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U.S. Securities and Exchange Commission
Washington, D.C.20549
FORM 10-SB
(Second Amended)
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
I3DX.COM, A NEVADA CORPORATION
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(Previously 3-Dx.com)
NEVADA 88-0429263
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
4850 RIVER GREEN PARKWAY, DULUTH, GEORGIA 30096
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(Address of principal executive offices) (zip code)
(770) 497-0727
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Issuer's telephone number
Securities to be registered under Section 12(g) of the Act:
Title of each class to be so Name of each exchange on which
registered: Class "A" Common Stock each class is to be registered: None
Class "B" Common Stock
Securities to be registered under Section 12(g) of the Act:
90 million Shares of Class "A" Common Shares and 10 million Class "B" Common
Shares, par value $0.01 (one cent) per share
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(Title of Class)
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I3DX.COM
PART I
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FORM 10-SB ITEM LOCATION IN
ITEM NUMBER CAPTION INFORMATION STATEMENT
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<S> <C> <C>
1. DESCRIPTION OF BUSINESS 3
2. MANAGEMENT'S DISCUSSION AND 7
ANALYSIS OR PLAN OF OPERATION
3. Description of Property 10
4. Security Ownership of Certain 10
Beneficial Owners and Management
5. Directors, Executive Officers, 13
Promoters and Control Persons
6. Executive Compensation 16
7. Certain Relationships and Related 17
Transactions
8. Description of Securities 18
PART II
1. MARKET PRICE AND DIVIDENDS ON 18
THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
2. LEGAL PROCEEDINGS 19
3. CHANGES IN AND DISAGREEMENTS 19
WITH ACCOUNTANTS
4. RECENT SALES OF UNREGISTERED 19
SECURITIES
5. INDEMNIFICATION OF DIRECTORS 20
AND OFFICERS
PART III
1. INDEX TO EXHIBITS 20
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ITEM 1. DESCRIPTION OF BUSINESS.
INCEPTION. I3DX.COM (THE "COMPANY" OR "I3DX") WAS INCORPORATED UNDER
THE LAWS OF THE STATE OF NEVADA ON JUNE 18, 1999 AS 3-DX.COM, WITH ITS NAME
CHANGED TO I3DX.COM AS OF AUGUST 16, 1999. THE COMPANY WAS ORGANIZED FOR THE
PURPOSES OF ACTING AS AN EXCLUSIVE LICENSEE, MANUFACTURING, PROCESSING AND
MARKETING ENTITY FOR CERTAIN UNIQUE AND PROPRIETARY 3D TECHNOLOGIES WHICH
ALLOW THE VIEWER TO PERCEIVE IMAGES PRINTED AS A THREE DIMENSIONAL PRINT OR
TRANSPARENCY. THE COMPANY ACHIEVES THIS RESULT BY USING A UNIQUE PROPRIETARY
LENTICULAR (MICRO-LENS) PRINT MATERIAL. ALL THE COMPANY'S IMAGES CAN BE
VIEWED WITHOUT THE USE OF SPECIAL GLASSES OR OTHER VISUAL AIDS.
I3DX IS A NEW OPERATING COMPANY, EMPLOYING THE LICENSED TECHNOLOGY
DEVELOPED BY ITS LICENSOR, NIMSTEC LIMITED. THE COMPANY IS OPERATIONAL, BUT
HAS MINIMAL REVENUES AND ITS LOSSES HAVE EXCEEDED ITS SALES. FOR THIS REASON,
THE AUDITOR'S REPORT ON THE COMPANY STATES "THE COMPANY HAS INCURRED
OPERATING LOSSES FROM ITS INCEPTION THROUGH JULY 31, 1999. IT HAS NOT
ESTABLISHED REVENUES SUFFICIENT TO COVER ITS OPERATING COSTS WHICH RAISES
DOUBT ABOUT ITS ABILITY TO CONTINUE AS A GOING CONCERN. HOWEVER, RESULTS OF
OPERATIONS ARE WITHIN THE EXPECTATIONS OF MANAGEMENT DUE TO THE EARLY STAGE
OF THE COMPANY'S EXISTENCE."
THE COMPANY'S TECHNOLOGY IS CURRENTLY IN AN EARLY PRODUCTION STAGE
AND INCLUDES THE FOLLOWING PRODUCTS:
- - THE PRODUCTION OF THREE-DIMENSIONAL IMAGES FROM A UNIQUE PROPRIETARY
PHOTOGRAPHIC MICRO-LENS PLASTIC THAT CAN BE VIEWED COMFORTABLY AND
CONVENIENTLY BY INDIVIDUALS AND GROUPS WITHOUT THE USE OF GLASSES,
VIEWERS OR OTHER ANCILLARY AIDS;
- - THREE-DIMENSIONAL IMAGES THAT ARE READILY TRANSMITTED VIA COMPUTERS AND
THE INTERNET.
The 3D technology licensed by the Company is currently being used to
produce 3D images in a wide range of sizes and formats. It is important to
note that the Company's products are well beyond the proto-type stage and are
readily available now for many applications. These products range from 3D
sports cards, 3D telephone debit cards and 3D prints to large poster size 3D
point-of-purchase display images used in advertising. While the cards and
prints are typically reflective like any other 2D card or print, the display
images may be transparent and lit from behind i.e. "back-lit transparencies".
The Company also produces clinically accurate 3D images for the medical
imaging market and exciting 3D prints for the average amateur photographer.
AS TO IMAGES PRODUCED ON A PHOTOGRAPHIC MEDIUM, THE COMPANY HAS A
TECHNOLOGY WHERE, AFTER PRINTING, THE IMAGE APPEARS TO REPRESENT THE ORIGINAL
SCENE INCLUDING DEPTH DIMENSIONS. THAT IS, LIGHT ARRIVING AT THE EYE FROM THE
UNIQUE PROPRIETARY SURFACE OF THE PRINT CLOSELY APPROXIMATES THE IMAGE
CAPTURED BY THE EYE OR CAMERA AT THE ORIGINAL SCENE AND APPEARS IN
THREE-DIMENSIONAL RELIEF.
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Previously other approaches to 3D printed images contained considerably
less information than a person sees when viewing the original image. The i3Dx
system actually encodes more information than is instantaneously received by the
eye of the person when viewing the original image.
For the purposes of this Registration Statement, these processes are
generically referred to as "3D" imaging or technology.
i3Dx.com is currently a privately held corporation with its
majority/controlling shareholder being, NimsTec Limited, a privately held
Bermuda corporation. The Company's CEO, Dr. Jerry C. Nims, is a principal in
NimsTec Limited. For more detail on ownership, see Item 4 herein.
PRODUCT AND TECHNOLOGY. I3DX IS A HI-TECH COMPANY WHICH PRIMARILY
UTILIZES THE INTERNET FOR THE DEVELOPMENT AND DISTRIBUTION OF ITS 3D PRODUCTS.
THE COMPANY'S TECHNOLOGY IS BASED ON THREE-DIMENSIONAL IMAGING SUITABLE FOR
APPLICATIONS SUCH AS MEDICAL IMAGING, ADVERTISING AND MARKETING.
THE COMPANY MAINTAINS A 26,500 SQUARE FOOT ADMINISTRATIVE,
MANUFACTURING AND PROCESSING FACILITY IN DULUTH, GEORGIA. IT MASS-PRODUCES 3D
IMAGES, IN BOTH REFLECTIVE PRINT AND TRANSPARENCY FORMATS, FOR THE FOLLOWING
MARKETS:
- COMMERCIAL
- MEDICAL
- CONSUMER
THE COMPANY CURRENTLY PRODUCES 3D IMAGES FROM:
- SINGLE 2D SOURCE IMAGES (PRINTS, NEGATIVES, OR SLIDES)
- SINGLE 2D DIGITAL DATASETS (ELECTRONIC FILES)
- MULTIPLE 2D IMAGES AND DATASETS
- CUSTOMER 3D DIGITAL DATASETS
- 3D DIGITAL DATASETS CREATED BY THE COMPANY'S COMPUTER SOFTWARE
FOR THE CUSTOMER.
THE MAJORITY OF THE COMPANY'S COMMERCIAL SOURCE IMAGES ARE DIGITAL
IMAGE FILES RECEIVED ELECTRONICALLY VIA THE INTERNET. THE COMPANY'S ABILITY TO
TRANSMIT 3D DATA FILES VIA THE INTERNET PROVIDES THE OPPORTUNITY FOR INTERACTIVE
PARTICIPATION WITH THE CLIENT. THIS INTERACTION ALSO FACILITATES REAL TIME
CREATION AND EDITING OF THE 3D IMAGE TO BE PRODUCED AND SUBSTANTIALLY REDUCES
TIME FROM CONCEPT TO MARKET.
THE COMPANY'S PRIMARY INTENDED BUSINESS APPLICATIONS FOR ITS
THREE-DIMENSIONAL PHOTOGRAPHIC TECHNOLOGY INCLUDE:
- - THE COMMERCIAL MARKET - INCLUDES PRODUCING OF TRANSPARENCIES AND
REFLECTIVE PRINTS FOR ADVERTISING IN VARIOUS PUBLIC AND RETAIL OUTLETS,
AND ASSISTING CLIENTS IN PREPARING PERSONAL IDENTIFICATION CARDS OR
DOCUMENTS THROUGH THE USE OF THE 3D IMAGING TECHNOLOGY.
- - THE MEDICAL MARKET - i3Dx's precision photographic optical film is
utilized to communicate detailed spatial relationships and depth cues
for medical diagnoses. A specific
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- - application is 3D Fundus Photography utilized in diagnosing patients in
approximately 50 medical institutions.
- - THE CONSUMER MARKET - PRIMARILY INVOLVES THE SALE AND MARKETING OF
CAMERAS, FOR USE BY THE AMATEUR PHOTOGRAPHER, WHICH ARE CAPABLE OF
TAKING PICTURES WHICH, WHEN DEVELOPED BY THE COMPANY USING ITS
PROCESSES AND MATERIALS, HAVE A THREE-DIMENSIONAL EFFECT. OTHER
CONSUMER PRODUCTS RANGE FROM 3D GREETING CARDS TO 3D ORIGINAL ART WHICH
THE COMPANY CREATES IN-HOUSE.
WHILE THE COMMERCIAL MARKET IMAGES ARE TYPICALLY CREATED DIGITALLY
USING COMPUTER SOFTWARE, THE MEDICAL MARKET TYPICALLY INVOLVES MULTIPLE IMAGES
TAKEN USING SPECIAL CAMERAS OR OTHER EQUIPMENT. THE CONSUMER MARKET PRIMARILY
INVOLVES 3D IMAGES TAKEN USING SPECIAL MULTI-LENS CAMERAS.
SINCE ITS INCEPTION IN JUNE, 1999, THE COMPANY HAS BEEN PROCESSING
MEDICAL IMAGES AND CONSUMER MARKET ORDERS. THE COMPANY HAS RECENTLY CREATED A
WEBSITE AT "www.i3dx.com" AND IS CURRENTLY RECEIVING ORDERS FOR ITS PRODUCTS
AS WELL AS THE 2D SOURCE IMAGE FILES AND 3D ELECTRONIC PICTURE DATASETS
REQUIRED FOR ITS COMMERCIAL MARKET IMAGING PROCESS.
BECAUSE OF THE ORGANIZATIONAL NATURE OF THE COMPANY'S BUSINESS, IT
MUST BE CONSIDERED A HIGH-RISK INVESTMENT WHICH DOES NOT YET HAVE ANY
SIGNIFICANT REVENUES OR ANY INCOME.
OWNERSHIP AND RELATED PARTY TRANSACTIONS. THE SHARES OF I3DX ARE
SUBSTANTIALLY OWNED BY NIMSTEC LIMITED, WHICH IS ALSO THE LICENSOR OF
TECHNOLOGY TO THE COMPANY. ITS PRINCIPAL SHAREHOLDERS ARE:
- - DR. JERRY NIMS 38%
- - L'AMI FOUNDATION 24%
AS A PRACTICAL MATTER, NIMSTEC LIMITED SHOULD BE CONSIDERED AS A
CONTROLLING ENTITY TO THE COMPANY AND ITS PRINCIPAL, DR. JERRY NIMS, MAY
ENCOUNTER CONFLICTS OF INTEREST IN HIS POSITION AS AN OFFICER/DIRECTOR IN
NIMSTEC AND I3DX. SEE SECTION ON RELATED PARTY TRANSACTIONS AND
RELATIONSHIPS.
THE COMPANY ALSO INTENDS TO FILE IN THE NEAR FUTURE A PROPOSED
REGISTRATION OF PART OF ITS SECURITIES FOR DISTRIBUTION TO SHAREHOLDERS OF A
FIRM KNOWN AS ELGT WHO HAS SUPPLIED INTERIM CAPITAL. SEE CAPITALIZATION AND
RELATED PARTY TRANSACTION SECTIONS.
LICENSE AGREEMENT. THE COMPANY ENTERED INTO AN EXCLUSIVE LICENSING
CONTRACT FOR THE TECHNOLOGY WITH NIMSTEC LIMITED AS OF JUNE 30, 1999 COVERING
THE TERRITORY OF THE UNITED STATES, CANADA, AND MEXICO. IN CONSIDERATION, THE
COMPANY IS OBLIGATED TO PAY TO NIMSTEC FIVE PER CENT (5%) OF ALL GROSS SALES
IN EXCHANGE FOR A FIFTY YEAR EXCLUSIVE LICENSE (RENEWABLE ONCE ON LIKE TERMS)
WITH NO MINIMUM SALES REQUIREMENTS TO MAINTAIN THE LICENSE.
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MAJORITY SHARES. NIMSTEC LIMITED HAS ACQUIRED THIRTY MILLION OF THE
COMPANY'S AUTHORIZED NINETY MILLION CLASS "A" SHARES, AS WELL AS ALL OF THE
10 MILLION CLASS "B" SHARES IN CONSIDERATION FOR THE TRANSFER OF CERTAIN
EQUIPMENT AND OTHER ASSETS TO THE COMPANY.
FUTURE FOREIGN INTEREST. THE COMPANY PRESENTLY INTENDS AND HAS THE
RIGHT TO ACQUIRE A CURRENTLY UNDESIGNATED MINORITY INTEREST IN A BELGIAN
CORPORATION TO BE LOCATED IN FLANDERS, BELGIUM. THIS COMPANY WILL MANUFACTURE
THE MICRO-LENS PRINT FILM EMPLOYED BY THE COMPANY FOR NIMSTEC LIMITED, THE
INTENDED MAJORITY SHAREHOLDER OF THE TO BE FORMED BELGIAN CORPORATION. THE
BELGIAN COMPANY MAY BE AN INDIRECT SUPPLIER OF PHOTOGRAPHIC FILM AND
POTENTIALLY RELATED SUPPLIES UTILIZED BY THE COMPANY. THE BELGIAN COMPANY
WILL BECOME AN AFFILIATE OF I3DX AND WILL HAVE A LICENSE TO MARKET 3D
PRODUCTS IN EUROPE. NEITHER I3DX NOR THE BELGIAN COMPANY WILL DIRECTLY SELL
TO, OR BUY FROM, THE OTHER. THE COMPANY HAS DESIGNATED SIXTY-SIX THOUSAND
DOLLARS ($66,000) OF THE DEBENTURE PROCEEDS TO BE RECEIVED FROM ELGT FOR THE
PURCHASE OF THE UNDESIGNATED MINORITY SHAREHOLDER INTEREST. NO OTHER TERMS OF
THIS INTENDED FUTURE TRANSACTION HAVE BEEN NEGOTIATED.
SUPPLIERS. THE COMPANY IS FULLY DEPENDENT UPON ITS LICENSOR, NIMSTEC
LIMITED, TO SUPPLY THE LENTICULAR PRINT FILM WHICH THE COMPANY USES TO
PRODUCE 3-D IMAGES. NIMSTEC LIMITED PRODUCES THE PRINT FILM FROM RAW
MATERIALS THAT ARE READILY AVAILABLE FROM A NUMBER OF SUPPLIERS. THE COMPANY
PURCHASES ITS SUPPLIES ON A MONTH TO MONTH BASIS FROM NIMSTEC AT A PRICE
PRESCRIBED BY ITS LICENSE AGREEMENT. THE COMPANY HAS NO COMPETITIVE BASIS TO
COMPARE THE REASONABLENESS OF THE COST OF THESE MATERIALS AS THERE ARE NO
OTHER AVAILABLE SUPPLIERS OF THIS UNIQUE PROPRIETARY MATERIAL.
COMPETITION. WHILE THE COMPANY REGARDS THE PROCESSES AND THE
SPECIALIZED FILM MATERIAL OBTAINED FROM NIMSTEC AS A UNIQUE PROPRIETARY
MATERIAL, IT SHOULD BE NOTED THAT THE ACTUAL PROCESSING OF THE MATERIALS IS
NOT PROTECTED BY EXISTING PATENT APPLICATIONS. HOWEVER, PRINTING PROTECTED BY
PATENTS GRANTED AND PENDING. AS A RESULT, IT MAY BE POSSIBLE FOR OTHER
COMPANIES TO REPLICATE AND PRODUCE A SUBSTANTIALLY SIMILAR PRODUCT USING A
MODIFIED AND UNPROTECTED PROCESSING PROCEDURE. ADDITIONALLY, THERE ARE OTHER
COMPANIES WHICH PRODUCE 3-D IMAGING USING DIFFERENT TECHNOLOGY AND
TECHNIQUES. WHILE THE COMPANY DOES NOT BELIEVE THAT THE QUALITY OR VARIETY OF
THE COMPETITIVE PROCESSING IS EQUIVALENT TO THE COMPANY'S PROCESSES, THERE IS
SUBSTANTIAL COMPETITION IN THIS MARKET SECTOR AND THE COMPANY DOES NOT CLAIM
ANY EXCLUSIVITY AS TO THE GENERAL 3-D IMAGING PRODUCT. MOREOVER, VARIOUS
OTHER COMPANIES WHICH ARE SUBSTANTIALLY LARGER AND BETTER CAPITALIZED MAY BE
ABLE TO DOMINATE THE MARKETS IN WHICH THE COMPANY CURRENTLY OPERATES.
EMPLOYEES. THE COMPANY PRESENTLY HAS 14 FULL-TIME EMPLOYEES AND NO
PART-TIME EMPLOYEES, EXCLUSIVE OF MANAGEMENT. THE TOTAL GROSS PAY ROLL FOR
ALL EMPLOYEES, EXCLUSIVE OF MANAGEMENT, IS APPROXIMATELY $338,000 PER YEAR.
IT IS ANTICIPATED THAT EMPLOYEES AND EMPLOYEE COSTS WILL INCREASE
SUBSTANTIALLY AS THE COMPANY MOVES TOWARDS GREATER ANTICIPATED PRODUCTION
DURING FISCAL YEAR 2000. NO SPECIFIC PROJECTION OF THE AMOUNT OF INCREASE HAS
BEEN DETERMINED, BUT IT IS ESTIMATED EMPLOYEE/PAYROLL GROWTH WILL BE IN THE
RANGE OF 20 PER CENT TO 40 PER CENT FOR THE CALENDAR YEAR 2000.
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SEGMENT ANALYSIS. As a development stage start-up Company,
management does not believe that it has sufficient revenues to be able to
analyze or project in any categorical or quantitative matter the relative
percentage of revenues from the three general sectors of the Company's
business, i.e. commercial, medical and consumer. It does appear from the very
limited revenues received to date that the commercial sector will be the
largest followed by the consumer and then the medical markets. It is
anticipated that as the Company files its anticipated periodic reports as a
Reporting Company, it will be in a position to subsequently have sufficient
revenue data to analyze and allocate revenues, costs and other accounting
factors by its principal market sectors and products. Further, to date, the
Company does not have any measurable foreign market share and can not report
sales on a foreign versus domestic basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company advises you that various information included in this
Section, as well as other parts of this Registration Statement, include
forward looking statements. These statements are based on management's
beliefs and assumptions, particularly related to certain projected economic
results, and upon information currently available to management. Forward
looking statements include the information concerning possible or assumed
future results of operations by the Company set forth under such headings as
"Dividend Policy," and "Management's Discussion and Analysis." Forward
looking statements also include statements in which we use words such as
"expect," "anticipate," "intend," "plan," "believe," "estimate," or similar
expressions indicating an intended but unknown future result. Each party
relying upon this registration should understand that these constitute merely
management's best projections of future results and should not be relied upon
as an assurance or warranty of future results in any manner.
The Company has processed and shipped product to all of its target
markets: medical, consumer and commercial. However, due to the short period
of time from inception to date, the sales volumes have been limited. As a
result, the Company's Financial Statements, to date, reflect limited revenues
without net earnings.
PLAN OF OPERATION. Since the Company has not had a full year of
operating history as a start-up entity, it is supplying as required under
this report, its plan of operation for the ensuing twelve month period. With
regard to this plan of operation, it should be understood that the Company
has received from ELGT a total of $1,000,000 of interim capital. It believes
that these funds should be sufficient to meet its ongoing operating costs,
including such matters as rents, utilities, salaries and other standard costs
for approximately a 10 month period. It is anticipated, though not warranted,
that by the end of this projected interim period, the Company should have
sufficient revenues to cover operating costs and would not be required to
seek supplemental capitalization or financing to provide for interim
operations. It is also anticipated that the Company may, after the next
twelve month period, seek additional public financing for expansion and
growth, but which future financing would be unrelated to this initial
operational period.
The Company does not anticipate that it will be able to devote any
significant portion of its initial capital to product research and
development during the interim period and would have to seek subsequent
capitalization for further product research and development. However, the
Company is satisfied that its current technology is adequate for at least the
initial operating period of the next
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twelve months to meet any demands for product as generally outlined in this
Registration Statement.
OTHER THAN THE PARTICIPATION IN THE BELGIAN CORPORATION, WHICH WOULD
BE A POTENTIAL SUPPLIER TO THE COMPANY OF FILM MATERIAL USED IN ITS 3-D
PROCESSING, THE COMPANY DOES NOT HAVE ANY ANTICIPATION OR EXPECTATION TO
PURCHASE OR EXPAND PLANT OR EQUIPMENT DURING THE NEXT TWELVE MONTHS.
AS PREVIOUSLY DISCUSSED, THE COMPANY ANTICIPATES ITS PRESENT
EMPLOYEE BASE OF 14 EMPLOYEES TO INCREASE BY A FACTOR OF APPROXIMATELY 20-40%
OVER THE NEXT TWELVE MONTHS AS ANTICIPATED PRODUCTION INCREASES. I3DX HAS
ALLOWED FOR AND BELIEVES IT WILL HAVE SUFFICIENT CAPITAL FROM THE INTERIM
FINANCING SUPPLIED BY ELGT TO MEET THE ANTICIPATED INCREASE IN PAYROLL FROM
THIS ANTICIPATED EMPLOYEE GROWTH.
THE COMPANY DOES NOT ANTICIPATE ANY OTHER SIGNIFICANT CHANGES IN
OPERATIONS OR PROCEDURES DURING THE NEXT TWELVE MONTH PERIOD.
NOTWITHSTANDING THE FOREGOING GENERAL PROJECTIONS, THE COMPANY IS
AWARE THAT THERE ARE VARIOUS FACTORS WHICH COULD ADVERSELY AFFECT ITS
ANTICIPATED REVENUES, GROSS MARGINS AND OVERHEAD EXPENSES THEREBY RENDERING
ITS ANTICIPATED ABILITY TO OPERATE ON THE INTERIM CAPITAL SUPPLIED BY ELGT TO
BE INSUFFICIENT. THE COMPANY IS DEVELOPING A SECONDARY PLAN OF FINANCING
SHOULD THE FINANCING SUPPLIED BY ELGT PROVE TO BE INSUFFICIENT UNTIL OR
UNLESS REVENUES ARE ADEQUATE TO MEET OPERATING REVENUES. THE COMPANY MAY
ATTEMPT TO OBTAIN ADDITIONAL INTERIM FINANCING FROM ELGT, THOUGH NO
COMMITMENT OR OBLIGATION EXISTS. ALTERNATIVELY, THE COMPANY MAY SEEK TO
COMPLETE AN INTERIM ADDITIONAL PRIVATE PLACEMENT FINANCING, THOUGH NO
ASSURANCE CAN BE GIVEN OR MADE THAT SUCH FINANCING COULD BE RAISED. FINALLY,
THE COMPANY COULD SEEK COMMERCIAL LOAN SOURCES, THOUGH IT DOES NOT HAVE ANY
PRESENT LINE OF CREDIT OR FINANCING COMMITMENT FROM ANY COMMERCIAL LENDER.
ALL OF THESE FACTORS CONSTITUTE A SIGNIFICANT RISK FACTOR IF THE
COMPANY'S EXPENSES SHOULD EXCEED THOSE PROJECTED FOR THE NEXT TWELVE MONTHS
OR IF ANTICIPATED REVENUES ARE NOT SUFFICIENT BY THE END OF SUCH PERIOD TO
COVER THE ONGOING OPERATING EXPENSES. THE ULTIMATE RISK IS THE COMPANY MAY BE
FORCED TO TERMINATE OPERATIONS SHOULD ADDITIONAL FINANCING BE REQUIRED BUT
NOT BE AVAILABLE. THERE ALSO EXISTS THE POSSIBILITY THAT OTHER 3-D
TECHNOLOGIES OR PROCESSES MAY ADVERSELY IMPACT UPON THE COMPANY'S COMPETITIVE
POSITION AND THEREBY REDUCE ITS ABILITY TO CONTINUE AS AN ONGOING CONCERN. IT
IS BELIEVED THAT ALL OF THESE SPECIFIC FACTORS ARE GENERALLY DISCUSSED ABOVE
AND IN THE ACCOUNTANTS RESERVATION CONCERNING THE COMPANY BEING A "GOING
CONCERN." SEE FINANCIAL STATEMENTS , NOTE 6.
LIQUIDITY AND CAPITAL RESOURCES. THE COMPANY'S PRESENT LIQUIDITY IS
ALMOST FULLY DEPENDENT ON ITS INITIAL FINANCING EFFORTS. THE COMPANY'S
INITIAL CAPITALIZATION CONSISTS OF TANGIBLE ASSETS VALUED AT $3,178,781
BEFORE DEPRECIATION, AND CASH OF $417,489 PRIOR TO THE SECOND ANTICIPATED
DEBENTURE FINANCING FROM ELGT AS SET-OUT BELOW. FOR ACCOUNTING PURPOSES, THE
FIXED ASSETS ARE VALUED AT THEIR COST BASIS, LESS DEPRECIATION. SEE ATTACHED
FINANCIAL STATEMENTS.
The Company owns an exclusive license from NimsTec Limited, for a
fifty year term with a right of renewal and with no volume restrictions, to
utilize the licensed technology to manufacture and market products throughout
its licensed territory of Canada, Mexico and the United States. The Company
is obligated to pay a license fee, in the amount five percent (5%) of the
Company's gross
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sales, for the term of the license. Ancillary to the license is the right of
the Company to non-exclusive use of various 3D equipment of NimsTec Limited
during the license term without additional consideration. The Company
currently also purchases its raw materials from NimsTec.
ELECTRIC AND GAS TECHNOLOGY, INC. (ELGT) IS A SMALL TECHNOLOGY
COMPANY TRADED ON THE NASDAQ (NATIONAL MARKET SYSTEM) WITH ITS PRINCIPAL
OFFICES IN DALLAS, TEXAS. ELGT HAS MADE AN INITIAL CAPITAL INVESTMENT IN THE
COMPANY OF FIVE HUNDRED THOUSAND DOLLARS AS OF APPROXIMATELY JUNE 30, 1999
FOR WHICH IT RECEIVED 4,500,000 SHARES OF CLASS "A" COMMON STOCK OF THE
COMPANY, AND WARRANTS TO ACQUIRE AN ADDITIONAL 2,500,000 CLASS "A" SHARES AT
THE EXERCISE PRICE OF $4.00 PER SHARE FOR A TWELVE MONTH PERIOD. ELGT INTENDS
TO "SPIN-OFF" OR DISTRIBUTE TO ITS SHAREHOLDERS THREE MILLION SHARES OF THE
COMMON STOCK AND TWO MILLION OF THE WARRANTS PURSUANT TO A REGISTRATION
STATEMENT OF I3DX TO BE SUBSEQUENTLY FILED AFTER THIS FORM 10-SB. IF ALL OF
THE WARRANTS WERE EXERCISED, OF WHICH THERE IS NO ASSURANCE, THEN THE COMPANY
WOULD RECEIVE AN ADDITIONAL GROSS CAPITALIZATION OF TEN MILLION DOLLARS.
ELGT HAS ALSO ENTERED INTO A FURTHER COMMITMENT TO SUPPLY TO I3DX AN
ADDITIONAL FIVE HUNDRED THOUSAND DOLLARS IN THE FORM OF A 24 MONTH
CONVERTIBLE DEBENTURE, BEARING INTEREST AT 8% ANNUALLY, AND CONVERTIBLE TO
I3DX CLASS "A" SHARES AT THE CONVERSION RATE OF $2.00 PER SHARE FOR A 24
MONTH PERIOD. THIS CONVERTIBLE LOAN IS PAYABLE UPON COMPLETION OF THE INITIAL
I3DX FINANCING AND DELIVERY OF THE AUDITED FINANCIAL STATEMENTS TO ELGT. IF
CONVERTED, THE RESULT WOULD CAUSE A REDUCTION OF THE DEBT OF THE COMPANY IN
EXCHANGE FOR THE ISSUANCE OF 250,000 SHARES OF I3DX STOCK TO ELGT AT $2.00
PER SHARE. AS NOTED ABOVE, $66,000 OF THE PROCEEDS WILL BE APPLIED TO
PURCHASE THE MINORITY INTEREST IN THE TO BE FORMED BELGIAN COMPANY. THIS
DEBENTURE IS A GENERAL OBLIGATION INSTRUMENT.
FINALLY, ELGT WILL BE ISSUED FIVE HUNDRED THOUSAND 24 MONTH WARRANTS
EXERCISABLE AT $1.00 PER SHARE AS PART OF THE FINANCING COMMITMENT OF ELGT TO
THE COMPANY. THESE WARRANTS WILL BE FOR A 24 MONTH PERIOD; AND, IF EXERCISED,
WOULD RAISE AN ADDITIONAL FIVE HUNDRED THOUSAND DOLLARS IN CAPITAL FOR THE
COMPANY. NO ASSURANCE OR GUARANTEE OF THE EXERCISE OF THESE WARRANTS CAN BE
GIVEN.
THE COMPANY HAS ALSO COMMITTED TO ELGT THAT IT WILL RETIRE THE
$500,000 DEBENTURES FROM THE FIRST $4,000,000 IN WARRANTS EXERCISED BY ELGT,
UNLESS ELGT ELECTS TO CONVERT THE DEBENTURE. AGAIN, NO ASSURANCE OF THE
EXERCISE OF THESE WARRANTS CAN BE MADE. IF THE WARRANTS ARE NOT EXERCISED,
THE COMPANY WILL BE CARRYING A DEBT OBLIGATION OF $500,000 TO ELGT WHICH CAN
ONLY BE PAID FROM ANTICIPATED REVENUES OR EARNINGS. IF THESE EARNINGS DO NOT
MATERIALIZE, THE COMPANY MAY NOT HAVE ANY MEANS OR RESOURCES FROM WHICH TO
PAY ITS OUTSTANDING DEBT OBLIGATIONS AND MAY BE FORCED INTO A POSITION OF
ILLIQUIDITY.
OF THE PROCEEDS RECEIVED FROM ELGT TO DATE, $500,000, AND THE
ANTICIPATED ADDITIONAL $500,000, THE COMPANY WILL RETIRE CURRENT OBLIGATIONS
AND ACCOUNTS IN THE AMOUNT OF APPROXIMATELY $15,000; USE APPROXIMATELY
$300,000 FOR MARKETING AND OPERATIONS; HOLD $66,000 IN RESERVE FOR THE
PURCHASE OF AN INTEREST IN THE TO BE FORMED BELGIAN CORPORATION; AND EMPLOY
THE APPROXIMATE BALANCE OF $619,000 AS A WORKING CAPITAL RESERVE TO BE
EMPLOYED TO COVER ANTICIPATED OPERATING LOSSES FOR THE NEXT TWELVE MONTHS.
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RESULTS OF OPERATIONS. AS NOTED ABOVE, THE COMPANY HAS VERY LIMITED
REVENUES TO DATE. HOWEVER, THE COMPANY HAS COMPLETED ITS WEBSITE AND IS
PURSUING ITS MARKETING ACTIVITIES AS DESCRIBED ABOVE.
MANAGEMENT'S PRESENT PROJECTED USE OF THE INITIAL PROCEEDS OBTAINED
FROM ELGT, AS GENERALLY DESCRIBED ABOVE, WILL BE MORE FULLY SET-OUT IN THE
USE OF PROCEEDS SECTION OF A SB-2 REGISTRATION STATEMENT ANTICIPATED TO BE
FILED FOR THE COMPANY. THIS REGISTRATION STATEMENT, IF FILED AND APPROVED,
MAY BE MADE AVAILABLE, WITHOUT COST, TO ANY INTERESTED SHAREHOLDER OR OTHER
PARTY BY INQUIRY TO THE COMPANY AT ITS OFFICES LISTED ABOVE, OR WILL BE
AVAILABLE AS A FILED DOCUMENT UNDER THE SEC EDGAR FILER WEBSITE DESIGNATED AS
WWW.SEC.GOV.
Y2K DISCLOSURE. FROM INCEPTION IN JUNE 1999 TO YEAR END THE COMPANY
EXPENDED APPROXIMATELY ONE THOUSAND DOLLARS ($1,000) TO ATTEMPT TO INSURE
THAT ITS INTERNAL COMPUTER SYSTEMS, INCLUDING CRITICAL INTERNET CONNECTIONS,
WOULD CAUSE THE COMPANY'S COMPUTERS TO RECOGNIZE THE YEAR 2000 CHANGE AND
CONTINUE TO FUNCTION NORMALLY. AS OF THE DATE OF THIS AMENDED REPORT, ALL OF
THE COMPANY'S INTERNAL COMPUTER SYSTEMS APPEAR TO BE FUNCTIONING NORMALLY AND
ALL HARDWARE AND SOFTWARE COMPONENTS ARE RECOGNIZING THE YEAR 2000 DATE.
FURTHER, THE COMPANY HAS NOT REALIZED ANY COMPUTER RELATED FAILURES IN
ANCILLARY SYSTEMS EMPLOYING COMPUTER COMPONENTS SUCH AS TELEPHONE SYSTEMS,
FAXES OR OTHER EQUIPMENT. FINALLY, THE COMPANY IS RECEIVING ORDERS AND
TRANSMITTING PRODUCT VIA THE INTERNET WITHOUT INTERRUPTION.
ITEM 3. DESCRIPTION OF PROPERTY.
THE COMPANY OWNS $3,178,781 OF TANGIBLE ASSETS AND CASH OF $417,489.
THE COMPANY'S RIGHT TO THE USE OF ADDITIONAL PRODUCTION EQUIPMENT, TECHNOLOGY
AND FACILITIES UNDER LEASE OR LICENSE AGREEMENTS ARE DESCRIBED BY CATEGORY
BELOW. THE COMPANY'S CAPITALIZATION, AS DESCRIBED IN THE PRECEDING SECTION,
PRIMARILY CONSISTS OF ITS PROPERTY AND CASH. FOR ACCOUNTING PURPOSES, THE
LEASEHOLDS AND LICENSE RIGHTS, INCLUDING PROPERTY AVAILABLE FOR NON-EXCLUSIVE
USE UNDER THE LICENSE WITH NIMSTEC, ARE NOT VALUED.
TANGIBLE PRODUCTION EQUIPMENT. IN ADDITION TO THE TANGIBLE ASSETS
GENERALLY DESCRIBED ABOVE, WHICH ARE USED FOR PRODUCTION, THE COMPANY HAS THE
NON-EXCLUSIVE USE, UNDER ITS LICENSE, OF VARIOUS OTHER EQUIPMENT OWNED BY THE
LICENSOR. TITLE TO THIS EQUIPMENT REMAINS WITH NIMSTEC. THIS EQUIPMENT IS NOT
INCLUDED IN THE FINANCIAL STATEMENTS FOR THE COMPANY. THE COMPANY BELIEVES
ITS OWNED EQUIPMENT, PLUS THE NIMSTEC "USE" EQUIPMENT, TO BE SUFFICIENT
EQUIPMENT FOR THE INITIAL INTENDED PRODUCTION OF THE 3D IMAGING PRODUCTS.
LEASEHOLDS. THE COMPANY PRESENTLY LEASES ITS PRINCIPAL OFFICE
FACILITIES AT 4850 RIVER GREEN PARKWAY, DULUTH, GEORGIA. THESE PREMISES
CONSIST OF ADMINISTRATIVE AND MANUFACTURING AREA OF APPROXIMATELY 26,500
SQUARE FEET. THE PROPERTY IS HELD UNDER A SEVEN YEAR LEASE AT A MONTHLY LEASE
RATE OF $ 18,000, WITH NO RIGHT OF RENEWAL.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
I3DX IS CURRENTLY A PRIVATELY HELD CORPORATION WITH ITS LICENSOR AND
PRINCIPAL SHAREHOLDER BEING, NIMSTEC LIMITED, A BERMUDA CORPORATION. NIMSTEC
CURRENTLY HOLDS THIRTY MILLION SHARES OF AN AUTHORIZED NINETY MILLION SHARES
OF THE CLASS "A" COMMON STOCK, CONSTITUTING 87% OF THE
10
<PAGE>
ISSUED AND OUTSTANDING SHARES, AND TEN MILLION SHARES OF AN AUTHORIZED TEN
MILLION SHARES OF THE CLASS "B" COMMON STOCK. IT SHOULD BE NOTED THE CLASS
"B" COMMON STOCK REPRESENTS 51% OF THE VOTING SHARES IN THE COMPANY. THE ONLY
OTHER SIGNIFICANT PRESENT SHAREHOLDER IS ELECTRIC GAS AND TECHNOLOGY, INC., A
SMALL PUBLICLY TRADED NASDAQ NATIONAL MARKET SYSTEM CORPORATION, (ELGT) WHOSE
RELATIONSHIP IS SUBSEQUENTLY EXPLAINED IN THIS REGISTRATION STATEMENT AS A
FUNDING AND CONSULTING PUBLIC COMPANY, AND WHICH IS ALSO ASSISTING I3DX IN
THE PARTIAL DISTRIBUTION OF ITS STOCK TO ELGT SHAREHOLDERS THROUGH AN INTERIM
CAPITALIZATION BY ELGT.
ELGT CURRENTLY HOLDS 4,500,000 SHARES OF CLASS "A" COMMON STOCK OF
WHICH IT INTENDS TO DISTRIBUTE THREE MILLION TO ITS SHAREHOLDERS PURSUANT TO
AN ANTICIPATED SB-2 REGISTRATION STATEMENT BY THE COMPANY EXPECTED TO BE
FILED DURING THE REVIEW OF THIS FORM 10, TOGETHER WITH TWO MILLION WARRANTS
OUT OF 2.5 MILLION EXERCISABLE FOR ADDITIONAL CLASS "A" COMMON SHARES TO ITS
SHAREHOLDERS AT $4.00 PER SHARE TO ACQUIRE ONE SHARE FOR EACH WARRANT
EXERCISED. AFTER THE INTENDED DISTRIBUTION, ELGT WOULD CONTINUE TO DIRECTLY
OWN APPROXIMATELY 1.5 MILLION I3DX CLASS "A" COMMON RESTRICTED SHARES AND
WARRANTS TO ACQUIRE AN ADDITIONAL 0.5 MILLION SHARES. IN ADDITION, I3DX HAS
RESERVED AN ADDITIONAL SIX MILLION CLASS "A" SHARES FOR WARRANTS OR OPTIONS
OF WHICH ELGT HAS RECEIVED A WARRANT RIGHT UNDER WHICH IT MAY ACQUIRE UP TO
500,000 SHARES IN A TWENTY-FOUR MONTH WARRANT PERIOD AT $1.00 PER SHARE. AT
PRESENT THERE ARE NO OTHER ISSUED AND OUTSTANDING SHARES OR SHAREHOLDERS OF
THE COMPANY.
IN THIS SECTION, WITHOUT FURTHER NARRATIVE DISCUSSION, THE COMPANY
ATTEMPTS TO SET OUT GRAPHICALLY A SUMMARY OF THOSE HOLDINGS BY THE PRINCIPAL
SECURITY HOLDERS, INCLUDING ALL WARRANT AND OPTIONS RIGHTS:
11
<PAGE>
<TABLE>
<CAPTION>
- ------------------------- ----------------------- ---------------------- -----------------------
Current Percentage of
Issued Shares /
percentage assuming
Max. No. of Shares all options or
Issued / or to be warrants are
Security Holder Type of Security Issued Exercised
- ------------------------- ----------------------- ---------------------- -----------------------
<S> <C> <C> <C>
NimsTec Limited(1) 30,000,000 87.0%
Class "A" Common (issued) -----
80%
- ------------------------- ----------------------- ---------------------- -----------------------
NimsTec Limited Class "B" Common 10,000,000 100%
(51% of voting shares) (issued) ----
100%
- ------------------------- ----------------------- ---------------------- -----------------------
ELGT (2) Class "A" Common 4,500,000 13.0%
(issued) -----
12%
- ------------------------- ----------------------- ---------------------- -----------------------
ELGT Class "A" Warrants at 2,500,000 0%
$4.00/share (3) (issued) ---
6.7%
- ------------------------- ----------------------- ---------------------- -----------------------
ELGT Warrants for 500,000 500,000 0%
Class "A" Shares at (issued) ---
$1.00/share (4) 1.3%
- ------------------------- ----------------------- ---------------------- -----------------------
</TABLE>
(1) NimsTec is a privately held Bermuda corporation whose principal
shareholders are:
- Dr. Jerry Nims 38%
- L'Ami Foundation 24%
(2) ELGT is a publicly held Texas Corporation. Following are the directors
and principal officers holding shares, together with their shareholder
percentage. There are no other shareholders which hold 10% or more of the
ELGT stock:
- S. Mort Zimmerman, Director, President and Chairman, 10.88%
- Daniel A. Zimmerman, Director, Vice President, 4.64%
- Edmund Bailey, Director, Vice President, CFO, .86%
- Fred M. Updegraff, Director, Vice President, Treasurer, 1.10%
(3) These warrants are exercisable at $4.00/share for twelve months and were
deemed issued on July 3, 1999.
(4) These warrants are exercisable at $1.00/share for twenty-four months,
and were issued on August 9, 1999.
12
<PAGE>
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
DIRECTORS AND EXECUTIVE OFFICERS. THE FOLLOWING CHART SETS OUT A LIST
OF THE DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS. FOLLOWING THE CHART IS A
BRIEF RESUME OF EACH OF THE DIRECTORS AND OFFICERS.
<TABLE>
<CAPTION>
- ------------------------- ----------------------- ---------------------- -----------------------
NAME TITLE CURRENT TERM OF YEARS OF SERVICE
OFFICE
- ------------------------- ----------------------- ---------------------- -----------------------
<S> <C> <C> <C>
DR. JERRY C. NIMS CHAIRMAN OF THE 6/18/99 TO 6/30/00* FROM INCEPTION JUNE,
BOARD, CEO, CTO 1999
- ------------------------- ----------------------- ---------------------- -----------------------
PAUL F. PETERS DIRECTOR, 6/18/99 TO 6/30/00* FROM INCEPTION JUNE,
PRESIDENT, 1999
COO
- ------------------------- ----------------------- ---------------------- -----------------------
DR. WILLIAM KARCZES, PHD SR. VICE PRESIDENT, 11/1/99 TO 6/30/00* FROM NOV. 1999
RESEARCH & DEVELOPMENT
- ------------------------- ----------------------- ---------------------- -----------------------
JAMES COLLINS TREASURER, CFO 9/1/99 TO 6/30/00* FROM SEP. 1999
- ------------------------- ----------------------- ---------------------- -----------------------
</TABLE>
*UNLESS OTHERWISE REPLACED AT THE PLEASURE OF THE BOARD OF DIRECTORS
THE FOLLOWING TABLE SETS-OUT THE OWNERSHIP OF THE COMPANY'S STOCK BY ALL
PRINCIPAL OFFICERS AND DIRECTORS:
13
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------- ---------------------------- ----------------------------- ----------------------------
TITLE OF CLASS(1) NAME & ADDRESS OF AMOUNT & NATURE OF PER CENT OF CLASS
BENEFICIAL OWNER BENEFICIAL OWNER
- ------------------------------- ---------------------------- ----------------------------- ----------------------------
<S> <C> <C> <C>
COMMON STOCK DR. JERRY C. NIMS 0 0%
"4850 RIVER GREEN PARKWAY,
DULUTH GEORGIA 30096"
- ------------------------------- ---------------------------- ----------------------------- ----------------------------
COMMON STOCK PAUL F. PETERS 0 0%
"4850 RIVER GREEN PARKWAY,
DULUTH GEORGIA 30096"
- ------------------------------- ---------------------------- ----------------------------- ----------------------------
COMMON STOCK DR. WILLIAM 0 0%
KARSZES, PHD
"4850 RIVER GREEN PARKWAY,
DULUTH GEORGIA 30096"
- ------------------------------- ---------------------------- ----------------------------- ----------------------------
COMMON STOCK JAMES COLLINS 0 0%
"4850 RIVER GREEN PARKWAY,
DULUTH GEORGIA 30096"
- ------------------------------- ---------------------------- ----------------------------- ----------------------------
</TABLE>
THE COMPANY HAS ONLY ONE CLASS OF STOCK, CLASS "A" WHICH WILL BE USED
FOR FINANCING PURPOSES. THE CLASS "B" SHARES REPRESENT AN EQUAL OWNERSHIP PER
SHARE, BUT 51% OF THE VOTING CONTROL, AND WILL BE HELD EXCLUSIVELY BY NIMSTEC
LIMITED.
(1)WHILE DR. NIMS DOES NOT DIRECTLY HOLD ANY SHARES IN THE COMPANY, HE
IS AN INDIRECT BENEFICIAL OWNER BY OWNING A LITTLE MORE THAN ONE-THIRD OF
NIMSTEC LIMITED.
BIOGRAPHICAL INFORMATION.
DR. JERRY C. NIMS, AGE 64. DR. NIMS IS THE FOUNDER OF THE COMPANY
AND ACTS AS ITS BOARD CHAIRMAN. HE IS ALSO THE CHIEF EXECUTIVE OFFICER AND
THE CHIEF TECHNICAL OFFICER. DR. NIMS HAS BEEN ACTIVE IN THE DEVELOPMENT OF
3D TECHNOLOGY OVER THE PAST 32 YEARS. DR. NIMS OBTAINED HIS FIRST PATENT IN
3-DIMENSIONAL TECHNOLOGY IN 1974. FROM 1970 TO 1984 HE WAS INVOLVED WITH
NIMSLO TECHNOLOGY, INC. IN THE DEVELOPMENT OF VARIOUS 3D TECHNOLOGIES AND
PATENTS. FROM 1984 TO 1990, HE WAS AFFILIATED WITH THE FAIRHAVEN GROUP OF
BERMUDA. FROM 1990 TO 1995 HE WAS PRIMARILY ENGAGED IN INTEREST OUTSIDE THE
TECHNOLOGY FIELD. FROM 1996 TO PRESENT, HE HAS BEEN A FULL-TIME OFFICER OF
NIMSTEC LIMITED. DR. NIMS WILL CONTINUE TO PARTICIPATE WITH NIMSTEC LIMITED
AS AN OFFICER AND DIRECTOR. HE WILL, HOWEVER, NOT PARTICIPATE AS EITHER AN
OFFICER OR DIRECTOR OF THE COMPANY IN ANY
14
<PAGE>
MATTER WHICH MATERIALLY EFFECTS THE CONTRACTUAL RELATIONSHIP BETWEEN THE
COMPANY AND NIMSTEC LIMITED. IT IS INTENDED THAT DR. NIMS WILL SERVE THE
COMPANY ON AN AS NEEDED BASIS.
PAUL F. PETERS, AGE 36. MR. PETERS WILL ACT AS PRESIDENT AND COO OF
THE COMPANY. MR. PETERS WAS FORMALLY WITH THE BANK OF NEW ENGLAND AS A
FINANCIAL/EDP (ELECTRONIC DATA PROCESSING) AUDITOR FROM APPROXIMATELY
1985-1987. HE ALSO HAS WORKED IN THE INVESTMENT BANKING FIELD, INCLUDING VICE
PRESIDENT FOR LEHMAN BROTHERS INTERNATIONAL PRIVATE CLIENT GROUP FROM
1988-1995. PREVIOUSLY, MR. PETERS WAS THE DIRECTOR OF BUSINESS DEVELOPMENT
FOR NIMSTEC LIMITED FROM APPROXIMATELY 1996 THROUGH JUNE, 1999. MR. PETERS
TRAVELED GLOBALLY FOR TWO YEARS FOR NIMSTEC LIMITED, DEVELOPING A FIVE-YEAR
PLAN AND BUSINESS MODEL AND NEGOTIATING GLOBAL ALLIANCES AND PARTNERSHIPS. IT
IS ANTICIPATED THAT MR. PETERS WILL SERVE THE COMPANY ON A FULL TIME BASIS.
DR. WILLIAM M. KARSZES, PHD, AGE 52. PRESENT: I3DX, SENIOR VICE
PRESIDENT, RESEARCH & DEVELOPMENT AND MANUFACTURING. 1992 TO 1999:
PRESIDENT/CONSULTANT, PLASTIC ASSOCIATES, INC. OVER 30 YEARS OF EXPERIENCE IN
ALL FORMS OF PLASTIC PROCESSING. WIDE RANGE OF EMPLOYMENT WITH VARIOUS
MULTINATIONALS INCLUDING GENERAL ELECTRIC, CIBA GEIGY, AND AMERITECH.
CONSULTING CLIENTS INCLUDING AMERICAN CYANAMID, POLYMER GROUP INC. (PGI),
AT&T, ETC. MR. KARSZES JOINED THE COMPANY IN NOVEMBER 1999 AND IT IS EXPECTED
WILL SERVE ON A FULL TIME BASIS.
JAMES COLLINS, AGE 52. FROM 1987 TO DATE MR. COLLINS HAS OWNED AND
OPERATED COLLINS & COMPANY WHICH PROVIDES MANAGEMENT ACCOUNTING SERVICES TO
VARIOUS BERMUDA BASED COMPANIES, INCLUDING SHIPPING AND REAL ESTATE
INTERESTS. MR. COLLINS IS A MEMBER OF THE INSTITUTE OF CHARTERED ACCOUNTANTS
AND WAS A FOUNDING MEMBER OF THE INSTITUTE OF CHARTERED ACCOUNTANTS FOR
BERMUDA. FROM 1973 TO 1986 HE WAS THE TREASURER AND HELD OTHER OFFICES IN
TMX, LTD., THE INTERNATIONAL FINANCIAL AND DISTRIBUTION AFFILIATE OF TIMEX
CORPORATION. HE HELD SEVERAL DIRECTORSHIPS WITHIN THE GROUP. HE WAS ALSO A
FORMER DIRECTOR OF ACCOUNTING SERVICES FOR PEAT MARWICK MITCHELL. MR. COLLINS
WILL ACT AS THE CHIEF FINANCIAL OFFICER AND THE TREASURER OF THE COMPANY. IT
IS INTENDED MR. COLLINS WILL SERVE THE COMPANY ON AN AS NEEDED BASIS.
KEY ADVISORS
SIR DAVID GIBBONS, Age 72. Sir David currently serves as the CEO of
Edmund Gibbons Ltd. and the Chairman of Colonial Insurance C.O. Ltd. both
privately held Bermuda based corporations. From 1958-1999 Sir David served
first as a Director of the Board of N. T. Butterfield & Sons Ltd. and lastly
as the Chairman (1986-1997). Sir David also has a long history of service in
various positions in the government of the Bermuda last serving as the
Chairman of the Bermuda Monetary Authority (1984-1986) and previously as
Premier, Finance Minister and a Member or Parliament. He was awarded the title
KBE by her majesty the Queen in January 1985. Sir David will advise the
Company on an as needed basis.
15
<PAGE>
DAVID PERDUE, Age 45. Currently Executive Vice President for Reebok
International Ltd. since 1998 where he was responsible for three of Reebok's
four divisions, including Global Marketing, Global Sales and Global
Operations. Prior to his affiliation with Reebok, Mr. Perdue was Senior Vice
President for Haggar Apparel (1995-1998) and was responsible for global sales
and distributions. From 1993 - 1995 he was the President of Sara Lee Asia.
Mr. Perdue will act as a Director and consultant to the Company starting in
May, 2000. Mr. Perdue will advise the Company on an as needed basis.
ITEM 6. EXECUTIVE COMPENSATION.
<TABLE>
<CAPTION>
- ------------------- --------- -------------------------------------- -------------------------------------------------- ------------
ALL OTHER
NAME AND COMPENSATION
PRINCIPAL POSITION YEAR ANNUAL COMPENSATION LONG TERM COMPENSATION ($)
------------- ----------- ------------ ------------------------------------- ------------
OTHER AWARDS PAYOUTS
ANNUAL ------------------------------------- ------------
SALARY BONUS COMPENSATION RESTRICTED SECURITIES LTIP
($) ($) ($) STOCK AWARD(S) UNDERLYING PAYOUTS
($) OPTIONS/SARS ($)
(#)
- ------------------- --------- -------------------------------------- -------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PAUL F. PETERS, 1999 $60,000 0 0 0 0 0 0
PRESIDENT
- ------------------- --------- -------------------------------------- -------------------------------------------------- ------------
DR. JERRY NIMS, 1999 $60,000 0 0 0 0 0 0
CHAIRMAN OF THE
BOARD, CEO
- ------------------- --------- -------------------------------------- -------------------------------------------------- ------------
</TABLE>
NONE OF THE CURRENT OR PROSPECTIVE OFFICERS HAVE BEEN GRANTED ANY
OPTIONS, WARRANTS OR 401K OR OTHER STOCK RIGHTS IN THE COMPANY. FURTHER, THE
COMPANY DOES NOT PRESENTLY HAVE ANY ESTABLISHED PENSION, STOCK OPTION, OR
STOCK INCENTIVE OR RELATED TYPE PLANS.
SALARIES HAVE BEEN PAID TO MESSRS. NIMS AND PETERS SINCE JULY, 1999.
NO SALARIES HAVE BEEN FIXED FOR THE OTHER OFFICERS WHO WILL INITIALLY SERVE
ON A PART-TIME BASIS.
DR. NIMS, WHILE NOT DIRECTLY HOLDING SHARES IN THE COMPANY, IS A
MINORITY OWNER (A LITTLE MORE THAN ONE-THIRD) IN THE LICENSOR OF THE COMPANY,
NIMSTEC LIMITED, A BERMUDA CORPORATION, WHICH CURRENTLY OWNS APPROXIMATELY
87% OF THE ISSUED AND OUTSTANDING CLASS "A" COMMON STOCK OF THE COMPANY AND
100% OF THE CLASS "B" COMMON STOCK (REPRESENTING 51% OF THE VOTING RIGHTS IN
THE
16
<PAGE>
COMPANY). AS A RESULT, IT SHOULD BE DEEMED THAT DR. NIMS IS AN INDIRECT
BENEFICIAL OWNER OF THE SHARES SET-OUT IN THE FOREGOING TABLE.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
AS GENERALLY DESCRIBED UNDER ITEM 1 "DESCRIPTION OF BUSINESS" AND
ITEM 4 "BENEFICIAL OWNERSHIP OF STOCK", THERE ARE DEEMED TO BE TWO AFFILIATED
ENTITIES WHICH MAY HAVE A MATERIAL INFLUENCE OR RELATIONSHIP WITH THE
COMPANY'S OPERATIONS.
- - NIMSTEC LIMITED CURRENTLY HOLDS 87% OF ALL CLASS "A" SHARES OF THE
COMPANY AND 100% OF THE CLASS "B" SHARES. THE CLASS "B" SHARES REPRESENT
51% OF THE VOTING SHARES. EVEN IF ALL PRESENT OPTIONS AND WARRANTS
OUTSTANDING WERE EXERCISED AND THE CONVERTIBLE DEBENTURES WERE CONVERTED
TO CLASS "A" SHARES BY ELGT, NIMSTEC WOULD CONTINUE TO HOLD 80% OF THE
CLASS "A" SHARES AND ALL OF THE CLASS "B" SHARES. AS A RESULT, NIMSTEC IS
IN CONTROL OF THE COMPANY AND WILL REMAIN IN CONTROL FOR THE FORESEEABLE
FUTURE. DR. JERRY C. NIMS WHO IS A PRINCIPAL OFFICER IN I3DX IS ALSO AN
OFFICER IN NIMSTEC LIMITED AND HOLDS APPROXIMATELY ONE-THIRD (1/3) OF THE
SHARES IN THAT ENTITY. ACCORDINGLY, DR. NIMS MUST BE CONSIDERED TO BE IN
A POSITION TO EXERCISE POTENTIAL CONTROL OVER THE COMPANY.
- - ELGT PRESENTLY OWNS 13% OF THE CLASS "A" SHARES AND HAS OPTION AND
CONVERSION RIGHTS TO ACQUIRE An ADDITIONAL 7.0% AS A RESULT, ELGT MUST BE
CONSIDERED TO HAVE SIGNIFICANT INFLUENCE IN THE COMPANY.
- - NIMSTEC LIMITED, AS PREVIOUSLY DESCRIBED, ACTS AS A LICENSOR FOR THE
COMPANY FOR ALL OF ITS TECHNOLOGICAL RIGHTS. NIMSTEC ALSO HAS A
RELATIONSHIP TO SUPPLY THE PROCESSING FILM AND MATERIALS TO THE COMPANY.
IT IS DOUBTFUL THE COMPANY COULD CONTINUE IN ITS INTENDED OPERATIONS IN
ANY MANNER WITHOUT THE LICENSE RIGHTS GRANTED AND EQUIPMENT PROVIDED BY
NIMSTEC UNDER THE LICENSING AGREEMENT AS GENERALLY DESCRIBED ABOVE. THE
CHAIRMAN OF THE BOARD OF THE COMPANY, DR. NIMS, CONTINUES TO ACT AS A
MANAGER WITHIN NIMSTEC LIMITED. THE FACT THAT DR. NIMS IS A MINORITY
INTEREST OWNER IN NIMSTEC, AS WELL AS THE CHAIRMAN OF THE BOARD OF THE
COMPANY, MAY CREATE CERTAIN POTENTIAL CONFLICTS OF INTEREST.
SPECIFICALLY, IT IS NOTED THAT DR. NIMS HAS POSITIONS WITH A BENEFICIAL
OWNERSHIP INTEREST IN THE COMPANY AND IN NIMSTEC LIMITED, AS WELL AS THE
RESULTING BENEFICIAL OWNERSHIP OF THE NIMSTEC LIMITED INTEREST IN THE
COMPANY. THE COMPANY BELIEVES THAT IS HAS PROVIDED ADEQUATE SAFEGUARDS
AGAINST THESE POTENTIAL CONFLICTS BY ADOPTING A PROTOCOL. UNDER THE
PROTOCOL, DR. NIMS WILL CONTINUE TO PARTICIPATE IN NIMSTEC LIMITED. HE
WILL NOT, HOWEVER, PARTICIPATE, AS EITHER AN OFFICER OR DIRECTOR OF I3DX,
IN ANY MATTER WHICH MATERIALLY EFFECTS ANY CONTRACTUAL RELATIONSHIP
BETWEEN THE COMPANY AND NIMSTEC LIMITED. IT IS NOTED THAT THE PRIMARY
CONTRACTUAL RELATIONSHIP BETWEEN THESE TWO ENTITIES IS ALREADY SPECIFIED
AND GOVERNED BY THE JUNE 30, 1999 ASSET AND LICENSE PURCHASE AGREEMENT.
IT IS NOT ANTICIPATED THAT THE COMPANY WILL BE INVOLVED WITH NIMSTEC
LIMITED IN ANY MATERIAL DEALINGS OUTSIDE OF THE TERMS OF SAID AGREEMENT.
NONETHELESS, BECAUSE OF THE PREDOMINANT SHAREHOLDER INTEREST OF NIMSTEC
LIMITED IN THE COMPANY, IT SHOULD BE DEEMED THAT NIMSTEC MAY BE IN A
POSITION TO SUBSTANTIALLY CONTROL THE DIRECTION OF THE COMPANY.
- - ELGT should be considered as an affiliated company, as it has supplied
interim capital financing to the Company and will be engaged with the
Company in a "spin-off" of various shares of i3Dx to ELGT shareholders as
part of a contemporaneously filed registration statement. While ELGT does
17
<PAGE>
not have a position on the Board of Directors or any management authority
or rights in the Company, it does hold in excess of ten per cent of the
issued and outstanding shares of the Company at the present time and by
such shareholder position should be considered a control or affiliated
party.
- - TO THE BEST KNOWLEDGE OF THE COMPANY, THERE ARE NO OTHER AFFILIATED
PERSONS OR RELATED PARTY CONTRACTUAL RELATIONSHIPS OTHER THAN DESCRIBED
IN THIS SECTION AND MORE FULLY SET-OUT IN OTHER PARTS OF THIS
REGISTRATION STATEMENT.
ITEM 8. DESCRIPTION OF SECURITIES.
THE COMPANY HAS TWO CLASSES OF COMMON STOCK. A CLASS "A" COMMON STOCK
CONSISTING OF 90 MILLION SHARES, AUTHORIZED AT $0.01 PAR VALUE AND 10 MILLION
CLASS "B" COMMON SHARES HAVING A $0.01 PAR VALUE. THE COMPANY HAS NO PREFERRED
OR OTHER CLASSES OF SHARES.
THE CLASS "B" VOTING SHARES CONSTITUTE 51% OF THE VOTING RIGHTS IN THE
COMPANY AND ARE ALL ISSUED AND HELD BY NIMSTEC LIMITED AS PREVIOUSLY
DESCRIBED. OF THE 90 MILLION AUTHORIZED CLASS "A" COMMON SHARES, PRESENTLY
34,500,000 SHARES ARE ISSUED AND AN ADDITIONAL 3,250,000 SHARES ARE SUBJECT
TO BE ISSUED PURSUANT TO VARIOUS DEBENTURE CONVERSION RIGHTS OR WARRANTS. THE
AGGREGATE OF THE CLASS "A" SHARES HOLD 49% OF THE VOTING RIGHTS IN THE
COMPANY.
THE CLASS "B" SHARES WOULD BE ENTITLED TO 51% OF ANY STOCK DIVIDEND
AND THE CLASS "A" SHARES ENTITLEMENT WOULD BE 49%.
THERE ARE NO PREEMPTIVE RIGHTS OR CUMULATIVE VOTING PROVISIONS IN THE
COMPANY. AT PRESENT, THE COMPANY PAYS NO DIVIDENDS AND IT DOES NOT ANTICIPATE
IN THE FORESEEABLE FUTURE THAT THERE WILL BE ANY DIVIDENDS PAID.
NO FULLY ISSUED AND SUBSCRIBED SHARE SUBJECT TO REDEMPTION,
ASSESSMENT, OR CALL.
THE DEBT SECURITIES OF THE COMPANY CONSTITUTE THE RIGHT TO ACQUIRE
250,000 CLASS "A" SHARES, WHICH MAY BE ISSUED PURSUANT TO THE CONVERTIBLE
DEBENTURE AS GENERALLY DESCRIBED UNDER THE MANAGEMENT'S DISCUSSION AND
ANALYSIS AND A TOTAL OF 3,000,000 WARRANTS FOR 3,000,000 CLASS "A" COMMON
SHARES. NO ASSURANCE OF WHETHER THE DEBENTURES WILL BE CONVERTED OR THE
WARRANTS EXERCISED CAN BE MADE OR GIVEN AT THIS TIME.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY & OTHER
SHAREHOLDER MATTERS.
THE COMPANY DOES NOT HAVE A PRICE RANGE FOR ITS SECURITIES, AS IT HAS NOT
ISSUED ANY PUBLICLY TRADED STOCK TO DATE. IT IS NOT ANTICIPATED THAT THERE CAN
BE ANY PUBLIC TRADING IN THE COMPANY'S STOCK UNTIL AFTER THE FILING AND
EFFECTIVENESS OF THIS REGISTRATION STATEMENT AND A SUBSEQUENTLY ANTICIPATED SB-2
REGISTRATION STATEMENT PERTAINING TO THE "SPIN OFF" OF THE COMPANY STOCK TO
VARIOUS ELGT SHAREHOLDERS AS PREVIOUSLY SET OUT AND EXPLAINED.
18
<PAGE>
NO BROKER/DEALERS OR OTHERS ACTING AS POTENTIAL MARKET MAKERS HAVE
MADE ANY COMMITMENT TO MAINTAIN OR TO INITIATE A TRADING MARKET IN THE
COMPANY'S STOCK UPON COMPLETION OF THE "SPIN OFF." IT IS ANTICIPATED THAT THE
SHARES "SPUN OFF" TO ELGT SHAREHOLDERS MAY BE SUBJECT TO LIMITED TRADING ON
THE ELECTRONIC BULLETIN BOARD ARISING OUT OF THE DESIRE TO TRADE SUCH
SECURITIES BY THESE SHAREHOLDERS, THOUGH NO ASSURANCE OF ANY SUCH MARKET
ACTIVITY CAN BE MADE. THE COMPANY'S LONGER TERMS OBJECTIVE WOULD BE TO
ATTEMPT TO MEET, AS SOON AS POSSIBLE, THE LISTING REQUIREMENTS FOR NASDAQ
"SMALL CAP" STATUS AND BE TRADED ON THAT MARKET, THOUGH NO ASSURANCE OR
WARRANTY WHETHER OR WHEN SUCH QUALIFICATION WILL BE MET, CAN BE GIVEN.
THE COMPANY DOES NOT PRESENTLY PAY ANY DIVIDENDS AND DOES NOT ANTICIPATE
PAYING DIVIDENDS FOR THE FORESEEABLE FUTURE. CURRENTLY THE COMPANY HAS NO
EARNING FROM WHICH TO PAY DIVIDENDS AND ANY FUTURE EARNING ARE ANTICIPATED TO BE
REINVESTED. THE COMPANY INTENDS TO RETAIN ALL EARNINGS FOR GROWTH PURPOSES. THE
COMPANY WAS ONLY RECENTLY ORGANIZED, IN JUNE, 1999, AND HAS NOT HAD ANY FORMAL
SHAREHOLDER MEETINGS SINCE SUCH ORGANIZATION. THE COMPANY PRESENTLY ANTICIPATES
HOLDING ITS FIRST ANNUAL SHAREHOLDERS' MEETING IN LATE CALENDAR YEAR 2000,
THOUGH NO SPECIFIC DATE HAS BEEN SET BY THE BOARD OF DIRECTORS AT THIS TIME. TO
THE BEST KNOWLEDGE OF THE COMPANY, THERE ARE NO PENDING SHAREHOLDER MATTERS OR
PROPOSED ITEMS TO BE INCLUDED IN ANY SPECIAL OR GENERAL MEETING OF SHAREHOLDERS,
NOR HAS ANY SUCH MEETING BEEN REQUESTED.
AT PRESENT THERE ARE 3,000,000 SHARES SUBJECT TO OPTION RIGHTS TO ELGT
AND 250,000 SHARES SUBJECT TO DEBENTURE CONVERSION TOTALLY 8.6% OF ALL PRESENTLY
ISSUED AND OUTSTANDING SHARES IF PRESENTLY EXERCISED OR CONVERTED. SHARES
CURRENTLY ELIGIBLE FOR RULE 144 SHARES ARE APPROXIMATELY 34,500,000 SHARES OR
100% OF ALL PRESENTLY ISSUED AND OUTSTANDING SHARES. THERE ARE 3,000,000 SHARES
WHICH WILL BE SUBJECT TO REGISTRATION UNDER THE CONTEMPLATED SB-2 REGISTRATION
OF SHARES SPUN-OFF TO ELGT AS PREVIOUSLY DESCRIBED. THERE ARE CURRENTLY ONLY TWO
HOLDERS OF THE CLASS "A" STOCK (NIMSTEC & ELGT) AND ONLY ONE HOLDER OF THE CLASS
"B" SHARES (NIMSTEC). IT IS NOT ANTICIPATED THAT FURTHER CLASS "B" SHARES WILL
BE ISSUED. THERE IS FURTHER NO INTENT TO REGISTER THE CLASS "B" SHARES.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not aware of any legal proceedings to which the Company is
a party, nor is the Company aware of any present demands, claims or causes of
actions pending against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The Company has retained the independent auditing firm of Jones, Jensen &
Company of Salt Lake City, Utah to act as its independent auditors. The Company
has no present disagreement with the initial audit material prepared by its
independent auditors and attached to this filing. The Company has no present
plans to change its auditors and would seek ratification of the continuing
services of its present auditors at the next regular shareholder meeting.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
The Company has detailed under Part I of this registration, all of its
initial private placement of shares and incorporates those sections by this
reference. In summary, and not in limitation of the more complete disclosure
set out under Part I, the Company indicates that it has initially placed its
19
<PAGE>
stock with two primary investors, the first being NimsTec Limited., a Bermuda
Corporation, which presently holds approximately 87% of the issued stock
Class "A" common being 30 million shares of an authorized 90 million shares
of the Company's Class "A" common stock and all of the 10 million Class "B"
common stock, which Class "B" represents 51% of the voting control in the
Company. These shares were issued in consideration for the transfer of the
initial equipment and the capital assets of the Company.
THE SECOND PRINCIPAL SHAREHOLDER IS ELGT CORPORATION, WHICH IS ASSISTING
THE COMPANY WITH INTERIM FINANCING IN 1999 IN THE SUM OF $1,000,000 AND WILL
SPIN OFF ACQUIRED SHARES TO ITS SHAREHOLDERS AS A PUBLIC COMPANY, PURSUANT TO A
TO BE FILED REGISTRATION STATEMENT WHEN EFFECTIVE. ON JUNE 30, 1999, ELGT
PURCHASED 13 % OF THE CLASS "A" COMMON STOCK, BEING 4,500,000 SHARES, AT A PRICE
OF $0.11 PER SHARE, AND RECEIVED WARRANTS TO ACQUIRE AN ADDITIONAL 2,500,000
CLASS "A" SHARES AT $4.00 A SHARE. IT IS ANTICIPATED THAT CONTEMPORANEOUSLY WITH
THE FILING OF THIS REGISTRATION, ELGT WILL OBTAIN A CONVERTIBLE DEBENTURE, WHICH
CAN BE EXERCISED FOR UP TO 250,000 SHARES AT $2.00 A SHARE, FOR AN ADDITIONAL
$500,000 OF CAPITAL CONSIDERATION TO THE COMPANY, AND WARRANTS TO ACQUIRE AN
ADDITIONAL 500,000 SHARES AT A $1.00 PER SHARE. THE COMPANY HAS NOT ISSUED ANY
OTHER UNREGISTERED SECURITIES. BOTH OF THE FOREGOING PLACEMENTS WERE DEEMED
COMPLETED AS ACCREDITED INVESTOR SALES PURSUANT TO THE EXEMPTIONS PROVIDED BY
SECTION 4(6) OF THE SECURITIES ACT OF 1933, AND/OR RULE 506 PROMULGATED PURSUANT
TO SUCH ACT.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
THE COMPANY HAS ADOPTED THE STANDARD INDEMNIFICATION PROVISIONS FOR
OFFICERS AND DIRECTORS AS PROVIDED BY NEVADA LAW IN ITS ARTICLES, WHICH THE
COMPANY GENERALLY INDEMNIFIES OFFICERS AND DIRECTORS FROM LIABILITY FOR GOOD
FAITH ERRORS OR OMISSIONS COMMITTED IN THE ORDINARY DISCHARGE OF THEIR DUTIES.
THE COMPANY IS GENERALLY AWARE THAT IT IS THE POSITION OF THE SEC THAT ANY CLAIM
OF INDEMNIFICATION AS MAY RELATE TO VIOLATIONS OF U.S. SECURITIES LAWS AND
REGULATIONS ARE DEEMED TO BE OF NO FORCE, EFFECT OR APPLICATION.
PART III
ITEM 1. INDEX TO EXHIBITS.
THE COMPANY ATTACHES THE FOLLOWING MATERIAL EXHIBITS TO THIS REGISTRATION
STATEMENT:
I. AUDITED FINANCIAL STATEMENTS FOR PERIODS ENDING JUNE 30, 1999 AND JULY 31,
1999.
20
<PAGE>
I3DX.COM
(FORMERLY 3-DX.COM)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND JUNE 30, 1999
<PAGE>
C O N T E N T S
<TABLE>
<CAPTION>
<S> <C>
Independent Auditors' Report .............................................. 3
Balance Sheets ............................................................ 4
Statements of Operations .................................................. 6
Statements of Stockholders' Equity ........................................ 7
Statements of Cash Flows .................................................. 8
Notes to the Financial Statements ......................................... 10
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
i3Dx.com
(Formerly 3-Dx.com)
(A Development Stage Company)
Duluth, Georgia
We have audited the accompanying balance sheet of i3Dx.com (formerly 3-Dx.com)
(a Nevada corporation) (a development stage company) as of June 30, 1999 and the
related statements of operations, stockholders' equity and cash flows from
inception on June 18, 1999 through June 30, 1999. 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 financial statements referred to above present fairly, in
all material respects, the financial position of i3Dx.com (formerly 3-Dx.com) (a
Nevada corporation) (a development stage company) as of June 30, 1999 and the
results of its operations and its cash flows from inception on June 18, 1999
through June 30, 1999 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company has suffered losses from operations since
inception, which raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 6. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
September 20, 1999
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Balance Sheets
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1999 1999
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 158,789 $ --
Accounts receivable, net (Note 1) 15,363 --
Prepaids 79,333 --
Inventory (Note 1) 57,504 --
----------- ----------
Total Current Assets 310,989 --
----------- ----------
FIXED ASSETS (Note 1)
Machinery and equipment 3,182,161 3,166,700
Less accumulated depreciation (158,334) --
----------- ----------
Total Fixed Assets 3,023,827 3,166,700
----------- ----------
OTHER ASSETS
License rights, net (Note 5) 393,333 --
Deposits 18,000 --
----------- ----------
Total Other Assets 411,333 --
----------- ----------
TOTAL ASSETS $ 3,746,149 $3,166,700
=========== ==========
</TABLE>
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
December 31, June 30,
1999 1999
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 118,227 $ --
Accrued expenses 247 --
----------- -----------
Total Current Liabilities 118,474 --
----------- -----------
LONG-TERM LIABILITIES
Convertible debenture (Note 7) 500,000 --
----------- -----------
Total Long-Term Liabilities 500,000 --
----------- -----------
Total Liabilities 618,474 --
----------- -----------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY (Note 2)
Common stock, class A; 90,000,000 shares
authorized of $0.01 par value, 34,500,000
shares issued and outstanding 345,000 345,000
Common stock, class B; 10,000,000 shares
authorized of $0.01 par value, 10,000,000
shares issued and outstanding 100,000 100,000
Additional paid-in capital 3,221,700 3,221,700
Stock subscription receivable -- (500,000)
Accumulated deficit (539,025) --
----------- -----------
Total Stockholders' Equity 3,127,675 3,166,700
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,746,149 $ 3,166,700
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From
For the Inception on
Six Months June 18,
Ended 1999 Through
December 31, June 30, December 31,
1999 1999 1999
----------- --------- ------------
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
NET SALES $ 200,465 $ -- $ 200,465
COST OF GOODS SOLD 58,883 -- 58,883
---------- --------- ------------
GROSS MARGIN 141,582 -- 141,582
---------- --------- ------------
OPERATING EXPENSES
General and administrative 195,642 -- 195,642
Rent 108,000 -- 108,000
Amortization 6,667 -- 6,667
Depreciation 158,334 -- 158,334
Salaries and wages 194,008 -- 194,008
---------- --------- ------------
Total Operating Expenses 662,651 -- 662,651
---------- --------- ------------
OPERATING LOSS (521,069) -- (521,069)
---------- --------- ------------
OTHER INCOME (EXPENSE)
Other expenses (15,709) -- (15,709)
Interest expense (6,667) -- (6,667)
Interest income 4,420 -- 4,420
---------- --------- ------------
Total Other Income (Expense) (17,956) -- (17,956)
---------- --------- ------------
LOSS BEFORE INCOME TAXES (539,025) -- (539,025)
INCOME TAXES -- -- --
---------- --------- ------------
NET LOSS $ (539,025) $ -- $ (539,025)
========== ========= ============
BASIC LOSS PER COMMON SHARE $ (0.02) $ 0.00
========== =========
FULLY DILUTED LOSS PER
COMMON SHARE $ (0.02) $ 0.00
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Common Common
Class A Stock Class B Stock Additional
------------------------ --------------------------------------- Paid-In
Deficit Shares Amount Shares Amount Capital Receivable
- ----------------------- ---------- --------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at inception on
June 18, 1999 (audited) -- $ -- -- $ -- $ -- $ --
Common stock issued for
machinery valued at
approximately $0.08
per share (audited) 30,000,000 300,000 10,000,000 100,000 2,766,700 --
Common stock subscribed
for at approximately
$0.11 per share (audited) 4,500,000 45,000 -- -- 455,000 (500,000)
Net loss from inception on
June 18, 1999 through
June 30, 1999 (audited) -- -- -- -- -- --
---------- -------- ---------- -------- ---------- ---------
Balance, June 30, 1999
(audited) 34,500,000 345,000 10,000,000 100,000 3,221,700 (500,000)
Cash received on stock
subscription receivable
(audited) -- -- -- -- -- 500,000
Net loss for the six months
ended December 31, 1999
(unaudited) -- -- -- -- -- (539,025)
---------- -------- ---------- -------- ---------- ---------
Balance, December 31, 1999
(unaudited) 34,500,000 $345,000 10,000,000 $100,000 $3,221,700 $(539,025)
========== ======== ========== ======== ========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
For the Inception on
Six Months June 18,
Ended 1999 Through
December 31, June 30, December 31,
1999 1999 1999
----------- -------- -----------
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (539,025) $ -- $ (539,025)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 158,334 -- 158,334
Amortization 6,667 -- 6,667
Bad debts 809 -- 809
Changes in operating assets and liabilities:
Increase in accounts receivable (16,172) -- (16,172)
Increase in prepaids (79,333) -- (79,333)
Increase in inventory (57,504) -- (57,504)
Increase in deposits (18,000) -- (18,000)
Increase in accounts payable 118,227 -- 118,227
Increase in accrued expenses 247 -- 247
----------- -------- -----------
Net Cash Used by Operating Activities (425,750) -- (425,750)
----------- -------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of license rights (400,000) -- (400,000)
Purchase of fixed assets (15,461) -- (15,461)
----------- -------- -----------
Net Cash Used by Investing Activities (415,461) -- (415,461)
----------- -------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock subscription receivable 500,000 -- 500,000
Proceeds from convertible debenture 500,000 -- 500,000
----------- -------- -----------
Net Cash Provided by Financing Activities 1,000,000 -- 1,000,000
----------- -------- -----------
NET INCREASE IN CASH 158,789 -- 158,789
CASH AT BEGINNING OF PERIOD -- -- --
----------- -------- -----------
CASH AT END OF PERIOD $ 158,789 $ -- $ 158,789
=========== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
From
For the Inception on
Six Months June 18,
Ended 1999 Through
December 31, June 30, December 31,
1999 1999 1999
----------- -------- -----------
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
CASH PAID FOR:
Income taxes $ -- $ -- $ --
Interest $6,667 $ -- $6,667
NON-CASH FINANCING ACTIVITIES:
Common stock issued for machinery $ -- $3,166,700 $ --
Common stock issued for stock
subscription receivable $ -- $ 500,000 $ --
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and June 30, 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
a. Organization
On August 16, 1999, the Company filed an amendment to its articles of
incorporation changing its name from 3-Dx.com to i3Dx.com. i3Dx.com
(the Company) was incorporated under the laws of the State of Nevada
on June 18, 1999. The Company is a hi-tech company which utilizes the
internet (www.i3dx.com) for the development and distribution of its
products. The Company's technology is based on three-dimensional
photographic lenticular imaging and is suitable for any application
which may benefit from increased visualization, such as medical
imaging, advertising and marketing.
The Company maintains a 26,500 square foot manufacturing and processing
facility in Duluth, Georgia where it mass-produces 3D images in both
reflective print and transparency formats for the commercial, medical
and consumer markets.
b. Cash and Cash Equivalents
For purposes of financial statement presentation, the Company considers
all highly liquid investments with a maturity of three months or less,
from the date of purchase, to be cash equivalents.
c. Accounts Receivable
Accounts receivable are shown net of the allowance for doubtful
accounts of $809 and $-0- at December 31, 1999 and June 30, 1999,
respectively.
d. Fixed Assets
Fixed assets are stated at cost less accumulated depreciation.
Depreciation on machinery is provided using the straight-line method
over an expected useful life of ten (10) years. Depreciation on
equipment is provided using the straight-line method over an expected
life of five (5) years. Depreciation expense for the six months ended
December 31, 1999 and from inception on June 18, 1999 through June 30,
1999 was $158,334 and $-0-, respectively.
e. Inventory
Inventory consists of lenticular print film for use in the development
of film and pictures. Inventory is stated at the lower of cost
determined by the first-in, first-out method or market. At December 31,
1999 and June 30, 1999, inventory amounted to $57,504 and $-0-,
respectively.
f. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a June 30 year end.
The accompanying notes are an integral part of these financial statements.
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and June 30, 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
g. 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.
h. Advertising
The Company follows the policy of charging the costs of advertising to
expense as incurred.
i. Credit Risks
The Company maintains cash in multiple bank accounts. The Federal
Deposit Insurance Corporation insures accounts to $100,000. The
Company's accounts occasionally exceed these insured amounts. At
December 31, 1999, one account exceeded the insured amount by $39,559.
j. Income Taxes
No provision for federal income taxes has been made at December 31,
1999 due to an accumulated operating loss. The Company has accumulated
a $539,025 net operating loss as of December 31, 1999, which may be
used to reduce taxable income and income taxes in future years. The use
of these losses to reduce future income taxes will depend on the
generation of sufficient taxable income prior to the expiration of the
net operation loss carryforwards. The carryforwards expire in 2019.
k. Revenue Recognition
Revenue is recognized upon shipment of goods to the customer.
l. Basic and Fully Diluted Loss Per Share
During February 1997, the FASB issued Statement of Financial Accounting
Standard No. 128, "Earnings per Share". This statement changed the
method in which earnings (loss) per share are determined. The new
standard requires the computation of basic earnings (loss) per share
and earnings (loss) per share assuming dilution. Warrants (Note 3) to
purchase 2,500,000 shares of class A common stock at $4.00 per share
were outstanding at December 31, 1999 and June 30, 1999. They were not
included in the computation of net loss per common share because they
would have had an antidilutive effect on the net loss per common share
for the periods ended December 31, 1999 and June 30, 1999. Basic net
loss per common share and assuming dilution were the same for the
periods ended December 31, 1999 and June 30, 1999.
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and June 30, 1999
NOTE 2 - STOCKHOLDERS' EQUITY
The Company has authorized 90,000,000 shares of Class A common stock
(Class A) and 10,000,000 shares of Class B common stock (Class B). Each
class of stock is entitled to the following provisions as outlined
below:
DIVIDEND PROVISIONS
The holders of shares of Class A shall be entitled to receive, when and
as declared by the Board of Directors out of any funds at the time
legally available thereof, forty-nine percent (49%) of all common stock
dividends of the Company. Each share of Class A shall rank on parity
with each other share of Class A with respect to dividends. Dividend
payments to the holders of shares of Class A shall be payable in cash
by delivery of a check to each entitled holder's address which is
registered with the Secretary of the Company.
The holders of shares of Class B shall be entitled to receive, when and
as declared by the Board of Directors out of any funds at the time
legally available thereof, fifty-one percent (51%) of all common stock
dividends of the Company. Each share of Class B shall rank on parity
with each other share of Class B with respect to dividends. Dividend
payments to the holders of shares of Class B shall be payable in cash
by delivery of a check to each entitled holder's address which is
registered with the Secretary of the Company.
LIQUIDATION PROVISIONS
In the event of any liquidation, dissolution or winding up of the
Company, whether voluntary of involuntary, the Class A and Class B
shall be entitled to receive an amount equal to forty-nine percent
(49%) and fifty-one percent (51%), respectively, of the amount payable
with respect to all classes of common stock distributed ratably to the
holders of common stock.
VOTING PROVISIONS
The holders of shares of Class A and Class B shall be entitled to
forty-nine percent (49%) and fifty-one percent (51%), respectively, of
the votes then held on all matters of which the shareholders of the
Company are entitled to vote.
NOTE 3 - WARRANTS
On June 30, 1999, the Company issued warrants to purchase up to
2,500,000 shares of the Company's Class A common stock. The warrants
are exercisable at $4.00 per share. The warrants were issued as
additional consideration for purchasing stock for $500,000. The
warrants expire on June 30, 2000.
<PAGE>
I3DX.COM
(Formerly 3-Dx.com)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and June 30, 1999
NOTE 4 - COMMITMENTS AND CONTINGENCIES
On July 1, 1999, the Company entered into a seven (7) year lease
agreement with a related party for office and warehouse space located
in Duluth, Georgia. The lease obligation is currently $18,000 per month
with annual increases in proportion to any increase in the CPI from the
date the lease is signed. Rent expense from the lease was $108,000 for
the six months ended December 31, 1999.
NOTE 5 - LICENSE RIGHTS - RELATED PARTY
On June 30, 1999, the Company acquired certain license rights from a
related company in exchange for a license fee of five percent (5%) of
gross sales attributable to the license rights. The license includes
the exclusive rights in Canada, Mexico and the United States to
manufacture and market animated and/or 3-dimensional photographic
lenticular (micro-lens) images for the initial period of fifty (50)
years without volume restrictions. The license may be renewed for a
second fifty (50) years on like terms. The Company may also sub-license
the licensed rights with written permission from the Licensor.
On October 25, 1999, the license purchase agreement was amended to
include an additional one-time fee of $400,000 to increase the scope of
the license to include sheet fed lithographic technology. The Company
paid $300,000 cash and the additional $100,000 is included in accounts
payable at December 31, 1999. The license rights will be amortized over
its expected useful life of ten (10) years. Amortization expense on the
license rights for the six months ended December 31, 1999 was $6,667.
NOTE 6 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. The Company has incurred operating
losses from its inception through December 31, 1999. It has not
established revenues sufficient to cover its operating costs which
raises doubt about its ability to continue as a going concern. However,
results of operations are within the expectations of management due to
the early stage of the Company's existence. Management believes that
revenues will be sufficient to cover and exceed operating costs by the
end of fiscal year 2000. In the interim, management plans to obtain
equity financing sufficient to cover its operating costs.
NOTE 7 - CONVERTIBLE DEBENTURE
On October 22, 1999, the Company issued a convertible debenture to a
shareholder (holder) in exchange for $500,000 cash. At the sole option
of the holder and upon thirty (30) days written notice, the holder has
the right, at any time during the term of the debenture, to convert up
to one hundred percent (100%) of the outstanding principal balance into
Class A common stock of the Company at the conversion price of two
dollars ($2.00) per share at any time prior to maturity. The term of
the note is two (2) years and interest accrues at the rate of eight
percent (8.0%) per year. The entire principal balance of the note is
due October 22, 2001 and interest is due on a monthly basis. Interest
expense on the convertible debenture was $6,667 for the six months
ended December 31, 1999.
<PAGE>
<TABLE>
<CAPTION>
REGULATION
II. OTHER EXHIBITS: S-K DESIGNATION
NUMBER:
<S> <C>
A. SHARE ACQUISITION AGREEMENT BY ELGT ENTITLED PLAN OF REORGANIZATION (2)
AND FINANCING AGREEMENT WITH ADDENDUM.*
B. ARTICLES OF INCORPORATION AND ALL AMENDMENTS THERETO.* 3(I)
C. BY-LAWS.*
3(ii)
D. DEBENTURE AND SECURITY INSTRUMENT BETWEEN ELGT AND I3DX.* (4)
E. OPINION RE LEGALITY* (5)
F. ASSET AND LICENSE PURCHASE AGREEMENT BETWEEN NIMSTEC LIMITED (10)
AND THE COMPANY WITH AMENDMENT.*
[APPLICATION FOR CONFIDENTIAL FILING PENDING]
G. FINANCIAL DATA SCHEDULE* (27)
</TABLE>
- -------------------
* Filed with initial filing
<PAGE>
PURSUANT TO THE REQUIREMENTS OF SECTION 12 OF THE SECURITIES EXCHANGE ACT
OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
REGISTRANT:
I3DX.COM
DATE: JANUARY 28, 2000 /s/ PAUL F. PETERS
PAUL F. PETERS
ITS PRESIDENT
<PAGE>
NIMSTEC LIMITED
- and -
3-Dx.com
ASSET AND LICENSE PURCHASE AGREEMENT
<PAGE>
EXHIBIT A
EQUIPMENT, ASSET AND LICENSE PURCHASE AGREEMENT
DATE: June 30th 1999
PARTIES:
"The Licensor": NIMSTEC LIMITED, an exempted corporation registration no.
21568 formed under the laws of Bermuda whose principal place of business is
at 48 Cedar Avenue, Suite 120, Hamilton HM JX, Bermuda
"The Licensee": 3-DX.COM, a corporation organised under the laws of Nevada.
RECITALS:
(A) The Licensor is the beneficial owner, for the manufacture of lenticular
optical material and the photographic and digital origination of animated
and 3-D images, for the photographic printing of animated and 3-D images,
of a substantial body of valuable Technical Information (as defined below)
and equipment relating to the manufacture, assembly, and commercial
operation of certain equipment and is the beneficial owner of the know how
relating thereto (as defined below).
(B) The Licensee wishes to receive and the Licensor is willing to grant a
licence on the terms and conditions hereinafter set forth to use such
Technical Information and to work under the said know how in order to
produce certain products using the equipment and Technical Information for
the manufacture, photographic and digital origination of animated and 3-D
images, for the photographic printing of animated and 3-D images.
1. DEFINITIONS
1.1 In this Agreement the following terms shall have the following
meanings unless the context otherwise requires:
"COPYRIGHT" all copyright and rights in the nature of copyright to
which either party may now be or may subsequently become entitled in
or in respect of all drawings and other documents, recordings in any
form and all other articles bearing or embodying any part of the
Technical Information
"EFFECTIVE DATE" On the date of $500,000 purchase of 3-Dx.com common
stock by ELGT.
Page 2
<PAGE>
"IMPROVEMENTS" all improvements, modifications or adaptations to any
part of the Technical Information which might reasonably be of
commercial interest to either party in the design manufacture or
supply of the Products or in the operation of the Equipment and which
may be made or acquired by either party during the term of this
Agreement
"GROSS SALES VALUE" the invoiced sales value of the Products in arm's
length transactions exclusively for money after deduction of any
credits actually given by the Licensee for returned or defective goods
and excluding or making proper deductions for any costs of packing,
insurance, carriage and freight and sales tax and, in the case of
export orders, any import duties or similar applicable governmental
levies or export insurance costs subject in all cases to the same
being separately charged on customer invoices. In any sale or other
disposal of any Products or part thereof otherwise than in an arm's
length transaction exclusively for money, the fair market price (if
higher) in the relevant country of disposal shall be substituted for
the Gross Sales Value.
"PATENTS"
(i) ***
(ii) ***
(iii) ***
"PRODUCTS" all animated or 3-D images *** created for the photographic
printing of animated or 3D images - 3D photographic cameras - 3D
photographic printers - 3D photographic apparatus used with 2-D
cameras *** - lenticular print optical material with photographic
emulsions (LPF).
"TECHNICAL INFORMATION" all know-how, experience, drawings, designs,
circuit diagrams, computer programs and all other technical
information relating to the Products or Equipment and which might
reasonably be of commercial interest to either party in the design
manufacture or supply of the Products or in the operation of the
Equipment.
"TERRITORY" North America, Canada, Mexico
2. ***
*** text omitted & filed separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 240.246-2
Page 3
<PAGE>
3. TECHNICAL INFORMATION
3.1 After execution of this Agreement by both parties the Licensor will
supply the Licensee with all Technical Information in its possession
that has not previously been disclosed that is reasonably necessary or
desirable to enable the Licensee to operate the Equipment and to
design manufacture on a commercial scale and sell Products of a
quality at least equivalent to those being produced by the Licensor at
the Effective Date.
3.2 The Licensor warrants that all Technical Information disclosed or to
be disclosed to the Licensee hereunder is or will be, to the best of
the Licensor's knowledge and belief, accurate (provided always that
the Licensor will promptly correct any significant errors in the
Technical Information subsequently discovered by the Licensor), but
subject thereto and without prejudice to the Licensor's obligations
under clause 2.1 hereof the Licensor shall be under no further
liability to the Licensee in respect of the Technical Information or
of the manufacture, use, sale or other disposition of the Equipment or
Products.
3.3 The Licensee shall be exclusively responsible for the technical and
commercial operation of the Equipment and for incorporating any
modifications or developments thereto that might be necessary or
desirable and for all Products sold or supplied by the Licensee and
accordingly the Licensee shall indemnify the Licensor in respect of
all costs, damages and expenses incurred as a result of any claims by
third parties in tort or otherwise against the Licensor arising in any
way out of the use of any of the Technical Information by the
Licensee.
3.4 The Licensee undertakes that for so long as any part of the Technical
Information remains subject to the obligations of confidence of clause
4 hereof it will not use the same for any purpose except as expressly
licensed hereby and in accordance with the terms of this Agreement.
4. IMPROVEMENTS
4.1 Each party shall forthwith disclose to the other in confidence and in
such detail as that other may reasonably require all Improvements that
it may develop or acquire during the term of this Agreement except in
so far as such disclosure would disclose information derived from and
subject to confidentiality obligations in favour of a third party.
4.2 Improvements that the Licensee is due to disclose to the Licensor
under clause 3.1 above shall be deemed to be part of the Technical
Information for the purposes of the rights granted to the Licensee
under clause 5 hereof.
5. CONFIDENTIALITY
Page 4
<PAGE>
5.1 Each party agrees to maintain secret and confidential all Technical
Information and information regarding Improvements obtained from the
other both pursuant to this Agreement and prior to and in
contemplation of it and all other information that it may acquire from
the other in the course of this Agreement, to respect the other's
proprietary rights therein, to use the same exclusively for the
purposes of this Agreement, and to disclose the same only to those of
its employees and contractors and sub-licensees pursuant to this
Agreement (if any) to whom and to the extent that such disclosure is
reasonably necessary for the purpose of this Agreement.
5.2 The foregoing obligations under clause 4.1 above shall not apply to
Technical Information or other information which:
5.2.1 prior to receipt thereof from one party was in the possession of
the other and at its free disposal;
5.2.2 is subsequently disclosed to the recipient party without any
obligations of confidence by a third party who has not derived
it directly or indirectly from the other;
5.2.3 is or becomes generally available to the public in printed
publications in general circulation through no act or default of
the recipient party or its agents or employees.
5.3 Notwithstanding the foregoing provisions the parties and any
sub-licensees pursuant to this Agreement shall be entitled to disclose
Technical Information of the other to actual or potential customers
for Products in so far as such disclosure is reasonably necessary to
promote the sale or use of Products.
5.4 Each party shall procure that all its employees contractors and
sub-licensees pursuant to this Agreement (if any) who have access to
any information of the other to which the obligations of clause 4.1
apply shall be made aware of and subject to these obligations and
shall further procure that so far as is reasonably practicable all of
such employees contractors and sub-licensees shall enter into written
undertakings in favour of the other party to this end in a form
previously approved by the Licensor.
6. GRANT OF RIGHTS
6.1 The Licensor hereby grants to the Licensee:
6.1.1 an exclusive licence to use the Technical Information and
improvements in the Territory and under the Licensor's
copyrights, technology, patents, trade secrets, know-how and
trademarks to use the Equipment to manufacture Products; and
6.1.2 an exclusive licence to use the name "NimsTec" and "3-Dx" in
connection with the marketing and putting into commercial effect
of the License in the Territory.
Page 5
<PAGE>
6.2 ***
6.3 The Licensee shall further be entitled to a licence under the Patent
Rights so far as the same extend to any act of the Licensee licensed
under clause 5.1 above.
6.4 The Licensee shall not be entitled to grant sub-licences of the rights
granted or to be granted under clauses 5.1 and 5.2 above without
approval of Licensor.
7. PAYMENT
7.1 The Licensee shall during the continuance of this Agreement pay to the
Licensor a license fee of five per cent (5%) of the Gross Sales Value
of all Products (or any part thereof) sold or otherwise supplied for
money or money's worth.
7.2 If any Products are incorporated in any other equipment or apparatus
sold by the Licensee or any sub-licensee hereunder at a price which is
included in the price for the other equipment or apparatus, the Gross
Sales Value for the purpose of calculating license fees due hereunder
shall be that proportion of the Gross Sales Value of that other
equipment or apparatus which is fairly attributable to such Products
comparing the manufacturing cost of the other equipment or apparatus
to that of the Products as components thereof.
7.3 Payments due under clause 6.1 shall be made within 30 days of the end
of each calendar quarter in respect of license fees accruing on
Products invoiced in that calendar quarter.
7.4 *** Amended
7.5 All sums due under this Agreement:
7.5.1 are exclusive of any sales tax which shall be payable in addition on
the rendering by Licensor of any invoice incorporating appropriate
sales tax;
7.5.2 shall be made in US dollars to the credit of a bank account to be
designated in writing by the Licensor. Conversion into US dollars
shall be calculated:
(a) in the case of each royalty payment at the rate of exchange
ruling on the last day of the calendar quarter in respect of
which the payment is due;
(b) in the case of all other payments at the rate of exchange ruling
on the day payment is made or due whichever is earlier; provided
always that where any payment is made after the date provided
therefor herein conversion shall be at the rate ruling at the
date of payment if this is more favourable to the Licensor;
*** text omitted & filed separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 240.246-2
Page 6
<PAGE>
7.5.3 shall be made in full without deduction of taxes charges and other
duties that may be imposed except in so far as any such deduction may
be credited in full by the Licensor against the Licensor's own tax
liabilities. The parties agree to co-operate in all respects
necessary to take advantage of such double taxation agreements as
may be available.
7.5.4 ***
8. RECORDS AND REPORTS
8.1 The Licensee agrees to keep true and accurate records and books of
account containing all data necessary for the determination of license
fees payable under clause 6.1 which records and books of account shall
upon reasonable notice of the Licensor be open at all reasonable times
during business hours for inspection by the Licensor or its duly
authorised agent for the purpose of verifying the accuracy of the
Licensee's reports hereunder.
8.2 The Licensee shall submit to the Licensor within 30 days of the end of
each calendar quarter a statement setting forth with respect to the
operations of the Licensee hereunder during that period the quantity
of Products made used or sold and the Gross Sales Value of Products.
8.3 The Licensor agrees to maintain confidential all financial information
received with respect to the Licensee's operations pursuant to the
foregoing clauses 7.1 and 7.2.
9. PERFORMANCE
9.1 During the continuance of this Agreement the Licensee shall:
9.1.1 use its best endeavours to promote the distribution and sale of
Products in the Territory as widely as its resources reasonably
permit and will make available all necessary selling and
manufacturing facilities to meet all reasonable demands for
Products throughout the Territory. The Licensee shall seek to
maximise such demand, consistent only with the Licensee
obtaining a reasonable rate of return on its assets employed in
making and selling Products;
9.1.2 ensure that all Products supplied by the Licensee meet all such
reasonable specifications as the Licensor may from time to time
apply thereto and satisfy in performance, quality, construction
and use the reasonable requirements of the Licensor and shall
upon reasonable notice from the Licensor give the Licensor or
its authorised representative free access at any reasonable time
to the premises of the Licensee for the purpose of ensuring that
the Licensee is observing these obligations;
9.1.3 sell Products to any suitable buyer independently of any other
products of the Licensee if
*** text omitted & filed separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 240.246-2
Page 7
<PAGE>
so required;
9.1.4 ensure that all literature prepared by the Licensee and relating
to Products bears an acknowledgement to the effect that they are
subject to a licence from the Licensor, and attach to all
Products a label quoting relevant patent numbers and stating
that such Products are made under licence from the Licensor;
9.1.5 provide adequate servicing facilities for any Products
manufactured and/or supplied by the Licensee;
9.1.6 not act as agent of the Licensor and specifically not give any
indication that it is acting otherwise than as principal and in
advertising or selling Products not make any representation or
give any warranty on behalf of the Licensor;
9.1.7 not use any equipment other than the Equipment to manufacture
the Products.
9.2 The Licensee shall not during the continuance of the Agreement and for
a period of five years from the date of its termination for any reason
be directly or indirectly concerned in the manufacture distribution
sale or other supply in any part of the Territory of any manufactured
goods which by reason of their properties and performance are
commercially competitive with any Products.
10. PATENTS
10.1 The Licensee shall at its own cost diligently prosecute to grant all
subsisting patent applications within the Patent Rights so as to
secure the broadest monopoly reasonably obtainable consistent with
avoiding serious prejudice to the validity of such granted patents and
shall maintain all patents within the Patent Rights in force for the
full terms thereof.
10.2 In the event of any infringement by a third party of any of the Patent
Rights in the Territory on such a scale as to affect prejudicially the
Licensee's business in the Products to a substantial extent the
Licensee may take all legitimate steps to halt such infringement.
Subject to receiving advice from experienced Patent Counsel that
infringement proceedings, including any interlocutory proceedings
where relevant, stand a reasonable chance of success the Licensee may
request the Licensor to lend its name to such proceedings and provide
reasonable assistance and the Licensor will do so subject to the
Licensee giving it an indemnity in respect of all costs damages and
expenses that it may incur including any award of costs against it.
Any damages recovered shall be dealt with in a manner which shall be
fair and reasonable as between the Licensor and the Licensee.
Page 8
<PAGE>
10.3 To the best of the Licensor's knowledge and belief the exercise of the
rights granted or to be granted to the Licensee hereunder will not
result in the infringement of valid patents of third parties. Subject
thereto the Licensor gives no warranty in this respect and does not
give the Licensee any indemnity against costs damages expenses or
license fees arising out of proceedings brought against the Licensee
or any customer of the Licensee by any third party. Should the
Licensee be sued for infringement of any patent or patents of the
third party by reason of its operation of the Equipment or manufacture
use or sale of the Products the Licensor shall on request assist the
Licensee in its defence to such action to the extent that in all the
circumstances it is reasonable to do so but shall otherwise be under
no obligations in respect thereof. All costs of any such action shall
be borne by the Licensee to whom shall belong all sums that may be
recovered from the third party.
10.4 If at any time during this Agreement the Licensee directly or
indirectly opposes or assists any third party to oppose the grant of
letters patent on any patent application within the Patent Rights or
disputes or directly or indirectly assists any third party to dispute
the validity of any patent within the Patent Rights or any of the
claims thereof the Licensor shall be entitled at any time thereafter
to determine all or any of the licences granted hereunder forthwith by
notice thereof to the Licensee.
10.5 The Licensee shall bear the costs of filing and prosecuting any future
patent applications to grant and of maintaining such granted patents
in all countries.
11. TERM AND TERMINATION
11.1 Unless terminated earlier in accordance with the following provisions
of this clause or by mutual agreement by both parties, this Agreement
shall be for a fixed period of 50 years from the Effective Date and
shall be renewable by either party for a further fixed period of 50
years by giving the other party at least 3 months' notice in writing
to the other before the expiry of the first fixed period of 50.
11.2 If either party is in breach of any obligation on it hereunder and, in
the case of a breach capable of remedy, it shall not have been
remedied by the defaulting party within 30 days of written notice
specifying the breach and requiring its remedy, or if either party
becomes insolvent, has a receiver appointed over the whole or any part
of its assets, enters into any compound with creditors, or has an
order made or resolution passed for it to be wound up (otherwise than
in furtherance of a scheme for amalgamation or reconstruction) or if
the ownership or control of the Licensee shall pass into the hands of
any legal person whom the Licensor in its reasonable discretion
considers unsuitable for any reason whatsoever then the other party or
in the case of breach, the party not in breach of the obligation or
condition may forthwith terminate this Agreement by notice in writing
without prejudice to the accrued rights of either party.
Page 9
<PAGE>
11.3 Termination of this Agreement for any reason shall not bring to an
end:
11.3.1 the secrecy obligations on the parties hereto;
11.3.2 the Licensee's obligations to pay license fees or other sums
which have accrued due or which will become due in respect of
sales under clause 10.4;
11.3.3 the obligations (if any) on the Licensee under clause 10.5;
11.3.4 the licences (if any) under clause 3.3.
11.4 On termination of this Agreement for any reason the Licensee shall
continue to have the right for a period of two months from the date of
termination to complete deliveries on contracts in force at that date
and to dispose of Products already manufactured subject to payment to
the Licensor of license fees thereon in accordance with clause 6
above.
11.5 On termination of this Agreement for any reason under clause 10.2
above the Licensee shall offer to the Licensor at cost all stocks of
Products and promotional and other literature relating thereto in its
possession or control and shall provide the Licensor with all
reasonable facilities to inspect the same and shall deliver up to the
Licensor all production manuals and all other documents (including
copies thereof) in its possession or control containing Technical
Information remaining subject to the secrecy obligations of clause 4
hereof.
12. INTELLECTUAL PROPERTY
12.1 Throughout the subsistence of this Agreement, the Licensee shall not
cause or permit anything which may damage or endanger such
intellectual property of the Licensor or Licensor's title to it or
assist or allow others to do so.
13. FORCE MAJEURE
13.1 If either party to this Agreement is prevented or delayed in the
performance of any of its obligations under this Agreement by force
majeure, and if such party gives written notice thereof to the other
party specifying the matters constituting force majeure, together with
such evidence as it reasonably can give and specifying the period for
which it is estimated that such prevention or delay will continue then
the party in question shall be excused the performance or the punctual
performance as the case may be as from the date of such notice for so
long as such cause of prevention or delay shall continue.
13.2 For the purpose of this Agreement "force majeure" shall be deemed to
be any cause affecting the performance of this Agreement arising from
or attributable to acts, events, omissions or
Page 10
<PAGE>
accidents beyond the reasonable control of the party to perform and
without limiting the generality thereof shall include the following:
13.2.1 strikes, lock-outs or other industrial action;
13.2.2 civil commotion, riot, invasion, war threat or preparation for
war;
13.2.3 fire, explosion, storm, flood, earthquake, subsidence, epidemic
or other natural physical disaster;
13.2.4 impossibility of the use of railways, shipping, aircraft, motor
transport or other means of public or private transport;
13.2.5 political interference with the normal operations of any party.
14. GENERAL
14.1 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective legal successors but shall not
otherwise be assignable by either party without the written consent of
the other which consent shall not be unreasonably withheld.
14.2 No variation or amendment of this Agreement shall bind either party
unless made in writing in the English language and agreed to in
writing by duly authorised officers of both parties.
14.3 If any provision of this Agreement is agreed by the parties to be
illegal void or unenforceable under any law that is applicable hereto
or if any court of competent jurisdiction in a final decision so
determines this Agreement shall continue in force save that such
provision shall be deemed to be excised herefrom with effect from the
date of such agreement or decision or such earlier date as the parties
may agree.
14.4 The headings in this Agreement are for convenience only and are not
intended to have any legal effect.
14.5 A failure by either party hereto to exercise or enforce any rights
conferred upon it by this Agreement shall not be deemed to be a waiver
of any such rights or operate so as to bar the exercise or enforcement
thereof at any subsequent time or times.
Page 11
<PAGE>
15. NOTICES
15.1 Any notice required to be given hereunder by either party to the other
shall be in writing and shall be served by sending the same by
registered or recorded delivery post or facsimile to the address of
the other party as given herein or to such other address as that party
may have previously notified to the party giving notice as its address
for such service.
15.2 All notices documents communications and any other data to be provided
under this Agreement shall be in the English language unless otherwise
agreed.
16. GOVERNING LAW AND DISPUTES
16.1 The construction validity and performance of this Agreement shall be
governed in all respects by the laws of Bermuda.
16.2 All disputes arising in connection with this Agreement shall be
finally settled by binding arbitration upon written demand by either
party. The arbitration shall be held at and conducted in accordance
with the Rules of the International Chamber of Commerce and its
International Court of Arbitration. Judgement upon the award rendered
may be entered in any court having jurisdiction or application may be
made to such court for a judicial acceptance of the award and an order
for enforcement (as the case may be).
16.3 The parties will seek to agree on a single arbitrator and if they fail
to so agree the arbitration will be conducted by three arbitrators,
with each party selecting one arbitrator who will in turn select the
third arbitrator. Arbitration shall be conducted in Bermuda and shall
be conducted in the English language.
NIMSTEC LIMITED 3-DX.COM
48 Cedar Avenue
Suite 120
Hamilton HM JX Bermuda
By: /s/ Jerry C. Nims By: /s/ Paul F. Peters
------------------------------- -------------------------------
Name: Jerry C. Nims Name: Paul F. Peters
Title: Chairman Title: President
Date: 6/30/99 Date: 6/30/99
----------------------------- -----------------------------
Page 12
<PAGE>
ASSET AND LICENSE PURCHASE MODIFICATION AGREEMENT
THIS AGREEMENT, made effective as of the 30th day of June, 1999, by and
between NIMSTEC LIMITED, an exempted corporation registration no. 21568
formed under the laws of Bermuda (hereinafter "LICENSOR") and i3Dx.com, a
company incorporated pursuant to the laws of the State of Nevada, formerly
known as 3-Dx.com (hereinafter "LICENSEE"), both of whom together referenced
herein as "the parties."
WHEREAS the LICENSOR and the LICENSEE entered into an Asset and License
Purchase Agreement governing the terms and conditions under which a
substantial body of valuable technical information owned beneficially by the
LICENSOR would be licensed to LICENSEE; and
WHEREAS the LICENSOR HAS AGREED TO CONTRIBUTE THE LICENSE RIGHTS SPECIFIED IN
THE JUNE 30, 1999 ASSET AND LICENSE PURCHASE AGREEMENT, IN THE SPECIFIED
TERRITORY, TO LICENSEE, THEREBY RESCINDING THAT PORTION OF THE ASSET AND
LICENSE PURCHASE AGREEMENT WHICH REQUIRES PAYMENT OF $2,000,000 AS PARTIAL
PAYMENT TO LICENSOR; and
WHEREAS the parties mutually agree to the modification of the Asset and
License Purchase Agreement for the purpose of effecting the contribution as
specified herein;
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter contained, and for such other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, it is agreed by and between the parties hereto as
follows:
1. RESCISSION OF LICENSE FEE.
The LICENSOR hereby agrees to the voiding and elimination of that
portion of sub-paragraph "7.4" of the Asset and License Purchase
Agreement, wherein Licensee purchased for the specified territory
the exclusive license for $2,000,000.00. However, the parties agree
that the remainder of sub-paragraph "7.4", wherein LICENSEE agrees
to pay LICENSOR 5% of LICENSEE'S gross revenues, remains intact.
LICENSOR agrees to the contribution of its $2,00,000.00 entitlement
for the intellectual property which is the subject of the license, to
LICENSEE, without charge other than the aforementioned 5% of
LICENSEE'S gross revenues.
2. RESCISSION OF DEBENTURE.
The parties hereto agree that the Convertible Debenture issued by the
LICENSEE to the LICENSOR on June 30, 1999, in the principle amount of
$2,000,000.00, with annual interest thereon at the rate of 8% per
annum, as security for the license is also null and void, and of no
force and effect AB INITIO. The LICENSOR further agrees to disgorge the
three interest payments received from the LICENSEE pursuant to the
terms of the Convertible Debenture, with return of said interest to be
made upon demand by LICENSEE.
<PAGE>
3. AGREEMENT REMAINDER
The parties agree that any portion of the Asset and License Purchase
Agreement not modified by this Agreement shall remain in full force
and effect between the parties.
IN WITNESS WHEREOF the parties hereto have caused this agreement to be
executed on the 24th day of September 1999, effective as of the date first
above written.
LICENSOR: LICENSEE:
By: /s/ Jerry C. Nims By: /s/ Paul F. Peters
------------------------------- -------------------------------
Jerry C. Nims, Chairman Paul F. Peters, President
NIMSTEC LIMITED i3Dx.com
<PAGE>
NIMSTEC LIMITED
- AND -
I3DX.COM
AMENDMENT
TO
ASSET AND LICENSE PURCHASE AGREEMENT
<PAGE>
AMENDMENT TO ASSET AND LICENSE PURCHASE AGREEMENT
DATE: October 25, 1999
PARTIES:
"The Licensor": NIMSTEC LIMITED, an exempted corporation registration no.
21568 formed under the laws of Bermuda whose principal place of business is
at 48 Cedar Avenue, Suite 120, Hamilton HM JX, Bermuda
"The Licensee": i3Dx.com, formerly named 3-Dx.com, a corporation
organised under the laws of Nevada.
WHEREAS the Licensor and Licensee entered into an Asset and License Purchase
Agreement dated June 39, 1999 (the "Agreement"); and
**
WHEREAS the Licensee wishes to add this new technology to the scope of its
license as defined in the Agreement;
NOW THEREFORE the Licensor and Licensee hereby agree to amend the Agreement
as follows:
AMENDMENT 1
Under Item 1. Definitions, sub-item 1.1, amend the definition of Products to
include the following additional products.
"Products" all animated or 3-D images photographically or digitally
created for the photographic printing of animated or 3D images - 3D
photographic cameras - 3D photographic printers - 3D photographic apparatus
used with 2-D cameras parallax rotation of image to simulate 3D image -
lenticular print optical material with photographic emulsions (LPF) **
** text omitted & filed separately
Confidential Treatment Requested
Under 17 C.F.R. Section 200.80(b)(4),
200.83 and 240.246-2
Page 2 of 3
<PAGE>
AMENDMENT 2
Under Item 7. Payment, sub-item 7.1, amend as indicated here:
7. PAYMENT
7.1 The Licensee shall during the continuance of this Agreement pay to
the Licensor a license fee of five per cent (5%) of the Gross Sales
Value of all Products (or any part thereof) sold or otherwise supplied
for money or money's worth. **
AS WITNESS whereof this Agreement has been duly executed the day and year
first above written:
NimsTec Limited i3Dx.com
48 Cedar Avenue 4850 River Green Parkway
Suite 120 Duluth Georgia
Hamilton HM JX Bermuda
By: By:
-------------------------------- --------------------------------
Name: Dr. Jerry C. Nims Name: Paul F. Peters
Title: Chairman Title: President
Date: Date:
------------------------------ ------------------------------
** text omitted & filed separately
Confidential Treatment Requested
Under 17 C.F.R. Section 200.80(b)(4),
200.83 and 240.246-2
Page 3 of 3
