SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
AMENDMENT NO.1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
youticket.com inc.
(Exact Name of Small Business Issuer as Specified in Its Charter)
NEVADA 88-0430607
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(State of Incorporation) (Issuer's I.R.S. Employer I.D. Number)
youticket.com inc.
4420 S. Arville, Suites 13 & 14
Las Vegas, NV 89103
(Address of principal executive offices and zip code)
(702) 876-8200
(Issuer's Telephone Number, Including Area Code)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g)of the Act:
Common Stock, $0.0001 par value per share
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ITEM 1. DESCRIPTION OF BUSINESS
Introduction
We operate an ^ entertainment ticketing and reservation service for the Las
Vegas, Nevada market. Our services are offered primarily through our website,
www.youticket.com which was relaunched in late October 1999. We provide show and
tour ticketing and reservation services ^ in conjunction with Ticketmaster
National Reservation Bureau, Inc., and Golf Reservations of Nevada, Inc. which
provides us with both systems and market support. In addition to selling tickets
^ on the Internet and by means of ticket outlets, youticket.com also enables
customers to purchase its products via its toll-free telephone numbers,
1-877-YOU-TIXS,1-877-YOU-TKTS and 1-877-BIG-TIXS. ^ By one means or another,
customers are able to purchase show and tour tickets and make reservations 365
days a year, 7 days a week and 24 hours a day.
youticket.com seeks to be the premier Internet site for entertainment
ticketing and reservations for the business and leisure visitor to and
residents of Las Vegas.
Corporate Background
youticket.com inc. was incorporated on May 9, 1996 under the name BNE
Associates Inc. The corporate name was changed in 1998 to Occidental Rand
Corporation and again in September 1999 to the current name. youticket.com had
no business operations until the purchase of Visitcom, Inc. on June 30, 1999.
Visitcom, our wholly owned subsidiary, was founded in 1996 under the laws
of the State of Nevada. Visitcom entered the ticketing business in 1997 as a
wholesaler of Las Vegas show tickets. Visitcom bought tickets or received block
allocations from the different Las Vegas showrooms and resold these tickets to
visitors to Las Vegas. Visitcom initially reached its consumer base by
advertising in the local Las Vegas visitor publications.
In early 1998, Visitcom quickly expanded its business operations. It opened
ticketing booths at the Alamo Car Rental outlet at McCarran Airport and at the
Union Plaza hotel. It created and began publishing High Roller Magazine, a Las
Vegas entertainment guide. It developed and launched one of the first websites
offering Las Vegas show tickets, www.bigticket.com. In mid-1998, Visitcom had
expanded its product offerings to include hotel room reservations and
telemarketing sales, and it had entered into a contract with Ticketmaster to use
and market Ticketmaster ticketing systems.
In early 1999, Visitcom faced liquidity issues from its rapid expansion and
was forced to restructure its operations. The result of the restructuring was to
discontinue High Roller Magazine, hotel room reservations services,
telemarketing
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sales programs and advertising in the local Las Vegas tourist publications.
Visitcom was then sold to Youticket.com inc. on June 30, 1999.
Early Stage Company; Qualified Accountants Report
Because the business operations of Visitcom were severely curtailed during
1999 prior to its being sold to us, youticket.com currently is still in the
early stages of re-building its business. As such, it is subject to all the
risks of a developmental company, including the requirement of significant
amounts of capital to fund operations, the need to establish business
relationships and to expand its product and service offerings, and the need to
develop and increase its customer base. Because of its early stage,
youticket.com has had significant losses and insufficient revenues to fund
operations. It is expected that losses will continue.
The report of the independent certified public accountants of youticket.com
indicates that the consolidated financial statements included in this Form 10-SB
have been prepared assuming that the company will continue as a going concern.
The significant loss for the year ended December 31, 1999 and the negative
working capital at December 31, 1999, raise substantial doubt about the
company's ability to continue as a going concern. Although youticket.com is
seeing some growth in its customer base and revenues and it has taken measures
to cut costs, it will need additional capital during the mid-part of the year
2000 to continue its operations. There is no assurance that revenues will grow
sufficiently or that financing will be available. If youticket.com is unable to
fund its operations, it will have to curtail or cease its operations.
Current Products and Services
^ Building on the core business of Visitcom, youticket.com offers an
increasing range of ticketing and reservation ^ services for entertainment,
tours and travel for the Las Vegas and the surrounding market areas. Below are
listed some of the principal ticketing and reservation services:
- Stage and Nightclub Shows - youticket.com offers ticketing and
reservations to approximately 33 stage shows, nightclub acts and
magic acts in Las Vegas, including the long running performances
of American Superstars, An Evening at La Cage, Comedy Magic,
Crazy Girls, Follies Bergere, Hipnosis, Headliners, Houdini,
Radio City Rockettes, and the Star Trek Experience.
- City, Shopping and National Park Tours - Las Vegas City,
Laughlin, Primm Outlets, Bryce National Park, Canyon National
Park, Death Valley, Grand Canyon, Hoover Dam, Lake Mead, Monument
Valley, Red Rock Canyon, Valley of Fire and Zion National Park.
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- Adventure Packages - Colorado River white water rafting, Hummer
vehicle off-road adventures, Lake Mead jet ski adventures and
Western ranch excursions.
- Golf Course Tee Reservations - youticket.com offers golf tee
reservations at 19 of the Las Vegas local and surrounding golf
courses, including Paiute Resort, Angel Park, Wild Horse, Legacy
and Royal Links.
- Travel Reservations - youticket.com offers room reservations at
26 hotels, including the major properties such as Venetian Hotel
and Casino, Tropicana Hotel, Luxor Hotel and Casino, Sahara Hotel
and Caesar's Palace and Thrifty car rentals in the Las Vegas
market.
For youticket.com to be successful, we will have to continue to expand its
offerings within each of the above categories, and expand the categories to
become a full service ticketing and reservation service in the Las Vegas market.
To do this, we will have to develop business alliances with a full range of
shows, nightclubs, magic acts, theaters, sports events, tours, adventure
packages, golf courses, hotels, restaurants, car rentals and other services that
the tourist and local resident seeks.
Market Opportunity
Las Vegas and Other Markets
Las Vegas is one of the largest tourism markets in the world. According to
the Las Vegas Convention and Visitors Bureau, the Las Vegas area received 30
million visitors in 1998, who spent close to $24 billion on entertainment. The
average Las Vegas visitor spends 3.7 nights within the city, and 48% of these
visitors will see at least one show. In addition, many Las Vegas visitors will
also take one of the many scenic tours to nearby locations such as the Grand
Canyon, Hoover Dam and the other nearby national parks.
We believe there are comparable tourism markets in other parts of North
America. These include, San Francisco, New Orleans, Orlando, Honolulu, various
casino markets such as Atlantic City, and vacation resorts such as Virginia
Beach and Branson. We believe that there is a market opportunity in these and
other markets for a comprehensive Internet based reservation and ticketing
service that offers both exciting content, in the form of online guides,
reviews, listings and other editorial content and providing visitors with the
ability to make a series of online transactions to satisfy or enhance their
vacation needs.
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E-Commerce Growth
Although we offer conventional telephone reservation and ticketing, we see
our GREATEST PROSPECTS FOR GROWTH IS via the Internet. As the Internet
population continues to grow, we see this as opening e-commerce opportunities to
sell an ever increasing range of products and services to visitors to not only
Las Vegas, but to many other resort destinations across North America.
As a result of the increasing popularity of the Internet with consumers and
businesses alike, e-commerce is undergoing significant growth. This growth is
due to several factors:
o A large and growing installed base of personal computers in
people's homes.
o The improving performance of personal computers in the workplace
and the home.
o The transformation of data transmission networks from those in
common use today that support simple transmissions of test and
statis images to those that will support two-way interactive
transmissions, multimedia messaging and retrieval servickes.
o Free and easy access to the Internet.
o Global, mass acceptance of the Internet as a communications and
commercial medium.
o Increasing acceptance of the Internet as a secure environment for
conducting transactions.
International Data Corporation, a market research firm, estimates that the
number of Internet users worldwide exceeded 159.0 million at the end of 1998 and
anticipates this number will grow to over 510.0 million by the end of 2003.
International Data Corporation also estimates that worldwide e-commerce will
increase from approximately $50.0 billion IN 1998 TO APPROXIMATELY $1.3 TRILLION
BY 2003.
E-commerce presents several advantages over traditional commerce by
bringing together traditionally fragmented, inefficient suppliers and
distribution channels, facilitating more efficient pricing models by better
matching buyers and sellers and empowering consumers by providing them with
better information, resulting in more informed purchasing decisions.
The travel industry has taken particular advantage of the Internet's
growth. Travelers in the United States spent more than $470 billion on travel
and tourism in 1996, according to the Travel Industry Association of America.
According to a recent study by Forrester Research, Inc., about 5 million U.S.
households booked trips online in 1998.
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Forrester Research predicts that number will grow to 9 million ^ in 1999 and 26
million--or one-fourth of all U.S. households--by 2003. The study also projects
that U.S. households will spend approximately $7.8 billion booking trips online
^ in 1999, and $29.4 billion ^ by 2003.
Airlines, hotels and travel services advertise to reach the growing number
of people who use the Internet to make their travel plans. According to
Competitive Media Reporting, in 1995 the travel industry purchased over $2.3
billion in advertising through traditional vehicles such as broadcast and cable
television, radio, print and outdoor media to reach and influence customers. It
is expected that internet related advertising will share an increasing portion
of the advertising budget.
Entertainment ticketing is also large and growing. The Internet has emerged
as a powerful medium for aggregating and disseminating event information,
selling tickets and related products, and marketing and promoting events.
According to Forrester Research, a market research firm, online ticketing sales
to marquee events, regular performances and sporting events are expected to grow
from $115.0 million in 1998 to an estimated $2.6 billion in 2003. The Internet
creates advantages and conveniences for consumers and entertainment
organizationns alike. Consumers' want a single web site where they can find
information about a wide range of events and conveniently buy tickets to those
events.
Business Strategy
General
Our initial objective is to develop a comprehensive, entertainment
ticketing and reservation service for visitors and residents in the greater Las
Vegas market. Currently, we focus on the tourist and business consumer, offering
these services for a number of shows, magic acts and nightclubs, tours, hotels,
car rental company and golf courses. We are seeking to further expand within
each of these categories to become a more comprehensive source of ticketing and
reservation source. In addition, we seek to expand our categories of service. We
anticipate future categories will include airlines, movies, sports venues,
restaurants and wedding planning. As the depth and breath of offerings
increases, we believe the customer base will expand among, and we will seek, the
national and international tourist and business traveler, travel service
professional and local resident.
The longer term objective of youticket.com is to take the model that is
developed in ^ the Las Vegas market^ and apply it to other tourist markets in
North America. Potential target markets for expansion include key tourist and
convention markets such as Anaheim, Orlando, Honolulu, New Orleans, San
Francisco, and San Diego, casino markets such as Atlantic City, Reno, Laughlin,
and Biloxi, and vacation resorts such as Branson, Myrtle Beach, Virginia Beach,
and Niagara Falls.
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Our ability to expand is dependant on our ability to identify those
entertainments and properties that consumers desire. Primarily we track the
inquiries of our website users and review other individual and comprehensive
website offerings, but we also engage in conventional research including the
review of competing or similar services, occupancy rates, travel reviews and
statistical studies. Once a particular category, entertainment or property is
identified, we seek the best available partners by researching on the Internet
and using conventional sources such as business directories. Once we have
identified likely business affiliates, we establish contact with the business
development departments and when possible negotiate and establish a business
relationship or alliance. For example, we have business relationships with
Ticketmaster for shows, National Reservation Bureau for hotels and Golf
Reservations of Nevada, Inc. for golf tee times and Thrifty car rentals.
The ability of youticket.com to develop its business model and expand will
depend on many factors. We will have to efficiently identify product offerings,
and then establish the business relationships that will permit youticket.com to
offer the ticketing or reservation services. There can be no assurance that we
will be able to establish the business relationships it needs to enhance or
expand its product offerings. We will have to sustain our operations during the
growth period which will require additional capital investment. There can be no
assurance that the model that works for Las Vegas will be successfully applied
to other markets.
Internet Focus
Our business plan calls for an ^ e-commerce orientation and the use of
our current and future websites. We plan to offer ^:
o An easy to use, fast and efficient web site.
o A one-stop ^ site with a wide selection of ^ entertainments, properties and
services that gives ^ the consumer everything they need and want for a ^
planned vacation or entertainment experience.
o Guides, reviews, listings and incisive editorial content that have a savvy,
young ^ person's perspective to help people make smart decisions about
their ^ entertainment and travel plans.
o The opportunity to comparison-shop across a broad spectrum of offerings in
several product and service categories.
o The ability to instantly complete safe and cost effective e-commerce
transactions.
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Building Strategic Relationships
We currently have strategic relationships with Ticketmaster, National
Reservation Bureau, Inc., Golf Reservation of Nevada leading hotels and casinos^
and Thrifty Car Rental. The relationships with Ticketmaster, National
Reservation Bureau, Golf Reservations and the Venetian Casino Resort are
pursuant to written agreements. These relationships are designed to build
product offerings and provide reliable ticketing systems. We will build on our
existing alliances, form new partnerships and acquire companies that target
visitors to resort destinations. Target acquisitions may include web sites in
resort destinations, online and offline tour guides and travel service
companies. WE PLAN to build the youticket.com brand name through expansion into
new markets and the acquisition of customer databases, products and content.
By targeting specified markets, and by focusing on the needs of vacationers
and conventioneers, we believe we can create a substantial market niche for
youticket.com without focused competition from the many reservation and
ticketing web sites such as Ticketmaster Online and Tickets.com that tend to
target larger urban metropolitan areas. We believe that we will benefit from a
first-mover advantage in the resort areas which we are targeting.
Ticketmaster - Las Vegas
In May, 1998, our subsidiary Visitcom entered into a hardware and software
rental agreement with Ticketmaster - Las Vegas. Under this agreement Visitcom,
Inc. retained and authorized Ticketmaster to act as their exclusive hardware and
software supplier for programming and storage of accounts with respect to
tickets for the attractions on the automated computerized ticketing system
developed by Ticketmaster utilizing telephones and ticket outlets with terminals
and ticket print-out capabilities linked to ticketmaster's central computer
facility. The term of this agreement is for three years with an automatic
renewal for a successive two years unless either party notifies the other not
less than 90 days and no more than 120 days prior to the expiration of the
initial term.
The Venetian Casino resort
In March, 1999, our subsidiary Visitcom entered into an agreement with the
Venetian Casino Resort to provide a leased ticketing system and training and
maintenance for A set fee per ticket sold. The contract expires in April, 2001
with a thirty-day cancellation provision by either party.
National Reservation Bureau
In November 1999, youticket.com entered into an agreement with National
Reservation Bureau, Inc. to crate and carry electronic advertisements for hotels
represented by National Reservation Bureau. The agreement extends to December
31, 2000; however it is terminable on thirty days notice. youticket.com is paid
a commission on each reservation made as a result of the youticket.com website.
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Golf Reservations of Nevada
In November 1999, youticket.com entered into an agreement with Golf
Reservations of Nevada, Inc. to create and carry electronic advertisements for
golf courses represented by Golf Reservations of Nevada. The agreement
terminates December 31, 2000; however it is terminable on thirty days notice.
youticket.com is paid a set fee for each player that reserves as a result of its
website advertising.
Sales and Marketing Strategy
In the near term our principal marketing goal is to expand our product
offerings in the Las Vegas market and increase our customer base. We plan to
increase ^ the number of entertainment venues, ^ tours, hotel properties and ^
travel providers for which we ^ offer reservation and ticketing services and add
other business categories, including restaurants, movies, sports venues and
wedding services. We principally will target ^ business and vacation visitors
who access the Internet seeking entertainment and travel options ^ during their
visits to Las Vegas, but we expect that our consumers will include the travel
professional and local resident as we become better known and become more
comprehensive in our offerings.
We will use direct marketing, cross marketing and traditional marketing to
attract a loyal customer base. By gaining the trust of ^ our consumers, we will
develop a highly targeted, brand loyal audience who will serve as the base for
growth. We also intend to use "opt-in" e-mail strategies to develop affiliate
programs that will encourage visitors to use our web site. Opt-in e-mail is a
service that permits the website visitor to enter their e-mail address so that
they may receive e-mail information in the future ^ about special deals,
discounts on products and services, and news, reviews, and tips for getting
about in Las Vegas and other resort destinations. ^ Registered members will be
rewarded with a variety of promotions and prizes such as the opportunity to win
free vacations, cash prizes, or products such as a new set of golf clubs. Loyal
members who have made purchases on youticket.com may receive gift certificates,
coupons and discounts.
Members may also be rewarded for telling people about our web site and
services. For example, a member will be rewarded with promotions or prizes for
telling people about us or a particular product or service. Through the
development of a loyal customer base, we will create an opportunity for
advertisers to reach a highly targeted audience who frequent resort
destinations. National advertisers such as airlines, national restaurant chains,
hotels and car rental companies will get an opportunity to target visitors to
numerous popular resort destinations. Local advertisers will get the opportunity
to advertise to people visiting their specific community. Local restaurants,
retailers, golf courses and the large base of companies that form the foundation
for a resort destination's local economy will find an excellent opportunity with
us.
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To extend our reach, we will use cross-marketing strategies with other
forms and types of ticket agents and distributors to drive web traffic. The goal
is to use our existing as well as other agents' physical ticketing locations as
web site marketing vehicles. We will target these cross-marketing campaigns with
special incentives. For example, any visitor to our ticket locations who is a
web site member will get a discount on their purchase and vice-versa.
In addition we will also form alliances and partnerships with web sites,
media publications, hotels and casinos, restaurants, tour companies and travel
agencies.
Web Site Overview
Consumers who plan their trips online often have to visit numerous sites
before making their purchases. The process often takes a considerable amount of
time. People must wait for web sites to download and then register to reach the
information they need. In this long search, users will find dozens of web sites
that offer products and services for their trip. but few, if any, provide a full
service for everything a resort destination offers. We intend to connect our web
site visitors to powerful e-commerce servers that track an interconnected
network of web sites providing a one-stop shop for all travel needs to a
particular destination. We believe our service will satisfy a growing need among
Internet users for effective and efficient one-stop online shopping.
^ Although our revenues currently come from service charges on the sales of
tickets or reservations, in the future we plan to provide advertisers with a web
site that gives them the opportunity to reach a wide range of tourists who we
expect will spend considerable time making their purchases. By holding this
traffic, we will provide advertisers an opportunity to efficiently target
visitors who travel to ^ particular destinations. We plan to offer advertisers
the opportunity to place banner ads, messages or e-mail links throughout the
site or in specific product and service categories. For example, a golf course
company may advertise on the home page, in the golf section or the lodging
category. So when a consumer reserves a hotel room, they will also be prompted
to make a tee-time reservation^ Once they make the tee time reservation, the
consumer may also be exposed to a banner ad for a golf store.
A key feature of the ^ Company's web site will be its proprietary
e-commerce engine that will be designed to drive revenues by:
o Directing visitors to daily specials that may include ticket discounts,
bargain airfares and more.
o Leading visitors to buy hotel rooms, reserve golf tee times and other
products and services that enhance their existing itinerary.
o Holding traffic on the web site to create opportunities for generating
advertising revenues from sponsors who want to reach a targeted
demographic.
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o Directing visitors to other youticket.com destinations where they may be
traveling as part of a vacation tour.
o Capturing demographic information for affiliate programs and promotions
that will include discounts, coupons and prizes. Demographic information
will be processed and managed for sales back to potential resort
destination visitors and carefully screened third-party customers.
We believe that ^ the travel industry is undergoing significant change. In
the past, the travel agent was the single most important source of information
and ticketing for the travel consumer and source of business for the travel
providers. More recently the trend has been to limit the role of the travel
agent. Airlines are encouraging direct sales to consumers and cutting their
commissions to the travel agent, forcing traditional travel companies to reduce
services to ^ customers. Pricing models are increasingly complex and time
sensitive. Prices change on a continual basis, making it a challenge to provide
customers with accurate price quotes. In the meantime, customers expect more
from their travel companies. They demand a high level of service and fast,
accurate prices on travel services.
We plan to take full advantage of the Internet's capabilities to solve many
of these issues. ^ Website visitors will have the ability to research
up-to-the-minute information on availability of flights, rooms, shows,
entertainment, golf tee-times, and tours. Consumers will feel empowered to
obtain the best prices and design the best vacation package that meets their
personal requirements, without the expense of using a traditional vacation
company. Also, as web technology improves, the ability to compare such items as
rooms and shows will be enhanced through the use of multimedia features such as
full-motion video footage that will provide the consumer with a real life
glimpse of what they are purchasing prior to their actual financial commitment.
The Internet's architecture also enables full automation of processes that
travel agents must often perform manually. This means more efficient systems and
less chance of operation losses.
In order to attract a larger audience to our web sites, we believe that it
needs to offer not only e-commerce opportunities, but also interesting and
entertaining editorial content, reviews, ratings, and detailed narrative
descriptions of its offerings. To establish an editorial base, we plan to form
joint ventures ^ with owners of relevant content such as local visitor
magazines. By this means, we would reproduce on our website the articles
appearing in print media. Alternatively, we may seek to acquire or make
strategic investments in print media sources in order to have access to their
content. Access to content or acquisitions will require a significant
investment. Therefore, unless youticket.com is able to raise substantial amounts
of capital, it does not anticipate that it will be able to expand its website
content in the near future.
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Through enhanced product selection, our visitor base will grow
significantly and will serve as the foundation for cross marketing and direct
marketing strategies. We will offer an increased number of shows and concerts,
tours and excursions, reservations for restaurants and golf tee-times,
recreation activities, accommodations at hotels, motels and other
establishments, and travel services.
Our web site currently generates revenues from sales of ^ stage show, magic
show and nightclub tickets, ^ tours and adventure packages^, hotels reservations
and golf tee time reservations. We will begin to offer rental car reservations
through Thrifty Car Rental during the second quarter of fiscal year 2000. We
also plan to add airline travel, weddings and restaurant reservations^ during
the third and fourth quarters of fiscal year 2000, however, there can be no
assurance that we will meet this schedule. We are currently researching
potential providers and are beginning to contact them to see if they wish to be
represented on our website. In the future we intend to generate additional
revenues by selling advertising
Since our redesign and relaunch of the youticket.com website in late
October 1999, we have seen an increase in "hits" from approximately 60,000 per
week to 200,000 per week. More significantly visitors to the website who
navigate through the product offerings, make inquiries or purchase tickets or
make reservations have increased in the time period of October 1999 to February
2000 by over 200% to approximately 10,000 web-visits per week. We believe much
of the growth is due to the introduction of hotel and golf tee links and the
additional listings and awareness of the website on Internet search engines.
All of the web sales are processed through DX Cart, a popular shopping cart
and authorized secure online credit card transaction processor. The website can
accept and process sale transactions 24 hours a day, 7 days a week with online
credit card confirmation.
In order to effectively compete with traditional retailers and other web
sites, as well as to overcome any hesitancy potential customers may have in
purchasing services over the Internet, we are planning to implement a customer
satisfaction program. Currently, we frequently deliver tickets ordered through
our website to our customers at their hotels. We believe that most e-commerce
companies do not provide users with real customer service. We intend to
differentiate our web site from other business web sites by providing live,
attentive customer service. We plan to implement a customer satisfaction system
which will manage customer service issues 24 hours a day, seven days a week,
both in person and online. We will incur substantial ongoing costs in connection
with the operation of this system, including fees payable to companies to which
we out-source parts of our customer satisfaction program.
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Research and Development
We re-launched our website in late October 1999 and only then began to
spend monies on website development. In 1999 we spent approximately $29,000 on
the development of our website. In November 1999, we entered into a consulting
agreement with Reservision, Inc. for the continued development of our website.
Reservision is a national interactive media development and marketing firm, with
a focus on developing marketing companies and e-commerce solutions and website
development. Reservision will provide approximately 40 hours per month for
development and support as required by us to maintain and improve the website.
The work that may be performed by Reservision will belong to us, and they agree
to assign their proprietary rights, if any, to us. We will pay Reservision ^
$42,000 per ^ year for their services during the term and reimburse Reservision
for their pre-approved expenses. ^ The agreement with Reservision may be
terminated at any time on 10 days written notice and it expires November 21,
2000. As additional consideration, we have issued Reservision a warrant to
purchase up to 300,000 shares of common stock at our exercise price of $.25 per
share. The warrant is vested and freely exercisable, provided that Reservision
forfeits the right to purchase 25,000 shares for each month it does not provide
services to us under the consulting agreement. At this time, warrants to
purchase 50,000 shares of common stock will not be subject to the forfeiture
clause. The warrant is exercisable until November 21, 2003.
Proprietary Rights
We regard the protection of our intellectual property, including our URLs
^"youticket.com" and "bigticket.com" as critical to our business. We also rely
on the proprietary technology of third parties, including TicketMaster,
Authorize Net and DXCart. Unauthorized use of the intellectual property used in
our business by third parties may damage our brand and our reputation. We rely
on intellectual property laws and confidentiality and license agreements with
key employees, customers and others to protect our intellectual property rights.
Because of the complexity and growing importance of intellectual property
rights, there can be no assurance that we will be able to protect our
proprietary rights on a global basis. Moreover, the expense of enforcing our
rights may limit or prohibit us from effective protection.
Internet and on-line activities are increasingly becoming the subject of
patent applications and patent grants. Recently Amazon.com was granted a patent
in connection with aspects of the linking function from one site to another for
cross selling purposes. Our website has cross selling and linking functions,
some or all of which may be covered by this recent patent. To the extent
youticket.com engages in any activity that is found to be the proprietary right
of another, it may have to cease it or obtain a license. No assurance can be
give that we will be able to continue business as we currently conduct it in
this changing environment.
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Government Regulation; Future Business Operations Risk
Currently, our business operations is not directly regulated by
governmental entities. It is possible that as the Internet develops, there will
be greater oversight or the introduction of direct regulation of the Internet
and transactions conducted on it. To the extent that there is oversight and
regulation, our business may be adversely impacted. We may encounter additional
direct costs in our operations such as various taxes or telecommunication
charges or increased compliance expense. ^ The laws governing Internet
transactions remain largely unsettled, even in the areas where there has been
some legislative action. ^ It may take years to determine whether and how
existing laws such as those governing intellectual property, privacy, libel,
consumer protection and taxation apply to the Internet.
For example, although not yet enacted, Congress is considering laws
regarding Internet taxation. In addition, various jurisdictions already have
enacted laws that are not specifically directed to electronic commerce but that
could affect our business. The applicability of many of these laws to the
Internet is uncertain and could expose us to substantial liability.
The growth of the Internet and electronic commerce, coupled with publicity
regarding Internet fraud, may lead to the enactment of more stringent consumer
protection laws. These laws may impose additional burdens on our business.
Several telecommunications carriers are seeking to have telecommunications
over the Internet regulated by the Federal Communications Commission in the same
manner as other telecommunications services. Additionally, local telephone
carriers have petitioned the Federal Communications Commission to regulate
Internet service providers and online service providers in a manner similar to
long distance telephone carriers and to impose access fees on these providers.
If either of these petitions are granted, the costs of communicating on the
Internet could increase substantially. This, in turn, could slow the growth of
use of the Internet. Any legislation or regulation could materially adversely
affect our business.
Competition
Our business is highly competitive. We compete with entertainment
organizations that handle their own ticket sales and distribution and
reservations through both traditional and on-line medium. These competitors
include international, national and local ticketing and reservation services.
Our primary competitor in Las Vegas is Allstate Ticketing which operates
multiple ticketing outlets and a web site focused on show tickets. On a national
level, Ticketmaster Online-CitySearch has an exclusive license to all of the
online ticketing for Ticketmaster Corporation. Another competitor is
Tickets.Com. We also compete with the internal reservation services of hotel
chains, airlines with their internal referrals and car rental companies. We also
compete with travel agencies, although we expect that some travel agents may use
our services. Our competitors vary in size and in the scope and breadth of the
services they offer, and the manner in which they offer their services.
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E-Commerce
The markets for reservation and ticketing services offered through
traditional channels and Internet channels are intensely competitive. We expect
competition to increase, especially in the e-commerce medium.
There are few barriers to the e-commerce market. The rapid growth of the
Internet in general, and online e-commerce activity specifically, has attracted
the attention of numerous companies. Competitors may enter into exclusive
distribution arrangements with our theaters, hotels, tour companies and
transportation companies which might deny us access to various products.
Increased competition also could result in pricing pressures, increased
marketing expenditures and loss of market shares. Others may be operating
similar types of comprehensive services to our company in markets that we intend
to enter that could present a formidable barrier to entry.
Employees
We currently have ^ four full-time employees, of which three are senior
executives in the positions of president, controller, and sales manager and one
part-time employee.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Selected Financial Data
Because we continue to develop our web site^ products and services ^, we
are still in the earlier stages of development. Therefore, selected financial
data would not be meaningful. Reference is made to the financial statements
included elsewhere in the document. The fiscal year is the calendar year.
Included in the document are the audited financial statements for the
twelve-month periods ending December 31st ^ 1998 and 1999.
Acquisition of Visitcoom, Inc.
On June 30, 1999, we acquired Visitcom, Inc., a Nevada corporation and Las
Vegas show and tour ticketing and service agency. The transaction was accounted
for as a purchase. We did not have business operations until the acquisition of
Visitcom, therefore, our financial statements only reflect the operations of
Visitcom as if acquired on January 1, 1999.
For the purchase of Visitcom, we initially issued 14,327,140 shares of
common stock . The market value of a share of common stock on the date of this
transaction was $0.25 per share. On September 3, 1999, based on facts that
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appeared to alter the representations and warranties of the prior stockholders
of Visitcom, we entered into a settlement agreement with the prior stockholders.
Under this arrangement, 11,327,140 of the shares issued for the acquisition were
returned to us for cancellation and are being held as treasury shares and we
paid $100,000 to the surrendering stockholder. As part of the settlement, on our
behalf two stockholders transferred an aggregate of 300,000 shares to one of the
prior stockholders of Visitcom. As an inducement for this action by those
stockholders, we issued a note to the transferring stockholders in the amount of
$93,750 which was subsequently converted into shares of common stock. The net
purchase price of Visitcom exceeded the fair value of the net assets acquired by
$1,204,623, and is being amortized on a straight-line basis over seven years.
Qualified Report of Independent Certified PUBLIC Accountants.
Our independent accountants have qualified their report. They state that
the audited financial statements of youticket.com for the ^ period ended
December 31, ^ 1999 have been prepared assuming the ^ company will continue as a
going concern. They note that the significant losses of our company as of
December 31, ^ 1999, and negative working capital at December 31, 1999, raise
substantial doubt about our ability to continue in business.
^ We had significant losses of ^ $619,512 for the ^ year ended ^ December
31, 1999. We have funded losses by the sale of additional securities. We expect
losses to continue. We have no sources of long-term capital. To the extent
losses continue and we are unable to fund them, we may have to curtail aspects
of our operations or cease operations altogether. We anticipate having
sufficient cash flow from operations and cash to fund our operations into the
second quarter of fiscal year 2000, but at that time we will need to raise
additional capital. We cannot predict how long we will be able to remain
operational into the future.
Results of Operations
Revenue
We had revenue of ^ $189,243 for fiscal year ^ 1999. Our revenues are
primarily derived from show ticket, hotel room and scenic tour ticket sales and
reservations via our ticketing booths and our website. ^
Cost of Revenue
The cost of revenue for fiscal year ^ 1999 was $117,779. Cost of revenues
primarily represents the costs of ^ show tickets^ sold and operating our
website.
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Selling, General and Administrative Expenses
The expenses for fiscal year 1999 were $604,931. These expenses are made up
of selling and marketing costs, salaries, rent, professional fees and general
overhead. ^
Net Losses
We had a loss of $619,512 for fiscal year 1999. Losses were
attributable to the costs of operations and costs of revenues being in excess of
revenues. Operational expenses are expected to exceed revenues for fiscal year
2000 as we develop and seek to expand the business of youticket.com.
Liquidity and Capital Requirements
^ At December 31, 1999 youticket.com had a working capital deficit of ^
$342,610. youticket.com had cash and cash equivalent assets of ^ $18,360 and
accounts receivable of $35,457 at December 31, 1999 and total current
liabilities of $414,149 at December 31, 1999.
^ Since the acquisition of Visitcom in June 1999, youticket.com has
restructured its outstanding debt obligations and funded its operations by the
issuance of common stock and shareholder loans. During the second half of 1999,
youticket.com issued an aggregate of 978,412 shares of common stock for the
conversion of outstanding debt and interest due of $503,206 and ^ 300,000 shares
of common stock for ^ proceeds of $150,000 ^. On December ^ 17, 1999
youticket.com entered into a two year convertible promissory note in the amount
of $125,000 with a shareholder ^ which was funded on January 4, 2000. The note
bears interest at the annual rate of 10% payable at the maturity date or upon
conversion and is convertible at any time at a rate of 60% of the then market
value of the common stock.
In the fourth quarter of fiscal 2000, youticket.com restructured its
operation to reduce its overhead and concentrate its business on those aspects
which management believes will produce operational revenues. The principal focus
of the business was directed to^ e-commerce sales via ^ the website. This
involved a redesign of the website and a relaunch in late October 1999.
youticket.com also took measures to reduce operating costs. This included the
discontinuance of ticket booths, reduction of staff, moving to a smaller
facility and generally cutting costs. The restructuring and shift in marketing
methodology reduced revenues at the same time that it reduced selling, general
and administrative expenses. However, as we have been adding new reservation
services in the categories of hotels and golf tee times, during the early part
of fiscal year 2000, there has been an increase in website hits, website
visitors and improving revenues. Notwithstanding the improvements in our
business, the growth in revenues do not cover operational
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expenses. Moreover, it is expected that revenues will not cover operations at
all in fiscal year 2000 and possibly for a considerable period of time
thereafter ^. If we do not increase our ^ revenues, we may not have access to
financing. Also, without an increase in revenues, we may have to reduce or cease
operations.
We will require additional capital financing to continue to develop our
business. Principally capital funds are required for operating losses and then
further web site development, marketing, and strategic business alliances and
acquisitions. We have determined, based on our internal cash flow projections,
that we will need additional funding in the second quarter of fiscal year 2000.
We plan to seek equity funding. We believe that we will need not less than
$500,000 to sustain our operations at the current level through the second
quarter of fiscal year 2001. We believe that the funds needed for the full
implementation of our current business plan will be substantial^ and well in
excess of the above amount. If we are unable to raise capital or increase our
revenues, we will have to curtail aspects of our business plan and operations or
cease our operations altogether.
We do not have any identified source of financing, including ^ bank or
private lending sources, or equity capital sources. No assurance can be given
that we will be able to develop sources of financing in the future when funds
are needed or on acceptable terms. The sale of additional equity will dilute the
current shareholder ownership position. The funding of the company by loans will
impose additional obligations on cash flow and will reduce income. (See above
for a discussion of the opinion of our independent auditors.)
Year 2000
Overview
We have evaluated the potential impact of the situation commonly referred
to as the "Year 2000 Issue". Y2K concerns the inability of information systems,
primarily computer software programs, to properly recognize and process date
sensitive information relating to the year 2000 and beyond. Many of the world's
computer systems currently record years in a two-digit format. These computer
systems will be unable to property interpret dates beyond the year 1999, which
could lead to business disruptions in the U.S. and internationally. The
potential costs and uncertainties associated with Y2K will depend on a number of
factors, including software, hardware and the nature of the industry in which a
company operates.
Accounting and Ticketing Systems
Because we have recently upgraded our accounting systems, and our
management believes that the computer programs it purchases are Y2K compliant,
our management believes these systems and programs are Y2K compliant. In
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addition, management uses ^ Ticketmaster's ticketing system, and they have been
informed by Ticketmaster that it is Y2K compliant for many of the our critical
computer needs. We have not experienced any problems associated with Y2K issues
to date.
Other Entity Compliance
We engage in electronic data interchange with other entities. The entities
with which we exchange data with are Y2K compliant. Tangently, however, the
failure of other entities to be Y2K compliant may cause our systems issues, none
of which are yet Apparent to our management. Management does not have a
contingency plan in the event a critical service, supplier or customer will not
be Y2K compliant.
ITEM 3. DESCRIPTION OF PROPERTY
Our executive offices are located at 4420 S. Arville, Suites 13 & 14 in Las
Vegas, Nevada and our telephone number is (702) 876-8200. We rent this space
under a lease That expires in April 2000. The lease requires us to pay $1,199
per month during the term. We believe that the current office and our other
facilities are adequate to meet our needs into the near future.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of shares of the common stock by (1) each person known to be the owner
of more than 5% of the outstanding shares of common stock, (2) each director and
(3) all executive officers AND DIRECTORS AS A GROUP. The informqation is as of
February 25, 2000, and it is based on informqation obtained from each of the
below named persons. On February 25, 2000 there were 16,051,272 shares of common
stock outstanding.
Number of Shares Percent of
of Common Stock Ownership of
Beneficially* Common Stock
Name of Beneficial Owner (1) Owned Outstanding
LeAnna Sidhu (2) ^ 1,057,833 6.5%
Virginia Thompson (3) 25,000 0.2%
Alexander H. Williams^(4) 25,000 0.2%
DYDX Consulting, LLC ^(5) 1,899,220 ^ 11.8%
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Elizabeth Barbara Wells 3,000,000 18.7%
ZDG Investments Limited ^ 1,361,860 8.5%
Stockbroker Relations, Inc. of
Colorado(6) 1,100,000 6.9%
David Roff 1,017,096 ^ 6.3%
Al Landau 1,007,096 ^ 6.3%
Joel Roff 905,000 ^ 5.6%
Directors and officers as a
group (3 persons)(7) 1,107,833 6.8%^
* Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
issuable upon the exercise of options or warrants currently
exercisable, or exercisable or convertible within 60 days, are deemed
outstanding for computing the percentage ownership of the person
holding such options or warrants but are not deemed outstanding for
computing the percentage ownership of any other person.
(1) The address for each of LeAnna Sidhu, Virginia Thompson and Alexander
H. Williams is c/o 4420 S. Arville, Suites 13 &14, Las Vegas, Nevada
89103. The address for each of ZDG Investments Limited, David Roff, Al
Landau and Joel Roff is ^ c/o133 Richmond Street West, Suite 401,
Toronto, Ontario, M5H 2L3. The address for DYDX LLC is 7300 N. Lehigh
Avenue, Niles, IL 60714. The address of Elizabeth Barbara Wells is
5304 Painted Lakes Way, Las Vegas, Nevada 89129.
(2) Includes 877,833 shares owned by Catalyst Capital, LLC, a Nevada
Limited Liability Company, of which Ms. Sidhu is a member and a
manager. Includes a vested option to purchase 30,000 shares of common
stock. Includes ^ 150,000 shares subject to an employee option
agreement which are currently exercisable but does not include ^
210,000 shares subject to the employee option agreement which are not
currently exercisable vesting at the rate of 30,000 per month while Ms
Sidhu is employed by us during 1999.
(3) Represents 25,000 shares subject to a currently exercisable option.
Excludes 75,000 shares subject to an option agreement which are not
currently exercisable.
(4) Represents 25,000 shares subject to a currently exercisable option.
Excludes 75,000 shares subject to an option agreement which are not
currently exercisable
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(5) Includes 248,000 shares owned by DYDX Corporation, an Illinois
corporation. DYDX Consulting, LLC and DYDX Corporation are owned by
Nikolas Konstant.
(6) These shares were issued in payment of services to be rendered and may
not be earned.
(7) See notes 2, 3 and 4 for the shares included and excluded that are
subject to employee options.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our directors and officers as set forth in the table below.
Name Age Position
- ----- --- ---------
LeAnna Sidhu 33 Chairperson and President
Virginia Thompson 33 Treasurer and Director
Alexander H. Williams 35 Secretary and Director
Ms. LeAnna Sidhu has been president and chairperson since December, 1999.
Ms Sidhu is employed full-time. Prior to joining our company, during 1998 and
1999 Ms. Sidhu was assistant director of advertising for both ^ Bally's Hotel &
Casino and the Paris Hotel and Casino where she supervised the advertising
launch of the new Paris Resort, including their website. From 1992 to 1997 Ms.
Sidhu worked for Pour Le Bebe Inc., who operated the Baby Guess, Guess Kids and
Guess Home apparel businesses under license from Guess. Ms. Sidhu was the vice
president of advertising. She supervised the launch of the Guess Home business
and numerous product line launches for Baby Guess and Guess Kids. Ms. Sidhu
attended Cal State University at Sacramento.
Ms. Virginia Thompson has been the treasurer and a director since May 1999.
Ms Thompson is with the company on a part-time basis for about 10 hours per
month and reviews the accounting records of the company. Ms. Thompson also is
the President of Tusk Studio, which she founded in 1990. In 1993, Ms. Thompson
was one of two people who initially designed Las Vegas Magazine. In 1995, she
and a partner became owners of Las Vegas Magazine, and she currently serves as
Publisher and President of the magazine. Ms. Thompson has a Bachelor of Arts
degree from Montana State University.
Mr. Alexander H. Williams has been the secretary and a director of our
company since December 1999. Mr. Williams primarily is available for
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consultations on the operation of the business and his primary duties are as a
director. There is no established time commitment. He is president of Hazard
Media, Inc., which he founded in 1999. Mr. Williams advises Internet companies
in marketing, communications and business development. From 1997 to 1999, Mr.
Williams worked for Mentor Graphics, a technology company that develops systems
and software solutions for the ^ world's largest semiconductor and electronics
companies. Mr. Williams was a strategic marketing manager for Mentor Graphics
and worked more than a year as the ^ company's corporate writer, working on an
interim basis as the director of worldwide communications. From 1996 to 1997,
Mr. Williams was the business anchor in Portland, Oregon for KPTV and The
Business Journal. From 1998 to 1996, Mr. Williams was a journalist, covering
news for The Augusta Chronicle, Times Herald-Record and HFN, a trade magazine
for the home furnishings industry. He also freelanced for Jupiter Communications
and served as the local reporter for Apple ^ Computer's digital newspaper,
broadcast at Woodstock ^'94. Mr. Williams has a master of journalism degree from
Northwestern ^ University's Medill School of Journalism and a bachelor of arts
degree in french literature from the University of Denver.
Board Meetings and Committees
During the period January 1, 1999 to December 31, 1999, the board of
directors met on 2 occasions and took written action on 18 occasions. All the
members of the board of directors attended the meetings. The written actions
were by unanimous consent. The board of directors has established no committees.
Directors serve for a term of one year after election or until their earlier
resignation or their successor is elected or appointed and qualified.
ITEM 6. EXECUTIVE COMPENSATION
Employment Agreement
We employ Ms. Sidhu as the chairperson and president of the company under a
one-year employment contract. The agreement commenced December 20, 1999 and ends
on December 20, 2000. The agreement is terminable at any time by either Ms.
Sidhu or us on thirty days advance written notice, for any reason. Ms. Sidhu is
paid a monthly salary of $3,000. When we raise an aggregate of $500,000 of
capital after December 20, 1999, her monthly salary will increase to $7,000 per
month. Ms. Sidhu receives a car allowance of $500 and a medical allowance of
$500 until we offer a paid, comprehensive medical plan. We have also entered
into a separate indemnification agreement with Ms. Sidhu.
We granted an option under our stock option plan to Ms Sidhu in connection
with her employment as the chairperson and president. The option is for an
aggregate of 360,000 shares of common stock. The option vests at the rate of
30,000 shares per month during her employment with us, commencing December 14,
1999. Once vested the option is exercisable at $.25 for seven years from the
vesting date. If
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Ms. Sidhu's employment is terminated for any reason, unvested options will
terminate and not be exercisable, but vested options will remain exercisable for
the seven year period.
Compensation of Other Officers
We currently do not pay any cash salaries to Ms. Virginia Thompson or Mr.
Alexander H. Williams for their services as officers or directors. We, however,
have issued Ms. Thompson and Mr. Williams options as compensation for their
services. Ms Thompson has an option to acquire up to 100,000 shares of common
stock of which 25,000 are vested and the balance vests in three equal
instalments in June 2000, December 2000 and June 2001^; the exercise price is
$.2815 per share and they are exercisable until June 2004. Mr. Williams has an
option to acquire up to 100,000 shares of common stock of which 25,000 are
vested and the balance vests in three equal instalments in July 2000, January
2001 and July 2001; the exercise price is $.2815 per shares and they are
exercisable until July 5, 2006.
Remuneration of the Board of Directors
A director who is an employee does not receive any cash compensation as a
director. There is no plan in place for compensation of persons who are
directors who are not employees of the Company.
Stock Options
1999 Performance Equity Plan
On September 30, 1999, the board of directors adopted the 1999 Performance
Equity Plan covering 3,000,000 shares of common stock. This plan is subject to
the approval of the stockholders prior to September 30, 2000. Under the plan, we
may issue awards to our directors, officers, employees and consultants. The
awards include stock options, restricted stock, deferred stock, stock
appreciation rights, reload options and other stock based awards. The plan will
terminate when there are no more shares of common stock available for issuance
or on September 30, 2009. The plan is administered by the board of directors or
a committee of the board of directors. These bodies have the authority to
determine the terms of any specific award, in compliance with the general terms
of the plan. Currently, there are 820,000 shares of common stock reserved for
outstanding awards under the plan including those issued to Ms. Sidhu , Ms.
Thompson and Mr. Williams. All of these awards are stock options, purchasable at
prices ranging from $.25 to $.2815 per share and exercisable until various dates
the last of which is in 2006.
Other Stock Options, Warrants, Agreements and Convertible Securities
In addition to the outstanding awards under the 1999 Performance Equity
Plan ^, youticket.com has issued options and warrants to acquire up to ^ 915,000
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shares of common stock. Of ^ this options, 15,000 shares are purchasable at $.25
and 600,000 shares are purchasable at $.3125. These options expire at different
dates in 2004. Of this number, 300,000 shares are purchasable by Reservision at
$.25 until November 21, 2003, of which 250,000 shares are subject to certain
forfeiture provisions as of the date of this Form 10-SBF
On January 4, 2000, youticket.com entered into an agreement with
Stockbroker Relations, Inc. of Colorado, an investor relations company.
Stockbroker Relations is a full services investor relations and financial public
relations firm that offers advertising, public relations, and incoming and
outgoing lead generation and will be providing these services to youticket.com.
As compensation for services including preparation of a national investor
relations campaign, introductions to prospective investors and market makers,
one month of lead generation and media services, and other services,
youticket.com has issued to Stockbroker Relations 600,000 shares of common
stock, and for future services (which will consist of a five month targeted lead
generation and financial public relations campaign) youticket.com has agreed to
issue to Stockbroker Relations an additional 100,000 shares of common stock for
each month of services rendered. youticket.com's stock closed at $0.3125 on the
date the contract was signed.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 30, 1999, youticket.com issued a note to each of three
stockholders, DYDX Consulting, David Roff and Al Landau, in the amount of
$70,000, $15,000 and $15,000, respectively. On November 19, 1999 these notes
were converted into 206,220 shares of common stock.
On September 3, 1999, youticket.com issued a note to each of two
stockholders, ZDG Holdings Inc. and David Roff, each in the amount of $96,875.
The notes earned interest at 11% and were due on demand. The principal and
interest were converted into 392,192 shares of common stock on November 19,
1999. ^
ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The authorized capital stock consists of 100,000,000 shares of capital
stock of which all the shares are common stock, $0.0001 par value. As of ^
February 25, 2000 there are ^ 16,051,272 shares of common stock issued and
outstanding.
Common Stock
The holders of common stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders. In addition, the holders are
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entitled to receive ratably dividends, if any, as may be declared from time to
time by the board of directors out of legally available funds. In the event of
our dissolution, liquidation or winding-up, the holders of common stock are
entitled to share ratably in all assets remaining after payment of all our
liabilities and subject to the prior distribution rights of any preferred stock
that may be outstanding at that time. The holders of common stock do not have
cumulative voting rights or preemptive or other rights to acquire or subscribe
for additional, unissued or treasury shares, which means that the holders of
more than 50% of such outstanding shares, voting at an election of directors can
elect all the directors on the board of directors if they so choose and, in such
event, the holders of the remaining shares will not be able to elect any of the
directors. All outstanding shares of common stock are, and when issued, the
shares of common stock offered hereby, are fully paid and non-assessable.
Stock Transfer Agent
The stock transfer agent for the common stock is Olde Monmouth Stock
Transfer Co., Inc., 77 Memorial Parkway, Suite 101, Atlantic Highlands, New
Jersey 07716.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND OTHER STOCKHOLDER MATTERS
Market Information
Our common stock is traded on the OTC Bulletin Board under the symbol UTIX.
Our common stock is only traded on a limited or sporadic basis and this should
not be deemed to constitute an established public trading market. There is no
assurance that the common stock will be actively traded in the future.
Therefore, there can be no assurance that there will be liquidity in the common
stock.
Below is a table indicating the range of high and low bid information for
the common stock for each full quarterly period within the two most recent
fiscal years and for the first three quarters of 1999, the only quarters during
which the common stock has been publicly traded. This information was obtained
from Reuters, PLC. The information reflects inter-dealer prices, without retail,
markup, markdown or commission and may not represent actual transactions.
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Quarterly Period High Low
- ----------------- ------- ---
Fiscal Year 1999
Jan. 1 - Mar. 31 2.00 .375
Apr. 1 - Jun. 30 1.125 .19
Jul. 1 - Sep. 30 1.00 .281
Oct. 1 - Ded. 31 .43 .21
Fiscal Year 2000
- -----------------
Jan. 1 - Feb. 25 .45 .28
Holders
As of ^ February 25, 2000, there were ^ 40 holders of record of the common
stock. stock.
Dividend Policy
We have never declared or paid cash dividends on the common stock and
anticipate that all future earnings will be retained for working capital and
business expansion. The payment of any future dividends will be at the sole
discretion of the board of directors and will depend upon, among other things,
future earnings, capital requirements, our financial condition and general
business conditions. Therefore, there can be no assurance that any dividends on
the common stock will be paid in the future.
ITEM 2. LEGAL PROCEEDINGS
Internal Revenue Service
The Internal Revenue Service brought an administrative claim in
September 1999 against Visitcom for unpaid payroll taxes from June 1996 through
June 1999 in the amount of $66,856.84. We have ^ entered into a settlement
agreement with the IRS for the satisfaction of this tax liability. Under the
settlement, we paid $10,000 and will pay $5,000 per month until the payroll tax
liability and penalties are satisfied ^. The IRS will forego all collection
efforts against us so long as we are current in our payments under the
settlement.
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Steve Notario/RSVP Ticketing Contract Dispute
On July 23, 1999, Mr. Steven Notario notified Visitcom that he was owed
$32,257.62 as of July 31, 1999 derived from our RSVP Ticketing operations. Mr.
Notario alleges that he was employed to establish the RSVP Ticketing division
for the purpose of selling high-end show tickets in Las Vegas for a split of the
profits from all tickets sold. We believe that the amount of profit from this
business was substantially less than the asserted amount due to the number of
returned tickets and credit card charge backs. We intend to vigorously defend
any litigation that may result from this dispute.
Get Ranked Payable
Get Ranked, an Internet search engine placement provider, has notified
Visitcom that it is owed $13,013.34 and will discontinue services and pursue
collection remedies unless arrangements are made to satisfy their outstanding
invoice. We are reviewing the contract to verify the amount of this invoice and
the productivity of their services.
New Century Productions
Visitcom sub-leases a ticket booth from New Century Productions at the
Union Plaza in Las Vegas. On or about October 1, 1999, New Century served
Visitcom with a five day notice to pay back rent or in the alternative to quit.
The amount of back rent claimed is approximately $20,000. We have quit the
location.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
BDO Seidman L.L.P., certified public accountants, were engaged by us on ^
August 6, 1999 as our independent accountants. Barry Friedman, CPA was employed
as the independent accountant prior to ^ August 6, 1999 for an audit performed
November 27, 1998. We are unaware of any disagreements or other issues, which
are required to be disclosed by the rules and regulations applicable to this
Form 10-SB.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
(1) On May 9, 1996 we issued 25,000 as our organizational shares to our
founding shareholders. On November 19, 1998, these were split on the basis of
100 for 1 share.
(2) On May 5, 1999 we issued 672,860 shares to a director for the
conversion of then outstanding debt of $16,822. The exemption claimed from
registration under the Securities Act of 1933 was pursuant to Rule 504 of
Regulation D.
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(3) ^ On June 30, 1999, we issued promissory notes to three persons in the
aggregate amount of $100,000. These notes were issued pursuant to Section 4(2)
of the Securities Act of 1933. These notes were converted into common stock on
November 19, 1999 (see below). Each of these persons is a foreign person who is
a sophisticated investor and would qualify under Regulation D as an "accredited
investor." The offer was not made by means of a public solicitation.
(4)^ On July 2, 1999, we issued 14,327,140 shares of common stock pursuant
to an Agreement and Plan of Reorganization. Under this agreement, we acquired
Visitcom, Inc. as a wholly-owned subsidiary. We issued the shares to one person
pursuant to Section 4(2) of the Securities Act of 1933. The person receiving the
shares was knowledgeable about the company as the prior owner and had a
demonstrated level of investment sophistication. By reason of his ownership of
Visitcom he was worth in excess of $1,000,000. Subsequent to the share issuance,
the number of shares was reduced to 3,000,000 to adjust ^ the aggregate
consideration paid for visitcom as a result of certain misrepresentations and
failure of the warranties made by Visitcom, Inc. and its owners. The 11,327,140
shares previously issued were returned to the capital of the company and are
being held as treasury shares.
^(5) On September 3, 1999, we issued promissory notes to two persons in the
aggregate amount of $193,750. These notes were issued pursuant to Section 4(2)
of the Securities Act of 1933. These notes were converted into common stock on
November 19, 1999 (see below). Each of these persons is a shareholder of
youticket.com and is a foreign person who is a sophisticated investor and would
qualify under Regulation D as an "accredited investor." The offer was not made
by means of a public solicitation.
(6)^ On September 14, 1999, we issued 380,000 shares of common stock as
consideration for settlement of outstanding debt of $204,000. We issued the
shares to one person pursuant to Section 4(2) of the Securities Act of 1933. The
person receiving the shares was knowledgeable about the company and had a
demonstrated level of investment sophistication. The offer was not made by means
of a public solicitation.
(7)^ On November 19, 1999, we issued 300,000 shares of common stock to four
accredited investors for an aggregate of $150,000, pursuant to individual
subscription agreements. We issued the shares pursuant to Section 4(2) of the
Securities Act of 1933. Each of these persons were foreign persons who are
sophisticated investors and would qualify under Regulation D as "accredited
investors." The offer was not made by means of a public solicitation.
(8)^ On November 19, 1999, we issued 598,412 shares of common stock for the
conversion of an aggregate of $299,206 of debt and accrued interest due to two
individuals and a limited liability company. We issued the shares pursuant to
Section 4(2) of the Securities Act of 1933. The persons receiving the shares
were knowledgeable about the company and had a demonstrated level of investment
sophistication. The offer was not made by means of a public solicitation.
-28-
<PAGE>
(9)^ On December 17, 1999, we issued a convertible promissory note in the
amount of $125,000 convertible into shares of common stock, to a corporation
that is a shareholder. The principal and interest are convertible at a rate
equal to the greater of 60% of the average closing bid price of a share of
common stock for the five days ending two days prior to the conversion or $.005.
The note was issued pursuant to Section 4(2) of the Securities Act of 1933. The
person is a shareholder of youticket.com and is a foreign person which is a
sophisticated investor and would qualify under Regulation D as "accredited
investor." The offer was not made by means of a public solicitation.
(10) On December 31, 1999, we issued a warrant to purchase 300,000 shares
of common stock to Reservision, Inc. in payment of services. The warrant is
exercisable at $.25 per share. The warrant was issued pursuant to Section 4(2)
of the Securities Act of 1933. Reservision, Inc. is a large corporation which
would qualify under Regulation D as an "accredited investor." The offer was not
make by means of a public solicitation.
(11) On January 19, 2000 we issued 1,100,000 shares of common stock to
Stockbroker Relations, Inc. of Colorado in payment of services. The shares were
issued under the Securities Act of 1933 pursuant to Rule 504 of Regulation D.
The recipient of the shares indicated it was an "accredited investor" and the
offering was made without any public solicitation. The issuance was also in
compliance with Colorado securities law.
All the proceeds of the above offerings, unless otherwise indicated, were
used for general working capital purposes.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection 1 of Section 78.751 of Chapter 78 of the Nevada General
Corporations Law empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceedings, had no
- -29-
<PAGE>
reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe his action was unlawful.
Subsection 2 of Section 78.751 of the Nevada corporate law empowers a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that he acted in any of the capacities set forth above, against expenses,
including amounts paid in settlement and attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in accordance with the standard set forth above,
except that no indemnification may be made in respect of any claim, issue or
mater as to which such person shall have been adjudged by a court of competent
jurisdiction after exhaustion of all appeals therefrom to be liable to the
corporation or for amounts paid in settlement to the corporation unless and only
to the extent that the court in which such action or suit was brought or other
court of competent jurisdiction determines that, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
Section 78.751 of the Nevada corporate law further provides that, to the
extent a director or officer of a corporation has been successful on the merits
or otherwise in the defense of any action, suit or proceeding referred to in
subsection (1) and (2), or in the defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith; that indemnification
provided for by Section 78.751 of the Nevada corporate law shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled and
that the scope of indemnification shall continue as to directors, officers,
employees or agents who have ceased to hold such positions, and to their heirs,
executors and administrators. Finally, Section 78.752 of the Nevada corporate
law empowers the corporation to purchase and maintain insurance on behalf of a
director, officer, employee or agent of the corporation against any liability
asserted against him or incurred by him in any such capacity or arising out of
his status as such whether or not the corporation would have the authority to
indemnify him against such liabilities and expenses.
Our bylaws provide that directors and officers will not be personally
liable for any of our obligations or for any breach duties or obligations
arising out of any acts or conduct of the director or officer performed for or
on behalf of us. We will indemnify and hold harmless each person and his heirs
and administrators who shall serve at any time hereafter as a director or
officer from and against any and all claims, judgments and liabilities to which
they become subject by reason of having been a director or officer, or by reason
of any action alleged to have been taken or omitted to have been taken by him
-30-
<PAGE>
as a director or officer. We will reimburse the director or officer for all
legal or other expenses reasonably incurred in connection with any claim or
liability; however, those persons will not be indemnified against, or be
reimbursed for, any expense incurred in connection with any claim or liability
arising out of their own negligence or willful misconduct.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling our company
pursuant to the foregoing provisions, we have been informed that in the opinion
of the SEC, indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event that a claim for
indemnification against liabilities, other than the payment by the company of
expenses incurred by a director, officer or controlling person in successful
defense of an y action, suit or proceeding, is asserted by such director,
officer or controlling person in connection with the securities being offered or
sold, we will, unless in the opinion of its counsel that the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the federal securities laws, and will be governed by the final
adjudication of such case.
We do not have any directors or officers liability insurance. We have
entered into an indemnification agreement with Ms. Sidhu.
Our financial statements are included in this report beginning on page F-1,
immediately following in this section.
30
<PAGE>
Youticket.com, Inc.
Consolidated Financial Statements
Years Ended December 31, 1998 and 1999
======================================
F-1
<PAGE>
Report on Independent Certified Public Accountants
To the Shareholders of
Youticket.com, Inc.
Las Vegas, Nevada
We have audited the accompanying consolidated balance ^ sheet of Youticket.com,
Inc. as of December 31, ^ 1999 and the related consolidated statements of ^
operations, shareholders' equity and cash flows for each of the years ^ ended
December 31, 1998 and 1999. These financial statements are the responsibility of
the ^ Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the ^ audits to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated 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 of the consolidated financial statements. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements, referred to above,
present fairly, in all material respects, the financial position of
Youticket.com, Inc., as of December 31, ^ 1999 and the results of its
F-2
<PAGE>
Youticket.com, Inc.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
operations and cash flows for ^ the years ^ ended December 31, 1998 and 1999 in
conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the significant ^ loss of the Company for the
year ended December 31, ^ 1999 and negative working capital at December 31,
1999, raise substantial doubt about ^ the Company's ability to continue as a
going concern. Management's plans concerning these matters are described in Note
1. The consolidated financial statements do not include any adjustments that
might result ^ from the outcome of this uncertainty.
/s/ BDO SEIDMAN, LLP
---------------------
BDO SEIDMAN, LLP
January 21, 2000
Los Angeles, California
F-3
<PAGE>
Youticket.com, Inc.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants F-3
Consolidated Financial Statements
Consolidated Balance Sheet F-4
Consolidated Statements of Operations F-5
Consolidated Statement of Shareholders' Equity F-6
Consolidated Statements of Cash Flows F-7
Notes to Consolidated Financial Statements F-8
F-4
<PAGE>
YOUTICKET.COM
CONSOLIDATED BALANCE SHEET
December 31,
1999
----------------
Assets
Current assets
Cash $ 18,360
Accounts receivable 35,457
Other assets 17,722
--------------
Total current assets 71,539
==============
Property and equipment, net (Note 3) 12,472
Goodwill, net of amortization of $86,045 (Note 8) 1,118,578
--------------
Total assets $ 1,202,589
==============
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 338,603
Other accrued liabilities 13,494
Accrued compensation 62,052
--------------
Total current liabilities 414,149
--------------
Commitments and contingencies (Note 6)
Shareholders' equity
Common stock, $0.0001 par value, 1,495
100,000,000 shares authorized, 14,951,272
shares issued and outstanding
Additional paid in capital 1,719,074
Deferred compensation (Note 7) (116,367)
Accumulated deficit (622,012)
Treasury stock (Note 8) (193,750)
--------------
Total shareholders' equity 788,440
--------------
Total liabilities and shareholders' equity $ 1,202,589
==============
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
YOUTICKET.COM
CONSOLIDATED BALANCE SHEET
<TABLE>
Years ended December 31,
----------------------------------
1998 1999
------------- ----------------
<S> <C> <C>
Revenue $ - $ 189,243
Cost of revenue - 117,779
------------- ----------------
Gross profit - 71,464
Selling, general and administrative expenses - 604,931
Amortization of goodwill - 86,045
------------- ----------------
Net loss $ - $ (619,512)
============= ================
Net loss per common share - basic and diluted (Note 2) $ - $ (0.05)
============= ================
Weighted average number of common shares 10,000,000 12,224,699
outstanding
============= ================
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
YOUTICKET.COM
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Additional
^ Common Stock Additional Treasury Stock Total
----------------------- Paid-In Deferred ------------------------ Accumulated Shareholders'
^ Shares Amount Capital Compensation Shares Amount Deficit Equity
------------ ------- ----------- -------------- ------------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1998 25,000 $ 2,500 $ - - - $ - $ (2,500) $ -
Changed par value from
no par value to
$0.0001 - (2,498) 2,498 - - - - -
Stock split 100.1 2,475,000 248 (248) - - - - -
- - - - - - - -
------------ ---------- ----------- ------------ ----------- --------- --------- ----------
Balance, December 31
1998 2,500,000 250 2,250 - - - (2,500) -
Stock split 4:1 7,500,000 750 (750) - - - - -
Common stock issued
to a relateed
party (Note 4) 672,860 67 168,148 - - - - 168,215
Common Stock issued
for business
acquisition
(Note 8) 14,327,140 1,433 3,580,352 - - - - 3,581,785
Common stock
repurchased
(Note 8) (11,327,140) (1,133) (2,830,935) - (11,327,140) (193,750) - (3,025,818)
Conversion of debt
to common stock
(Note 4) 978,412 98 503,108 - - - - 503,206
Issuance of stock
options - - 146,931 (116,367) - - - 30,564
Issuance of stock
for cash 300,000 30 149,970 - - - - 150,000
Net loss - - - - - - (619,512) (619,512)
------------ -------- ----------- ------------ ----------- --------- ---------- ------------
Balance, December
31, 14,951,272 $ 1,495 $ 1,719,074 $ (116,367) (11,327,140) (193,750) $ (622,012) $ 788,440
============ ======== =========== ============ ============ ========== ========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE>
<TABLE>
Years Ended
December 31
-----------------------------
Increase (Decrease) in Cash: 1998 1999
------------ -------------
<S> <C> <C>
Cash flows from operating activities
Net Loss $ - $ (619,512)
Adjustments to reconcile net loss to net cash used in
Operating Activities:
Depreciation and amortization - 90,681
Non-cash charges related to equity issuances (Note 4) - 181,941
Changes in operating assets and liabilities:
Accounts receivable - (35,457)
Other assets - (17,722)
Accounts payable - 76,061
Other accrued liabilities - 13,494
Accrued compensation - 62,052
------------ ------------
Net cash used in operating activities - (248,462 )
------------ ------------
Cash flows from financing activities
Capital contribution (Note 4) - 166,822
Proceeds from related party debt (Note 4) - 293,750
Purchase of treasury stock (Note 8) - (193,750)
------------ ------------
Net cash provided by financing activities - 266,822
------------ ------------
Increase in cash - 18,360
Cash, beginning of year - -
------------ ------------
Cash, end of year $ - $ 18,360
============ ============
Supplemental disclosures of cash flow information
Excess over fair value of assets acquired (Note 8) $ - $ 1,204,623
Debt converted to equity (Note 4) $ - $ 503,206
Deferred compensation (Note 7) $ - $ 116,367
============ ============
</TABLE>
See accompany notes to consolidated finasncial statements..
F-8
<PAGE>
YOUTICKET.COM
CONSOLIDATED STATEMENTS OF CASH FLOWS
Note 1 - Nature of Business
The Company
The Company was organized May 9, 1996, under the laws of the State of Nevada, as
^ BNE Associates, Inc.
On May 9, 1996, the Company issued 25,000 shares of its no par value common ^
stock for cash of $2,500.
On November 19, 1998, the State of Nevada approved the ^ Company's restated ^
Articles of Incorporation, which increased its capitalization from 25,000 common
^ shares to 50,000,000 common shares. The par value was changed from no par
value ^ to $.0001. On August 27, 1999, the Company increased the number of
authorized ^ common shares from 50,000,000 shares to 100,000,000 shares.
On November 19, 1998, the Company forward split its common stock 100:1, thus ^
increasing the number of outstanding common shares from 25,000 shares to ^
2,500,000 shares^. ^ On January 11, 1999, the Company forward split its common
stock 4:1, thus ^ increasing the number of outstanding common shares from
2,500,000 shares to ^ 10,000,000 shares. For purpose of presenting loss per
share, the splits were assumed to have occurred as of January 1, 1998.
On June 30, 1999, the Company acquired Visitcom, Inc. ^("Visitcom") (see Note 8)
^ and the Company changed its name to Youticket.com, Inc., (the ^"Company").
The Company operates an Internet show and tour ticketing website, ^
www.youticket.com, for the Las Vegas market. Through its wholly owned subsidiary
^ Visitcom, the Company also provides show and tour ticketing services to the ^
Venetian Hotel, the Union Plaza Hotel and Alamo Car Rental Service in ^
conjunction with Ticketmaster who provides the Company with both systems and ^
market support. In addition to selling tickets through its website and ticket ^
outlets, Youticket.com also enables customers to purchase its products via its ^
toll-free telephone numbers.
Going Concern
The Company has incurred significant operating losses and ^ at December 31,
1999, has negative working capital, ^ which raises substantial doubt about the ^
Company's ability to continue as a ^ going concern. The consolidated financial
statements do not include any adjustments that ^ might result from the outcome
of ^ this uncertainty. Management's plans for ^ correcting ^ this issue include
raising equity through private placement ^ offerings, focusing the ^ Company's
business on their website business and ^ restructuring its operations to reduce
operating expenses. However, there can be ^ no assurances that the Company will
be able to secure additional capital or that ^ if such capital is available,
whether the terms or conditions will be acceptable ^ to the Company.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and ^
its wholly-owned ^ subsidiary, Visitcom, Inc. All significant intercompany ^
transactions and balances are eliminated.
F-9
<PAGE>
YOUTICKET.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation ^
which is computed using the straight-line method over estimated ^ lives of five
to seven years. The Company capitalizes expenditures which ^ materially increase
asset lives and charges ordinary repairs and maintenance to ^ operations as
incurred.
Property and equipment are reviewed for impairment whenever events or ^
circumstances indicate that the ^ assets' undiscounted expected cash flows are
not ^ sufficient to recover its carrying amount. Impairment losses, if any, are
^ recorded currently.
Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected ^
future tax consequences of events that have been recognized in the Company's
consolidated financial statements or tax returns. Deferred tax liabilities and
assets are ^ determined based on the difference between the financial statement
carrying ^ amounts and tax bases of assets and liabilities using enacted tax
rates in ^ effect in the years in which the differences are expected to reverse.
Loss Per Share
Basic earnings per share is calculated by dividing net income (loss) by the ^
weighted average number of common shares outstanding during the period. Diluted
^ earnings per share is calculated by dividing net income (loss) by the basic ^
shares outstanding and all dilutive securities, including stock options, but ^
does not include the impact of potential common shares which would be ^
antidilutive. These dilutive securities were anti-dilutive in 1999.
For the ^ year ended ^ December 31, 1999, potential dilutive securities ^
representing ^ 1,635,000 outstanding stock options and warrants are not included
in the earnings ^ per share calculation since their effect would be
antidilutive.
Stock-Based Compensation
The Company adopted Statement of Financial Accounting Standards ^("SFAS") No. ^
123, ^"Accounting for Stock-Based Compensation^ ", which establishes a fair
value ^ method of accounting for stock-based compensation plans. The provisions
of this ^ Statement allow companies to either expense the estimated fair value
of stock ^ options or to continue to follow the intrinsic value method set forth
in ^ Accounting Principles Board Opinion No. 25, ^"Accounting for Stock Issued
to ^ Employees^ ", but to disclose the pro forma effect on net income (loss) and
net ^ income (loss) per share had the fair value of the stock options been
expensed. ^ The Company has elected to continue to account for stock-based
compensation ^ plans utilizing the intrinsic value method. Accordingly, the
compensation cost ^ for stock options is measured as the excess, if any, of the
fair market price of ^ the ^ Company's stock at the date of grant above the
amount paid ^ to acquire the stock.
F-10
<PAGE>
YOUTICKET.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies (Continued)
In accordance with this Statement, the Company has provided footnote disclosure
^ with respect to stock-based employee compensation. The cost of stock-based ^
employee compensation is measured at the grant date based on the value of the ^
award and is recognized over the vesting period. The value of the stock-based ^
award is determined using a pricing model whereby compensation cost is the ^
excess of the fair value of the award, as determined by the pricing model at ^
grant date or other measurement date, above the amount an employee must pay to ^
acquire the stock.
Concentration of Credit Risks
Financial instruments which potentially expose the Company to concentration of ^
credit risk consist primarily of cash and ^ accounts ^ receivable. The company
places its cash ^ with major ^ financial institutions. At times, cash balances
may be in excess of the amounts ^ insured by the Federal Deposit Insurance
Corporation, however, management ^ believes the risk of loss to be minimal.
The Company provides credit, in the normal course of business, to various ^
customers. The Company conducts on-going credit evaluations but does not obtain
^ collateral or other forms of security. The Company believes its credit
policies ^ do not result in significant adverse risk and do not expect
significant credit ^ related losses.
Revenue Recognition
The Company generates revenues primarily from per ticket convenience fees ^
charged directly to consumers who order tickets through the ^ Company's website,
^ telephone sales center or retail outlets. In addition, the Company charges a ^
handling fee to consumers for tickets sold by the Company. The Company ^
recognizes convenience fee and handling fee revenue from ticket sales at the ^
time the sale is made.
Use of Estimates
The preparation of consolidated 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 amounts could differ from those estimates.
Fair Value of Financial Instruments
The carrying value of the ^ Company's financial instruments, consisting
primarily ^ of accounts receivable^ and accounts payable ^, approximates fair
value due ^ to the relatively short maturity of these instruments and the
borrowing costs to ^ the Company.
^ Goodwill
^ Cost in excess of the fair market value of assets acquired is amortized on a
straight-line basis of seven years.
F-11
<PAGE>
YOUTICKET.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Property and Equipment
Property and equipment consists of the following:
<TABLE>
DECEMBER
31, Estimated
Useful
1999 Life
--------------- ------------
<S> <C> <C>
Computer and office equipment $ 9,582 5 TO 7
---------------- ------------
years
Furniture and fixtures 7,526 5 years
---------------
17,108
Less accumulated depreciation 4,636
---------------
$ 12,472
==============
</TABLE>
Note 4 - Related Party Transactions
On May 5, 1999, the Company issued 672,860 shares of Common Stock, with a fair ^
market value of $0.25 per share, to a Director in exchange for cash proceeds of
^ $16,822. As a result of this issuance the Company has recorded compensation ^
expense of $151,393, which is included in general and administrative expense.
On September 1, 1999, the Company granted 400,000 stock options with an exercise
^ price of $0.3125, which was the fair market value of the shares on the date of
^ the grant, to ^ an executive of the Company. These options ^ vested
immediately and ^ expire on August 31, 2004. On the same day, the Company
granted an additional ^ 480,000 stock options with an exercise price of $0.3125,
which was the fair ^ market value of the shares on the date of the grant, to
this ^ executive of the ^ Company. These options ^ vested at a rate of 80,000
options per month with the first ^ vesting on September 30, 1999. Non-vested
options ^ were canceled when the executive terminated ^ his agreement with the
Company^ in November 1999. The remaining options have an expiration date ^ of
five years after the vesting date.
On June 30, 1999, the Company issued three promissory notes to shareholders of ^
the Company in the amounts of $70,000, $15,000 and $15,000 in exchange for cash.
^ These notes, which ^ were secured by the assets of the Company, ^ beared
interest at a ^ rate of 10% per annum^ and ^ had a maturity date of January 31,
2000. The notes, plus accrued interest, were converted to 206,220 shares of the
Company's common stock in November 1999.^
On September 3, 1999, the Company issued two promissory notes of $96,875 each to
^ two shareholders of the Company in exchange for cash. These notes ^ were
secured by ^ 11,327,140 shares of the ^ Company's common stock, which were
repurchased from the ^ previous owners of Visitcom. The promissory notes ^
beared interest at a rate of 10% ^ per annum and ^ were due on demand. These
notes, plus accrued interest, were converted into 392,192 shares of the
Company's common stock in November 1999.
In November 1999, the Company issued 300,000 shares of Common Stock in exchange
for $150,000 in cash to existing shareholders of the Company.
F-11
<PAGE>
YOUTICKET.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 - Income Taxes
At ^ December 31, 1999, the Company has a net deferred asset of approximately
$293,000 ^, which has been fully offset by a valuation allowance. The net
deferred ^ tax asset is comprised principally of a net operating loss
carryforward. At December 31 ^, 1999, the Company has a Federal operating loss
carryforward of approximately $686,000. The net operating loss carryforward
expires in 2019 ^.
Note 6 - Commitments and Contingencies
The Company leases office space under a non-cancelable operating lease^
expiring in March 2000. Future minimum payments due ^ under this lease for the
year^ ending December 31, ^ 2000 are $10,477.
The Company leases office space under a non-cancelable operating lease^
expiring in March 2000. Future minimum payments due ^ under this lease for the
year^ ending December 31, ^ 2000 are $10,477.
^ Employment Agreement
^ In December 1999, the Company entered into an employment agreement with the
President of the Company ("President"). Under the terms of this agreement, the
Company shall pay the President a salary of $3,000 per month increasing to
$7,000 upon receipt of $500,000 of new capital. The term of this agreement is
twelve months. The agreement also provided for the granting of 360,000 options
to the President, vesting at a rate of 30,000 per month at an exercise price of
$0.25 per share.
Note 7 - Stock Options and Shareholders' Equity
During 1999, the Company received advances of $204,000 which ^ were converted,
including accrued interest, into ^ 380,000 shares of the ^ Company's common
stock^ in September 1999. Conversion ^ price ^ was based on the fair market
value of the ^ Company's common stock as of the ^ date of the transaction.
During 1999, options were granted to purchase 15,000 shares of common stock.
These options were granted with an exercise price of $0.25 with a term of five
years. The fair value of these warrants was determined by the Company to be
approximately $5,901. These charges have been recorded as general and
administrative expenses during the year ended December 31, 1999.
In November 1999, the Company entered into a website development agreement with
an outside consulting service. In conjunction with this agreement, the Company
issued options to purchase 300,000 shares of Common Stock. These options were
granted with an exercise price of $0.25 and a term of four years. The fair value
of these options was determined by the Company to be approximately $68,272.
These charges are amortized over the twelve-month term of the agreement. As of
December 31, 1999, the unamortized balance of the deferred expense related to
these options amounted to $51,976.
In September 1999, the board of directors of the Company approved a performance
^ equity plan that ^ authorized up to 3,000,000 shares to be issued. The Company
has ^ reserved 3,000,000 shares of Common Stock for issuance under this plan.
F-12
<PAGE>
YOUTICKET.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Stock Options and Shareholders' Equity (Continued)
The Company has also granted options under a non-qualified plan.
<TABLE>
Weighted
Average
Exercise
Activity under the performance equity plan as follows: Shares Price
----------- ------------
<S> <C> <C>
Outstanding at December 31, 1998 - $ -
Granted 1,600,000 0.2915
Exercised - -
Canceled (280,000) 0.3125
----------- ------------
Outstanding at December 31, 1999 1,320,000 $ 0.2870
=========== ============
</TABLE>
Stock Based Compensation
^ During the year ended December 31, 1999, some of the options granted to
employees under the plan were granted at an exercise price below the fair market
value. In accordance with APB Opinion No. 25, the Company has recorded
compensation expense of $14,269 for the year ended December 31, 1999 and has
deferred $64,391 of future compensation expense at December 31, 1999. All other
stock options issued to employees have an exercise price not less than the ^
fair market value of the Common Stock on the date of grant, and in accounting ^
for such options utilizing the intrinsic value method, there is no related ^
compensation expense recorded in the ^ Company's consolidated financial
statements. If ^ compensation cost for stock-based compensation had been
determined based on the ^ fair market value of the stock options on their dates
of grant in accordance ^ with SFAS 123, the ^ Company's net loss for the ^ year
ended ^ December 31, ^ 1999 would have been increased to the pro forma amounts
presented below:
December
31,
1999
----------------
Net loss:
As reported $ (619,512)
Pro forma $ (845,933)
Basic and diluted loss per common share:
As reported $ (0.05)
Pro forma $ (0.07)
The fair value of option grants is estimated on the date of grant utilizing the
Black-Scholes option-pricing model with the following weighted average
assumptions for options granted during 1999; expected life of option of four to
six and a half years, expected volatility of 79%, risk free interest rate of 6%
and a 0% dividend yield. The weighted average fair value at the grant date for
stock options granted during 1999 is $0.28 per option.
F-13
<PAGE>
YOUTICKET.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Stock Options and Shareholders' Equity (Continued)
Additional information relating to stock options and warrants outstanding and
exercisable at December 31, 1999, summarized by exercise price are as follows:
<TABLE>
Exercisable
Outstanding Weighted Average Weighted Average
------------------------------------------------- ------------ ------------
Exercise Price Life Exercise Exercise
Per share Shares (Years) Price Shares Price
- ------------------------ ------------- --------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 0.25 675,000 5.05 $ 0.25 345,000 $ 0.25
$ 0.2815 360,000 6.38 $ 0.2815 112,500 $ 0.2815
$ 0.3125 600,000 4.75 $ 0.3125 600,000 $ 0.3125
------------- ------------
1,635,000 1,057,500
============= ============
</TABLE>
Note 8 - Business Acquisition
On June 30, 1999, the Company acquired Visitcom, Inc. ^("Visitcom"), a Las Vegas
^ show and tour ticketing service agency. The Company issued 14,327,140 shares
of ^ its common stock to purchase Visitcom. The market value of these shares on
the ^ date of this transaction was $0.25 per share. On September 3, 1999, the
Company repurchased 11,327,140 shares of the original issuance for $193,750 in
cash due to subsequent changes in the purchase price. The transaction was
accounted for as a purchase. The net purchase price of Visitcom was $750,000.
The cost in excess of the fair value of the net assets acquired was $1,204,623,
which is being amortized on a straight line basis over seven years. The results
of operations of Visitcom are included in the accompanying consolidated
financial statements from the date of acquisition. ^
^ The following summarized unaudited pro forma financial information assumes the
acquisition had occurred on January 1, 1998. The unaudited proforma results are
not necessarily indicative of the results which might actually have been
obtained had the acquisition occurred as of January 1, nor are they intended to
be indicative of future results of operations.
<TABLE>
Year ended Year ended
December 31, 1998 December 31, 1999
---------------------------------------------------- ------------ -----------------------------------------
Proforma Proforma Consolidated
Youticket, Visitcom, Adjust- Consolidated Youticket, Visitcom, Adjustmen Amounts
Inc. Inc. ments Amounts Inc. Inc. Adjustments Amounts
------------ ----------- ---------- ----------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue $ - $ 767,163 $ -$ 767,163$ 189,243 $ 178,148 $ - $ 367,391
Cost of
Revenue - 428,217 - 428,217 117,779 99,757 - 217,536
------------ ----------- ---------- ----------- ------------ ----------- ---------- -----------
Gross Profit - 338,946 - 338,946 71,464 78,391 - 149,855
Selling and
administrative
expenses - 460,125 (1) 172,089 632,214 690,976 199,553 (1) 86,045 976,574
------------ ----------- ---------- ----------- ------------ ----------- ---------- -----------
Net loss $ - $ (121,179) $ (293,268) $ (619,512) $ (121,162 ) $ (826,719)
============ =========== =========== ============ =========== ===========
Loss per common
share - basis
and diluted $ (0.01) $ (0.02) $ (0.05) $ (0.06)
Shares used in computing 10,000,000 13,000,000 12,224,699 13,704,151
earnings per share
</TABLE>
(1) To amortize goodwill in connection with the purchase of Visitcom on a
straight-line basis over seven years.
F-14
<PAGE>
YOUTICKET.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8 - Business Acquisition (Continued)
The acquisition of Visitcom on June 30, 1999 and the allocation of the purchase
price on the basis of the fair values of the assets acquired and liabilities
assumed is as follows:
Components of Purchase Price:
Common stock issued (14,327,140 shares) $ 3,581,785
Repurchase of common stock (11,327,140 shares) (2,831,785)
-----------------
$ 750,000
=================
Summary Allocation:
Assets $ 15,362
Liabilities (469,985)
Goodwill 1,204,623
-----------------
$ 750,000
=================
The purchase price is based on the fair value of the Company's common stock on
the date of the acquisition.
Note 9 -^ Subsequent Events
In ^ January 2000, the Company received $125,000 in exchange for a convertible
note payable issued to a company controlled by two shareholders and directors of
the company. This note bears interest at a rate of 10%, is due in December 2001
and is convertible into the number of shares of the Company's common stock of
approximately 60% of the Company's common stock price on the date of conversion.
^ In January 2000, the Company entered into an agreement with an investor
relations company ^ whereby the consultant will receive an initial 500,000 ^
shares of common stock^ at $0.4375 per share, plus an additional 100,000 shares
of common stock for each month of services rendered, up to a maximum of six
months. The shares are to be issued at the market value of the common stock five
business days subsequent to the month in which the services are provided.
F-15
<PAGE>
YOUTICKET.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART III
ITEM 1. INDEX TO EXHIBITS
(a) Exhibits
3.1 Certificate of Incorporation, as amended, of youticket.com inc.
3.2 By-laws of the Registrant
4.1 Form of common stock certificate of youticket.com inc.
4.2 Convertible Promissory Note between youticket.com inc. and ZDG
Holdings, Inc.
4.3* Warrant Agreement between Registrant and Reservision, Inc. dated
December 31, 1999.
10.1 Agreement between Visitcom, Inc. and Venetian Casino Resort LLC
10.2 Hardware and TM System User Agreement between Visitcom, Inc. and
Ticketmaster - Las Vegas.
10.3 Emplooyment and Indemnification Agreements between youticket.com inc.
and LeAnna Sidhu.
10.4 Reservision, Inc. Website Development Agreement
10.5 1999 Performance Equity Plan
10.8* Amendment No. 1 Reservision, Inc. Website Development Agreement
10.9* Consulting Agreement dated January 4, 2000 between Registrant and
Stockbroker Relations, Inc. of Colorado
10.10* Stock Issuance Agreement dated January 19, 2000 between Registrant and
Stockbroker Relations, Inc., of Colorado.
21.1 Subsidiaries of Registrant
27.1* Financial Data Schedule
* Filed herewith.
-31-
<PAGE>
Pursuant to the requirements of Section 12 of the Securities Exchange ^
Act of 1934, the registrant has duly caused this ^ Amendment No. 1 to the Report
on Form 10-SB to be signed on its ^ behalf by the undersigned, thereunto duly
authorized on the ^ 9th day of March, 2000 ^.
YOUTICKET.COM, INC.
/s/ LeAnna Sidhu
-------------------------
LeAnna Sidhu, President
-32-
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION IS AVAILABLE AND AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
ISSUER IS DELIVERED TO SUCH EFFECT.
Date: December 31, 1999
WARRANT
TO PURCHASE COMMON STOCK OF
YOUTICKET.COM, INC.
THIS CERTIFIES that RESERVISION, INC., a Michigan corporation (the
"Holder") is entitled to purchase, subject to the terms of this Warrant, from
YOUTICKET.COM, INC. (hereinafter referred to as the "Company"), a corporation
organized and existing under the laws of the State of Nevada, at any time after
the date hereof and until 5:00 P.M. (Pacific Time) on the Expiration Date (as
defined herein), up to 300,000 fully paid and nonassessable shares (the "Warrant
Shares") of Common Stock of the Company, $0.001 par value per share (the "Common
Stock"), subject to adjustment as provided herein, at a purchase price of $0.25
per share (the "Warrant Price").
1. Definitions. As used in this Warrant, the following terms have the
respective meanings set forth below:
"Business Day" shall mean any day that is not (i) a Saturday or Sunday or
(ii) a day on which the Securities and Exchange Commission is closed.
"Consulting Agreement" shall mean the Consulting Agreement, dated November
22, 1999, as amended on December 31, 1999, between the Company and the Holder.
"outstanding" shall mean, when used with reference to Common Stock or any
class thereof, at any date as of which the number of shares thereof is to be
determined, all issued shares of Common Stock or of the relevant class, except
shares then owned or held by or for the account of the Company or any subsidiary
thereof, and shall include all shares issuable in respect of outstanding scrip
or any certificates representing fractional interests in shares of Common Stock
or of the relevant class.
2. Vesting and Exercisability of Warrant. This Warrant shall be fully
vested and freely exercisable by the Holder for the purchase of the number of
shares of Common Stock with respect to which this Warrant entitles the Holder
to. However, Holder shall forfeit its' right to purchase 25,000 Warrant Shares
for every month that the Holder fails to provide services for the Company in
<PAGE>
accordance with the terms and conditions of the Consulting Agreement short of
twelve (12) months. For illustration purposes only, in the event the Holder
works for the Company for eight months before it fails to provide further
services to the Company and/or its' services are terminated by the Company in
accordance with their rights under the Consulting Agreement, Holder will forfeit
its' right to purchase 100,000 Warrant Shares (12 months - 8 months = 4 months x
25,000 = 100,000).
3. Expiration of Warrant. This Warrant, to the extent not exercised, shall
expire and cease to be of force and effect at 5:00 P.M. (Pacific Time) on
November 21, 2003 (the "Expiration Date").
4. Method of Exercise. This Warrant may be exercised in whole or in part
(but not as to fractional shares) by the surrender of the Warrant, with the
Purchase Agreement attached hereto as Annex A properly completed and duly
executed, at the principal office of the Company at
__________________________________, or such other location which at that
time shall be the principal office of the Company (the "Principal Office"), and
upon payment to it of the Warrant Price for each Warrant Share to be purchased
upon such exercise (the aggregate of the Warrant Price for all shares to be
exercised being referred to herein as the "Purchase Price"). The Purchase Price
shall be paid by delivering a certified check, bank draft or wire transfer of
immediately available funds to the order of the Company. The purchaser shall be
treated for all purposes as the holder of the Warrant Shares as of the close of
business on the date of exercise, and certificates for the Warrant Shares so
purchased shall be delivered to the person so entitled within a reasonable time,
not exceeding thirty (30) days, after such exercise. Unless this Warrant shall
have expired, a new Warrant of like tenor and for such number of Warrant Shares
as the Holder shall direct, representing in the aggregate the right to purchase
that number of Warrant Shares with respect to which this Warrant shall not have
been exercised, shall also be issued to the Holder within such time.
5. Certain Covenants of the Company. The Company shall cause the shares of
Common Stock underlying any exercised Warrant to be registered with the
Securities and Exchange Commission by filing a Form S-8 at the Consultant's
request, such request not to be earlier than ninety (90) days after the
Company's Form 10-SB is declared effective by the SEC. During the period within
which this Warrant may be exercised, the Company will at all times have
authorized and reserved for the purpose of issuance upon exercise of this
Warrant, a sufficient number of shares of its Common Stock to provide for the
exercise of this Warrant.
6. Adjustment of Purchase Price and Number of Shares. The number of shares
of Common Stock purchasable upon the exercise of this Warrant and the purchase
price of such shares shall be subject to adjustment from time to time upon the
happening of certain events as follows:
6.1 Stock Dividends, Subdivisions or Combinations. If the Company at
any time while this Warrant remains outstanding and unexpired shall:
2
<PAGE>
(a) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock,
(b) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or
(c) pay a dividend or make a distribution in shares of its
Common Stock,
then the number of shares of Common Stock purchasable upon the exercise of
this Warrant immediately after the occurrence of any such event shall be
adjusted to equal the number of shares of Common Stock that a record holder
of the same number of shares of Common Stock represented by this Warrant
immediately prior to the occurrence of such event would own or be entitled
to receive after the happening of such event. In the event of any increase
or decrease in the number of shares purchasable upon the exercise of this
Warrant in accordance with this Section 6.1, the purchase price per share
of such shares shall be proportionately increased or decreased such that
the economics of the Warrant remain consistent.
6.2 Reclassification, Consolidation or Merger. At any time while this
Warrant remains outstanding and unexpired, in case of any reclassification
or change of outstanding securities issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or
from no par value to par value or as a result of an event described in
Sections 6.1(a) or (b) above) or in case of any consolidation or merger of
the Company with or into another corporation (other than a merger with
another corporation in which the Company is a continuing corporation and
which does not result in any reclassification or change, other than a
change in par value, or from par value to no par value, or from no par
value to par value), or in the case of any sale or transfer to another
corporation of the property of the Company as an entirety or substantially
as an entirety, the Company, or such successor or purchasing corporation,
as the case may be, shall, without payment of any additional consideration
therefor, execute a new Warrant providing that the Holder shall have the
right to exercise such new Warrant (upon terms not less favorable to the
Holder than those then applicable to this Warrant) and to receive upon such
exercise, in lieu of each share of Common Stock of the Company theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of
stock, other securities, money or property receivable upon such
reclassification, change, consolidation, merger, sale or transfer by the
Holder of one share of Common Stock issuable upon exercise of this Warrant
had this Warrant been exercised immediately prior to such reclassification,
change, consolidation, merger, sale or transfer. Such new Warrant shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6. The
provisions of this Section 6.2 shall similarly apply to successive
reclassification, changes, consolidations, mergers, sales and transfers.
3
<PAGE>
6.3 Liquidating Dividends, Etc. If the Company at any time while this
Warrant remains outstanding and unexpired makes a distribution of its
assets to the holders of its Common Stock as a dividend in liquidation or
by way of return of capital or other than as a dividend payable out of
earnings or surplus legally available for dividends under applicable law or
any distribution to such holders made in respect of the sale of all or
substantially all of the Company's assets (other than under the
circumstances otherwise provided for in this Section 6), the holder of this
Warrant shall be entitled to receive upon the exercise hereof, in addition
to the shares of Common Stock receivable upon such exercise, and without
payment of any consideration other than the Warrant Price, an amount in
cash equal to the value of such distribution per share of Common Stock
multiplied by the number of shares of Common Stock which, on the record
date for such distribution, are issuable upon exercise of this Warrant
(with no further adjustment being made following any event which causes a
subsequent adjustment in the number of shares of Common Stock issuable upon
the exercise hereof), and an appropriate provision therefor should be made
a part of any such distribution. The value of a distribution which is paid
in other than cash shall be determined in good faith by the Board of
Directors.
6.4 Other Action Affecting Common Stock. If after the date hereof the
Company shall take any action affecting the outstanding number of shares of
Common Stock, other than an action described in any of the foregoing
subsections of Section 6 hereof, inclusive, that would have a materially
adverse effect upon the rights of the Holder, the Warrant Price shall be
adjusted in such manner and at such time as the Board of Directors on the
advice of the Company's independent public accountants may in good faith
determine to be equitable in the circumstances.
6.5 Other Provisions Applicable to Adjustment under this Section. The
following provisions shall be applicable to the making of adjustment of the
number of shares of Common Stock issuable upon exercise of this Warrant
provided for in this Section 6:
(a) When Adjustments to Be Made. The adjustments required by this
Section 6 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment of the
number of shares of Common Stock issuable upon exercise of the Warrant
that would otherwise be required may be postponed (except in the case
of a subdivision or combination of shares of the Common Stock, as
provided for in Section 6.1) up to, but not beyond the date of
exercise if such adjustment either by itself or with other adjustments
not previously made adds or subtracts less than 1% of the shares of
Common Stock issuable upon exercise of the Warrant immediately prior
to the making of such adjustment. Any adjustment representing a change
less than such minimum amount (except as aforesaid) which is postponed
shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 6 and not previously
made, would result in a minimum adjustment or on the date of exercise.
For the purpose of any adjustment, any specified event shall be deemed
to have occurred at the close of business on the date of its
occurrence.
4
<PAGE>
(b) Fractional Interest. In computing adjustments under this
Section 6, fractional interests in Common Stock shall be taken into
account to the nearest 1/10th of a share.
(c) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or distribution or subscription or purchase
rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
(d) Escrow of Warrant Stock. If after any property becomes
distributable pursuant to this Section 6 by reason of the taking of
any record of the holders of Common Stock, but prior to the occurrence
of the event for which such record is taken, and the Holder exercises
this Warrant, any additional shares of Common Stock issuable upon
exercise by reason of such adjustment shall be deemed the last shares
of Common Stock for which this Warrant is exercised (notwithstanding
any other provision to the contrary herein) and such shares or other
property shall be held in escrow for the Holder by the Company to be
issued to the Holder upon and to the extent that the event actually
takes place, upon payment of the Warrant Price. Notwithstanding any
other provision to the contrary herein, if the event for which such
record was taken fails to occur or is rescinded, then such escrowed
shares shall be canceled by the Company and escrowed property
returned.
7. Notice of Adjustments. Whenever the number of shares of Common Stock
issuable upon exercise of this Warrant shall be adjusted pursuant to Section 6
hereof, the Company shall promptly notify the Holder in writing of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Company's
Board of Directors made any determination hereunder), and the number of shares
of Common Stock issuable upon exercise of this Warrant after giving effect to
such adjustment. Such notice shall be mailed (by first class and postage
prepaid) to the Holder at the following address:
___________________________________________________, or such other address as
the Holder shall hereafter furnish in writing to the Company.
5
<PAGE>
8. Fractional Shares. No fractional shares of the Company's Common Stock
will be issued in connection with any purchase hereunder but in lieu of such
fractional shares, the Company shall make a cash refund therefor equal in amount
to the product of the applicable fraction multiplied by the Warrant Price paid
by the Holder for its Warrant Shares upon such exercise.
9. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Holder as follows:
(a) This Warrant has been duly authorized by all necessary corporate
action on the part of the Company and has been duly executed by a duly
authorized officer of the Company and constitutes a valid and binding
obligation of the Company.
(b) Neither the execution and delivery of this Warrant, nor the
consummation of the transactions contemplated hereby, will violate or
result in any violation of or be in conflict with or constitute a default
under any term of the charter or bylaws of the Company or of any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to the Company.
(c) Upon exercise of this Warrant and payment of the Warrant Price by
the Holder, the Warrant Shares will be duly issued, fully paid and
nonassessable shares of Common Stock and free from all taxes, liens and
changes with respect to the issuance thereof.
10. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company of
evidence reasonably satisfactory to it that this Warrant has been mutilated,
destroyed, lost or stolen, and in the case of any destroyed, lost or stolen
Warrant, a bond of indemnity reasonably satisfactory to the Company, or in the
case of a mutilated Warrant, upon surrender and cancellation thereof, the
Company will execute and deliver in the Holder's name, in exchange and
substitution for the Warrant so mutilated, destroyed, lost or stolen, a new
Warrant of like tenor substantially in the form thereof with appropriate
insertions and variations.
11. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company
and the Holder.
12. Amendment. This Warrant may be modified with the written consent of the
Company and the Holder.
13. Transferability. This Warrant may not be sold, pledged or otherwise
transferred or encumbered by the Holder without the prior written consent of the
Company.
14. Headings. The descriptive headings of the several sections of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant.
6
<PAGE>
15. Governing Law. This Warrant shall be governed by the laws of the State
of Nevada without regard to the provisions thereof relating to conflict of laws.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer, attested by its duly authorized officer, on the date of
this Warrant.
YOUTICKET.COM, INC.
/s/ LeAnna Sidhu
By:____________________
Name: LeAnna Sidhu
Title:CEO
7
<PAGE>
Annex A
PURCHASE AGREEMENT
Date:
TO: YOUTICKET.COM, INC.
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby agrees to purchase shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share of
$__________ provided by this Warrant.
Signature: ____________________________
Address: _____________________________
ADDENDUM TO CONSULTING AGREEMENT
THIS ADDENDUM TO CONSULTING AGREEMENT (the "Addendum") is entered into
as of December 31, 1999 by and between YouTicket.com inc. ("UTIX"), a Nevada
corporation and Reservision, Inc., a Michigan corporation ("Consultant").
RECITALS
WHEREAS, on or about November 22, 1999, UTIX and Consultant entered
into a Consulting Agreement with UTIX (the "Consulting Agreement"), pursuant to
which Consultant agreed to provide certain services to UTIX in return for a
mutually agreed-upon consideration; and
WHEREAS, after further negotiations, the parties wish to amend and
augment the terms contained in the Consulting Agreement by entering into this
Addendum.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
obligations and benefits contained herein, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
MODIFICATION OF EXISTING TERMS
By this Addendum, the parties agree to amend and modify only those
terms and conditions of the Consulting Agreement specifically enumerated. To the
extent that a specific term, provision or condition is not modified or set forth
in this Addendum, the original terms of Consulting Agreement are intended to
remain in full force and effect. To the extent possible, the numbering of the
following provisions shall correspond with the numbering sequence of the
original Consulting Agreement terms, which they replace or to which they are
added. Any defined terms shall have the meanings set forth in the Consulting
Agreement.
TERMS AND CONDITIONS
4. CONSIDERATION. UTIX shall pay to the Consultant in accordance with the
Schedule set forth below as consideration for the services herein:
(a) Forty Two Thousand Dollars ($42,000.00) per annum (beginning on
November 22, 1999), and
(b) A warrant to purchase 300,000 shares of common stock (the "Warrant").
The Warrant shall have an exercise price of $0.25 per share and shall
automatically expire on November 21, 2003. The common stock underlying
the Warrant will be registered with the Securities and Exchange
Commission ("SEC") by filing a Form S-8 at the Consultant's request,
such request not to be earlier than ninety (90) days after UTIX's Form
10-SB is declared effective by the SEC. The number of Warrants shall
be adjusted proportionately for any comprehensive changes in the
company's capital structure including stock splits, stock dividends,
etc.
<PAGE>
Page 2
Addendum to Consulting Agreement
December 31, 1999
6. TERM. The term of the Consulting Agreement commenced November 22, 1999 and
will continue through November 21, 2000 (the "Term").
23. TERMINATION. The Consulting Agreement will automatically terminate on
November 21, 2000 (the "Termination Date"). Each party shall have the right to
terminate this Consulting Agreement before the Termination Date, provided the
terminating party provides the other with ten (10) days prior written notice of
such intention. In the event the Consulting Agreement is terminated prior to the
Termination Date: (i) the annual consideration paid under Paragraph 4(a) will be
terminated as of the effective date of the early termination; and (ii) the
Warrants granted to Consultant pursuant to Section 4(b) will be cancelled in
direct proportion to the number of weeks Consultant performed services for UTIX.
All cancelled warrants shall be forfeited to UTIX. For illustration purposes
only, in the event UTIX exercises its' right to terminate the Consulting
Agreement eight months into the Term, or on July 22, 2000, then Consultant will
have earned 200,000 warrants (8 months x 25,000 per month = 200,000), with the
remaining 100,000 warrants being cancelled.
IN WITNESS WHEREOF, the parties hereto have duly executed this Addendum
on the date first above written.
YOUTICKET.COM INC.
A Nevada corporation
By: ____________________
Name: LeAnna Sidhu, President and Director
RESERVISION, INC.
A Michigan corporation
By: _____________________
Name: __________________
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is entered into as of this 4th
day, of January, 2000 between Stockbroker Relations of Colorado , Inc. a
COLORADO Corporation (herein referred to as "SRI OF COLORADO") and YOU
TICKET.COM a NEVADA Corporation (herein referred to as "COMPANY"), collectively
SRI OF COLORADO and COMPANY hereinafter referred to as "the parties".
WITNESSETH:
WHEREAS, COMPANY requires the services of SRI OF COLORADO; and
WHEREAS, SRI OF COLORADO a investor relations, direct marketing, public
relations and advertising firm with experience in the dissemination of
information about private and publicly traded companies; and is in the business
of providing investor relations services, public relations services, general
consulting services, advertising services, fulfillment services, marketing of
business formats and opportunities, financing arrangements, and other related
programs, services and products to other clients.
AGREEMENT
1. Appointment
COMPANY hereby appoints and engages SRI OF COLORADO as its advisor and hereby
retains and employs SRI OF COLORADO on the terms and conditions of this
Consulting Agreement. SRI OF COLORADO accepts such appointment and agrees to
perform the services upon the terms and conditions of said Consulting Agreement.
2. Engagement
COMPANY engages SRI OF COLORADO to provide the services described in paragraph 3
herein. SRI OF COLORADO accepts said engagement and COMPANY as a client, and
agrees to provide services to COMPANY as further described in paragraph 3 below
and subject to the provisions of this Consulting Agreement.
3. Authority and Description of Services
During the term of this Consulting Agreement SRI OF COLORADO shall furnish some
or all of the various services from time to time as requested by the COMPANY and
agreed upon by the parties as described herein as follows:
a. SRI OF COLORADO shall act, generally, as corporate public relations
counsel, essentially acting (1) as liaison between COMPANY and its shareholders;
(2) as advisor to COMPANY with respect to existing and potential market makers,
broker-dealers, underwriters and investors as well as being the liaison between
COMPANY and such persons; and (3) as advisor to COMPANY with respect to
communication and information.
b. SRI OF COLORADO shall assist in establishing, and advise COMPANY
with respect to: interviews of COMPANY officers by the financial media;
interviews of COMPANY officers by analysts, market makers, broker-dealers, and
other members of the financial community.
__________________ ________________________
SRI of Colorado Company
<PAGE>
c. SRI OF COLORADO shall seek to make COMPANY, its management, its
products, and its financial situation and prospects, known to the financial
media, financial publications, broker-dealers, mutual funds, institutional
investors, market makers, analysts, investment advisors, and other members of
the financial community as well as the public generally.
d. SRI OF COLORADO's compensation under this Consulting Agreement shall
be deemed to include the afore-mentioned costs and expenses, unless otherwise
expressly provided herein.
Under the terms and conditions of this Agreement the Consultant has
agreed to act in an advisory capacity to YOU TICKET .COM and to provide such
services in exchange for the due consideration as set forth with-in this
Agreement. The scope of such services shall be subject to the restrictions and
limitations as set forth below:
e. The Consultant shall not be required to perform any investment
banking related activities on behalf of , as a condition of this Agreement. For
the purposes of this Agreement investment banking activities shall be defined as
being any of the following:
1. The location, negotiation and/or securing of any public or private
debt for YOU TICKET .COM
2. The location, negotiation and/or securing of any public or private
equity for YOU TICKET .COM
3. The production of any documentation that is to be utilized for the
purposes and activities as relating to the activities as outlined in
subheadings (1) and (2) above.
4. Any other activities as may normally be associated with the practice
of investment banking.
4. Term of Agreement
This Consulting Agreement shall become effective upon execution hereof and shall
continue thereafter and remain in effect for a period of six (6) months. It is
expressly acknowledged and agreed by and between the parties hereto that SRI OF
COLORADO shall not be obligated to provide any services and/or perform any work
related to this Consulting Agreement until such time any agreed and/or specified
retainer (deposit, initial fee, down payment) in U.S. funds, and/or other
specified and/or agreed valuable consideration, has been received by SRI OF
COLORADO. Further, SRI OF COLORADO may terminate services should COMPANY fail to
make all payments upon receipt of invoices. Time is of the essence with respect
to payment by Company of SRI OF COLORADO invoices.
5. Where Services Shall be Performed
SRI OF COLORADO's services shall be performed at the main office location of SRI
OF COLORADO or other such designated location(s) as SRI OF COLORADO and COMPANY
agree are the most advantageous for the work to be performed.
6. Limitations on Services
The parties hereto recognize that certain responsibilities and obligations are
imposed by Federal and State securities laws and by the applicable rules and
regulations of stock exchanges, the National Association of Securities Dealers,
in-house "due diligence" or "compliance" departments of brokerage houses, etc.
Accordingly, SRI OF COLORADO agrees as follows:
a. SRI OF COLORADO shall NOT release any financial or other information
or data about COMPANY without the consent and approval of COMPANY.
b. SRI OF COLORADO shall NOT conduct any meetings with financial
analysts without informing COMPANY in advance of any proposed meeting, the
format or agenda of such meeting and COMPANY may elect to have a representative
of COMPANY attend such meeting.
c. SRI OF COLORADO shall NOT release any information or data about
COMPANY to any selected or limited person(s), entity, or group if SRI OF
COLORADO is aware that such information or data has not been generally released
or promulgated and COMPANY requests in writing that said information or data is
not to be so released or promulgated.
__________________ ________________________
SRI of Colorado Company
<PAGE>
7. Duties of Company
a. COMPANY shall supply SRI OF COLORADO, on a regular and timely basis
with all approved data and information about COMPANY, its management, its
products, and its operations and COMPANY shall be responsible for advising SRI
OF COLORADO of any facts which would affect the accuracy of any prior data and
information previously supplied to SRI OF COLORADO so that SRI OF COLORADO may
take corrective action.
b. COMPANY shall promptly supply SRI OF COLORADO with full and complete
copies of all filings with all Federal and State securities agencies; with full
and complete copies of all shareholder reports and communications whether or not
prepared with SRI OF COLORADO's assistance; with all data and information
supplied to any analyst, broker-dealer, market maker, or other member of the
financial community; and with all product/service brochures, sales materials,
etc. COMPANY shall supply to SRI OF COLORADO, within fifteen (15) days of
execution of this Consulting Agreement, a complete list of all stockbrokers and
market makers active in the stock of COMPANY, and a complete list of all
shareholders on 3-1/2 inch computer disk in ASCII delimited format.
c. SRI OF COLORADO reports are not intended to be used in the sale or
offering of securities. Accordingly, COMPANY, by the execution hereof agrees to
each of the points listed below and to indemnify and hold SRI OF COLORADO
harmless for any breach of these representations and covenants.
i.) COMPANY is not presently engaged in a private or public
offering of securities, including S-8, convertible preferred, 504(d) or
Regulation S, or including any continuing distribution, whether or not exempt,
that will not be included prior to the issuance of a SRI OF COLORADO research
report on COMPANY, and COMPANY has no intention of making such an offering
during the initial term of this Consulting Agreement. An "evergreen" prospectus
for employee stock option and other plans will not preclude issuance of SRI OF
COLORADO research reports.
ii.) COMPANY will notify SRI OF COLORADO in writing a minimum
of thirty (30) days prior to making any private or public offering of
securities, including but not limited to S-8, convertible preferred 504(d)
filing or Regulation S unless prohibited by Federal Securities laws.
iii.) COMPANY will notify SRI OF COLORADO at least thirty
(30) days prior to any insider selling of COMPANY's stock.
iv.) COMPANY will not use SRI OF COLORADO reports in
connection with any offering of securities without the prior written consent of
SRI OF COLORADO.
v.) COMPANY will not cause to be effected any split of the
COMPANY's stock during the term of this Consulting Agreement without the prior
written consent of SRI OF COLORADO.
d. In that SRI OF COLORADO relies on information provided by COMPANY
for a substantial part of its preparations and report, COMPANY represents that
said information is neither false nor misleading, nor omits to state a material
fact and has been reviewed and approved by counsel to COMPANY and COMPANY agrees
to hold harmless and indemnify SRI OF COLORADO for any breach of these
representations and covenants; and COMPANY agrees to hold harmless and indemnify
SRI OF COLORADO for any claims relating to the purchase and/or sale of COMPANY
securities occurring out of, or in connection with, SRI OF COLORADO's
relationship with COMPANY, including, without limitation, reasonable attorney's
fees and other costs arising out of any such claims.
e. In that SRI OF COLORADO shareholders, officers, employees, and/or
members of their families may hold a position in and engage in transactions with
respect to COMPANY securities, and in light of the fact that SRI OF COLORADO
imposes restrictions on such transactions to guard against trading on the basis
of material nonpublic information, COMPANY shall contemporaneously notify SRI OF
COLORADO if any information or data being supplied to SRI OF COLORADO has not
been generally released or promulgated.
8. Representation, Undertakings and Indemnification
a. COMPANY shall be deemed to make a continuing representation of the
accuracy of any and all material facts, material, information and data which it
supplies to SRI OF COLORADO and COMPANY acknowledges its awareness that SRI OF
COLORADO will rely on such continuing representation in disseminating such
information and otherwise performing its functions hereunder.
b. SRI OF COLORADO, in the absence of notice in writing from COMPANY,
will rely on the continuing accuracy of material, information and data supplied
by COMPANY.
__________________ ________________________
SRI of Colorado Company
<PAGE>
c. COMPANY hereby agrees to hold harmless and indemnify SRI OF COLORADO
against any claims, demands, suits, loss, damages, etc., arising out of SRI OF
COLORADO's reliance upon the instant accuracy and continuing accuracy of such
facts, material, information and data, unless SRI OF COLORADO has been grossly
negligent in performing its duties and obligations hereunder.
d. COMPANY hereby authorizes SRI OF COLORADO to issue, in SRI OF
COLORADO's sole discretion, corrective, amendatory, supplemental, or explanatory
press releases, shareholder communications and reports or data supplied to
analysts, broker-dealers, market makers, or other members of the financial
community.
e. COMPANY shall cooperate fully and timely with SRI OF COLORADO to
enable SRI OF COLORADO to perform its duties and obligations under this
Consulting Agreement.
f. The execution and performance of this Consulting Agreement by
COMPANY has been duly authorized by the Board of Directors of COMPANY in
accordance with applicable law, and, to the extent required, by the requisite
number of shareholders of COMPANY.
g. The performance by COMPANY of this Consulting Agreement will not
violate any applicable court decree or order, law or regulation, nor will it
violate any provision of the organizational documents and/or bylaws of COMPANY
or any contractual obligation by which COMPANY may be bound.
h. COMPANY activities pursuant to this Consulting Agreement or as
contemplated by this Consulting Agreement do not constitute and shall not
constitute acting as a securities broker or dealer under Federal or State
securities laws; any contract between COMPANY and a potential investor in
COMPANY shall be such that COMPANY would be acting merely as a consultant with
respect to such prospective investor obligations under this Consulting
Agreement.
i. COMPANY shall promptly deliver to SRI OF COLORADO with-in five (5)
days of signing contract, a complete due diligence package to include latest
10K, latest 10Q, last six (6) months of press releases and all other relevant
materials, including but not limited to corporate reports, brochures, etc.
j. COMPANY shall act diligently and promptly in reviewing materials
submitted to it by SRI OF COLORADO to enhance timely distribution of the
materials and shall inform SRI OF COLORADO of any inaccuracies contained therein
within a reasonable time prior to the projected or known publication date.
k. In the event that SRI OF COLORADO or any affiliate of the
Consultant, including any officer, director, or employee or associate of the
Consultant becomes involved in any capacity (including as a witness) in any
action, proceeding or investigation brought by or against any person, including
the Company or regarding any Security developed by the Company or as a result,
either direct or indirect, of this Agreement, in connection with any matter
related to the assignment described within this Agreement, the Company and any
affiliates periodically upon receipt from the consultant of notice will
immediately reimburse the Consultant for its legal and other expenses (including
the cost of any investigation and preparation) as may be reasonably incurred in
connection therewith and will indemnify and hold the Consultant from and
harmless against any losses, claims, damages or liabilities to any such person;
provided, however, that if it is determined by a final nonappealable judgment by
a court having jurisdiction over such matter, in any such action, proceeding or
investigation that any expense, loss, claim, damage or liability of the
Consultant has resulted solely from the fraud of the Consultant in performing
the services which are the subject of this Agreement, the Consultant shall repay
such portion of the reimbursed amounts that is attributable to expenses incurred
in relation to the act or omission of the Consultant which is the subject of
such finding. If any officer or director, agent, employee, representative or
controlling person of the Consultant is called to provide written or oral
testimony of information relating to the Consultant's services hereunder in
connection with any judicial, administrative or other proceeding, the Company (
YOU TICKET.COM ) ,and any affiliates will compensate the Consultant at the rate
of $150.00 per hour for time so consumed (including preparation time) and
reimbursed the Consultant for its reasonable fees and expense or counsel, if
any, as retained by him.
If for any reason the foregoing indemnification is unavailable to the
Consultant or is insufficient to hold him harmless, then the Company and any
affiliates shall contribute to the amount paid or payable by the Consultant as a
result of such loss, claim, damage or liability in such proportion as is
__________________ ________________________
SRI of Colorado Company
<PAGE>
appropriate to reflect the relative economic interest of the Company, its
affiliates or the Securities on the one hand and the Consultant on the other
hand in the matters as contemplated by this Agreement as well as the relative
fault of the Company and any affiliates and Securities and the Consultant with
respect to such loss, claim, damage, or liability and any other relevant
equitable considerations; provided, that in no event shall the liability of the
Consultant pursuant to this Agreement exceed the total fees collected by him
(subtracting any un-reimbursement) actually paid hereunder. The relative benefit
received or sought to be received by the Company and any affiliates and any
Securities on the one hand, and by the Consultant on the other hand, shall be
deemed to be in the same proportion as (i) the total value of the transactions
(treating each transaction separately and cumulating the value of all such
transactions) the total increased value of the Company and any affiliates, the
value of any other benefits to the Company and any affiliates with respect to
matter related to this Agreement or occurring during the term of this Agreement
bears to (ii) the total fees collected by the Consultant (subtracting all
un-reimbursement) actually paid to the Consultant with respect to such
engagement hereunder. Further agrees that the Company will not, without the
prior written consent of the Consultant, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding. The reimbursement, indemnity and contribution obligation of the
Company under this section shall be in addition to any liability which the
Company may otherwise have, shall extend upon the same terms and conditions to
any affiliate of the Consultant as well as the directors, officers,
shareholders, agents, employees and controlling persons, as the case may be, of
the Consultant and any affiliates, and shall be binding upon and inure to the
benefit of any successors, assignees, heirs and personal representatives of the
Company, the Consultant, any such affiliates and any such persons.
The indemnity obligations of the Company hereunder shall not extend to any
affiliate of the Consultant or to the directors, officers, shareholders, agents,
employees or controlling persons, as the case may be, of the Consultant or any
such determined by a final nonappealable judgment that any loss, claim, damage
or liability results solely from the fraud of the Consultant or any such other
person in performing the services which are the subject of this Agreement. To
the extent not already exculpated under the Agreement or this Exhibit A, the
Company also agrees that neither the Consultant nor any such affiliates,
directors, officers, shareholders, agents, employees or controlling persons
shall have any liability to the Company or any other person or entity for or in
connection with any matter as referred to within this Agreement except to the
extent that a court having jurisdiction over such matter shall have determined
by final, nonappealable judgment that any losses, claims, damages, liabilities
or expenses incurred by the Company or otherwise the subject of such claim
result solely from the fraud of the Consultant in performing the services that
are the subject of this Agreement. If any clause, sentence or provision hereof
shall be determined to be invalid or unenforceable in any respect, Section 18,
Severability of the Agreement, shall apply.
9. Agreement not to Hire
COMPANY acknowledges that SRI OF COLORADO has expended considerable time, effort
and expense in training the respective employees independent contractors,
subcontractors and vendors of SRI OF COLORADO in the methods of operation, and
that the employees and consultants of SRI OF COLORADO will acquire confidential
knowledge and information as to accounts, customers and business patrons, as
well as confidential knowledge and information concerning the methods, forms,
contracts and negotiations to employ any employee of SRI OF COLORADO for a
period of twenty four (24) months from the expiration or termination of this
Contract, without the written consent of SRI OF COLORADO.
10. Compensation and Disclaimers
a. Compensation payable to SRI OF COLORADO for all general investor
relations services and other services hereunder, including but not limited to
acquisition and merger services, shall be paid by COMPANY to SRI OF COLORADO by
the means and in the manner or manners as described in "Addendum A", a copy of
which is attached hereto and incorporated herein by this reference.
b. All moneys payable hereunder shall be in U.S. funds and drawn on
U.S. banks.
c. For all special services, not within the scope of this Consulting
Agreement, COMPANY shall pay to SRI OF COLORADO such fee(s) as, and when, the
parties shall determine in advance of performance of said special services,
provided COMPANY has agreed to said special services.
__________________ ________________________
SRI of Colorado Company
<PAGE>
d. In recognition and mutual acknowledgment of the fact that
YOU TICKET.COM is a company in its development stage and is further engaged in a
business of a highly speculative nature with little or no current revenues,
income or liquid market for its stock at this time the Consultant makes no
representations, warranties or other affirmations as to the efficacy, viability
and/or success of any efforts that may be undertaken on the Company's behalf,
and YOU TICKET.COM hereby acknowledges, accepts and understands such disclaimers
as made by the Consultant.
11. Dilution
COMPANY will not, by Amendment to its Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, dilute the securities issued
to SRI OF COLORADO, avoid or seek to avoid the observance of any term of this
Consulting Agreement. COMPANY will in good faith assist in the carrying out of
all such terms and in the taking of all such action that is necessary or
appropriate to protect SRI OF COLORADO against dilution or other impairment of
SRI OF COLORADO's securities. COMPANY shall not for a period of twelve (12)
months of this Consulting Agreement enter into any transaction including
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities including additional Regulation D Rule 504 shares or any
other voluntary action without the written consent of SRI OF COLORADO which
consent cannot be reasonably withheld.
12. Billing and Payment
Monthly fees or payments shall be due and payable upon invoice. Billing and
payments for special services shall be as agreed on a case by case basis.
COMPANY acknowledges and agrees that deposits, initial payments, down payments,
partial payments, payments for special services, monthly fees or monthly
payments shall be by wire to SRI OF COLORADO's bank account upon execution of
any agreement or agreements, or; upon payment due date in the case of monthly
fees or monthly payments, or; in the case of special services by the first day
of the preceding month that work is scheduled to be performed, unless expressly
provided otherwise in writing, and that if such funds are not received by SRI OF
COLORADO by said date COMPANY shall pay to SRI OF COLORADO an additional
operations charge equal to one percent (1%) for each day said funds are not
received. Notwithstanding the provision for the forgoing operations charge, time
is of the essence with respect to all payments due SRI OF COLORADO, whether in
"currency" or stock.
13. SRI OF COLORADO as an Independent Contractor
SRI OF COLORADO shall provide said services as an independent contractor, and
not as an employee or of any company affiliated with COMPANY. SRI OF COLORADO
has no authority to bind COMPANY or any affiliate of COMPANY to any legal
action, contract, agreement, or purchase, and such action cannot be construed to
be made in good faith or with the acceptance of COMPANY; thereby becoming the
sole responsibility of SRI OF COLORADO. SRI OF COLORADO is not entitled to any
medical coverage, life insurance, savings plans, health insurance, or any and
all other benefits afforded COMPANY employees. SRI OF COLORADO shall be solely
responsible for any Federal, State or local taxes, and should COMPANY for any
reason by required to pay taxes at a later date, SRI OF COLORADO shall reassure
such payment is made by SRI OF COLORADO and not by COMPANY. SRI OF COLORADO
shall be responsible for all workers compensations payments and herein holds
COMPANY harmless for any and all such payments and responsibilities related
hereto.
14. SRI OF COLORADO May Engage in Conflicting Activities
COMPANY hereby acknowledges notification by SRI OF COLORADO and understands that
SRI OF COLORADO does, and shall, represent and service other and multiple
clients in the same manner as it does COMPANY, and that COMPANY is not an
exclusive client of SRI OF COLORADO.
15. Amendments
This Consulting Agreement may be modified or amended, provided such
modifications or amendments are mutually agreed upon by and between the parties
hereto and that said modifications or amendments are made in writing and signed
by both parties.
__________________ ________________________
SRI of Colorado Company
<PAGE>
16. Severability
If any provision of this Consulting Agreement shall be held to be contrary to
law, invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision of
this Consulting Agreement is contrary to law, invalid or unenforceable, and that
by limiting such provision it would become valid and enforceable, then such
provision shall be deemed to be written, construed, and enforced as so limited.
17. Termination of Agreement
This Consulting Agreement may not be terminated by either party prior to the
expiration of the term provided in paragraph 4 above except as follows:
a. Upon the bankruptcy or liquidation of the other party; whether
voluntary or involuntary;
b. Upon the other party taking the benefit of any insolvency law;
c. Upon the other party having or applying for a receiver
appointed for either party; and/or
d. As provided for in paragraph 22 below.
18. Attorneys Fees
In the event either party is in default of the terms or conditions of this
Consulting Agreement and legal action is initiated or suit be entered as a
result of such default, the prevailing party shall be entitled to recover all
costs incurred as a result of such default including all costs, reasonable
attorney fees, expenses and court costs through trial, appeal and to final
disposition.
19. Return of Records
Upon termination of this Consulting Agreement, SRI OF COLORADO shall deliver all
records, notes, data, memorandum, models and equipment of any nature that are in
the control of SRI OF COLORADO that are the property of or relate to the
business of COMPANY when SRI OF COLORADO has been paid in full.
20. Non-waiver
The failure of either party, at any time, to require any such performance by any
other party shall not be construed as a waiver of such right to require such
performance, and shall in no way affect such party's right to require such
performance and shall in no way affect such party's right subsequently to
require full performance hereunder.
21. Disclaimer by SRI OF COLORADO
SRI OF COLORADO makes no representation to COMPANY or others that; (a) is
efforts or services will result in any enhancement to COMPANY (b) the price of
COMPANY's publicly traded securities will increase (c) any person will purchase
COMPANY's securities, or (d) any investor will lend money and/or invest in or
with COMPANY.
22. Early Termination
In the event COMPANY fails or refuses to cooperate with SRI OF COLORADO, or
fails or refuses to make timely payment of the compensation set forth above
and/or in Addendum A, SRI OF COLORADO shall have the right to terminate any
further performance under this Consulting Agreement. In such event, and upon
notification thereof, all compensation shall become immediately due and payable
and/or deliverable, and SRI OF COLORADO shall be entitled to receive and retain
the same as liquidated damages and not as a penalty, in lieu of all other
remedies the parties hereby acknowledge and agree that it would be too difficult
currently to determine the exact extent of SRI OF COLORADO's damages, but that
the receipt and retention of such compensation is a reasonable present estimate
of such damage.
23. Limitation of SRI OF COLORADO Liability
In the event SRI OF COLORADO fails to perform its work or services hereunder,
its entire liability to COMPANY shall not exceed the lessor of; (a) the amount
of cash compensation SRI OF COLORADO has received from COMPANY under paragraph 4
above (b) the amount of cash compensation SRI OF COLORADO has received from
COMPANY under Addendum A, or (c) the actual damage to COMPANY as a result of
__________________ ________________________
SRI of Colorado Company
<PAGE>
such non-performance. In no event shall SRI OF COLORADO be liable to COMPANY for
any indirect, special or consequential damages, nor for any claim against
COMPANY by any person or entity arising from or in any way related to this
Consulting Agreement.
24. Ownership of Materials
All right, titles and interest in and to materials to be produced by SRI OF
COLORADO in connection with this Consulting Agreement and other services to be
rendered under said Consulting Agreement shall be and remain the sole and
exclusive property of SRI OF COLORADO except in the event COMPANY performs fully
and timely its obligations hereunder, COMPANY shall be entitled to receive upon
written request, one (1) copy of all such materials.
25. Miscellaneous
a. Currency: In all instances, references to dollars shall be United
States Dollars.
b. Stock: In all instances, references to stock shall be deemed to be
unrestricted and free trading.
26. Notices
All notices hereunder shall be in writing and addressed to the party at the
address herein set forth, or at such other address which notice pursuant to this
section may be given, and shall be given by either personal delivery, certified
mail, express mail or other national or three (3) business days after being
mailed or delivered to such courier service. Any notices to be given hereunder
shall be effective if executed by and sent by the attorneys for the parties
giving such notice, and in connection therewith the parties and their respective
counsel agree that in giving such notice such counsel may communicate directly
in writing with such parties to the extent necessary to give such notice. Any
notice required or permitted by this Consulting Agreement to be given shall be
given to the respective parties at the address first written above, on page one
(1) of this Consulting Agreement.
27. Parent and Subsidiary Companies or Entities
This Consulting Agreement applies to all parent or subsidiary companies or
entities of COMPANY.
28. Exclusion with Respect to Partnership
The parties agree that, in no way, shall this Consulting Agreement be construed
as being an act of partnership between the parties hereto and that no party
hereto shall have, as a result of the execution of this Consulting Agreement,
any liability for the commitments of any other party of any type, kind or sort.
29. Reasonable Expense Reimbursement
In the course of SRI OF COLORADO providing services as necessary hereunder, on
the behalf of or for COMPANY during the term of this Consulting Agreement,
COMPANY shall pay to, or reimburse, SRI OF COLORADO for any expenses incurred by
SRI OF COLORADO that are not specifically described elsewhere herein, provided
that COMPANY has been notified in advance by SRI OF COLORADO of the nature and
of the cost of any such required expense and the amount of compensation and/or
reimbursement related thereto. Expenses shall be deemed to include, but not be
limited to, all costs related to the dissemination of press releases, overnight
delivery services, compensation to third party vendors, transportation expenses,
hotel expenses, airline fares, taxi fares, toll road fees, reasonable food
expenses and reasonable gratuities related thereto. COMPANY shall have the right
to book airline reservations, hotels, etc. itself on behalf of SRI OF COLORADO
within five (5) days upon notice for the requirement thereof from SRI OF
COLORADO.
30. Inurement
This Consulting Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, personal
representatives, successors, assigns and any addendas attached hereto.
Notwithstanding anything to the contrary herein, if (a) all or substantially all
of the assets of the Company should be transferred (wither by sale, exchange,
foreclosure, liquidation, dissolution, repurchase or other disposition) to a
__________________ ________________________
SRI of Colorado Company
<PAGE>
corporation or other entity without the prior consent of the Consultant, this
Agreement shall also continue to be binding upon both the Consultant as well as
the transferee corporation and/or entity, and the Company shall make adequate
provisions within remaining jointly and severally liable hereunder.
31. Company agrees to provide and pay costs for:
* Weekly DTC sheets.
* Monthly shareholder list. (SRI OF COLORADO will pay if we require
more often.) * Monthly NOBL list. * Bi-weekly press release.
* Bi-weekly broker teleconference calls.
* Transfer Agent/clearing firm weekly stock activity.Which includes
notification before any new stock is issued or any restricted stock is
being converted to free trading stock.Company will provide SRI OF
COLORADO with a copy of letter sent to transfer agent.
* Copy of moods or S&P Blue Sky certification.
* Due Diligence Package equivalent to Stockbroker
Relations,Inc.standard package. * Web site equivalent to Stockbroker
Relations, Inc.standard website
32. Entire Agreement
This Consulting Agreement contains the entire agreement of the parties and may
be modified or or amended only by agreement in writing, signed by the party
against whom enforcement of waiver, change, amendment, modification, extension
or discharge is sought. It is declared by both parties that there are no oral or
other agreements or understanding between them affecting this Consulting
Agreement, or relating to the business of SRI OF COLORADO. This Consulting
Agreement supersedes all previous agreements between SRI OF COLORADO and
COMPANY.
33. Applicable Law
This Consulting Agreement is executed pursuant to and shall be interpreted and
governed for all purposes by the laws of the State of COLORADO for which the
Courts shall have jurisdiction. If any provision of this Consulting Agreement is
declared void, such provision shall be deemed severed from this Consulting
Agreement, which shall otherwise remain in full force and effect.
34. Acceptance by SRI OF COLORADO
This Consulting Agreement is not valid or binding upon SRI OF COLORADO unless
and until executed by its President or other duly authorized executive officer
or SRI OF COLORADO at its home office .
35. Execution in Counterpart; Telecopy-Fax
This Consulting Agreement may be executed in counterparts, not withstanding the
date or dates upon which this Consulting Agreement is executed and delivered by
any of the parties, and shall be deemed to be an original and all of which
constitute one and the same agreement, effective as of the reference date first
written above. The fully executed telecopy (fax) version of this Consulting
Agreement shall be construed by all parties hereto as an original version of
said Consulting Agreement.
36. Disclaimer
SRI OF COLORADO is in the business of investor/public relations and other
related business, as previously stated above, and in no way proclaims to be an
investment advisor and/or stock or securities broker. SRI OF COLORADO is not
licensed as a stock or securities broker and is not in the business of selling
such stocks or securities or advising as to the investment viability or worth of
such stocks or securities. It is the responsibility of COMPANY to obtain advice
of counsel and approve all materials published by SRI OF COLORADO or other
subcontractors to ensure compliance with Federal and State securities laws
applicable to the activities of COMPANY.
37. Authority
The Company( YOU TICKET .COM) and any affiliates hereby warrant and represent
that they have the full power and authority to execute and deliver this
__________________ ________________________
SRI of Colorado Company
<PAGE>
Agreement to the Consultant and to perform the obligations as contained herein,
and that this Agreement has been duly executed and delivered by the Company and
any affiliates and further constitutes a valid, binding and legally enforceable
obligation of the Company and any affiliates. Each party has read and understood
this Agreement.
AGREEMENT
AGREEMENT, dated as of January 19, 2000 by and between STOCKBROKER
RELATIONS OF COLORADO, INC., a Colorado corporation ("SRCI") and
YOUTICKET.COM, INC., a Nevada corporation ("YouTicket").
W I T N E S S E T H
WHEREAS, YouTicket and SRCI are parties to that certain Agreement dated
January 4, 2000 (the "Services Agreement") wherein YouTicket agreed to issue to
SRCI, in exchange for services rendered, an initial 500,000 shares of common
stock, plus an additional 100,000 shares of common stock for each month of
services rendered, up to a maximum of six (6) months (the "Shares").
NOW THEREFORE, in consideration of the promises and respective mutual
agreements herein contained, it is agreed by and between the parties hereto as
follows:
ARTICLE 1
ISSUANCE OF THE SHARES
1.1 Issuance of the Shares. Upon the execution of this Agreement as
provided in Section 3.1 hereto (the "Closing"), subject to the terms and
conditions herein set forth, and on the basis of the representations, warranties
and agreements herein contained, no later than the fifth day of each month in
which the Services Agreement is in effect, YouTicket shall issue to SRCI, and
SRCI shall receive from YouTicket, the appropriate number of Shares.
1.2 Instruments of Conveyance and Transfer. Simultaneously with the
Closing, and during each subsequent closing as set forth in Section 3.1 hereof,
YouTicket shall deliver a certificate or certificates representing the Shares to
SRCI, in form and substance satisfactory to SRCI, as shall be effective to vest
in SRCI all right, title and interest in and to all of the Shares, as set forth
in Section 3 herein.
ARTICLE 2
REPRESENTATIONS AND COVENANTS OF SELLER AND PURCHASER
2.1 YouTicket hereby represents and warrants that:
(a) It shall transfer title, in and to the Shares, to the
SRCI free and clear of all liens, security interests,
pledges, encumbrances, charges, restrictions, demands
and claims, of any kind and nature whatsoever,
whether direct or indirect or contingent.
(b) Prior to Closing, the Company shall have prepared and
filed any and all filings and other documents
required to qualify the issuance of the Shares in
accordance with Rule 504 and the NASD, if applicable,
in accordance with their requirements, and shall have
taken all other necessary action and
<PAGE>
proceedings as may be required and permitted by
applicable law, rule and regulation, for the legal
and valid issuance of the Shares to SRCI or
subsequent holders. The Company will file an original
Form D and pay the required filing fee with the State
of Colorado to claim the applicable Colorado offering
exemption. The Company represents and warrants that
the Shares may be issued as securities without
restrictive legend or other restriction on transfer
pursuant to Rule 504. The Company is relying upon the
truth and accuracy of the representations,
warranties, agreements, acknowledgments and
understandings of SRCI set forth herein in order to
determine the applicability of such exemptions and
the suitability of SRCI to acquire the Shares.
2.2 SRCI hereby represents and warrants that:
(a) SRCI has the full right, power and authority to enter
into this Agreement and to carry out and consummate
the transaction contemplated herein. This Agreement
constitutes the legal, valid and binding obligation
of SRCI.
(b) SRCI acknowledges that investment in the Shares
involves substantial risks and is suitable only for
persons of adequate financial means who can bear the
economic risk of an investment in the Shares for an
indefinite period of time. SRCI further represents
that it:
(1) has adequate means of providing for its
current needs and possible personal
contingencies, has no need for liquidity in
its investment in the Shares, is able to
bear the substantial economic risks of an
investment in the Shares for an indefinite
period, and, at the present time, can afford
a complete loss of its investment;
(2) does not have an overall commitment to
investments which are not readily marketable
that is disproportionate to its net worth,
and that its investment in the Shares will
not cause such overall commitment to become
excessive;
(3) is acquiring the Shares for its own account,
for investment purposes only and not with a
view toward resale, assignment or
distribution thereof, and no other person
has a direct or indirect, beneficial
interest, in whole or in part, in such
Shares;
(4) has such knowledge and experience in
financial, tax and business matters that it
is capable of evaluating the merits and
risks of an investment in the Shares;
(5) has been given the opportunity to ask
questions of and to receive answers from
persons acting on YouTicket's behalf
concerning the
2
<PAGE>
terms and conditions of this transaction and
also has been given the opportunity to
obtain any additional information which
YouTicket possesses or can acquire without
unreasonable effort or expense. As a result,
SRCI is cognizant of the financial
condition, capitalization, use of proceeds
from this financing and the operations and
financial condition of YouTicket, and has
available full information concerning their
affairs and has been able to evaluate the
merits and risks of the investment in the
Shares; and
(6) is a Colorado resident or an entity whose
primary place of business is in Colorado.
(7) is an "Accredited Investor" as that term is
defined in Section 501(a) of Regulation D
promulgated under the Securities Act of
1933, as amended (the "Act").
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMENTS
3.1 Closing. The Closing shall be deemed to have occurred upon
the date of signing of this Agreement. Subsequent to the signing, the following
shall occur:
(a) Within five (5) business days of the Closing, YouTicket
shall cause to be issued in the name of SRCI an aggregate of
1,100,000 shares of its common stock, without restrictive
legend, all of which will be held by YouTicket to be
distributed as follows:
(1) Upon issuance, YouTicket shall deliver to
SRCI 500,000 of the shares of common stock;
and
(2) No later than the fifth day of each month
that the Services Agreement is in effect, up
to a maximum of six (6) months, YouTicket
shall deliver to SRCI a stock certificate
representing an aggregate of 100,000 shares
of common stock, without restrictive legend.
(3) In the event the Services Agreement is
terminated in accordance with its terms
prior to the expiration of six (6) months,
any undelivered shares shall be returned to
YouTicket's transfer agent for retirement.
3
<PAGE>
ARTICLE 4
TERMINATION, AMENDMENT AND WAIVER
4.1 Termination. Notwithstanding anything to the contrary contained in
this Agreement, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned at such time as the Services Agreement is
terminated or abandoned, or after six (6) months.
4.2 Waiver and Amendment. Any term, provision, covenant,
representation, warranty or condition of this Agreement may be waived, but only
by a written instrument signed by the party entitled to the benefits thereof.
The failure or delay of any party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any condition, or of
the breach of any term, provision, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
parties hereto.
ARTICLE 5
MISCELLANEOUS
5.1 Entire Agreement. This Agreement, together with the Services
Agreement, sets forth the entire agreement and understanding of the parties
hereto with respect to the transactions contemplated hereby, and supersedes all
prior agreements, arrangements and understandings related to the subject matter
hereof. No understanding, promise, inducement, statement of intention,
representation, warranty, covenant or condition, written or oral, express or
implied, whether by statute or otherwise, has been made by any party hereto
which is not embodied in this Agreement or the written statements, certificates,
or other documents delivered pursuant hereto or in connection with the
transactions contemplated hereby, and no party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth. In the event
any terms of this Agreement conflict with any terms of the Services Agreement,
the parties hereto agree that the terms of this Agreement shall control.
5.2 Notices. All notices provided for in this Agreement shall be in
writing signed by the party giving such notice, and delivered personally or sent
by overnight courier or messenger or sent by registered or certified mail (air
mail if overseas), return receipt requested, or by telex, facsimile
transmission, telegram or similar means of communication. Notices shall be
deemed to have been received on the date of personal delivery, telex, facsimile
transmission, telegram or similar means of communication, or if sent by
overnight courier or messenger, shall be deemed to have been received on the
next delivery day after deposit with the courier or messenger, or if sent by
certified or registered mail, return receipt requested, shall be deemed to have
been received on the third business day after the date of mailing. Notices shall
be sent to the addresses set forth below:
4
<PAGE>
If to SELLER:
------------
YouTicket.com, Inc.
4420 S. Arville, Suite 13 and 14
Las Vegas, NV 89103
Facsimile (702) 876-8630
Attn: Maria Burkenholder, Controller
With a copy to:
--------------
Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Facsimile (949) 719-1988
Attention: Brian A. Lebrecht, Esq.
If to Purchaser:
---------------
Stockbroker Relations of Colorado, Inc.
6408 S. Tibet Street
Aurora, CO 80016
Facsimile (___) ____________________
Attn: ____________________________
5.3 Choice of Law. This Agreement and the rights of the parties
hereunder shall be governed by and construed in accordance with the laws of the
State of Colorado including all matters of construction, validity, performance,
and enforcement and without giving effect to the principles of conflict of laws.
5.4 Jurisdiction. The parties submit to the jurisdiction of the Courts
of the State of Colorado or a Federal Court empaneled in the State of Colorado
for the resolution of all legal disputes arising under the terms of this
Agreement, including, but not limited to, enforcement of any arbitration award.
5.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
5.6 Attorneys' Fees. Except as otherwise provided herein, if a dispute
should arise between the parties including, but not limited to arbitration, the
prevailing party shall be reimbursed by the nonprevailing party for all
reasonable expenses incurred in resolving such dispute, including reasonable
attorneys' fees exclusive of such amount of attorneys' fees as shall be a
premium for result or for risk of loss under a contingency fee arrangement.
5
<PAGE>
5.7 Taxes. Any income taxes required to be paid in connection with the
payments due hereunder, shall be borne by the party required to make such
payment. Any withholding taxes in the nature of a tax on income shall be
deducted from payments due, and the party required to withhold such tax shall
furnish to the party receiving such payment all documentation necessary to prove
the proper amount to withhold of such taxes and to prove payment to the tax
authority of such required withholding.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date first written hereinabove.
"PURCHASER" "SELLER"
STOCKBROKER RELATIONS YOUTICKET.COM, INC.
OF COLORADO, INC.
- ---------------------------- -----------------------------
By: ______________________ By: _______________________
Its: ______________________ Its: _______________________
6
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