107 $ 102,259
Total assets 394,075 80,124 106,604
Current liabilities (a) 169,369 71,960 82,901
Total liabilities 169,369 71,960 82,901
Stockholders' equity (a) 224,706 8,164 23,703
Total liabilities and
stockholders' equity 394,075 80,124 106,604
(a) Adjusted to record provisions for income taxes using a
federal tax rate of 25%.
Liquidity of Investment.
There is no established market for these securities. Therefore,
an investor may not be able to sell shares when he or she wishes;
therefore, an investor may consider his or her investment to be
long-term. See "Risk Factors."
Risk Factors.
An investment in the company involved risks due in part to a
limited previous financial and operating history of Company, as
well as competition in the internet marketing industry. Also,
certain potential conflicts of interest arise due to the
relationship of the Company to management and others. See "Risk
Factors."
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE
AND INVOLVE A HIGH DEGREE OF RISK. THEY SHOULD BE PURCHASED ONLY
BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT.
THEREFORE, EACH PROSPECTIVE INVESTOR SHOULD, PRIOR TO PURCHASE,
CONSIDER VERY CAREFULLY THE FOLLOWING RISK FACTORS AMONG OTHER
THINGS, AS WELL AS ALL OTHER INFORMATION SET FORTH IN THIS
PROSPECTUS.
Limited Prior Operations and Experience.
The Company is newly reorganized, has only limited revenues from
its operations, and has only limited assets. There can be no
assurance that the Company will generate significant revenues in
the future; and there can be no assurance that the Company will
operate at a profitable level. See "Description of Business."
If the Company is unable to obtain customers and generate
sufficient revenues so that it can profitably operate, the
Company's business will not succeed. In such event, investors in
the Shares may lose their entire cash investment.
Also the Company and its management do have limited
experience in the internet business. See "Directors, Officers,
Promoters, and Control Persons."
Dependence on the Internet/Marketing Industries
The Company's business is influenced by the rate of use and
expansion in the internet/marketing industries. Although this
industry has been expanding at a rapid rate in recent years,
there is no guarantee that it will continue to do so in the
future. Declines in these industries may influence the Company's
revenues adversely.
Influence of Other External Factors.
The Company is a speculative venture necessarily involving some
substantial risk. There is no certainty that the expenditures to
be made by the Company will result in commercially profitable
business. The marketability will be affected by numerous factors
beyond the control of the Company. These factors include market
fluctuations, and the general state of the economy (including the
rate of inflation, and local economic conditions), which can
affect peoples' discretionary spending. Factors which leave less
money in the hands of potential clients of the Company will
likely have an adverse effect on the Company. The exact effect
of these factors cannot be accurately predicted, but the
combination of these factors may result in the Company not
receiving an adequate return on invested capital.
Regulatory Factors.
Existing and possible future consumer legislation, regulations
and actions could cause additional expense, capital expenditures,
restrictions and delays in the activities undertaken in
connection with the business, the extent of which cannot be
predicted.
Competition.
The Company may experience substantial competition in its efforts
to locate and attract clients. Many competitors in the industry,
have greater experience, resources, and managerial capabilities
than the Company and may be in a better position than the Company
to obtain access to attractive clientele. There are a number of
larger companies which will directly compete with the Company.
Such competition could have a material adverse effect on the
Company's profitability.
Success of Management.
Any potential investor is strongly cautioned that the purchase of
these securities should be evaluated on the basis of: (i) the
limited diversification of the venture capital opportunities
afforded to the Company, (ii) the high-risk nature and limited
liquidity of the Company, and (iii) the Company's ability to
utilize funds for the successful development and distribution of
revenues as derived by the revenues received by the Company's yet
undeveloped portfolio of clients, and any new potentially
profitable ventures, among other things. The Company can offer no
assurance that any particular client and/or property under its
management contract will become successful.
Reliance on Management.
The Company's success is dependent upon the hiring of key
administrative personnel. None of the officers or directors, or
any of the other key personnel, has any employment or non-
competition agreement with the Company. Therefore, there can be
no assurance that these personnel will remain employed by the
Company. Should any of these individuals cease to be affiliated
with the Company for any reason before qualified replacements
could be found, there could be material adverse effects on the
Company's business and prospects. In addition, management has
limited experience is managing companies in the same business as
the Company.
In addition, all decisions with respect to the management of the
Company will be made exclusively by the officers and directors of
the Company. Investors will only have rights associated with
minority ownership interest rights to make decision which effect
the Company. The success of the Company, to a large extent, will
depend on the quality of the directors and officers of the
Company. Accordingly, no person should invest in the Shares
unless he is willing to entrust all aspects of the management of
the Company to the officers and directors.
Use of Proceeds Not Specific.
The proceeds of this offering have been allocated only generally.
Proceeds from the offering have been allocated generally to legal
and accounting, and working capital. Accordingly, investors will
entrust their funds with management in whose judgment investors
may depend, with only limited information about management's
specific intentions with respect to a significant amount of the
proceeds of this offering. See "Use of Proceeds."
Lack of Diversification.
The size of the Company makes it unlikely that the Company will
be able to commit its funds to diversify the business until it
has a proven track record, and the Company may not be able to
achieve the same level of diversification as larger entities
engaged in this type of business.
No Cumulative Voting
Holders of the Shares are not entitled to accumulate their votes
for the election of directors or otherwise. Accordingly, the
holders of a majority of the Shares present at a meeting of
shareholders will be able to elect all of the directors of the
Company, and the minority shareholders will not be able to elect
a representative to the Company's board of directors.
Absence of Cash Dividends
The Board of Directors does not anticipate paying cash dividends
on the Shares for the foreseeable future and intends to retain
any future earnings to finance the growth of the Company's
business. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements, and the general
operating and financial condition of the Company, and will be
subject to legal limitations on the payment of dividends out of
paid-in capital.
Conflicts of Interest.
The officers and directors may other interests to which they
devote substantial time, either individually or through
partnerships and corporations in which they have an interest,
hold an office, or serve on boards of directors, and each will
continue to do so notwithstanding the fact that management time
may be necessary to the business of the Company. As a result,
certain conflicts of interest may exist between the Company and
its officers and/or directors which may not be susceptible to
resolution.
In addition, conflicts of interest may arise in the area of
corporate opportunities which cannot be resolved through arm's
length negotiations. All of the potential conflicts of interest
will be resolved only through exercise by the directors of such
judgment as is consistent with their fiduciary duties to the
Company. It is the intention of management, so as to minimize
any potential conflicts of interest, to present first to the
Board of Directors to the Company, any proposed investments for
its evaluation.
Investment Valuation Determined by the Board of Directors.
The Company's Board of Directors is responsible for valuation of
the Company's investments. There are a wide range of values which
are reasonable for an investment for the Company's services.
Although the Board of Directors can adopt several methods for an
accurate evaluation, ultimately the determination of fair value
involves subjective judgment not capable of substantiation by
auditing standards. Accordingly, in some instances it may not be
possible to substantiate by auditing standards the value of the
Company's investments. The Company's Board of Directors will
serve as the valuation committee, responsible for valuing each of
the Company's investments. In connection with any future
distributions which the Company may make, the value of the
securities received by investors as determined by the Board may
not be the actual value that the investors would be able to
obtain even if they sought to sell such securities immediately
after a distribution. In addition, the value of the distribution
may decrease or increase significantly subsequent to the
distributee shareholders' receipt thereof, notwithstanding the
accuracy of the Board's evaluation.
Additional Financing May Be Required.
Even if all of the 500,000 Shares offered to the public are
sold, the funds available to the Company may not be adequate for
it to be competitive in the areas in which it intends to operate.
See "Plan of Distribution." There is no assurance that
additional funds will be available from any source when needed by
the Company for expansion; and, if not available, the Company may
not be able to expand its operation as rapidly as it could if
such financing were available. The proceeds from this offering
are expected to be sufficient for the Company to develop and
market it's line of services. Additional financing could possibly
come in the form of debt/preferred stock. If additional shares
were issued to obtain financing, investors in this offering would
suffer a dilutive effect on their percentage of stock ownership
in the Company. However, the book value of their shares would
not be diluted, provided additional shares are sold at a price
greater than that paid by investors in this offering. The
Company does not anticipate having within the next 12 months any
cash flow or liquidity problems
Purchases by Affiliates.
Certain officers, directors, principal shareholders and
affiliates may purchase, for investment purposes, a portion of
the Shares offered hereby, which could, upon conversion, increase
the percentage of the Shares owned by such persons. The purchases
by these control persons may make it possible for the Offering to
meet the escrow amount.
No Assurance Shares Will Be Sold.
The 500,000 Shares being offered to the public are to be
offered directly by the Company, and no individual, firm, or
corporation has agreed to purchase or take down any of the
shares. No assurance can be given that any or all of the Shares
will be sold.
Offering Price.
The offering price of the Shares bears no relation to book value,
assets or earnings. There can be no assurance that the Shares
will maintain values commensurate with the offering price. See
"Determination of Offering Price."
Dilution of Share Value.
Assuming the sale of all Shares offered to the public hereby
(500,000), the net tangible book value of the Shares would then
be $0.020 per Share compared to the effective offering price of
$0.10 per common share (based on the number of shares issued and
outstanding as of September 30, 1999 plus all of the shares being
offered in this offering). Accordingly, persons purchasing
Shares in this Offering would then suffer $0.08 dilution to the
net tangible book value of their shares.
Limited Public Market for Company's Securities.
Prior to the Offering, there has been no public market for the
Shares being offered. There can be no assurance that an active
trading market will develop or that purchasers of the Shares will
be able to resell their securities at prices equal to or greater
than the respective initial public offering prices. The market
price of the Shares may be affected significantly by factors such
as announcements by the Company or its competitors, variations in
the Company's results of operations, and market conditions in the
retail, electron commerce, and internet industries in general.
The market price may also be affected by movements in prices of
stock in general. As a result of these factors, purchasers of
the Shares offered hereby may not be able to liquidate an
investment in the Shares readily or at all.
Penny Stock Regulations.
The Company's Shares will be quoted on the "Electronic Bulletin
Board" maintained by the National Quotation Bureau, Inc., which
reports quotations by brokers or dealers making a market in
particular securities. In view of the fact that no broker will be
involved in the Offering, it is likely to be difficult to find a
broker who is willing to make an active market in the stock. The
Securities and Exchange Commission (the "Commission") has adopted
regulations which generally define "penny stock" to be any equity
security that has a market price less than $5.00 per share. The
Company's shares will become subject to rules that impose
additional sales practice requirements on broker-dealers who sell
penny stocks to persons other than established customers and
accredited investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000, or $300,000
together with their spouse). For transactions covered by these
rules, broker-dealers must make a special suitability
determination for the purpose of such securities and must have
received the purchaser's written consent to the transaction prior
to the purchase.
Additionally, for any transaction effected involving a penny
stock, unless exempt, the rules require the delivery, prior to
the transaction, of a disclosure schedule prepared by the
Commission relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker--
dealer and the registered representative, and current quotations
for the securities. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of
broker-dealers to sell the Company's Shares and may affect the
ability of purchasers in the Offering to sell the Company's
securities in the secondary market. There is no assurance that a
market will develop for the Company's Shares.
Forward-Looking Statements.
This Prospectus contains "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Act of 1934, as amended, and as
contemplated under the Private Securities Litigation Reform Act
of 1995, including statements regarding, among other items, the
Company's business strategies, continued growth in the Company's
markets, projections, and anticipated trends in the Company's
business and the industry in which it operates. The words
"believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward-looking
statements. These forward-looking statements are based largely
on the Company's expectations and are subject to a number of
risks and uncertainties, certain of which are beyond the
Company's control. The Company cautions that these statements are
further qualified by important factors that could cause actual
results to differ materially from those in the forward looking
statements, including those factors described under "Risk
Factors" and elsewhere herein In light of these risks and
uncertainties, there can be no assurance that the forward-looking
information contained in this Prospectus will in fact transpire
or prove to be accurate. All subsequent written and oral forward-
looking statements attributable to the Company or persons acting
on its behalf are expressly qualified in their entirety by this
section.
Uncertainty Due to Year 2000 Problem.
The Year 2000 issue arises because many computerized systems use
two digits rather than four to identify a year. Date sensitive
systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when information using the year 2000 date is
processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something
other than a date. The effects of the Year 2000 issue may be
experienced before, on, or after January 1, 2000, and if not
addressed, the impact on operations and financial reporting may
range from minor errors to significant system failure which could
affect the Company's ability to conduct normal business
operations. This creates potential risk for all companies, even
if their own computer systems are Year 2000 compliant. It is not
possible to be certain that all aspects of the Year 2000 issue
affecting the Company, including those related to the efforts of
customers, suppliers, or other third parties, will be fully
resolved.
The Company currently believes that its systems are Year 2000
compliant in all material respects, its current systems and
products may contain undetected errors or defects with Year 2000
date functions that may result in material costs. Although
management is not aware of any material operational issues or
costs associated with preparing its internal systems for the Year
2000, the Company may experience serious unanticipated negative
consequences (such as significant downtime for one or more of
its web site properties) or material costs caused by undetected
errors or defects in the technology used in its internal systems.
Furthermore, the purchasing patterns of advertisers may be
affected by Year 2000 issues as companies expend significant
resources to correct their current systems for Year 2000
compliance. The Company does not currently have any information
about the Year 2000 status of its advertising customers.
However, these expenditures may result in reduced funds available
for web advertising or sponsorship of web services, which could
have a material adverse effect on its business, results of
operations, and financial condition. The Company's Year 2000
plans are based on management's best estimates.
USE OF PROCEEDS
Following the issuance of the 500,000 Shares for common stock
offered for sale by the Company to the public, this will
represent gross proceeds to the Company of approximately $50,000
(less certain expenses of this offering). These proceeds, less
the expenses of the offering, will be used to provide working
capital for the Company.
The following table sets forth the use of proceeds from this
offering (based on the minimum and maximum offering amounts):
Use of Proceeds Maximum Offering
Amount Percent
Transfer Agent Fee $ 1,000 0.2%
Printing Costs $ 1,000 0.2%
Legal Fees $ 25,000 50.0%
Accounting Fees $ 10,000 20.0%
Working Capital $ 13,000 26.0%
Total $ 50,000 100.0%
Management anticipates expending these funds for the purposes
indicated above. To the extent that expenditures are less than
projected, the resulting balances will be retained and used for
general working capital purposes or allocated according to the
discretion of the Board of Directors. Conversely, to the extent
that such expenditures require the utilization of funds in excess
of the amounts anticipated, supplemental amounts may be drawn
from other sources, including, but not limited to, general
working capital and/or external financing. The net proceeds of
this offering that are not expended immediately may be deposited
in interest or non-interest bearing accounts, or invested in
government obligations, certificates of deposit, commercial
paper, money market mutual funds, or similar investments.
DETERMINATION OF OFFERING PRICE
The offering price is not based upon the Company's net worth,
total asset value, or any other objective measure of value based
upon accounting measurements.
DILUTION
"Net tangible book value" is the amount that results from
subtracting the total liabilities and intangible assets of an
entity from its total assets. "Dilution" is the difference
between the public offering price of a security and its net
tangible book value per Share immediately after the Offering,
giving effect the receipt of net proceeds in the Offering. As of
September 30, 1999, the net tangible book value of the Company
was $255,411 or $0.017 per Share. Giving effect to the issue by
the Company of all Shares of common stock being sold to the
public 15,500,000, the pro forma net tangible book value of the
Company would be $305,411, or $0.020 per Share, which would
represent an immediate increase of $0.003 in net tangible book
value per Share and $0.08 per Share dilution per share to new
investors. Dilution of the book value of the Shares may result
from future share offerings by the Company.
The following table illustrates the pro forma per Share dilution:
Assuming Maximum
Shares Sold
Offering Price (1) $0.10
Net tangible book value per $0.017
share before Offering (2)
Net tangible book value Share $0.020
after offering (3)
Increase attributable to $0.003
issue of stock to
new investors (4)
Dilution to new investors (5) $0.08
Percent Dilution to new 80%
investors (6)
(1) Offering price before deduction of offering expenses,
calculated on a "Common Share Equivalent" basis.
(2) The net tangible book value per share before the offering
($0.0.017) is determined by dividing the number of Shares
outstanding as of June 30, 1999 into the net tangible book value
of the Company as of that date.
(3) The net tangible book value after the offering is determined
by adding the net tangible book value before the offering to the
estimated proceeds to the Corporation from the current offering
(assuming all the Shares being offered to the public are issued).
The net tangible book value per share after the offering ($0.020)
is determined by dividing the number of Shares that will be
outstanding after this offering (15,500,000), assuming issue of
all the Shares offered, into the net tangible book value after
the offering.
(4) The increase attributable to purchase of stock by new
investors is derived by taking the net tangible book value per
share after the offering ($0.020) and subtracting from it the net
tangible book value per share before the offering ($0.017) for an
increase of $0.003.
(5) The dilution to new investors is determined by subtracting
the net tangible book value per share after the offering ($0.020)
from the offering price of the Shares in this offering ($0.10),
giving a dilution value of $0.08.
(6) The Percent Dilution to new investors is determined by
dividing the book value after the offering ($0.020) by the
offering price per Share ($0.10) and subtracting from 100, giving
a dilution to new investors of 80%.
PLAN OF DISTRIBUTION
The Company will issue up to 500,000 Shares of its common stock
at $0.10 per share on a best efforts basis.
Opportunity to Make Inquiries.
The Company will make available to each Offeree, prior to any
issue of the Shares, the opportunity to ask questions and receive
answers from the Company concerning any aspect of the investment
and to obtain any additional information contained in this
Prospectus, to the extent that the Company possesses such
information or can acquire it without unreasonable effort or
expense.
Execution of Documents.
Each person desiring to be issued Shares, either as a conversion
of a debenture, or an exercise of a warrant, must complete,
execute, acknowledge, and delivered to the Company certain
documents, By executing these documents, the subscriber is
agreeing that such subscriber will be, a shareholder in the
Company and will be otherwise bound by the articles of
incorporation and the bylaws of the Company in the form attached
to this Prospectus.
LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The names, ages, and respective positions of the directors,
officers, and significant employees of the Company are set forth
below. There are no other persons which can be classified as a
promoter or controlling person of the Company.
D. Gary McDonald- President
D. Gary McDonald, Age 35, is in charge of negotiating the contracts
for advertising as well as hiring and training of the sales
staff. Gary has over 12 years of sales and sales training
experience.
Prior to founding Cybertech in April of 1998, Gary was a partner
in McDonald & Associates which was a Las Vegas internet design
firm. From June of 1996 until March of 1998 McDonald & Associates
built over 100 websites in the Las Vegas area. Some of their
clients were the Henderson Chamber of Commerce, St. Rose
Dominican Hospital, and Sprint Telephone of Nevada.
Before becoming involved with the internet Gary McDonald was a
senior account executive with the United States Chamber of
Commerce from 1992 to 1996. Gary has a bachelor of science with a
major in finance from the University of Florida.
Gregory N. McDonald- Treasurer
Gregory N. McDonald, Age 38 is responsible for running the day to day
operations of the company as well as handling the media relations
between the stations and the clients, since 1998.
Greg McDonald was also a partner in McDonald & Associates from
1996 to 1998.
Prior to McDonald & Associates Greg McDonald was the President of
Educated Office Services from 1993 6to 1996. Greg has attended
Florida State University as well as the University of South
Florida with an emphasis on Finance.
Joan S. Golden (53) - Secretary
Joan Golden is responsible for the design and implementation of
all internet material. Joan has over 22 years experience working
with computers with the last 7 years focusing on the internet.
Prior to being a founder of Cybertech, Joan Golden was the owner
of Quik Internet Inc., this is a franchise Internet Service
Provider. Quik Internet was started in 1994 and is still owned by
Joan Golden. Joan Golden graduated from San Francisco State
University in 1968 with a degree in Business.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 1, 1999, the
outstanding Shares of common stock of the Company owned of record
or beneficially by each person who owned of record, or was known
by the Company to own beneficially, more than 5% of the Company's
Common Stock, and the name and share holdings of each officer and
director and all officers and directors as a group:
Title of Name and Address Amount and Nature Percent of
Class of Beneficial of Beneficial Class
Owner Owner
Common D. Gary McDonald 5,000,000 33%
Stock 1130 Legato Drive
Las Vegas, NV
89123
Common Gregory McDonald 5,000,000 33%
Stock 1863 Poetic
Valley Court
Henderson, NV
89102
Common Joan S. Golden 5,000,000 33%
Stock 9316 Baysinger
Drive
Las Vegas, NV
89128
DESCRIPTION OF SECURITIES
General Description
The securities being offered are shares of common stock. The
Articles of Incorporation authorize the issuance of 100,000,000
shares of common stock, with a par value of $0.001. The holders
of the Shares: (a) have equal ratable rights to dividends from
funds legally available therefore, when, as, and if declared by
the Board of Directors of the Company; (b) are entitled to share
ratably in all of the assets of the Company available for
distribution upon winding up of the affairs of the Company; (c)
do not have preemptive subscription or conversion rights and
there are no redemption or sinking fund applicable thereto; and
(d) are entitled to one non-cumulative vote per share on all
matters on which shareholders may vote at all meetings of
shareholders. These securities do not have any of the following
rights: (a) cumulative or special voting rights; (b) preemptive
rights to purchase in new issues of Shares; (c) preference as to
dividends or interest; (d) preference upon liquidation; or (e)
any other special rights or preferences. In addition, the Shares
are not convertible into any other security. There are no
restrictions on dividends under any loan other financing
arrangements or otherwise. See a copy of the Articles of
Incorporation, and amendments thereto, and Bylaws of the Company,
attached as Exhibit 3.1, Exhibit 3.2, and Exhibit 3.3,
respectively, to this Form SB-2.
Non-Cumulative Voting.
The holders of Shares of Common Stock of the Company do not have
cumulative voting rights, which means that the holders of more
than 50% of such outstanding Shares, voting for the election of
directors, can elect all of the directors to be elected, if they
so choose. In such event, the holders of the remaining Shares
will not be able to elect any of the Company's directors.
Dividends.
The Company does not currently intend to pay cash dividends. The
Company's proposed dividend policy is to make distributions of
its revenues to its stockholders when the Company's Board of
Directors deems such distributions appropriate. Because the
Company does not intend to make cash distributions, potential
shareholders would need to sell their shares to realize a return
on their investment. There can be no assurances of the projected
values of the shares, nor can there be any guarantees of the
success of the Company.
A distribution of revenues will be made only when, in the
judgment of the Company's Board of Directors, it is in the best
interest of the Company's stockholders to do so. The Board of
Directors will review, among other things, the investment quality
and marketability of the securities considered for distribution;
the impact of a distribution of the investee's securities on its
customers, joint venture associates, management contracts, other
investors, financial institutions, and the company's internal
management, plus the tax consequences and the market effects of
an initial or broader distribution of such securities.
Possible Anti-Takeover Effects of Authorized but Unissued Stock.
Upon the completion of this Offering, assuming the maximum
offering of 500,000 is sold, the Company's authorized but
unissued capital stock will consist of 84,500,000 shares of
common stock. One effect of the existence of authorized but
unissued capital stock may be to enable the Board of Directors to
render more difficult or to discourage an attempt to obtain
control of the Company by means of a merger, tender offer, proxy
contest, or otherwise, and thereby to protect the continuity of
the Company's management. If, in the due exercise of its
fiduciary obligations, for example, the Board of Directors were
to determine that a takeover proposal was not in the Company's
best interests, such shares could be issued by the Board of
Directors without stockholder approval in one or more private
placements or other transactions that might prevent, or render
more difficult or costly, completion of the takeover transaction
by diluting the voting or other rights of the proposed acquiror
or insurgent stockholder or stockholder group, by creating a
substantial voting block in institutional or other hands that
might undertake to support the position of the incumbent Board of
Directors, by effecting an acquisition that might complicate or
preclude the takeover, or otherwise.
Transfer Agent.
The Company has engaged the services of Pacific Stock Transfer,
Las Vegas, Nevada, to act as transfer agent and registrar.
INTEREST OF NAMED EXPERTS AND COUNSEL
No named expert or counsel was hired on a contingent basis, will
receive a direct or indirect interest in the small business
issuer, or was a promoter, underwriter, voting trustee, director,
officer, or employee of the small business issuer.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
No director of the Company will have personal liability to the
Company or any of its stockholders for monetary damages for
breach of fiduciary duty as a director involving any act or
omission of any such director since provisions have been made in
the Articles of Incorporation limiting such liability. The
foregoing provisions shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or, which involve intentional
misconduct or a knowing violation of law, (iii) under applicable
Sections of the Nevada Revised Statutes, (iv) the payment of
dividends in violation of Section 78.300 of the Nevada Revised
Statutes or, (v) for any transaction from which the director
derived an improper personal benefit.
The By-laws provide for indemnification of the directors,
officers, and employees of the Company in most cases for any
liability suffered by them or arising out of their activities as
directors, officers, and employees of the Company if they were
not engaged in willful misfeasance or malfeasance in the
performance of his or her duties; provided that in the event of a
settlement the indemnification will apply only when the Board of
Directors approves such settlement and reimbursement as being for
the best interests of the Corporation. The Bylaws, therefore,
limit the liability of directors to the maximum extent permitted
by Nevada law (Section 78.751).
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means they are required to exercise
good faith and fairness in all dealings affecting the Company. In
the event that a shareholder believes the officers and/or
directors have violated their fiduciary duties to the Company,
the shareholder may, subject to applicable rules of civil
procedure, be able to bring a class action or derivative suit to
enforce the shareholder's rights, including rights under certain
federal and state securities laws and regulations to recover
damages from and require an accounting by management..
Shareholders who have suffered losses in connection with the
purchase or sale of their interest in the Company in connection
with such sale or purchase, including the misapplication by any
such officer or director of the proceeds from the sale of these
securities, may be able to recover such losses from the Company.
The registrant undertakes the following:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to
directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that
in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
ORGANIZATION WITHIN LAST FIVE YEARS
The names of the promoters of the registrant are the officers and
directors as disclosed elsewhere in this Form SB-2. None of the
promoters have received anything of value from the registrant.
DESCRIPTION OF BUSINESS
The Company was formed to provide local businesses an avenue to
market in their community through various forms of media, as well
as, assist in developing strategies to increase their customer
base for these local businesses. Usetheexperts.com provides
these services through an entirely new marketing product by
combining traditional television, radio, and mailer marketing
with the ever growing presence of the internet e-commerce. This
new marketing product is accomplished by forming and establishing
partnerships with television and radio stations, and the
effective utilization of the Information Superhighway. These
local businesses will be able to inform and reach potential
clients of their products, services, and qualifications within
their local community and abroad. Furthermore, these local
businesses will benefit from the kind of exposure previously
reserved for those companies with high marketing budgets. The
Company believes it will be known as an Innovator and Leader in
Internet Marketing by combining the use of traditional
advertising with the internet e-commerce.
Effective September 1, 1999, the Usetheexperts.com consummated a
Stock Transfer Agreement with Cybertech, Inc. (Cybertech), and CA
Experts, Inc. (CA) (collectively referred to as the "Acquired
Companies"), whereby Usetheexperts.com acquired all the
outstanding capital stock of Cybertech and CA in consideration
for the simplification of the corporate structures of
Usetheexperts.com, Cybertech and CA.
Usetheexperts.com and the Acquired Companies (collectively
referred to as the "Combined Entities") are related entities
under common management and controlling ownership. Accordingly,
the business combination between the Combined Entities has been
accounted for as a reorganization of entities under common
control. The reorganization reflects the combined financial
statements of the Combined Entities. Usetheexperts.com is
considered the accounting acquirer in the business combinations
with Cybertech and CA.
Business of the Company
Usetheexperts.com considers itself as an innovator in internet
marketing through the effective combination use of traditional
advertising (i.e., television, radio, etc.) and internet e-
commerce. Usetheexperts.com markets this new marketing strategy
through a program it has developed named "Ask the Expert". This
program provides a broad category of businesses, whereby a
business would be considered an expert in each category. As an
example, "Joe's Automobile Mechanics" would be considered the
sole expert in the category of automobile mechanics.
Additionally, Usetheexperts.com intends on capitalizing internet
traffic generated on their internet websites due primarily to the
"Ask the Expert" program. Usetheexperts.com will actively seek
in negotiating advertising and e-commerce agreements with
selected merchants.
"Ask the Expert" Program
The "Ask the Expert" program is an 8 point marketing tool that is
the direct result of the utilization of the "Ask the Expert"
campaign incorporated for the purpose of providing local
businesses with a distinct edge over their competition while
providing a much needed community service. The "Ask the Expert"
program provides the distinct edge for local businesses through a
blend of traditional marketing (i.e., television, radio, etc.)
and the emerging internet e-commerce marketing.
The "Ask the Expert" program designates a business to be an
expert in its respective category. Consumers having questions
pertaining to a particular product service, or health related
questions could now turn to businesses participating in the "Ask
the Expert" program designated as an expert in its respective
category to provide such answers. Accordingly, each business
designated as an expert in their respective category will have an
opportunity to interface with potential customers through e-
mailed questions regarding matters and issues relating to its
products or service further enhancing corporate image, name
recognition, instant lead generation, increase market share,
customer loyalty and increased profits. Each business category
will have one designated expert, henceforth, exclusive rights to
the "Ask the Expert" program within its respective category.
The "Ask the Expert" program has received and continues to
receive success through the blending of traditional marketing and
the emerging internet e-commerce marketing, and the unique
designation of businesses as an expert in the respective business
category.
Traditional Marketing
Usetheexperts.com has formed strategic alliances with television
and radio stations. Strategic alliances with television
broadcasters such as CBS and ABC have provided Company clients to
take advantage of television marketing typically reserved for
companies with large advertising budgets. Each television station
airs an "Ask the Expert" program within its daily programming.
Each spot highlights a business and its products or service and
make the public aware that they are the designated experts in
their business category. This type of exposure provides an
avenue for businesses to interact with the public by answering
questions through a telephone or e-mail medium.
Ustheexperts.com strategic alliances with radio stations provide
another avenue for businesses to reach potential consumers.
Lastly, Usetheexperts.com further completes the triangulation of
traditional marketing through the effective use of mailer packs
that offers coupon saving offers for these businesses.
Internet E-Commerce Marketing
The Internet has become the latest, hottest, fastest growing
medium for communication and advertising. Current estimates are
that the Internet is growing at a rate of 20% percent a month,
and that there are currently over 60 million Internet users
worldwide. Over 40% of all US households are estimated to now
have a PC, with up to 30% of those owners using the Internet on a
regular basis. The Internet's pace of growth accelerates each
month. It is spreading faster than cable television, VCRs,
cellular phones, and fax machines-faster than any
telecommunication product in history. Current projections
indicate that by the year 2000, 187 million host computers will
be connected to an Internet constituting 4.1 million networks
dispersed around the globe.
Usetheexperts.com has capitalized and effectively used the ever-
growing internet e-commerce to reach consumers where traditional
marketing has missed. Usetheexperts.com have and continue to
create internet websites unique to each market (i.e.,
metropolitan city or cities). These internet websites provide a
listing of local business to target markets, who are designated
as an expert in their business category. Furthermore, each
internet websites is linked to the local television stations'
internet website that Usetheexperts.com has an alliance. The
local television internet websites have the unique "Ask the
Expert" banner which provides a link to the Company's internet
website for that local market. Since the initial launch of the
"Ask the Expert" program, the local television stations' internet
website have benefited from increased traffic of consumers
searching for businesses considered to be an expert in a product
or service.
Advertising and E-Commerce
An important strategy to the Company's overall growth includes
advertising and e-commerce revenues, which the Company believes
are increasingly important to its growth and success. The
Company will actively seek to establish a wide variety of
relationships with advertising and e-commerce partners in order
to grow and diversify its non-local businesses marketing revenues
and to provide consumers accessing the "Ask the Expert" internet
websites access to a broad selection of competitively priced,
easy-to-order products and services. The Company will offer its
advertising partners a variety of customized programs, which may
include guaranteed numbers of impressions (internet traffic hits)
and select sponsorship of particular online areas for a
designated time period. As merchants recognize the value in
reaching the Company's large internet traffic through its
internet websites, Usetheexperts.com will be have the ability to
earn additional revenues by offering selected merchants exclusive
rights to market particular goods or services within the
Company's internet websites. Usetheexperts.com will provide its
internet e-commerce partners certain marketing and promotional
opportunities and in return seek cash payments, the opportunity
for revenue sharing, and competitive pricing and online
conveniences for internet users. Certain transactions may
include an equity component for Usetheexperts.com. The Company
will also seek to offer these relationships across the United
States and abroad.
Market
Currently, there are 130 major markets that Usetheexperts.com
will seek to penetrate in the future. Usetheexperts.com
currently operates in the San Francisco Bay Area, California,
Sacramento, California and Las Vegas, Nevada. The Company
anticipates in accessing and penetrating approximately 36 major
markets by the end of the year 2001. These markets include: Los
Angeles, California, New York, New York, Miami, Florida, etc.
The Company anticipates having an average of two "Ask the
Expert" programs per market, depending on the geographic size of
the market. The Company also intends to offer the "Ask the
Expert" program internationally.
Competition
There are companies offering business marketing through
television, radio, mailers, or internet e-commerce. However,
none that blends the traditional marketing and internet e-
commerce effectively as Usetheexperts.com. Furthermore, the
effective campaign of the "Ask the Expert" program adds the
unique edge over other marketers. The combination of these
marketing tools gives Usetheexperts.com a market with little
competition offering such avenues for marketing businesses.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following financial review and analysis is intended to assist
prospective investors in understanding and evaluating the
financial condition and results of operations of the Company, for
the nine months ended September 30, 1999 and 1998. This
information should be read in conjunction with the Company's
Financial Statements and accompanying notes thereto, "Selected
Financial Data" and other detailed information regarding the
Company appearing elsewhere in this Prospectus.
OVERVIEW
Usetheexperts.com, formerly known as NV Management, Inc., (the
Company) is engaged primarily in the marketing of businesses
through the use of internet e-commerce, television, radio, and
mailers. The Company was incorporated in the state of Nevada in
January 1999.
Effective September 1, 1999, the Usetheexperts.com consummated a
Stock Transfer Agreement with Cybertech, Inc. (Cybertech), and CA
Experts, Inc. (CA) (collectively referred to as the "Merged
Companies"), whereby Usetheexpert.com acquired all the
outstanding capital stock of Cybertech and CA in consideration
for the simplification of the corporate structures of
Usetheexpert.com, and Cybertech and CA.
Usetheexpert.com and the Merged Companies (collectively referred
to as the "Combined Entities") are related entities under common
management and controlling ownership. Accordingly, the business
combination between the Combined Entities has been accounted for
as a reorganization of entities under common control. The
reorganization reflects the combined financial statements of the
Combined Entities. Usetheexpert.com is considered the accounting
acquirer in the business combinations with Cybertech and CA.
RESULTS OF OPERATIONS:
COMPARISON OF HISTORICAL NINE MONTHS PERIOD ENDED SEPTEMBER 30,
1999 AND SEPTEMBER 30, 1998
The historical consolidated operations of Usetheexperts.com for the
nine months period ended September 30, 1999 and 1998 are analyzed
as follows:
Revenue. The Company reported revenues of $888 thousand for the
nine months ended September 30, 1999, an increase from $400
thousand in the same period for 1998. The increase in revenue was
primarily due to expansion into two new markets, Sacramento, CA
and San Francisco, CA.
General and Administrative Expenses. General and administrative
expenses of $298 thousand for the nine months ended September 30,
1999 increased from $51 thousand in the same period for 1998. The
increase in general and administrative expenses is primarily due
to 1998 operations not fully commencing until the second quarter
of 1998. Furthermore, the majority of general and administrative
expenses were incurred in the fourth quarter of 1998 compared
with the second and third quarter of 1998.
Income Before Provisions for Income Taxes. As a result of the
foregoing factors, income before provisions for income taxes of
$322 thousand for the nine months ended September 30, 1999,
decreased from $332 thousand in the same period for 1998.
CAPITAL AND LIQUIDITY
Liquidity is a measure of a company's ability to meet potential
cash requirements, including ongoing commitments to fund lending
activities and for general purposes. Cash for originating loans
and general operating expenses is primarily obtained through cash
flows from operations and private investors.
The Company has significant ongoing liquidity needs to support
its existing business and continued growth. The Company's
liquidity is actively managed on a periodic basis and the
Company's financial status, including its liquidity, is reviewed
periodically by the Company's management. This process is
intended to ensure the maintenance of sufficient funds to meet
the needs of the Company.
The Company has historically relied upon the cash flow from
operations to provide for its capital requirements. Management
believes that cash generated from operations will be sufficient
to provide for its capital requirements for at least the next 12
months. The Company may seek additional equity financing in the
early part of 2000 through an offering of its common stock, and
contemplate that this offering, before expenses relating to the
offering, will be no less than $3 million and no more than $5
million.
During the nine months ended September 30, 1999, cash flows from
operating activities provided $266 thousand compared to $403
thousand during the same period during 1998. Cash used in
investing activities consisted primarily of fixed asset purchases
of $3 thousand compared to $5 thousand during the same period in
1998. Cash used in financing activities consisted primarily of
distributions to shareholders of $93 thousand compared to $240
thousand during the same period during 1998.
At September 30, 1999, Usetheexperts.com had $178 thousand of
cash and had $334 thousand in current assets. At that same date,
current liabilities were $89 thousand. Stockholders' equity
approximated $305 thousand at June 30, 1999. Accordingly,
Usetheexperts.com appears to have sufficient working capital and
capital to meet its operating needs in the near term without
additional external financing.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statements of Financial Accounting Standards ("SFAS") No.
133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES, which establishes accounting and reporting standards
for derivative instruments and hedging activities. SFAS No. 133
requires recognition of all derivative instruments in the
statement of financial position as either assets or liabilities
and the measurement of derivative instruments at fair value. SFAS
No. 133 is effective for fiscal years beginning after June 15,
1999. The adoption of SFAS No. 133 is not expected to affect the
consolidated financial statements of the Company.
YEAR 2000 PROBLEM
Usetheexperts.com's assessments of the cost and timeliness of
completion of Year 2000 modifications set forth below are based
on management's best estimates, which are derived using numerous
assumptions relating to future events, including, without
limitation, the continued availability of certain internal and
external resources and third party readiness plans. Furthermore,
as the Company's Year 2000 initiative (described below)
progresses, the Company continues to revise its estimates of the
likely problems and costs associated with the Year 2000 problem
and to adapt its contingency plan. However, there can be no
assurance that any estimate or assumption will prove to be
accurate.
THE COMPANY'S YEAR 2000 INITIATIVE. The Company is conducting a
comprehensive Year 2000 initiative with respect to its internal
business-critical systems. This initiative encompasses
information technology ("IT") systems and applications, as well
as non-IT systems and equipment with embedded technology, such as
fax machines and telephone systems, which may be impacted by the
Year 2000 problem. Business-critical systems encompass internal
accounting systems, including general ledger, accounts payable
and financial reporting applications; and loan servicing systems;
as well as the underlying technology required to support the
software. The initiative includes assessing, remediating or
replacing, testing and upgrading the Company's business-critical
IT systems. Based upon a review of the contemplated and planned
stages of the initiative, and testing done to date, the Company
does not anticipate any material difficulties in achieving Year
2000 readiness with respect to its internal business-critical
systems, and the Company anticipates that Year 2000 compliance
with respect to virtually all its internal business-critical
systems will be achieved by latter-part of 1999.
In addition to its own internal IT systems and non-IT systems,
the Company may be at risk from Year 2000 failures caused by or
occurring to third parties. These third parties can be classified
into two groups. The first group includes borrowers, lenders,
vendors and other service providers with whom the Company has a
direct contractual relationship. The second group, while
encompassing certain members of the first group, is comprised of
third parties providing services or functions to large segments
of society, both domestically and internationally such as
airlines, utilities and national stock exchanges.
As is the case with most other companies, the actions the Company
can take to avoid any adverse effects from the failure of
companies, particularly those in the second group, to become Year
2000 ready is extremely limited.
There can be no assurance that the systems of the Company or
those third parties will be timely converted. Furthermore, there
can be no assurance that a failure to convert by another company,
or a conversion that is not compatible with the Company's systems
or those of other companies on which the Company's systems rely,
would not have a material adverse effect on the Company.
The Company does not anticipate that it will incur additional
expenditures in connection with any modifications necessary to
achieve Year 2000 readiness. The Company estimates that is has
incurred minimal costs of less than $10,000 related to its Year
2000 initiative through September 30, 1999.
MARKET SUMMARY
The focus and purpose is to create an effective presence in each
market, as well as the internet online community. Through a
structured program, designed to be all encompassing for the
business and internet community.
Usetheexperts.com, is a company dedicated to assisting businesses
both locally and through e-commerce expanding its presence
through a blend of traditional marketing and internet e-commerce
marketing. In addition the Company will expand services to
include advertising and e-commerce. This service will establish a
common place for consumers utilizing the "Ask the Expert" program
to shop and share information.
PLAN OF OPERATION
A discussion of the Company's plan of operation over the next 12
months in incorporated into the discussion of the Company's
business. See "Description of Business."
DESCRIPTION OF PROPERTY
The Company currently owns the following property in connection
with its operations:
(a) Various office computer equipment, valued at $9,409.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
(a) Market Information.
The Company's Shares are not traded.
(b) Holders of Common Equity.
As of October 10, 1999, there were 6 shareholders of
record of the Company's common stock.
(c) Dividends.
The Company has not declared or paid a cash dividend to
stockholders. The Board of Directors presently intends to
retain any earnings to finance Company operations and does
not expect to authorize cash dividends in the foreseeable
future. Any payment of cash dividends in the future will
depend upon the Company's earnings, capital requirements and
other factors.
EXECUTIVE COMPENSATION
Name and
Principal Position Year Salary Bonus
D. Gary McDonald,
President and Director 1998 $26,000 $59,000
Gregory N. McDonald,
Treasurer and Director 1998 $26,000 $59,000
Joan S. Golden,
Secretary and Director 1998 $26,000 $59,000
FINANCIAL STATEMENTS
The Financial Statements required by Item 310 of Regulation S-B
are incorporated by reference in this Prospectus, and are set
forth in their entirety as Exhibits 13.1 to this Form SB-2.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Information on this item is set forth in Propsectus under the
heading "Disclosure of Commission Position on Indemnification for
Securities Act Liabilities."
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Information on this item is set forth in the Prospectus under the
heading "Use of Proceeds."
RECENT SALES OF UNREGISTERED SECURITIES
The Company recently issued 15,000,000 shares of restricted stock
to the current shareholders.
EXHIBITS
The Exhibits required by Item 601 of Regulation S-B, and an index
thereto, are attached.
UNDERTAKINGS
The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or
sells securities, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or
events which, individually or together, represent a
fundamental change in the information in the
registration statement; and Notwithstanding the
forgoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation From the low or high end
of the estimated maximum offering range may be
reflected in the form of prospects filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective
registration statement.
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities
Act, treat each post-effective amendment as a new
registration statement of the securities offered, and the
offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the
end of the offering.
(d) Provide to the underwriter at the closing specified in
the underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the small business issuer
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
SB-2 and authorized this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorize, in the
City of Las Vegas, State of Nevada, on October 25, 1999.
USETHEEXPERTS.COM
By: /s/ D. Gary McDonald
D. Gary McDonald, President
Special Power of Attorney
The undersigned constitute and appoint D. Gary McDonald their
true and lawful attorney-in-fact and agent with full power of
substitution, for him and in his name, place, and stead, in any
and all capacities, to sign any and all amendments, including
post-effective amendments, to this Form SB-2 Registration
Statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and
Exchange Commission, granting such attorney-in-fact the full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the date indicated:
Signature Title Date
/s/ D. Gary McDonald President, Chief Executive October 25, 1999
D. Gary McDonald Officer, Director
/s/ Gregory N. McDonald Treasurer and Director October 18, 1999
Gregory N. McDonald
/s/ Joan S. Golden Secretary and Director October 18, 1999
Joan S. Golden
<PAGE>
EXHIBIT INDEX
Exhibit Description Method of
Number Filing
3.1 Articles of Incorporation See Below
3.2 Certificate of Amendment of Articles of See Below
Incorporation Changing Name filed with the
Nevada Secretary of State on September 30,
1999)
3.3 Bylaws See Below
5.1 Opinion Re: Legality See Below
10.1 Stock Transfer Agreement
dated September 1, 1999 See Below
13.1 Audited Financials Statements
dated September 30, 1999 See Below
23.1 Consent of Counsel See Below
23.2 Consent of Accountant See Below
24.1 Special Power of Attorney See Signature Page
27.1 Financial Data Schedule See Below
ARTICLES OF INCORPORATION
OF
NV EXPERT MANAGEMENT, INC.
a Nevada corporation
The undersigned incorporator, desiring to form a Nevada
corporation pursuant to Chapter 78 of the Nevada Revised
Statutes, adopts the following Articles of Incorporation for the
Corporation.
ARTICLE I
NAME
The name of the Corporation is NV Expert Management, Inc., a
Nevada corporation.
ARTICLE II
PRINCIPAL PLACE OF BUSINESS/RESIDENT AGENT
The principal place of business of the Corporation shall be
3601 W. Sahara Ave., Suite 201, Las Vegas, NV 89102. The name and
address of the Corporation's initial resident agent is Ira S.
Levine, 2700 W. Sahara Avenue, 5th Floor, Las Vegas, Nevada
89102.
ARTICLE III
PURPOSE AND POWERS
The Corporation is organized to hold, operate and manage the
Corporation's property and to engage in such other purposes as
are allowed under Nevada law.
ARTICLE IV
AUTHORIZED CAPITAL
The Corporation shall have the authority to issue a total of
25,000 shares of capital stock with no par value.
ARTICLE V
INITIAL BOARD OF DIRECTORS
The members of the governing board of the Corporation shall
be styled directors. The initial board of directors shall
consist of three (3) directors, and the names and addresses of
the persons who shall serve as the directors until the first
annual meeting of shareholders, or until their successor(s) are
elected and qualified, are:
Name Address
Dale Gary McDonald 3601 W. Sahara Ave., #201
Las Vegas, NV 89102
Gregory Norman McDonald 3601 W. Sahara Ave., #201
Las Vegas, NV 89102
Joan Golden 3601 W. Sahara Ave., #201
Las Vegas, NV 89102
The number of directors may be increased or decreased from
time to time in the manner provided in the Bylaws of the
Corporation.
ARTICLE VI
INCORPORATOR
The name and address of the incorporator is Dale Gary
McDonald, 3601 W. Sahara Ave., #201, Las Vegas, Nevada 89102.
All powers, duties, and responsibilities of the incorporator
shall cease upon the filing of these Articles of Incorporation by
the Secretary of State of Nevada.
ARTICLE VII
INDEMNIFICATION
The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, including an action
by or in the right of the Corporation, by reason of the fact that
he or she is or was a director, officer, employee, or agent of
the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action,
suit, or proceeding if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful.
ARTICLE VIII
LIMITATION OF OFFICER AND DIRECTOR LIABILITY
personally liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as an officer or
director; provided, however, that this Article VII shall not
eliminate or limit the liability of an officer or director to the
extent provided by applicable law for: (A) acts or omissions that
involve intentional misconduct, fraud, or a knowing violation of
law; or (B) authorizing the unlawful payment of any dividend or
other distribution in violation of Section 78.300 of the Nevada
Revised Statutes. The limitation of liability provided herein
shall continue after an officer or director has ceased to occupy
such position as to acts or omissions occurring during such
officer's or director's term or terms of office, and no amendment
or repeal of this Article VII shall apply to or have any effect
on the liability or alleged liability of any officer or director
of the Corporation for or with respect to any acts or omissions
of such officer or director.
All powers, duties, and responsibilities of the incorporator
shall cease upon the filing of these Articles of Incorporation by
the Secretary of State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th
day of March, 1999.
INCORPORATOR
By:/s/ Dale Gary McDonald
Dale Gary McDonald
STATE OF NEVADA )
) ss.
COUNTY OF CLARK )
On this 24th day of March, 1999 personally appeared before
me, a notary public in and for said county and state, Dale Gary
McDonald, known (or proved) to me to be the person described in
and who executed the foregoing instrument and who acknowledged to
me that he executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
______________________________
NOTARY PUBLIC
CERTIFICATE OF ACCEPTANCE
OF APPOINTMENT BY RESIDENT AGENT
In the matter of NV Expert Management, Inc., a Nevada
corporation, I, Ira S. Levine, with address at 2700 W. Sahara
Avenue, 5th Floor, Las Vegas, Nevada 89102 hereby accept the
appointment as Resident Agent of the above-entitled corporation
in accordance with NRS ' 78.090.
IN WITNESS WHEREOF, I hereunto set my hand this 24th day of
March, 1999.
RESIDENT AGENT
By:/s/Ira S. Levine
Ira S. Levine, Esq.
CERTIFICATE OF AMENDMENT OF AMENDMENT TO ARTICLES OF
INCORPORATION
of
NV EXPERT MANAGEMENT, INC.
I, Gary McDonald certifies that:
1. The original articles were filed with the Office of the
Secretary of State on March 24, 1999.
2. As of the date of this certificate, no shares of stock of
the corporation have been issued.
3. Pursuant to a Board of Directors of meeting at which it was
unanimously voted to make the following amendments, the company
hereby adopts the following amendments of the Articles of
Incorporation of this Corporation:
First: Name of Corporation.
The name of the corporation is: USETHEEXPERTS.COM
(the "Corporation")
Fourth: Capital Stock.
Corporation is allowed to issue up to 50,000,000 shares
at .001 par value stock.
By:/s/D. Gary McDonald
D. Gary McDonald, President/Director
By:/s/ Joan S. Golden
Joan S. Golden, Secretary/Director
STATE OF NEVADA )
) ss:
COUNTY OF CLARK )
On September 30, 1999, personally appeared before me, a Notary
public, Gary D. McDonald and Joan S. Golden, who acknowledged
that they executed the above instrument.
_______________________________
A Notary Public in and for said
County and State.
BYLAWS
OF
USETHEEXPERTS.COM
ARTICLE I: OFFICES
The principal office of the Corporation is in the State of
Nevada shall be located at 3601 West Sahara Avenue, Suite 201, in
Las Vegas, County of Clark, the Corporation may have such other
offices, either within or without the State of Nevada, as the
Board of Directors my designate or as the business of the
Corporation may require from time to time.
ARTICLE II: SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the
shareholders shall be held on the 15th day in the month of
December in each year, beginning with the transaction of such
other business as my come before the meeting. If the day fixed
for the annual meeting shall be a legal holiday in the Sate of
Nevada, such meeting shall be held on the next succeeding
business day. If the election of Directors shall be held on the
day designated herein for any annual meeting of the shareholders
or at any adjournment thereof, the Board of Directors shall cause
the election to be held at a special meeting of the shareholders
as soon thereafter as conveniently may be.
SECTION 2. Special Meetings. Special meeting of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or by the
Board of Directors, and shall be called by the President at the
request of the holders of not less than ten percent (10%) of all
the outstanding shares of the Corporation entitled to vote at the
meeting.
SECTION 3. Place of Meeting. The Board of Directors my
designate any place, either within our without the State of
Nevada, unless otherwise prescribed by statute, as the place of
meeting for any annual meeting or for any special meeting. A
waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within our without the
State of Nevada, unless otherwise prescribed by statute, as the
place for the holding of such meeting. If no designation is
made, the place of meeting shall be the principal office of the
Corporation.
SECTION 4. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called,
shall unless otherwise prescribed by statute, be delivered not
less than ten (10) nor more than sixty (60) days before the date
of the meeting, to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States Mail, addressed to
the shareholder at his address as it appears on the stock
transfer books of the Corporation, with postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record.
For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be
closed for a stated period, but not to exceed in any case fifty
(50) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for
at least fifteen (15) days immediately preceding such meeting.
In lieu of closing the stock transfer books, the board of
Directors may fix in advance a date as the record date for any
such determination of shareholders, such date in any case to be
not more than thirty (30) days and, in case of a meeting of
shareholders, not less than ten (10) days, prior to the date on
which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are not
closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or
the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall make a complete list of shareholders entitled to vote at
each meeting of shareholders or any adjournment thereof, arranged
in alphabetical order, with the address of and the number of
shares held by each. Such lists shall be produced and kept open
at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the
meeting for the purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares of
the Corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders.
If less than a majority of the outstanding shares are represented
at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The
shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in writing by
the shareholder or by his or duly authorized attorney-in-fact.
Such proxy shall be filed with the secretary of the Corporation
before or at the time of the meeting. A meeting of the Board of
Directors my be had by means of telephone conference or similar
communications equipment by which all persons participating in
the meeting can hear each other, and participation in a meeting
under such circumstances shall constitute presence at the
meeting.
SECTION 9. Voting of Shares by Certain Holders. Shares
standing in the name of another corporation may be voted by such
officer, agent or proxy as the Bylaws of such corporation may
prescribe or, in the absence of such provision, as the Board of
Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or
conservator my be voted by him either in person or by proxy,
without a transfer of such shares into his name. Shares standing
in the name of a trustee may be voted by him, either in person or
by proxy, but no trustee shall be entitled to vote shares held by
him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name, if authority to do so be contained in an
appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
Shares of its own stock belonging to the Corporation shall
not be voted directly or indirectly, at any meeting, and shall
not be counted in determining the total number of outstanding
shares at any given time.
SECTION 10. Informal Action by Shareholders. Unless
otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, may be taken without a
meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to
vote with respect to the subject matter thereof.
ARTICLE III: BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number
of directors of the Corporation shall be fixed by the Board of
Directors, but in no event shall be less than one ( 1 ). Each
Director shall hold office until the next annual meeting of
shareholder and until his successor shall have been elected and
qualified.
SECTION 3. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
Bylaw immediately after, and at the same place as, the annual
meeting of shareholders. The Board of Directors may provide, by
resolution, the time and place for the holding of additional
regular meetings without notice other than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the President
or any two directors. The person or persons authorized to call
special meetings of the Board of Directors may fix the place for
holding any special meeting of the Board of Directors called by
them.
SECTION 5. Notice. Notice of any special meeting shall be
given at least one (1) day previous thereto by written notice
delivered personally or mailed to each director at his business
address, or by telegram. If mailed, such notice shall be deemed
to be delivered when deposited in the United Sates mail so
addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any directors
may waive notice of any meeting. The attendance of a director at
a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
SECTION 6. Quorum. A majority of the number of directors
fixed by Section 2 of the Article III shall constitute a quorum
for the transaction of business at any meeting of the Board of
Directors, but if less than such majority is present at a
meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
SECTION 7. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
SECTION 8. Action Without a Meeting. Any action that may
be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the
action so to be taken, shall be signed before such action by all
of the directors.
SECTION 9. Vacancies. Any vacancy occurring in the Board
of Directors may be filled by the affirmative vote of a majority
of the remaining directors though less than a quorum of the Board
of Directors, unless otherwise provided by law. A director
elected to fill a vacancy shall be elected for the unexpired term
of his predecessor in office. Any directorship to be filled by
reason of an increase in the number of directors may be filled by
election by the Board of Directors for a term of office
continuing only until the next election of directors by the
shareholders.
SECTION 10. Compensation. By resolution of the Board of
Directors, each director may be paid his expenses, if any, of
attendance at each meeting of the Board of Directors, and may be
paid a stated salary as a director or a fixed sum for attendance
at each meeting of the Board of Directors or both. No such
payment shall preclude any director from serving the Corporation
in any other capacity and receiving compensation thereof.
SECTION 11. Presumption of Assent. A director of the
Corporation who is present at a meeting of the Board of Directors
at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as
the Secretary of the meeting before the adjournment thereof, or
shall forward such dissent by registered mail to the Secretary of
the Corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in
favor of such action.
ARTICLES IV: OFFICERS
SECTION 1. Number. The officers of the corporation shall
be a President, one or more vice Presidents, a Secretary and a
Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of
Directors, including a Chairman of the Board. In its discretion,
the Board of Directors may leave unfilled for any such period as
it may determine any office except those of President and
Secretary. Any two or more offices may be held by the same
person. Officers may be directors or shareholders of the
Corporation.
SECTION 2. Election and Term of Office. The officers of
the Corporation to be elected by the board of Directors shall be
elected annually by the board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified,
or until his death, or until he shall resign or shall have been
removed in the manner hereinafter provided.
SECTION 3. Removal. Any officer or agent may be removed by
the Board of Directors whenever, in its judgement, the best
interests of the Corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights, and
such appointment shall be terminable at will.
SECTION 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may
be filled by the Board of Directors for the unexpired portion of
the term.
SECTION 5. President. The president shall be the
principal executive officer of the Corporation and, subject to
the control of the Board of Directors, shall in general supervise
and control all of the business and affairs of the Corporation.
He shall, when present, preside at all meetings of the
shareholders and of the Board of Directors, unless there is a
Chairman of the Board, in which case the Chairman shall preside.
He may sign, with the Secretary or any other proper officer of
the Corporation thereunto authorized by the Board of Directors,
certificates for shares of the Corporation, any deed, mortgages,
bonds, contract, or other instruments which the Board of
Directors has authorized to be executed, except in cases where
the signing and execution thereof shall be expressly delegated by
the Board of Directors or by there Bylaws to some other officer
or agent of the Corporation, or shall be required by law to be
otherwise signed or executed; and in general shall perform all
duties incident to the office of President and such other duties
as may be prescribed by the Board of Directors from time to time.
SECTION 6. Vice President. In the absence of the president
or in the event of his death, inability or refusal to act, the
Vice President shall perform the duties of the President, and
when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. The Vice President
shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors,
If there is more than one Vice President, each Vice President
shall succeed to the duties of the President in order of rank as
determined by the Board of Directors. If no such rank has been
determined, then each Vice President shall succeed to the duties
of the President in order of date of election, the earliest date
having the first rank.
SECTION 7. Secretary. The Secretary shall: (a) keep the
minutes of the Board of Directors in one or more minute books
provided for the purpose; (b) see that all notices are duly
given in accordance with the provisions of the Bylaws or as
required by law; (c) be custodian of the corporate records and
of the seal of the Corporation and see that the seal of the
Corporation is affixed to all documents, the execution of which
on behalf of the Corporation under its seal is duly authorized;
(d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the President certificates for share
of the Corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the Corporation,
and (g) in general perform all duties incident to the office of
the Secretary and such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
SECTION 8. Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the Corporation; (b) receive and give receipts for
moneys due and payable to the Corporation in such banks, trust
companies or other depositories as shall be selected in
accordance with the provisions of Article VI of these Bylaw; and
(c) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
If required by the Board of Directors, the Treasurer shall give a
bond for the faithful discharge of his duties in such sum and
with such sureties as the Board of Directors shall determine.
SECTION 9. Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors, and no officer
shall be prevented from receiving such salary by reason of the
fact that he is also a director of the Corporation.
ARTICLE V: INDEMNITY
The Corporation shall indemnify its directors, officers and
employees as follows:
(a) Every director, officer, or employee of the Corporation
shall be indemnified by the Corporation against all expenses and
liabilities, including counsel fees, reasonable incurred by or
imposed upon him in connection with any proceeding to which he
may become involved, by reason of his being or having been a
director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director,
officer, employee or agent of the corporation, partnership, joint
venture, trust or enterprise, or any settlement thereof, whether
or not he is a director, officer, employee or agent at the time
such expenses are incurred, except in such cases wherein the
director, officer, or employee is adjudged guilty of willful
misfeasance or malfeasance in the performance of his duties;
provided that in the event of a settlement the indemnification
herein shall apply only when the Board of Directors approves such
settlement and reimbursement as being for the best interests of
the Corporation.
(b) The Corporation shall provide to any person who is or
was a director, officer, employee, or agent of the Corporation or
is or was serving at the request of the Corporation as director,
officer, employee or agent of the corporation, partnership, joint
venture, trust or enterprise, the indemnity against expenses of
suit, litigation or other proceedings which is specifically
permissible under applicable law.
(c) The Board of Directors may, in its discretion, direct the
purchase of liability insurance by way of implementing the
provisions of the Article V.
ARTICLE VI: CONTRACTS, LOANS, CHECKS, AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize
any office or officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name of and
on behalf of the Corporation, and such authority may be general
or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the Board
of Directors. Such authority may be general or confined to
specific instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the Corporation, shall be
signed by such officer or officers, agent or agents of the
Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies or other
depositories as the Board of Directors may select.
ARTICLE VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form as
shall be determined by the Board of Directors. Such certificates
shall be signed by the President and by the Secretary or by such
other officers authorized by law and by the Board of Directors so
to do, and sealed with the corporate seal. All certificates for
shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the Corporation.
All certificates surrendered to the Corporation for transfer
shall be cancelled and no new certificate shall be issued until
the former certificate for a like number of shares shall have
been surrendered and cancelled, expect that in case of a lost,
destroyed or mutilated certificate a new one may be issued
therefore upon such terms and indemnity to the Corporation as the
Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the
Corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the certificate
for such shares. The person in whose name shares stand on the
books of the Corporation shall be deemed by the Corporation to be
the owner thereof for all purposes, Provided, however, that upon
any action undertaken by the shareholder to elect S Corporation
status pursuant to Section 1362 of the Internal Revenue Code and
upon any shareholders agreement thereto restricting the transfer
of said shares so as to disqualify said S Corporation status,
said restriction on transfer shall be made a part of the Bylaws
so long as said agreements is in force and effect.
ARTICLE VIII: FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st
day of January and end on the 31st day of December of each year.
ARTICLE IX: DIVIDENDS
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and condition provided by law and
its Articles of Incorporation.
ARTICLE X: CORPORATE SEAL
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the
name of the Corporation and the state of incorporation and the
words, Corporate Seal.
ARTICLE XI: WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is
required to be given to any shareholder or director of the
Corporation under the provision of the Articles of Incorporation
or under the provisions of the applicable Business Corporation
Act, a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
ARTICLE XII: AMENDMENTS
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by the Board of Directors at any regular or
special meeting of the Board of Directors.
The above Bylaws are certified to have been adopted by the
Board of Directors of the Corporation on the 8th day of April,
1999.
By:/s/ Joan S. Golden
Joan S. Golden, Secretary
Law Office of
Shawn F. Hackman, a P.C.
3360 West Sahara Avenue, Suite 200
Las Vegas, Nevada 89102
October 25, 1999
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: USETHEEXPERTS.COM - Form SB-2
Dear Sir/Madam:
We have acted as counsel to USETHEEXPERTS.COM, a Nevada
corporation ("Company"), in connection with its Registration
Statement on Form SB-2 relating to the registration of 15,000,000
shares of its common stock ("Shares"), $0.001 par value per
Share, at a maximum offering price of $0.10 per Share.
In our representation we have examined such documents,
corporate records, and other instruments as we have deemed
necessary or appropriate for purposes of this opinion, including,
but not limited to, the Articles of Incorporation and Bylaws of
the Company.
Based upon the foregoing, it is our opinion that the Company
is duly organized and validly existing as a corporation under the
laws of the State of Nevada, and that the Shares, when issued and
sold, will be validly issued, fully paid, and non-assessable.
We hereby consent to the use of this opinion as an exhibit
to the Registration Statement.
Sincerely,
/s/ Shawn F. Hackman
Shawn F. Hackman, Esq.
STOCK TRANSFER AGREEMENT
THIS Agreement is made and entered into as of the 1st day of
September, 1999, by and among NV Expert Management, Inc., a Nevada
corporation (the "Buyer"), and Dale Gary McDonald, Gregory N.
McDonald and Joan S. Golden (collectively, the "Sellers"). The
Buyer and the Sellers are referred to collectively herein as the
"Parties."
WHEREAS, the Sellers are the sole shareholders of Cybertech,
Inc., a Nevada corporation ("Cybertech") and CAEXPERTS, INC., a
Nevada corporation ("CA") (Cybertech and CA are collectively
referred to hereinafter as the "Corporations"); and
WHEREAS, Sellers own twenty-five (25) shares each of the
common stock of Cybertech and Five Hundred shares each of the
common stock of CA ("Sellers' Shares") of the Corporation
constituting a one hundred percent (100%) ownership interest in
both Cybertech and CA; and
WHEREAS, Sellers desires to sell, assign, transfer and convey
to Buyer and Buyer desires to purchase and receive from from
Sellers Sellers' Shares on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the
Parties agree as follows.
1. Purchase and Sale of Shares.
(a) Basic Transaction. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from
the Sellers, and the Sellers agree to sell, transfer, assign and
convey to the Buyer, Sellers' Shares for the consideration
specified below in this Paragraph 1.
(b) Consideration. The Sellers are the sole shareholders of
Buyer. As such, after the transaction is completed as set forth
in this Agreement, the Buyer will be the owner of one hundred
percent of the stock of the Corporations which prior to the
transaction were owned in the same proportion by the Sellers that
the Buyer is owned by the Sellers. The consideration is the
simplification of the corporate structure of the Buyer and the
Corporations.
(c) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices
of Berkley, Gordon, Levine, Goldstein & Garfinkel, LLP., 2700 W.
Sahara Ave., Fifth Floor, Las Vegas, Nevada on July 2, 1999
provided all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will
take at the Closing itself) are completed or such other date as
the Buyer and the Sellers may mutually determine (the "Closing
Date").
(d) Deliveries at the Closing. At the Closing, (i) the Sellers
will deliver to the Buyer the various certificates, instruments,
and documents referred to in Paragraph 2(a) below, (ii) the Buyer will
deliver to the Sellers the various certificates, instruments, and
documents referred to in Paragraph 2(b) below, and (iii) the Sellers
will deliver to the Buyer stock certificates representing all of
Sellers' Shares, endorsed in blank or accompanied by duly executed
assignment documents.
2. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of
the Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the Sellers shall have performed and complied with
all of their covenants hereunder in all material respects
through the Closing;
(ii) the Corporations shall have procured all of the
third party consents required to be received;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would
(A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded
following consummation, (C) affect adversely the right of the
Buyer to own the Shares, or (D) affect adversely the right of
the Corporations to own its assets and to operate its businesses
(and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);
(iv) the Sellers shall have delivered to the Buyer any
and all corporate records, equipment and property belonging to
the Corporation including but not limited to the corporate
minute book and all bank checks and records; and
(v) all actions to be taken by the Sellers in connection
with consummation of the transactions contemplated hereby and
all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will
be satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this Paragraph 2(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Sellers. The obligation of
the Sellers to consummate the transactions to be performed by
them in connection with the Closing is subject to satisfaction of
the following conditions:
(i) The Buyer shall have taken all actions to be taken by
the Buyer in connection with consummation of the transactions
contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the
transactions contemplated hereby will be satisfactory in form
and substance to the Sellers.
3. Miscellaneous.
(a) No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any person other than the
Parties and their respective successors and permitted assigns.
(b) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the
Parties and supersedes any prior understandings, agreements, or
representations by or among the Parties, written or oral, to the
extent they related in any way to the subject matter hereof.
(c) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and
their respective successors and permitted assigns. No Party may
assign either this Agreement or any of his or her rights,
interests, or obligations hereunder without the prior written
approval of the Buyer and the Sellers.
(d) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but
all of which together will constitute one and the same
instrument.
(e) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
(f) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed
duly given if (and then two business days after) it is sent by
registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth
below:
If to the Sellers:
If to the Buyer:
Any Party may send any notice, request, demand, claim, or
other communication hereunder to the intended recipient at the
address set forth above using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the
intended recipient. Any Party may change the address to which
notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of
Nevada without giving effect to any choice or conflict of law
provision or rule (whether of the State of Nevada or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Nevada.
(h) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing
and signed by the Buyer and the Sellers. No waiver by any Party
of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any way
any rights arising by virtue of any prior or subsequent such
occurrence.
(i) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any
other jurisdiction.
(j) Expenses. Each of the Parties will bear his or her own
costs and expenses (except for legal fees and expenses) incurred
in connection with this Agreement and the transactions
contemplated hereby.
(k) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal,
state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The word "including" shall mean
including without limitation. The Parties intend that each
representation, warranty, and covenant contained herein shall
have independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the
fact that the Party is in breach of the first representation,
warranty, or covenant.
(l) Incorporation of Exhibits, Annexes, and Schedules. The
Exhibits, Annexes, and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
"BUYER" "SELLERS"
NV EXPERT MANAGEMENT, INC.,
a Nevada corporation
__________________________ ________________________
By: Dale Gary McDonald
Its;
________________________
Gregory N. McDonald
________________________
Joan S. Golden
USETHEEXPERTS.COM
INDEX TO FINANCIAL STATEMENTS
Page No.
Usetheexperts.com and Subsidiaries:
Consolidated Balance Sheets as of September 30, 1999,
and 1998 (Unaudited) F-1
Consolidated Statements of Operations for the Nine
Months Ended September 30, 1999, and for the Period
From April 1, 1998 (Date of Inception) through
September 30, 1998 (Unaudited) F-2
Consolidated Statements of Stockholders' Equity for
the Nine Months Ended September 30, 1999, and for the
Period From April 1, 1998 (Date of Inception) through
September 30, 1998 (Unaudited) F-3
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 1999, and for the Period
From April 1, 1998 (Date of Inception) through
September 30, 1998 (Unaudited) F-4
Notes to Consolidated Financial Statements (Unaudited) F-5
Usetheexperts.com and Subsidiaries:
Independent Auditors' Report F-8
Consolidated Balance Sheets as of June 30, 1999,
and December 31, 1998 F-9
Consolidated Statements of Operations for the Six
Months Ended June 30, 1999, and for the Period From
April 1, 1998 (Date of Inception) through December 31, 1998 F-10
Consolidated Statements of Stockholders' Equity for
the Six Months Ended June 30, 1999, and for the Period from
April 1, 1998 (Date of Inception) through December 31, 1998 F-11
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1999, and for the Period from
April 1, 1998 (Date of Inception) through December 31, 1998 F-12
Notes to Consolidated Financial Statements F-13
<PAGE>
USETHEEXPERTS.COM
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
September 30, September 30,
1999 1998
Current assets
Cash $178,366 $ 58,256
Accounts receivable 143,305 42,378
Prepaid expenses 301 --
Other current assets 12,215 1,625
Total current assets 334,187 102,259
Property and equipment, net 10,244 4,345
Other assets
Capitalized IPO costs, net 49,644 --
Total assets $394,075 $ 106,604
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 89,020 $ --
Total current liabilities 89,020 --
Commitments and contingencies -- --
Stockholders' equity
Common stock, $.001 par value,
50,000,000 shares authorized,
15,000,000 shares issued and
outstanding 15,000 15,000
Additional paid-in capital 290,055 91,604
Total stockholders' equity 305,055 106,604
Total liabilities and
stockholders' equity $ 394,075 $ 106,604
See accompanying notes to consolidated financial statements
<PAGE>F-1
USETHEEXPERTS.COM
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Period
From
April 1, 1998
For the Nine (Date of Inception)
Months Ended Through
September 30, September 30, 1998
1999
Revenues $ 888,322 $ 399,253
Costs of revenues 269,686 16,874
Gross profit 618,636 382,379
General and administrative expenses 297,239 50,775
Net income $ 321,397 $ 331,604
Primary and fully diluted earnings
per common share $ 0.02 $ 0.02
Weighted average number of common
shares used for primary and fully
diluted per share calculations 15,000,000 15,000,000
See accompanying notes to consolidated financial statements
<PAGE>F-2
USETHEEXPERTS.COM
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
FOR THE PERIOD FROM APRIL 1, 1998 (DATE OF INCEPTION)
THROUGH SEPTEMBER 30, 1998
Common Stock Additional Total
Number of Paid-in Stockholders'
Shares Amount Capital Equity
Balance, April 1, 1998
(Date of Inception) -- $ -- $ -- $ --
Issuance of common stock 15,000,000 15,000 -- 15,000
Distributions -- -- (240,000) (240,000)
Net income -- -- 331,604 331,604
Balance,
September 30, 1998 15,000,000 $ 15,000 $ 91,604 $106,604
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
Common Stock Additional Total
Number of Paid-in Stockholders'
Shares Amount Capital Equity
Balance,
January 1, 1999 15,000,000 $ 15,000 $ 62,010 $ 77,010
Distributions -- -- (93,352) (93,352)
Net income -- -- 321,397 321,397
Balance,
September 30, 1999 15,000,000 $ 15,000 $ 290,055 $305,055
See accompanying notes to consolidated financial statements
<PAGE>F-3
USETHEEXPERTS.COM
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Period
From
April 1, 1998
For the Nine (Date of Inception)
Months Ended Through
September 30, September 30, 1998
1999
Cash flows from operating
activities:
Net income $321,397 $ 331,604
Adjustments to reconcile net
income to net cash provided
by operating activities:
Amortization 356 --
Depreciation 1,459 160
Services paid for with common stock -- 15,000
Changes in operating assets
and liabilities:
Increase in accounts receivable (130,696) (42,378)
Decrease in prepaid expenses 36,587 --
(Increase) decrease in other
current assets 1,410 (1,625)
Increase in other assets (50,000) --
Increase in accounts payable 89,020 --
Decrease in accrued liabilities (3,114) --
Net cash provided by operating
activities 266,419 302,761
Cash flows from investing activities:
Purchase of property and equipment (2,686) (4,505)
Net cash used in investing activities (2,686) (4,505)
Cash flows from financing activities:
Distributions to shareholders (93,352) (240,000)
Net cash used in financing activities (93,352) (240,000)
Net increase in cash 170,381 58,256
Cash, beginning of period 7,985 --
Cash, end of period $178,366 $58,256
Supplemental schedule on non-cash financing activities:
During the period ended December 31, 1998, the Company issued
15,000,000 shares of commonstock for $15,000 of services
performed.
See accompanying notes to consolidated financial statements
<PAGE>F-4
USETHEEXPERTS.COM
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
1. Description of business and summary of significant accounting
policies
Description of business - Usetheexperts.com, formerly known as NV
Expert Management, Inc., ("the Company") is engaged primarily in
the marketing of business through an effective blend of internet
e-commerce, television and radio marketing, and mailers. The
Company was incorporated in the State of Nevada in January 1999.
Effective September 1, 1999, Usetheexpert.com consummated a Stock
Transfer Agreement with Cybertech, Inc. (Cybertech), and CA
Experts, Inc. (CA) (collectively referred to as the "Acquired
Companies"), whereby Usetheexperts.com acquired all the
outstanding capital stock of the Acquired Companies to simplify
the corporate structures.
Usetheexpert.com and the Acquired Companies (collectively
referred to as the "Combined Entities") are related entities
under common management and controlling ownership. Accordingly,
the business combination between the Combined Entities has been
accounted for as a reorganization of entities under common
control. The reorganization reflects the combined financial
statements of the Combined Entities. Usetheexperts.com is
considered the accounting acquirer in the business combinations
with Cybertech and CA.
The Company plans to file with the Securities and Exchange
Commission a registration statement on Form SB-2 for the
registration of 15,000,000 shares of common stock issued and
outstanding as of June 30, 1999.
Interim consolidated financial statements - The accompanying
consolidated financial statements are unaudited and include the
accounts of the Company and its subsidiary which is wholly-owned.
All significant inter-company transactions and balances have been
eliminated. In the opinion of management, all necessary
adjustments (which include only normal recurring adjustments)
have been made to the accompanying financial statements in order
to present fairly the financial position, results of operations
and cash flows for the period presented.
Revenue and cost recognition - Revenues from contracts are
recognized upon contract's issuance. Management has determined
that contract revenues will be recognized immediately due to the
fact that contract revenues are non-refundable.
Costs associated with contract revenues are recognized upon
contract's issuance. Such costs include various types of
advertising expenses, which are paid by Usetheexperts.com based
on the type of contract.
Accounts receivable - No allowance for uncollectible accounts has
been provided. Management has evaluated the accounts and
believes they are all collectible.
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 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.
<PAGE>F-5
USETHEEXPERTS.COM
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
1. Description of business and summary of significant accounting
policies (continued)
Property and equipment - Property and equipment are stated at
cost less accumulated depreciation. Depreciation is provided
principally on the straight-line method over the estimated useful
lives of the assets, which are generally 5 to 7 years. The costs
of repairs and maintenance are charged to expense as incurred.
Expenditures for property betterments and renewals are
capitalized. Upon sale or other disposition of a depreciable
asset, cost and accumulated depreciation are removed from the
accounts and any gain or loss is reflected in other income
(expense).
The Company periodically evaluates whether events and
circumstances have occurred that may warrant revision of the
estimated useful life of property and equipment or whether the
remaining balance of property and equipment should be evaluated
for possible impairment. The Company uses an estimate of the
related undiscounted cash flows over the remaining life of the
property and equipment in measuring their recoverability.
Advertising costs - Advertising costs incurred in the normal
course of operations are expensed accordingly.
Income taxes - The Company has elected to be taxed as an S-
Corporation under sections of the Internal Revenue Code of 1986,
as amended, which provide that shareholders separately account
for items of income, deductions, losses and credits.
Accordingly, no provisions for federal income taxes are included
in the accompanying financial statements for the nine months
ended September 30, 1999, and the period ended September 30,
1998.
Year 2000 issue - The Company has assessed the exposure to date
sensitive computer software programs that may not be operative
subsequent to 1999 and has implemented a requisite course of
action to minimize Year 2000 risk and ensure that neither
significant costs nor disruptions of normal business operations
are encountered. However, because there is no guarantee that all
systems of outside vendors or other entities affecting the
Company's operations will be 2000 compliant, the Company remains
susceptible to consequences of the Year 2000 issue.
2. Property and equipment
Property and equipment consist of the following:
September 30, September 30,
1999 1998
Computers $ 2,665 $ 1,595
Office equipment 7,397 2,000
Software 1,136 --
Furniture and fixtures 910 910
12,108 4,505
Less: accumulated depreciation 1,864 160
$ 10,244 $ 4,345
<PAGE>F-6
USETHEEXPERTS.COM
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
3. Other assets
The company has capitalized costs related to the SEC registration
as discussed in Note 1, as follows:
September 30, September 30,
1999 1998
Development Costs $ 50,000 $ --
Less: accumulated amortization 356 --
$ 49,644 $ --
Other assets consist of capitalized costs, which the Company's
management estimate future derived benefits. Development costs
are amortized on a straight-line basis over five years.
4. Fair value of financial instruments
The carrying amounts for the Company's cash, accounts receivable,
prepaid expenses, other current assets, and accounts payable
approximate fair value.
5. Commitments and contingencies
Operating lease - The Company is obligated under a lease
agreement for office space. The rental amount includes a fixed
cost plus the tenant's share of real estate taxes. The rental
expense for the nine months ended September 30, 1999, and the
period ended September 30, 1998, are $9,866 and $8,872,
respectively. The minimum rental commitments for the remaining
periods are as follows:
Future minimum rental commitments:
Three months ended December 31, 1999 $ 5,049
2000 11,723
$ 16,772
6. Subsequent event
Effective October 1, 1999, the Company elected to be treated as a
C-Corporation for federal income tax purposes.
<PAGE>F-7
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Usetheexpert.com and subsidiaries
Las Vegas, Nevada
We have audited the accompanying consolidated balance sheets of
Usetheexperts.com as of June 30, 1999 and December 31, 1998 and
the related consolidated statements of operations, stockholders'
equity and cash flows for the six months ended June 30, 1999, and
for the period from April 1, 1998 (Date of Inception) through
December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Usetheexperts.com as of June 30, 1999, and December
31, 1998, and the results of its operations and its cash flows
for the six months ended June 30, 1999 and for the period from
April 1, 1998 (Date of Inception) through December 31, 1998 in
conformity with generally accepted accounting principles.
L.L. BRADFORD & COMPANY
September 24, 1999
Las Vegas, Nevada
<PAGE>F-8
USETHEEXPERTS.COM
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1999 1998
Current assets
Cash $119,873 $ 7,985
Accounts receivable 37,423 12,609
Prepaid expenses 4,391 36,888
Other current assets 2,215 13,625
Total current assets 163,902 71,107
Property and equipment, net 9,409 9,017
Total assets $173,311 $ 80,124
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 32,855 $ --
Accrued liabilities 3,845 3,114
Total current liabilities 36,700 3,114
Commitments and contingencies -- --
Stockholders' equity
Common stock, $.001 par value,
50,000,000 shares authorized,
15,000,000 shares issued and
outstanding 15,000 15,000
Additional paid-in capital 121,611 62,010
Total stockholders' equity 136,611 77,010
Total liabilities and
stockholders' equity $ 173,311 $ 80,124
See accompanying notes to consolidated financial statements
<PAGE>F-9
USETHEEXPERTS.COM
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Period
From
April 1, 1998
For the Six (Date ofInception)
Months Ended Through
June 30, 1999 December 31, 1998
Revenues $ 367,168 $ 521,771
Costs of revenues 119,477 41,482
Gross profit 247,691 480,289
General and administrative expenses 120,738 204,905
Net income $ 126,953 $ 275,384
Primary and fully diluted earnings
per common share $ 0.01 $ 0.02
Weighted average number of common
shares used for primary and fully
diluted per share calculations 15,000,000 15,000,000
See accompanying notes to consolidated financial statements
<PAGE>F-10
USETHEEXPERTS.COM
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock Additional Total
Number of Paid-in Stockholders'
Shares Amount Capital Equity
Balance, April 1, 1998
(Date of Inception) -- $ -- $ -- $ --
Issuance of common stock 15,000,000 15,000 -- 15,000
Distributions -- -- (213,374) (213,374)
Net income -- -- 275,384 275,384
Balance,
December 31, 1998 15,000,000 15,000 62,010 77,010
Distributions -- -- (67,352) (67,352)
Net income -- -- 126,953 126,953
Balance,
June 30, 1999 15,000,000 $ 15,000 $121,611 $136,611
See accompanying notes to consolidated financial statements
<PAGE>F-11
USETHEEXPERTS.COM
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Period
From
April 1, 1998
For the Six (Date of Inception)
Months Ended Through
June 30, 1999 December 31, 1998
Cash flows from operating
activities:
Net income $ 126,953 $ 275,384
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 943 405
Services paid for with common stock -- 15,000
Changes in operating assets
and liabilities:
Increase in accounts receivable (24,814) (12,609)
(Increase) decrease in prepaid
expenses 32,497 (36,888)
(Increase) decrease in other assets 11,410 (13,625)
Increase in accounts payable 32,855 --
Increase in accrued liabilities 731 3,114
Net cash provided by operating
activities 180,575 230,781
Cash flows from investing activities:
Purchase of property and equipment (1,335) (9,422)
Net cash used in investing
activities (1,335) (9,422)
Cash flows from financing activities:
Distributions to shareholders (67,352) (213,374)
Net cash used in financing
activities (67,352) (213,374)
Net increase in cash 111,888 7,985
Cash, beginning of period 7,985 --
Cash, end of period $119,873 $ 7,985
Supplemental schedule on non-cash financing activities:
During the period ended December 31, 1998, the Company issued
15,000,000 shares of common stock for $15,000 of services performed.
See accompanying notes to consolidated financial statements
<PAGE>F-12
USETHEEXPERTS.COM
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999 AND DECEMBER 31, 1998
1. Description of business and summary of significant accounting
policies
Description of business - Usetheexperts.com, formerly known as NV
Expert Management, Inc., ("the Company") is engaged primarily in
the marketing of business through an effective blend of internet
e-commerce, television and radio marketing, and mailers. The
Company was incorporated in the State of Nevada in January 1999.
Effective September 1, 1999, Usetheexpert.com consummated a Stock
Transfer Agreement with Cybertech, Inc. (Cybertech), and CA
Experts, Inc. (CA) (collectively referred to as the "Acquired
Companies"), whereby Usetheexperts.com acquired all the
outstanding capital stock of the Acquired Companies to simplify
the corporate structures.
Usetheexpert.com and the Acquired Companies (collectively
referred to as the "Combined Entities") are related entities
under common management and controlling ownership. Accordingly,
the business combination between the Combined Entities has been
accounted for as a reorganization of entities under common
control. The reorganization reflects the combined financial
statements of the Combined Entities. Usetheexperts.com is
considered the accounting acquirer in the business combinations
with Cybertech and CA.
The Company plans to file with the Securities and Exchange
Commission a registration statement on Form SB-2 for the
registration of 15,000,000 shares of common stock issued and
outstanding as of June 30, 1999.
Revenue and cost recognition - Revenues from contracts are
recognized at the time of contract's issuance. Management has
determined that contract revenues will be recognized immediately
due to the fact that contract revenues are non-refundable.
Costs associated with contract revenues are recognized at the
time of contract's issuance. Such costs include various types of
advertising expenses, which are paid by Usetheexpert.com based on
the type of contract.
Accounts receivable - No allowance for uncollectible accounts has
been provided. Management has evaluated the accounts and
believes they are all collectible.
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 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.
<PAGE>F-13
USETHEEXPERTS.COM
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999 AND DECEMBER 31, 1998
1. Description of business and summary of significant accounting
policies (continued)
Property and equipment - Property and equipment are stated at
cost less accumulated depreciation. Depreciation is provided
principally on the straight-line method over the estimated useful
lives of the assets, which are generally 5 to 7 years. The costs
of repairs and maintenance are charged to expense as incurred.
Expenditures for property betterments and renewals are
capitalized. Upon sale or other disposition of a depreciable
asset, cost and accumulated depreciation are removed from the
accounts and any gain or loss is reflected in other income
(expense).
The Company periodically evaluates whether events and
circumstances have occurred that may warrant revision of the
estimated useful life of property and equipment or whether the
remaining balance of property and equipment should be evaluated
for possible impairment. The Company uses an estimate of the
related undiscounted cash flows over the remaining life of the
property and equipment in measuring their recoverability.
Advertising costs - Advertising costs incurred in the normal
course of operations are expensed accordingly.
Income taxes - The Company has elected to be taxed as an S-
Corporation under sections of the Internal Revenue Code of 1986,
as amended, which provide that shareholders separately account
for items of income, deductions, losses and credits.
Accordingly, no provisions for federal income taxes are included
in the accompanying financial statements for the six months ended
June 30, 1999, and for the period ended December 31, 1998.
Year 2000 issue - The Company has assessed the exposure to date
sensitive computer software programs that may not be operative
subsequent to 1999 and has implemented a requisite course of
action to minimize Year 2000 risk and ensure that neither
significant costs nor disruptions of normal business operations
are encountered. However, because there is no guarantee that all
systems of outside vendors or other entities affecting the
Company's operations will be 2000 compliant, the Company remains
susceptible to consequences of the Year 2000 issue.
2.Property and equipment
Property and equipment consist of the following:
June 30, December 31,
1999 1998
Computers $ 2,665 $ 2,665
Office equipment 6,045 4,710
Software 1,137 1,137
Furniture and fixtures 910 910
10,757 9,422
Less: accumulated depreciation 1,348 405
$ 9,409 $ 9,017
<PAGE>F-14
USETHEEXPERTS.COM
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999 AND DECEMBER 31, 1998
3. Fair value of financial instruments
The carrying amounts for the Company's cash, accounts receivable,
prepaid expenses, other current assets, accounts payable and
accrued liabilities approximate fair value.
4.Commitments and contingencies
Operating lease - The Company is obligated under a lease
agreement for office space. The rental amount includes a fixed
cost plus the tenant's share of real estate taxes. The rental
expense for the six months ended June 30, 1999, and for the
period ended December 31, 1998, are $11,142 and $12,295,
respectively. Minimum rental commitments for the remaining
periods are as follows:
Future minimum rental commitments:
Six months ended December 31, 1999 $ 10,098
2000 11,723
$ 21,821
5.Subsequent event
Effective October 1, 1999, the Company elected to be treated as a
C-Corporation for federal income tax purposes.
<PAGE>F-15
Law Office of
Shawn F. Hackman, a P.C.
3360 West Sahara Avenue, Suite 200
Las Vegas, Nevada 89102
October 25, 1999
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: USETHEEXPERTS.COM - Form SB-2
Dear Sir/Madam:
We have acted as counsel to USETHEEXPERTS.COM, a Nevada
corporation ("Company"), in connection with its Registration
Statement on Form SB-2 relating to the registration of 15,000,000
shares of its common stock ("Shares"), $0.001 par value per
Share, at a maximum offering price of $0.10 per Share.
In our representation we have examined such documents,
corporate records, and other instruments as we have deemed
necessary or appropriate for purposes of this opinion, including,
but not limited to, the Articles of Incorporation and Bylaws of
the Company.
Based upon the foregoing, it is our opinion that the Company
is duly organized and validly existing as a corporation under the
laws of the State of Nevada, and that the Shares, when issued and
sold, will be validly issued, fully paid, and non-assessable.
We hereby consent to the use of this opinion as an exhibit
to the Registration Statement.
Sincerely,
/s/ Shawn F. Hackman
Shawn F. Hackman, Esq.
L.L. Bradford & Company
Certified Public Accountants & Consultants
3441 Eastern Avenue
Las Vegas, Nevada 89109
(702) 735-5030
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in this registration statement
on Form SB-2 of Usetheexperts.com and the related prospectus
of our report, relating to the financial statements of
Usetheexperts.com, dated September 24, 1999.
/s/ L.L. Bradford & Company
L.L. BRADFORD & COMPANY
Las Vegas, Nevada
October 21, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet and statements of operations found on pages F-1 ex seq. of the Company's
Form SB-2 for the nine months ended September 30, 1999, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 178,366
<SECURITIES> 0
<RECEIVABLES> 143,305
<ALLOWANCES> 0
<INVENTORY> 334,187
<CURRENT-ASSETS> 10,244
<PP&E> 0
<DEPRECIATION> 394,075
<TOTAL-ASSETS> 89,020
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
15,000
<COMMON> 290,055
<OTHER-SE> 305,055
<TOTAL-LIABILITY-AND-EQUITY> 888,322
<SALES> 888,322
<TOTAL-REVENUES> 269,686
<CGS> 269,686
<TOTAL-COSTS> 297,239
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 321,397
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 321,397
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
