AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11
REGISTRATION NO. *
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
Ninth Enterprise Service Group, Inc.
(Exact name of registrant as specified in its charter)
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Florida 6770 Applied For
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State or other jurisdiction PRIMARY STANDARD INDUSTRIAL I.R.S. Employer
of CLASSIFICATION CODE NUMBER Identification No.
incorporation or organization
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2503 W. Gardner Ct.,
Tampa, FL 33611
813. 831-9348
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Michael T. Williams
PRESIDENT
Ninth Enterprise Service Group, Inc.
2503 W. Gardner Ct.
Tampa, FL 33611
TELEPHONE: 813.831.9348
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As promptly as practicable after this registration statement becomes effective
and after the closing of the merger of the proposed merger described in this
registration statement.
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b, under the securities act, check the following box and
list the securities act registration statement number of the earlier effective
registration statement for the same offering. *[ ] *registration number,
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the securities act, check the following box and list the securities act
registration statement number of the earlier effective registration statement
for the same offering. *[ ]
*registration number,
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. *[ ]
------------------------
CALCULATION OF REGISTRATION FEE
================================================================================
Title of each Proposed maximum
class of Proposed aggregate
securities to Amount to be maximum offering price Amount of
be registered registered offering price registration
per unit fee
================================================================================
================================================================================
Common Stock,
no par value 6,800,000 N/A $0 (2) $100 (2)
================================================================================
(1) Represents an estimate of the maximum number of shares of common stock of
Registrant which may be issued to former holders of shares of common stock of
Wiremedia.com pursuant to the merger described herein.
(2) The registration fee has been calculated pursuant to Rule 457(f )(2). As of
the filing of this registration statement, Wiremedia.com had an accumulated
capital deficit. In addition, Wiremedia.com's common stock has no par value.
Accordingly, the proposed maximum offering price has been calculated by
multiplying one-third,1/3, of an assumed par value for Wiremedia.com's Common
Stock of, no par value per share, pursuant to Florida law by the maximum number
of shares to be issued to the holders of Wiremedia.com common stock in the
merger. The minimum registration fee of $100 is used.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
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WIREMEDIA.COM, INC.
INFORMATION STATEMENT FOR SHAREHOLDERS
NINTH ENTERPRISE SERVICE GROUP, INC.
PROSPECTUS
SOLICITATION OF WRITTEN CONSENTS
NOTICE IS HEREBY GIVEN that in accordance with the provisions of Florida
law, you are asked to consider and give your written consent to a proposal to
approve:
o The merger agreement and plan of reorganization dated as of ____ between
Wiremedia.com, Inc., a Florida corporation, and Ninth Enterprise Service
Group, Inc., a Florida corporation
o The articles of merger which will be filed with the offices of the
secretary of state of the state of Florida.
As a result of the merger, each outstanding share of Wiremedia.com common stock,
other than dissenting shares, as discussed later in this document, will be
exchanged for one share of Ninth Enterprise Service Group common stock.
Immediately after the closing of the merger, the former holders of Wiremedia.com
common stock will hold in the aggregate 6,800,000 shares of Ninth Enterprise
Service Group common stock, or approximately 98% of the shares of Ninth
Enterprise Service Group common stock to be outstanding immediately after the
closing of the merger, calculated assuming the issuance of 6,930,000 shares of
Ninth Enterprise Service Group common stock to the Wiremedia.com shareholders in
the merger and based upon 130,000 outstanding shares of Ninth Enterprise Service
Group common stock outstanding as of the date of the closing of the merger.
Prior to the closing of the merger, Ninth Enterprise Service Group will
o Change its name to Wiremedia.com, Inc.
o Adopt Wiremedia.com's articles and bylaws
o Elect, effective upon the effectiveness of the merger, a new board of
directors to consist of the current directors of Wiremedia.com.
Ninth Enterprise Service Group will be subject to the reporting requirements of
the securities exchange act of 1934 after the merger as a result of its filing
of a form 8-A electing to be a reporting company subject to the requirements of
the 1934 act.
In anticipation of closing of the merger, Ninth Enterprise Service Group will
seek to become listed on the over the counter bulletin board under the symbol
"*symbol". If and when listed, the Wiremedia.com shareholders will hold shares
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of a publicly-traded Florida corporation subject to compliance with the
reporting requirements of the 1934 Act. Because the state of incorporation,
articles and bylaws of Ninth Enterprise Service Group will be the same as those
of Wiremedia.com prior to the merger, the rights of shareholders of
Wiremedia.com will not change as a result of the merger.
Assuming consents are secured from shareholders owning more than 50% of the
stock of Wiremedia.com, shareholders who did not consent to the merger will, by
otherwise complying with Florida corporate law, be entitled to dissenters'
rights with respect to the proposed merger. No consents will be solicited or
accepted until after the effective date of this information
statement/prospectus.
In the materials accompanying this letter, you will find an information
statement/prospectus relating to the merger proposal and a form of written
consent. The information statement/prospectus more fully describes the proposal
and includes information about Ninth Enterprise Service Group and Wiremedia.com.
I urge you to read the information contained in the accompanying information
statement/prospectus.
If the required approvals of the shareholders of Wiremedia.com are received and
all other conditions to the closing of the merger are satisfied or waived, the
merger is anticipated to close ____.
The board of directors of Wiremedia.com has determined that the merger is fair
to Wiremedia.com and in the best interests of the Wiremedia.com's shareholders.
The board of directors of Wiremedia.com has unanimously approved a merger
between Wiremedia.com and Ninth Enterprise Service Group, Inc. Ninth Enterprise
Service Group has committed to file to have its stock is quoted on the
over-the-counter bulletin board of the Nasdaq Stock Market Inc., under the
symbol "*BBB symbol."
Your board of directors has determined that the merger is fair to you and
in your best interests. Because Ninth Enterprise Service Group is a company
whose securities will be quoted on the bulletin board, the Wiremedia.com board
believes that the merger will
o Increase the visibility of Wiremedia.com's business, which could be
helpful in further developing and commercializing Wiremedia.com's products.
o Facilitate Wiremedia.com's ability to raise capital in the public markets
o Potentially improve Wiremedia.com's shareholders' ability to sell their
shares in the over-the-counter market.
Accordingly, the board of directors of Wiremedia.com has unanimously approved
the merger agreement and the board unanimously recommends that you vote in favor
of these items.
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The board of directors has fixed the close of business on ___, as the record
date for the determination of shareholders of Wiremedia.com entitled to notice
of and to vote on the merger proposal. Only holders of record of Wiremedia.com
common stock on the record date are entitled give or withhold their consents.
You can ensure that your consent is considered by signing and dating the
enclosed consent and sending it to the Secretary of Wiremedia.com at
Wiremedia.com' headquarters, at 1355 W Palmetto Park Rd. Suite 180, Boca Raton,
FL 33486. You will be notified within 10 days of the date that consents are
received from shareholders owning more than 50% of the stock of Wiremedia.com
.
The proposed merger is a very complex transaction with a number of risks and
uncertainties associated with it. This document provides you with detailed
information about the proposed merger. We strongly urge you to read and consider
carefully this document in its entirety, especially the matters referred to
under "risk factors" beginning on *insert page #.
Neither the Securities and Exchange Commission nor any state securities
regulators have approved or disapproved the Ninth Enterprise Service Group
common stock to be issued in the merger or if this information
statement/prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The date of this information statement/prospectus is ****, and it is first
being mailed to Wiremedia.com shareholders on or about ***.
Other Information for Wiremedia.com Stockholders:
o The prospectus incorporates important business and financial information that
is not included in or delivered with the document. This information is
available without charge to security holders upon written or oral request
at: Wiremedia.com, Inc., 1355 W Palmetto Park Rd. Suite 180, Boca Raton, FL
33486; Phone 561-362-8236; Fax 617-344-6141; e-mail [email protected].
o Do not send in your Wiremedia.com stock certificates now. If the merger
is completed, we will send you written instructions for exchanging your
shares.
o The merger has been structured as a tax-free reorganization. The tax
basis in your Wiremedia.com common stock will carryover and become the
tax basis in your new shares of Ninth Enterprise Service Group common
stock.
o Like Wiremedia.com, Ninth Enterprise Service Group has never paid any
dividends.
o If you have any questions about the merger, please call Mr. Colby Fede,
at Wiremedia.com, at 561-362-8236
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Dealer prospectus delivery obligation
Until , all dealers that effect transactions in these securities, whether
or not participating in this offering, are required to deliver a prospectus.
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SUMMARY
This summary highlights selected information from this information
statement/prospectus and may not contain all of the information that is
important to you. To understand the merger fully and for a more complete
description of the legal terms of the merger, you should read carefully this
entire document and the documents to which we have referred you.
In the merger, Wiremedia.com's shareholders will exchange shares with Ninth
Enterprise Service Group, and Ninth Enterprise Service Group will be the
surviving company of Wiremedia.com.
The merger agreement is attached as annex A to this document. We encourage
you to read the merger agreement, as it is the legal document that governs the
merger.
The companies.
Ninth Enterprise Service Group
2503 W. Gardner Ct.
Tampa, FL 33611
Telephone: 813/831-9348
We were organized under the laws of the state of Florida in May, 1999. Since
inception, our primary activity has been directed to organizational efforts. We
were formed as a vehicle to acquire through a registered securities offering a
private company desiring to become an SEC reporting company in order thereafter
to secure a listing on the over the counter bulletin board.
Wiremedia.com, Inc.
1355 W Palmetto Park Rd. Suite 180,
Boca Raton, FL 33486
Phone 561-362-8236
Fax 617-344-6141
e-mail [email protected]
Wiremedia.com was incorporated in Florida in January 2000. Wiremedia.com sells
e-commerce software and solutions.
Wiremedia.com maintains a website at http://www.wiremedia.com. Nothing contained
on this website is part of this information statement/prospectus.
Wiremedia.com's reasons for the merger
o Increase the visibility of Wiremedia.com's business, which could be
helpful in further developing and commercializing Wiremedia.com's
products.
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o Facilitate Wiremedia.com's ability to raise capital in the public markets.
o Potentially improve Wiremedia.com's shareholders' ability to sell their
shares in the over-the-counter market.
Comparison of the percentage of outstanding shares entitled to vote held by
directors, executive officers and their affiliates and the vote required for
approval of the merger.
One hundred percent of Ninth Enterprise Service Group's shares are held by
its directors, executive officers and their affiliates. A majority vote of the
issued and outstanding shares is required to approve the merger. Shareholders
owning 100% of our common stock have executed a written consent voting to
approve the merger. No further consent of you or any of the shareholders of
Ninth Enterprise Service Group is necessary to approve the merger under the laws
of the state of Florida.
Approximately 85% percent of Wiremedia.com's shares are held by its
directors, executive officers and their affiliates. A majority vote of the
issued and outstanding shares is required to approve the merger. Assuming
consents are secured from shareholders owning more than 50% of the stock of
Wiremedia.com, shareholders who did not consent to the merger will, by otherwise
complying with Florida corporate law, be entitled to dissenters' rights with
respect to the proposed merger. No consents will be solicited or accepted until
after the effective date of this information statement/prospectus.
No regulatory approval required.
Neither Ninth Enterprise Service Group nor Wiremedia.com is aware of any
governmental regulatory approvals required to be obtained with respect to the
closing of the merger, except for the filing of the articles of merger with the
offices of the secretary of state of the state of Florida, the filing with the
Commission of the registration statement on Form S-4 registering the shares and
this information statement/prospectus, and compliance with all applicable state
securities laws regarding the offering and issuance of the shares.
Dissenters' rights
Dissenters' rights of appraisal exist. See page * for further information.
Federal income tax consequences.
Tax matters are very complicated and the tax consequences of the merger to
you will depend on the facts of your own situation. You should consult your tax
advisors for a full understanding of the tax consequences of the merger to you.
Wiremedia.com and Ninth Enterprise Service Group have structured the merger so
that neither Wiremedia.com nor its shareholders should recognize gain or loss
for federal income tax purposes as a result of the merger.
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SELECTED HISTORICAL FINANCIAL INFORMATION
The following selected historical financial information of Wiremedia.com
and Ninth Enterprise Service Group has been derived from their respective
historical financial statements, and should be read in conjunction with such
financial statements and the notes , which are included in this information
statement/prospectus.
Wiremedia.com SELECTED HISTORICAL FINANCIAL INFORMATION
The following selected financial data as of and for the period January 25,
2000 (date of incorporation) to February 29, 2000 is derived from the Company's
audited financial statements. The data should be read in conjunction with the
Financial Statements and other financial information included elsewhere herein.
Period
Ended
February 29,
------------
2000
------------
Income Statement Data:
Revenues 0
General, administrative, and
selling expenses 100,094
Loss before taxes (100,094)
Income tax expense 0
Net loss (100,094)
Common Share Data:
Net loss per share 0.02
Book value (0.01)
Weighted average common shares
Outstanding (in 000s) 6,346,611
Period end shares outstanding
(in 000s) 6,346,611
Balance Sheet Data:
Total assets 21,300
Working deficit (35,600)
Shareholders' deficit (35,600)
Ninth Enterprise Service Group SELECTED HISTORICAL FINANCIAL INFORMATION
The following information concerning our financial position and operations is as
of and for the period ended December 31, 1999.
Total assets $ 0
Total liabilities 0
Equity 0
Sales 0
Net loss 3,079
Net loss per share 0.00
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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS OF
Wiremedia.com AND Ninth Enterprise Service Group
The merger of Wiremedia.com, Inc. with Ninth Enterprise Service Group will not
result in any changes to the financial statements as presented for
Wiremedia.com, Inc.
COMPARATIVE PER SHARE DATA
February 29,
2000
-------------
(unaudited)
Numerator - basic and diluted
LOSS per share
Net loss before and after merger $ 100,094
=============
Denominator - Basic LOSS per share
Common stock outstanding before merger 6,700,000
=============
Common stock outstanding after merger 6,830,000
=============
Basic and diluted loss per share before
Merger* $ 0.01
=============
Basic and diluted loss per share after
merger* $ 0.01
=============
* Convertible notes, convertible preferred stock, options and warrants are
considered anti-dilutive and not included in the above calculations
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision in our company. In addition, you should keep in mind that
the risks described below are not the only risks that we face. The risks
described below are all the risks that we currently believe are material risks
of this offering. However, additional risks not presently known to us, or risks
that we currently believe are immaterial, may also impair our business
operations. Moreover, you should refer to the other information contained in
this prospectus for a better understanding of our business.
Our business, financial condition, or results of operations could be adversely
affected by any of the following risks. If we are adversely affected by such
risks, then if and when our stock is listed for trading on the bulletin board,
the trading price of our common stock could decline, and you could lose all or
part of your investment.
This proxy statement/prospectus contains forward-looking statements that involve
risks and uncertainties. Wiremedia.com's actual results could differ materially
from those discussed herein. Factors that could cause or contribute to such
differences, include, but are not limited to, those discussed in the following
section and in Wiremedia.com's Management's Discussion and Analysis Of Financial
Condition and Results of Operations and Wiremedia.com Business.
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The merger agreement contains a number of conditions that must be satisfied in
order for the merger to take place. If these conditions aren't satisfied, the
merger will not close and Wiremedia.com will have suffered a delay in reaching
its objective of becoming a listed, trading company on the bulletin board.
The conditions include:
o The shareholders of Wiremedia.com must approve the merger, which condition has
been satisfied;
o The holders of no more than 10% of the outstanding shares of common
stock of Wiremedia.com shall have exercising dissenters' rights;
o The Securities and Exchange Commission must declare this registration
statement effective;
o Ninth Enterprise Service Group must have filed an application to have its
stock quoted on the bulletin board; and
o Wiremedia.com and its counsel must have satisfactorily completed their due
diligence review of Ninth Enterprise Service Group
Wiremedia.com is also not obligated to complete the merger if other
conditions are not satisfied. Please understand that there is no guarantee that
any of these conditions will be satisfied, or that the merger will occur in the
time frame contemplated, or occur at all.
Shareholders of Wiremedia.com will incur immediate dilution of percentage
of ownership in the amount of 2% as a result of the merger.
Dilution refers to a decrease in the percentage ownership interest of a
company that a share of stock represents. In connection with the merger,
wiremedia.com's shareholders' percentage ownership interest in Ninth Enterprise
Service Group will be 2% less than their ownership interest in Wiremedia.com
prior to the merger.
RISKS CONCERNING WIREMEDIA.COM, INC.
WE HAVE A LIMITED OPERATING HISTORY. OUR PRODUCT HAS JUST BEEN DEVELOPED AND MAY
NEVER BE SUCCESSFULL. THESE FACTORS MAKE IT DIFFICULT TO EVALUATE OUR STRATEGY
AND FORECAST OPERATING RESULTS
We commenced operations in January and are presently have launched our website
and anticipate shipping our first products in August 2000. Accordingly, we have
a limited operating history, which makes it difficult to evaluate our business
strategy and forecast our future operating results. The new, competitive,
fragmented and rapidly changing nature of our market increases these risks and
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uncertainties. We cannot assure you that our business strategy will be
successful or that we will be able to accurately forecast our future operating
results.
OUR OPERATING RESULTS PRIMARILY RELY ON MARKET ACCEPTANCE OF OUR E-COMMERCE
SOFTWARE AND SOLUTIONS.
Our future financial performance will depend substantially on our ability
to develop and maintain market acceptance of our existing e-commerce software
and solutions and new and enhanced versions of e-commerce software and solutions
and other new products. We expect subscriber revenues from e-commerce software
and solutions to account for a substantial majority of our revenues for the
foreseeable future. As a result, factors adversely affecting the pricing or
demand for e-commerce software and solutions, such as competition, technological
change or evolution in customer preferences, could materially adversely affect
our business, financial condition and operating results. Many of these factors
are beyond our control and difficult to predict.
WE HAVE A HISTORY OF LOSSES AND EXPECT TO INCUR FUTURE LOSSES
We incurred net losses from inception through February 29, 2000. As of
February 29, 2000, we had an accumulated deficit of approximately $100,000. We
have not achieved profitability and expect to continue to incur net losses for
the foreseeable future. We expect to continue to devote substantial resources to
our product development, sales, marketing and customer support activities. As a
result, we will need to generate significant working capital until our solution
is available for formal release. At that time we will need significant quarterly
revenues to achieve and maintain profitability. As a result, we expect to incur
additional losses and continued negative cash flow from operations for the
foreseeable future, and such losses are anticipated to increase significantly
from current levels. There can be no assurance that our revenues will increase
or even continue at their current level or that we will achieve or maintain
profitability or generate cash from operations in future periods.
Our current and future expense levels are to a large extent fixed and are
based on our operating plans and estimates of future revenues. Sales and
operating results generally depend on the volume and timing of customers, which
are difficult to forecast. We may be unable to adjust spending in a timely
manner to compensate for any unexpected revenue shortfall. Accordingly, any
significant shortfall in revenues would have an immediate adverse effect on our
business, financial condition and results of operations.
We currently anticipate that we will need at least $2,000,000 in capital
to meet our capital requirements through the next twelve months, although there
can be no assurance that we will not have additional capital needs prior to the
end of such period. Thereafter, we may be required to raise additional funds.
Although we are currently planning a public offering of our securities, there
can be no assurance that such offering or any other financing will be available
when required by us on terms acceptable to us, or at all.
OUR OPERATING RESULTS PRIMARILY RELY ON MARKET ACCEPTANCE OF OUR E-COMMERCE
SOFTWARE AND SOLUTIONS.
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Our future financial performance will depend substantially on our ability to
develop and maintain market acceptance of our e-commerce software and solutions,
our Intranet Prospecting Automation and Sales Management service, and new and
enhanced versions of our e-commerce software and solutions and other new our
e-commerce software and solutions. We expect subscriber revenues from our
e-commerce software and solutions to account for a substantial majority of our
revenues for the foreseeable future. As a result, factors adversely affecting
the pricing or demand for our e-commerce software and solutions, such as
competition, technological change or evolution in customer preferences, could
materially adversely affect our business, financial condition and operating
results. Many of these factors are beyond our control and difficult to predict.
The market for our e-commerce software and solutions is still emerging and
continued growth in demand for and acceptance of our e-commerce software and
solutions remains uncertain. The success of our business in the face of intense
competition will depend on growth of the overall market for our e-commerce
software and solutions. We will spend considerable resources targeting small and
home-based business segments of the market, educating potential customers about
our e-commerce software and solutions and software solutions in general and
developing our e-commerce software and solutions that are compatible with
Microsoft's browser technology, as well as others, and the Internet. However,
even with these efforts, sales of our e-commerce software and solutions may not
increase unless the market for our e-commerce software and solutions continues
to grow. If the market for our e-commerce software and solutions does not grow
or grows more slowly than we anticipate, the demand for Internet-related
e-commerce software and solutions does not continue to grow, or the small and
home-based business segments turn out to have significantly less potential than
we estimate, our business, financial condition and operating results would be
materially adversely affected.
WE HAVE NO CONTRACTS WITH OUR CUSTOMERS. THUS, THEY CAN QUICKLY AND EASILY STOP
BUYING OUR E-COMMERCE SOFTWARE AND SOLUTIONS , WHICH WOULD REDUCE OUR REVENUES
AND INCREASE OUR LOSSES.
We anticipate that we will derive a significant portion of our revenues from
the sale of e-commerce software and solutions. A significant number of these
e-commerce software and solutions sales will be made to customers with no
contracts. As a result, many of our e-commerce software and solutions customers
could cease purchasing e-commerce software and solutions quickly and without
penalty. As a result, our quarterly operating results will depend heavily on
e-commerce software and solutions revenues from purchases made by customers
within the quarter and on our ability to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall. If customers stop purchasing
our e-commerce software and solutions or if we fail to obtain new e-commerce
software and solutions customers in any quarter, our business, results of
operations and financial condition for that quarter and future periods will be
adversely affected.
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OUR ABILITY TO COMPETE EFFECTIVELY DEPENDS UPON THIRD PARTIES CONTINUING TO
DELIVER, SUPPORT AND ENHANCE CURRENT AND NEW VERSIONS OF SOFTWARE INCORPORATED
INTO OUR PRODUCTS
We plan to incorporate into our products, software that may be licensed to
us by third Parties, including Microsoft, Informix, Sun Microsystems, BellSouth
Communications, and various other providers of infrastructure technology.
Because our products incorporate, or are created using, software and solutions
developed and maintained by third parties, we depend on such parties' abilities
to deliver, support and enhance reliable products, develop new products and
respond to emerging industry standards and other technological changes. We also
plan to rely heavily on software development tools to build many key components
of our e-commerce software and solutions. The utility tools and application
development market is constantly evolving and highly competitive as Microsoft
and other well-financed competitors develop and market competing tools. If any
individual business partner or third party supplier of key infrastructure tools
becomes unable to provide items and/or components, we may be required to adopt a
replacement tool and substantially modify our application programs, requiring a
substantial amount of time to rewrite our e-commerce software and solutions in a
new language, which could have a material adverse effect on our business,
financial condition and operating results. The third-party software currently
incorporated into or used in our products may become obsolete or incompatible
with future versions of our products. Our sales could be materially adversely
affected if we are unable to replace that software with comparable or better
software.
THIRD PARTIES COULD INDEPENDENTLY DEVELOP TECHNOLOGIES SIMILAR TO OR BETTER THAN
THOSE WE USE ON OUR WEB SITE. OUR BUSINESS, FINANCIAL CONDITION AND OPERATING
RESULTS COULD BE ADVERSELY AFFECTED IF THIS HAPPENS
Third parties could independently develop technologies similar or superior
to our technologies but which do not violate any of our intellectual property
rights, such as our planned copyrights and trademarks. We have not commenced any
formal action to trademark our name. Others may take our name, and this could
cause us to lose customers or potential customers. This is particularly true for
internet customers who we believe are interested in the most sophisticated,
up-to-date technologies.
THE NEW AND, RAPIDLY EVOLVING NATURE OF SELLING OUR E-COMMERCE SOFTWARE AND
SOLUTIONS ON THE INTERNET MAKES THE ULTIMATE DEMAND FOR THE SALE OF OUR
E-COMMERCE SOFTWARE AND SOLUTIONS ON THE INTERNET UNCERTAIN.
The sale of our e-commerce software and solutions on the Internet is a
relatively new approach to the sale of our e-commerce software and solutions.
Our future revenues and profits will be substantially dependent upon the
widespread acceptance of the Internet and online services as a medium for
commerce by consumers. Rapid growth in the use of and interest in the World Wide
Web, the Internet and online products and services is a recent phenomenon. This
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acceptance and use may not continue. Because global commerce and the online
exchange of information is new and evolving, we cannot predict whether the Web
will prove to be a viable commercial marketplace in the long term.
As an exclusively online commerce company in the early stage of development, we
face increased risks, uncertainties, expenses and difficulties. You should
consider our company in light of these risks, uncertainties, expenses and
difficulties.
IN ORDER TO EXPAND OUR CUSTOMER BASE, WE MUST APPEAL TO AND ACQUIRE CONSUMERS
WHO HISTORICALLY HAVE USED TRADITIONAL MEANS OF COMMERCE TO PURCHASE GOODS.
Customers of traditional businesses selling e-commerce software and solutions
may be reluctant or slow to purchase our e-commerce software and solutions on
the Internet, which would adversely effect our ability to sell our e-commerce
software and solutions on the Internet. We cannot guarantee that those more
traditional consumers will be willing to make the transition to Internet
commerce.
EVEN IF THE INTERNET IS ACCEPTED, CONCERNS ABOUT FRAUD, PRIVACY AND OTHER
PROBLEMS MAY MEAN THAT A SUFFICIENTLY BROAD BASE OF CONSUMERS WILL NOT ADOPT THE
INTERNET AS A MEDIUM OF COMMERCE. THESE CONCERNS MAY INCREASE AS ADDITIONAL
PUBLICITY OVER PRIVACY ISSUES OVER THE INTERNET INCREASES.
A significant barrier to online commerce and communications is the secure
transmission of confidential information over public networks. Websites operated
by us or third party providers' security measures may not prevent security
breaches. The failure by websites operated by us to prevent security breaches
could harm our business.
Advances in computer capabilities, new discoveries in the field of cryptography,
or other developments may result in a compromise or breach of the technology
used by us to protect customer transaction data. Any such compromise of our
security could harm our reputation and, therefore, our business. In addition, a
party who is able to circumvent our security measures could misappropriate
proprietary information or cause interruptions in our operations.
THE SUCCESS OF OUR E-COMMERCE SOFTWARE AND SOLUTIONS WILL DEPEND LARGELY ON THE
DEVELOPMENT AND MAINTENANCE OF THE WEB INFRASTRUCTURE. PROBLEMS WITH DEVELOPMENT
AND MAINTENANCE OF THE WEB INFRASTRUCTURE COULD DECREASE USERS OR THE GROWTH OF
USERS OR COSTS OF OUR WEBSITE, WHICH COULD HURT OUR BUSINESS.
Development and maintenance of the web infrastructure includes maintenance of a
reliable network backbone with the necessary speed, data capacity and security,
as well timely development of complementary products such as high speed modems,
for providing reliable Web access to our e-commerce software and solutions. The
Web has experienced, and is likely to continue to experience, significant growth
in the numbers of customers and amount of traffic. If the Web continues to
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experience increased numbers of customers, increased frequency of use or
increased bandwidth requirements, the Web infrastructure may be unable to
support the demands placed on it. Specifically, if sufficient bandwidth is not
available, there may be a slower than anticipated growth of the internet as a
means of commerce. If it costs customers more to access the internet, there may
be fewer users than we anticipate. If it costs e-commerce retailers more to
maintain their sites, prices may increase and demand may decrease. Any of these
factors could harm our operating results.
A key element of our strategy is to generate a high volume of traffic on, and
use of, our Web site. Our revenues depend on the number of customers who use our
Web site to access our e-commerce software and solutions. Any systems
interruptions that result in the unavailability of our Web site or reduced order
fulfillment performance would reduce the volume of goods sold and the
attractiveness of our product and service offerings, which could have a material
adverse effect on our business, financial condition and results of operations.
THE POSSIBILITY OF LARGE-SCALE TECHNICAL DIFFICULTIES OR SERVICE INTERRUPTION OR
DAMAGE FROM EARTHQUAKES, FLOODS, FIRES, POWER LOSS, TELECOMMUNICATION FAILURES
AND SIMILAR EVENTS INTERRUPTIONS COULD HARM OUR BUSINESS.
The Web has experienced a variety of outages and other delays as a result of
damage to portions of its infrastructure, and it could face outages and delays
in the future. These outages and delays could reduce the level of Web usage as
well as the level of traffic and the processing of commerce on our website.
If system failures were sustained or repeated, our reputation and the
attractiveness of our e-commerce software and solutions could be impaired. Sales
of our e-commerce software and solutions are heavily dependent on the integrity
of the software and hardware systems supporting it. Heavy stress placed on
systems could cause them to operate at unacceptably low speed or fail. Failure
of our systems could also be caused by online service providers, record keeping
and data processing functions performed by third parties and third-party
software such as Internet browsers, databases and load balancing software.
Additionally, a natural disaster, power or telecommunications failure or act of
war may cause extended systems failure. Computer viruses or unauthorized access
to or sabotage of our network by a third party could also result in system
failures or service interruptions.
OUR SUCCESS, IN PARTICULAR OUR ABILITY TO SUCCESSFULLY RECEIVE AND FULFILL
ORDERS AND PROVIDE HIGH QUALITY CUSTOMER SERVICE, LARGELY DEPENDS ON THE
EFFICIENT AND UNINTERRUPTED OPERATION OF OUR COMPUTER AND COMMUNICATIONS
SYSTEMS. IF OUR COMPUTER AND COMMUNICATIONS SYSTEMS ARE INADEQUATE OR FAIL TO
PERFORM, OUR BUSINESS COULD BE HURT.
Substantially all of our management systems are located at our corporate
offices. We contract with a third party for mission critical Internet
connectivity, and these systems are located at a single location in Arlington,
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Va. We do not have a formal disaster recovery plan and do not carry sufficient
business interruption insurance to compensate us for losses that may occur. Any
failure of these systems could cause our business to crash.
WE MAY NEED TO UPGRADE HARDWARE AND SOFTWARE TO ACCOMMODATE ADDITIONAL CUSTOMER
TRANSACTIONS.
Our inability to add additional software and hardware or to upgrade our
technology, transaction processing systems or network infrastructure to
accommodate increased transaction volume could have adverse consequences. These
consequences include:
o Unanticipated system disruptions.
o Slower response times.
o Degradation in levels of customer support.
o Impaired quality of the customers' experience on our service.
o Delays in reporting accurate financial information.
WE INTEND TO RELY ON STRATEGIC MARKETING ALLIANCES WITH ONLINE PROVIDERS.
We plan to enter into marketing agreements to generate leads and visitors to our
website. There can be no assurance that we will achieve sufficient online
traffic, or generate sufficient sales to realize economies of scale that justify
our planned significant fixed financial obligations to future marketing
relationships, or to satisfy our projected contractual obligations necessary to
prevent termination of any such agreements. Our failure to do so would likely
have a material adverse effect on our business, results of operations and
financial condition. In addition, these planned marketing agreements will not
provide us with automatic renewal rights upon expiration of their respective
terms. Such agreements if entered into may not be renewed on commercially
acceptable terms, or at all. Our planned significant investment in these
marketing relationships is based on their continued positive market presence,
reputation and anticipated success, as well as the commitment by each to deliver
specified numbers of customers. Any decline in the significant market presence,
business or reputation of these vendors, or the failure of any to deliver the
specified numbers of customers, will reduce the value of these strategic
agreements to us and will likely have a material adverse effect our the
business, results of operations and financial condition.
OUR BUSINESS MAY BE HARMED BY LITIGATION RESULTING FROM THE SALE OF OUR
E-COMMERCE SOFTWARE AND SOLUTIONS OR ON OUR WEBSITE.
The law relating to the liability of providers of online products and services
for the activities of their customers is currently unsettled. We could be liable
for any faulty our e-commerce products and solutions we sell.
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Any resulting litigation could:
o Be costly for us.
o Divert management attention from the operation of our business.
o Result in increased costs of doing business.
o Lead to adverse judgment.
o Otherwise harm our business.
APPLICABILITY TO THE INTERNET OF EXISTING LAWS GOVERNING INFORMATION
DISSEMINATED THROUGH OUR WEBSITES IS UNCERTAIN. IF APPLIED TO US IN AN ADVERSE
MANNER, OUR BUSINESS COULD BE HARMED.
The vast majority of laws governing information disseminated through our website
were adopted prior to the advent of the Internet and related technologies and,
as a result, do not contemplate or address the unique issues of the Internet and
related technologies. Changes to such laws intended to address these issues,
including some recently proposed changes, could create uncertainty in the
Internet marketplace which could reduce demand for our e-commerce software and
solutions or increase the cost of doing business as a result of costs of
litigation or increased service delivery costs, or could in some other manner
have a material adverse effect on our business, financial condition and results
of operations.
MANY ISSUES CONCERNING REGULATION OF INTERNET COMPANIES ARE UNSETTLED. NEW AND
EXISTING REGULATION BY FEDERAL AND STATE GOVERNMENTS OF THE INTERNET DUE TO ITS
INCREASING POPULARITY COULD HARM OUR BUSINESS. GOVERNMENT INQUIRIES MAY LEAD TO
CHARGES OR PENALTIES.
The sale of products and services on the Internet is a relatively new field and
legally unsettled. We are subject to the same federal, state and local laws as
other companies conducting business on the Internet. However, today there are
relatively few laws specifically directed towards online products. The vast
majority of these laws were adopted prior to the advent of the Internet and
related technologies and, as a result, do not contemplate or address the unique
issues of the Internet and related technologies. Those laws that do reference
the Internet, such as the recently passed Digital Millennium Copyright Act, have
not yet been interpreted by the courts and their applicability and reach are
therefore uncertain.
Due to the increasing popularity and use of the Internet and online products, it
is possible that laws and regulations will be adopted with respect to the
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Internet or online products. These laws and regulations could cover issues such
as online contracts, user privacy, freedom of expression, pricing, fraud,
content and quality of our e-commerce software and solutions, taxation,
advertising, intellectual property rights and information security.
We are not currently subject to direct regulation by any domestic or foreign
governmental agency, other than regulations applicable to businesses generally,
export control laws and laws or regulations directly applicable to online
commerce. However, the growth and development of the market for online commerce
may prompt calls for more stringent consumer protection laws that may impose
additional burdens on those companies conducting business online. The adoption
of certain additional laws or regulations may decrease the growth of the
Internet or other online our e-commerce software and solutions, which could, in
turn, decrease the demand for our e-commerce software and solutions and increase
our cost of doing business, or otherwise have an adverse effect on our business,
financial condition and results of operations.
One or more states may attempt to impose regulations upon us in the future,
which could harm our business. Several states have proposed legislation that
would limit the uses of personal user information gathered online or require
online providers to establish privacy policies. The Federal Trade Commission
also has recently settled a proceeding with one online service regarding the
manner in which personal information is collected from customers and provided to
third parties. Changes to existing laws or the passage of new laws intended to
address these issues could directly affect the way we do business or could
create uncertainty in the marketplace. This could reduce demand for our
e-commerce software and solutions, increase the cost of doing business as a
result of litigation costs or increased service delivery costs, or otherwise
harm our business.
We may receive inquiries from local, state and federal governments on our
consumer practices. Should these inquiries lead to civil or criminal charges
against us, we would likely be harmed by negative publicity, the costs of
litigation, the diversion of management time and other negative effects, even if
we ultimately prevail. Our business would certainly suffer if we were not to
prevail in any legal action. If we become liable for any of these claims,
particularly liability that is not covered by insurance or is in excess of
insurance coverage, we could be directly harmed and we may be forced to
implement new measures to reduce our exposure to this liability. This may
require us to expend substantial resources and to discontinue certain product or
service offerings. In addition, the increased attention focused upon liability
issues as a result of these lawsuits could harm our reputation or otherwise
impact the growth of our business.
In addition, because our e-commerce software and solutions are accessible
worldwide, and we facilitate sales of goods to customers worldwide, foreign
jurisdictions may claim that we are required to comply with their laws. Our
failure to comply with foreign laws could subject us to penalties ranging from
fines to bans on our ability to offer our e-commerce software and solutions.
IN THE UNITED STATES, COMPANIES ARE REQUIRED TO QUALIFY AS FOREIGN CORPORATIONS
IN STATES WHERE THEY ARE CONDUCTING BUSINESS.
As an Internet company, it is unclear in which states we are actually conducting
business. Our failure to qualify as a foreign corporation in a jurisdiction
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where we are required to do so could subject us to taxes and penalties for the
failure to qualify and could result in our inability to enforce contracts in
those jurisdictions. Any new legislation or regulation, or the application of
laws or regulations from jurisdictions whose laws do not currently apply to our
business, could harm our business.
OUR BUSINESS MAY BE SUBJECT TO SALES AND OTHER TAXES.
We do not plan to collect sales or other similar taxes on goods or our
e-commerce software and solutions sold through our websites. One or more states
may seek to impose sales tax collection obligations on companies such as ours
that engage in or facilitate online commerce. Several proposals have been made
at the state and local level that would impose additional taxes on the sale of
goods and our e-commerce software and solutions through the Internet. These
proposals, if adopted, could substantially impair the growth of electronic
commerce, and could diminish our opportunity to derive financial benefit from
our activities.
The U.S. federal government recently enacted legislation prohibiting states or
other local authorities from imposing new taxes on Internet commerce for a
period of three years. This tax moratorium will last only for a limited period
and does not prohibit states or the Internal Revenue Service from collecting
taxes on our income, if any, or from collecting taxes that are due under
existing tax rules. A successful assertion by one or more states or any foreign
country that we should collect sales or other taxes on the exchange of
merchandise on our system could harm our business.
WE MAY EXPERIENCE SUBSTANTIAL CHANGES IN THE EXPANSION OF OUR
BUSINESS AND OPERATIONS
We may choose to expand our operations by developing new Web sites, promoting
new or complementary our e-commerce software and solutions or sales formats,
expanding the breadth and depth of our e-commerce software and solutions offered
or expanding our market presence through relationships with third parties. In
addition, we may broaden the scope and content of our website through the
acquisition of existing online our e-commerce software and solutions. Although
no such acquisitions are currently being negotiated, any future acquisitions
would expose us to increased risks, including risks associated with the
assimilation of new operations, sites and personnel, the diversion of resources
from our existing businesses, sites and technologies, the inability to generate
revenues from new sites or content sufficient to offset associated acquisition
costs, the maintenance of uniform standards, controls, procedures and policies
and the impairment of relationships with employees and customers as a result of
any integration of new management personnel. Acquisitions may also result in
additional expenses associated with amortization of acquired intangible assets
or potential businesses. There can be no assurance that we would be successful
in overcoming these risks or any other problems encountered in connection with
such acquisitions, and our inability to overcome such risks could have a
material adverse effect on our business, financial condition and results of
operations.
THE DEMAND FOR OUR E-COMMERCE PRODUCTS AND SOLUTIONS IS CYCLICAL, AND AS SUCH,
WE EXPECT TO EXPERIENCE FLUCTUATIONS IN OUR QUARTERLY OPERATION RESULTS.
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The level of demand for our e-commerce products and solutions is generally
greater in the second, and third quarter of the year because companies are
generally preparing for increased holiday sales which generally start in the
latter part of the. Accordingly, we should have greater revenues in this period
than other periods of the year, resulting in potentially significant variations
in our quarterly operating results from quarter to quarter.
OUR OPERATING RESULTS PRIMARILY DEPEND UPON THE SUPPORT OF OUR E-COMMERCE
SOFTWARE AND SOLUTIONS BY OUR SALES AND CUSTOMER SERVICE TEAM
Our success will continue to depend significantly on our ability to rapidly
and successfully deploy our e-commerce software and solutions for our customers.
Our sales and distribution strategy focuses primarily on developing a direct
inside sales distribution team and, to a lesser extent, developing an outside
direct sales organization. We will also have to provide excellent customer
service. We cannot assure you that we will be able to recruit or retain our
sales and service team or add experienced additional sales and service
representatives to market, sell, implement and support our e-commerce software
and solutions effectively. Our failure to do so could materially adversely
affect our business.
WE MAY EXPERIENCE RAPID GROWTH, WHICH WILL PUT A SIGNIFICANT STRAIN ON OUR
RESOURCES
We anticipate that we will grow rapidly. This rapid growth is likely to
place, a significant strain on our managerial, operating, financial and other
resources, including our ability to ensure customer satisfaction. For example,
as our customer base grows, and the need for high capacity Internet data
transmission capability expands, we will need to acquire substantial network
capacity to support their needs. Our expansion efforts also require significant
time commitments from our senior management and place a strain on their ability
to manage our existing business. We also may be required to manage multiple
relationships with third parties as we expand our enhanced value service
offerings. Our future performance will depend, in part, upon our ability to
manage this growth effectively. To that end, we will have to undertake the
following improvements, among others:
o Implement additional management information systems capabilities
o Further develop our operating, administrative and financial and
accounting systems and controls
o Improve coordination between our engineering, accounting, finance,
marketing and operations
o Hire and train additional personnel
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IF WE EXPERIENCE DIFFICULTY DEVELOPING AND EXPANDING OUR OUTSIDE SALES
CAPABILITY, WE MAY NOT BE ABLE TO DEVELOP OR EXPAND OUR BUSINESS AS PLANNED
We project that in August 2000, an outside sales team will focus on key
strategic accounts and larger opportunities and an inside sales team will focus
on lead follow-up from Internet direct marketing activities. We currently have
no direct sales force. Accordingly, this internal development and expansion may
not be successfully completed and the cost of this expansion may exceed the
revenues generated. Our sales organization may not be able to compete
successfully against the significantly more extensive and well-funded sales and
marketing operations of many of our current or potential competitors. We expect
to experience difficulty in recruiting qualified sales personnel. We cannot
assure you that we will be able to effectively establish or maintain and expand
our direct sales force.
WE DEPEND ON KEY PERSONNEL FOR OUR FUTURE SUCCESS AND WE MAY NOT BE ABLE TO
RECRUIT AND RETAIN THE PERSONNEL WE NEED TO SUCCEED
Our future performance will largely depend on the continued efforts and
abilities of our key technical, customer support, sales and management
personnel, many of whom would be difficult to replace. In particular, we believe
that our future success is highly dependent on Colby Fede and Irene MacAllister.
We do anticipate the addition of several key employees during the year 2000. We
will seek to have key personnel subject to non-compete covenants, but cannot
promise that employees will sign them or honor them. Key executives have not yet
functioned together as a formal management team. Accordingly, our executive
management's ability to function effectively as a team is unproven. Competition
for highly skilled employees with technical, management, marketing, sales,
product development and other specialized training is intense and there can be
no assurance that we will be successful in attracting and retaining such
personnel. In addition, we may experience increased costs in order to attract
and retain skilled employees. The loss of any of our senior management or other
key technical, customer support, sales and marketing personnel, particularly if
lost to competitors, could materially and adversely affect our business,
financial condition and operating results.
OUR FUTURE SUCCESS, AND IN PARTICULAR OUR REVENUES AND OPERATING RESULTS,
DEPENDS UPON OUR ABILITY TO SUCCESSFULLY EXECUTE SEVERAL KEY ASPECTS OF OUR
BUSINESS PLAN. IF WE DON'T SUCCEED IN EXECUTING THESE ASPECTS, OUR BUSINESS
COULD SUFFER.
To continue to grow our business, we will need to increase our client base and
the brand awareness of our company among small to medium sized businesses
setting up e-commerce websites.
Although we have plans to implement strategies designed to accomplish these
objectives, there can be no assurance that we will be able to increase the
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dollar volume of revenues through sales. The failure to accomplish this
objective would likely have a material adverse effect on our business, financial
condition and operating results.
OUR GROSS MARGINS MAY BE IMPACTED BY A NUMBER OF FACTORS WHICH COULD NEGATIVELY
AFFECT OPERATING RESULTS.
This includes the mix of revenues from various aspects of our e-commerce
software and solutions sold, and the mix of revenues derived from our
relationships with strategic partners, if any. We will realize higher gross
margins from the sale of customization services than we do from the sale of
products. We also may from time to time offer discount pricing and special
promotions, which periodically may reduce our gross margins. Any change in one
or more of the foregoing factors could materially adversely affect our gross
margins and operating results in future periods.
OUR FUTURE OPERATING RESULTS ARE LIKELY TO FLUCTUATE SIGNIFICANTLY AND MAY FAIL
TO MEET OR EXCEED THE EXPECTATIONS OF SECURITIES ANALYSTS OR INVESTORS, CAUSING
OUR STOCK PRICE TO DECLINE
o The demand and unpredictability of customer need for our e-commerce
products and solutions
o The mix of revenues generated by our various our e-commerce products and
solutions
o The marketing response rates from marketing activities
o New product announcements and introductions by our competitors
o Our ability to develop, market and manage product transitions and possibly,
acquisitions
o The amount and timing of operating costs and capital expenditures relating
to expansion of our business, operations and infrastructure
o General economic conditions and economic conditions specific to our
industry
Due to the foregoing factors, we believe that period-to-period comparisons
of our operating results should not be relied upon as indicative of future
performance.
We plan to increase our operating expenses to expand our product
development, sales, marketing and customer support activities. We base our
decisions regarding our operating expenses on anticipated revenue trends and
many of our expenses are relatively fixed in the short term. We may not be able
to reduce our expenses if our revenues are lower than anticipated, which could
cause our operating results to be below the expectations of public market
analysts or investors, causing the price of our common stock to fall after we
commence trading.
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WE MAY NOT RECOGNIZE REVENUE WHEN ANTICIPATED, WHICH MAY CAUSE OUR OPERATING
RESULTS TO VARY WIDELY
We have not yet established a sales cycle for our e-commerce products and
solutions since it has just been developed. The sales cycle for our product may
be variable, typically ranging between a few hours to several months from
initial contact with the customer to the acquisition of our e-commerce products
and solutions, although occasionally sales may require substantially more time.
Delays in executing customer contracts may affect revenue recognition and may
cause our operating results to vary widely. We believe that a business's
decision to purchase e-commerce software and solutions is discretionary,
involves a commitment of certain resources and may be influenced by its budget
cycles. To successfully sell our e-commerce software and solutions, we generally
must educate our potential customers regarding the use and benefit of our
e-commerce software and solutions, which can require significant time and
resources.
Consequently, the period between initial contact and the purchase of our
e-commerce software and solutions is often subject to delays associated with
budgeting, approval and competitive evaluation processes.
CHANGES IN ACCOUNTING STANDARDS COULD AFFECT OUR FUTURE OPERATING RESULTS
We recognize revenues from software license agreements based upon the
following criteria:
o persuasive evidence of an arrangement exists, such as an executed license
agreement, unconditional purchase order or contract;
o delivery of the product has occurred;
o collection of the resulting receivable is probable; and
o the fee is fixed or determinable based upon vendor-specific objective
evidence of the elements of the arrangement.
We will recognize customer support or maintenance revenues ratably over the
contract term, typically one year, and recognize revenues for consulting and
training our e-commerce software and solutions as such our e-commerce software
and solutions are performed.
Statement of Position 97-2 ("SOP 97-2"), "Software Revenue Recognition," was
issued in October 1997 by the American Institute of Certified Public Accountants
and amended by Statement of Position 98-4 ("SOP 98-4"). We plan to adopt SOP
97-2 effective July 1, 2000. Based on our interpretation of SOP 97-2 and SOP
98-4, we believe our planned revenue recognition policies and practices are
consistent with SOP 97-2 and SOP 98-4. However, full implementation guidelines
for this standard have not yet been issued. Once available, such implementation
guidance could lead to unanticipated changes in our planned revenues accounting
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practices, which changes could materially adversely affect our business,
financial condition and operating results. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
Additionally, the accounting standard setters, including the Securities and
Exchange Commission and the Financial Accounting Standards Board, are reviewing
the accounting standards related to business combinations and stock-based
compensation. Any changes to either of these standards or any other accounting
standards could materially adversely affect our operating results.
OUR ABILITY TO INCREASE REVENUES WILL DEPEND IN PART ON SUCCESSFUL DEVELOPMENT
OF OUR INTERNATIONAL OPERATIONS
Development of international operations will require significant management
attention and financial resources and may not produce desired levels of revenue.
We currently have no experience in marketing and distributing our e-commerce
software and solutions nationally or internationally and have not yet developed
non-U.S. versions of our e-commerce software and solutions. In addition, our
international business will be subject to inherent risks which could materially
and adversely affect our business, financial condition and operating results,
including:
o Difficulties in managing operations across disparate geographic areas
o Difficulties in enforcing agreements and intellectual property rights
o Fluctuations in local economic, market and political conditions
o Need for compliance with a wide variety of u.s. and foreign export
regulations
o Potential adverse tax consequences
o Currency exchange rate fluctuations
We have not yet assessed the impact and cost that conversion to the Euro will
have on both our internal systems and the our e-commerce software and solutions
we sell. We will attempt appropriate corrective actions based on the results of
our assessment. This issue and its related costs could materially adversely
affect our business, financial condition and operating results.
WE HAVE TAKEN NO STEPS TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS OR AVOID
INFRINGEMENT OF THIRD PARTY PROPRIETARY RIGHTS, WHICH COULD RESULT IN COSTLY
LITIGATION
Our success depends in part on our ability to protect our proprietary rights. We
currently have not yet engaged a law firm or taken any other steps to protect
these rights. Until these rights are protected, anyone may copy aspects of our
e-commerce software and solutions and obtain and use information that we regard
as proprietary. Other parties may breach confidentiality agreements and other
protective contracts with us and we may not become aware of, or have adequate
remedies in the event of, such breach. To protect our proprietary rights, we
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plan to rely primarily on a combination of copyright, patent, trade secret and
trademark laws, confidentiality agreements with employees and third parties and
protective contractual provisions such as those contained in license agreements
with business partners and customers, although we have not signed such
agreements at this time. We will employ security access tools designed to
restrict the unauthorized use of our e-commerce software and solutions but such
tools may be difficult to enforce. It may be more difficult to protect our
proprietary rights outside the United States. We also cannot assure you that a
third party will not assert a claim that our technology violates its
intellectual property rights. As the number of software our e-commerce software
and solutions in our markets increases and product functionalities increasingly
overlap, companies such as ours may become increasingly subject to infringement
claims. Any claims relating to the infringement of proprietary rights of third
parties, regardless of their merit, could result in costly litigation, divert
our management's attention and our company's resources, cause us to delay
product shipments or require us to pay damages or enter into royalty or license
agreements on terms that are not advantageous to us. Any of these results could
materially adversely affect our business, financial condition and operating
results.
OUR E-COMMERCE SOFTWARE AND SOLUTIONS MAY SUFFER FROM DEFECTS OR ERRORS,
RESULTING IN ADDITIONAL EXPENSES OR LOST SALES
Products as complex as our e-commerce software and solutions frequently
contain errors or defects, especially when first introduced or when new versions
are released. In some cases, we may have to delay commercial release of versions
of our e-commerce software and solutions until problems are corrected and in
some cases provide product enhancements to correct errors in released our
e-commerce software and solutions. Our current and future e-commerce software
and solutions or releases our e-commerce software and solutions may not be free
from errors after commercial shipments have begun. Any errors that are
discovered after commercial release could result in loss of revenues or delay in
market acceptance, diversion of development resources, damage to our reputation
or increased service and warranty costs, all of which could materially adversely
affect our business, financial condition and operating results.
WE DO NOT CARRY LIABILITY INSURANCE.
Should we become involved in liability litigation, we may be responsible for
large legal fees, financial settlements or fines. We have no insurance to cover
these costs. Such fees, settlements or fines could substantially harm our
business.
THE LEVEL OF DEMAND FOR OUR E-COMMERCE SOFTWARE AND SOLUTIONS IS UNCERTAIN
BECAUSE THE MARKET IS RAPIDLY EVOLVING AND SUBJECT TO BUSINESS AND CONSUMER
TRENDS.
The popularity of certain good and our e-commerce software and solutions among
consumers may vary over time due to subjective value, societal, business and
consumer trends in general. Any decline in demand for our e-commerce software
and solutions as a result of changes in business or consumer trends could harm
our business. If the market does not develop as we expect, or if we fail to
anticipate changing trends in our business, our financial condition and
operating results will be harmed.
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WE FACE A HIGH LEVEL OF COMPETITION IN THE SMALL TO MIDSIZE BUSINESS-TO-BUSINESS
SECTOR OF THE ONLINE COMMERCE MARKET
Wiremedia.com competes in the small to midsize business-to-business sector
of the online commerce market. The tremendous growth and potential market size
of the Internet access market and the absence of substantial barriers to entry
have attracted many new start-ups as well as existing businesses from the
telecommunications, cable and technology industries. As a result, the market for
business to business e-commerce products and related services is extremely
competitive. We anticipate that competition will continue to intensify as the
use of the Internet grows.
We currently compete with a variety of companies, including
o Local online service providers who target the business customer,
o Full-Service Internet firms with related products.
There are approximately 2 direct competitors and 4 other indirect competitors
within the sector. These competitors include: Verio, Hypermart, Bigstep, and
Bizland. Many of the local online providers are able to service their client's
needs at the local level, by virtue of their local presence. Many of the
full-service firms are able to bundle other features into their offerings.
We believe that the following are the primary competitive factors in this
market:
o A secure and reliable national network with sufficient capacity, quality
of service and scalability to support continued growth
o A knowledgeable and effective sales force, and broad and effective
distribution channels
o Knowledgeable and capable technical support personnel, and prompt and
efficient customer care services
o Internet system engineering and other technical expertise
o Competitive prices
o Timely introductions of new products and services
o Sufficient financial resources
o A recognized and trusted brand name
Many of our competitors have significantly greater market presence, brand
recognition, and financial, technical, network capacity and personnel resources
than we do. Wiremedia.com, unlike, its competitors, allows its clients to use
its products without an upfront fee, but on a revenue sharing basis.
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WE MUST KEEP UP WITH TECHNOLOGY TRENDS AND EVOLVING INDUSTRY STANDARDS
The market for e-commerce products and solutions is characterized by
rapidly changing technology, evolving industry standards, changes in customer
needs and frequent new product and service introductions. Our future success
will depend, in part, on our ability to effectively use leading technologies, to
continue to develop our technical expertise, to enhance our current services, to
develop new products and services that meet changing customer needs, and to
influence and respond to emerging industry standards and other technological
changes on a timely and cost-effective basis. We cannot assure you that we will
be successful in accomplishing these tasks or that such new technologies or
enhancements will achieve market acceptance.
We believe that our success is also dependent upon the continued compatibility
and interoperability of our services with products and architectures offered by
various vendors. We cannot assure you that we will be able to effectively
address the compatibility and interoperability issues raised by technological
changes or new industry standards. In addition, we cannot assure you that
services or technologies developed by others will not render our services or
technology uncompetitive or obsolete. For example, our services rely on the
continued widespread commercial use of transmission control protocol/Internet
protocol. Alternative open and proprietary protocol standards that compete with
transmission control protocol/Internet protocol, including proprietary protocols
developed by IBM and Novell, Inc., have been or are being developed. Any of
these factors adversely impact our business, financial condition and results of
operations.
OUR MANAGEMENT HAS SIGNIFICANT CONTROL OVER STOCKHOLDER MATTERS, WHICH MAY
IMPACT THE ABILITY OF MINORITY STOCKHOLDERS TO INFLUENCE OUR ACTIVITIES.
Our officers and directors and their families control the outcome of all matters
submitted to a vote of the holders of common stock, including the election of
directors, amendments to our certificate of incorporation and approval of
significant corporate transactions. These persons will beneficially own, in the
aggregate, approximately 85% of our outstanding common stock. This consolidation
of voting power could also have the effect of delaying, deterring or preventing
a change in control of Wiremedia.com that might be beneficial to other
stockholders.
OUR MANAGEMENT IS ONLY DEVOTING 50% OF THEIR TIME TO OUR BUSINESS. CONFLICTS IN
INTEREST IN DECIDING HOW TO DOVOTE THEIR AVAILABLE TIME MAY CAUSE OUR BUSINESS
TO BE LESS SUCCESSFUL THAN IF THEY DEVOTED FULL TIME TO OUR BUSINESS.
Under their employment agreements, our management is only required to devote
half of their business time to us and the other half will be devoted to
Biztalk.com, another business with which they are associated. Their devoting
less than full time to our business may adversely impact our financial condition
and results of operations.
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THE PRICE OF OUR STOCK MAY FALL IF, AFTER THE MERGER, OUR INSIDERS SELL A LARGE
NUMBER OF THEIR SHARES. IT MAY ALSO FALL IF NON-INSIDERS SELL THEIR SHARES AS
WELL.
After the merger, 2 of our principal executive officers and other insiders will
own an aggregate of 6,000,000 restricted shares. These shares may only be sold
in compliance with Rule 144, except that there is no one year holding period
because these shares are being issued under this registration statement. After
the merger, 50 non-insiders will own an aggregate of restricted shares. These
non-insiders are not subject to the restrictions of Rule 144, and all of these
non-insider shares may be sold immediately.
Rule 144 generally provides that a person owning shares subject to the Rule who
has satisfied or is not subject to a one year holding period for the restricted
securities may sell, within any three month period (provided we are current in
our reporting obligations under the Exchange Act) subject to certain manner of
resale provisions, an amount of restricted securities which does not exceed the
greater of 1% of our total issued and outstanding shares.
A sale of shares by these security holders, whether under Rule 144 or otherwise,
may have a depressing effect upon the price of our common stock in any market
that might develop after the merger.
THERE HAS BEEN NO PRIOR MARKET FOR OUR COMMON STOCK. IF WE DON'T GET OUR STOCK
LISTED FOR TRADING AFTER THE MERGER, WE WILL NOT HAVE SATISFIED THE PRIMARY
OBJECTIVE OF THE MERGER TRANSACTION.
Prior to this offering, you could not buy or sell our common stock publicly. We
may not be able to secure a market maker to file an application to have our
stock listed for trading. Even if we do, an active public market for our common
stock may not develop or be sustained after the offering.
WE EXPECT THE PRICE OF OUR COMMON STOCK TO BE VOLATILE. YOU MAY NOT BE ABLE TO
SELL YOUR STOCK FOR MORE THAN YOU PAID FOR IT.
The trading price of our common stock has been and is likely to be extremely
volatile. Our stock price could be subject to wide fluctuations in response to a
variety of factors, including the following:
o Actual or anticipated variations in our quarterly operating results.
o Announcements of technological innovations or new our e-commerce
software and solutions by us or our competitors.
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o Changes in financial estimates by securities analysts.
o Conditions or trends in the Internet and online commerce industries.
o The emergence of online securities trading.
o Changes in the market valuations of other Internet or online service
companies.
o Developments in Internet regulations.
o Announcements by us or our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments.
o Unscheduled system downtime.
o Additions or departures of key personnel.
o Sales of our common stock or other securities in the open market.
o Other events or factors that may be beyond our control.
In addition, the trading price of Internet stocks in general have experienced
extreme price and volume fluctuations in recent months. These fluctuations often
have been unrelated or disproportionate to the operating performance of these
companies. The valuations of many Internet stocks are extraordinarily high based
on conventional valuation standards, such as price to earnings and price to
sales ratios.
Any negative change in the public's perception of the prospects of Internet or
e-commerce companies could depress our stock price regardless of our results.
Other broad market and industry factors may decrease the market price of our
common stock, regardless of our operating performance. Market fluctuations, as
well as general political and economic conditions such as recession or interest
rate or currency rate fluctuations, also may decrease the market price of our
common stock.
In the past, securities series Action litigation has often been brought against
a company following periods of volatility in the market price of its securities.
We may in the future be the target of similar litigation. Securities litigation
could result in substantial costs and divert management's attention and
resources, which could harm our business, operating results and financial
condition.
WE WILL BE SUBJECT TO PENNY STOCK RULES THAT MAY MAKE IT MORE DIFFICULT FOR YOU
TO SELL YOUR SHARES.
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Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by certain penny stock rules adopted by the Commission. Penny stocks
generally are equity securities with a price of less than $5.00. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document that provides information about penny stocks and the risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. In
addition, the penny stock rules generally require that prior to a transaction in
a penny stock, the broker-dealer make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. As our shares immediately following the closing of the merger
and listing of our stock be subject to subject to such penny stock rules, our
shareholders will in all likelihood find it more difficult to sell their
securities.
MERGER APPROVALS
Approval of the merger
On March 9, 2000, Michael T. Williams as the sole member of our board of
directors approved the merger proposal. All our stockholders approved the merger
proposal on the same date.
On April 14, 2000, your board of directors unanimously approved the merger
proposal.
MERGER TRANSACTIONS
The merger agreement provides that each outstanding share of Wiremedia.com
common stock, other than dissenting shares, as defined later in this document,
will be exchanged for one share of Ninth Enterprise Service Group common stock.
Immediately after the closing of the merger, the former holders of Wiremedia.com
common stock will hold in the aggregate 6,800,000 shares of Ninth Enterprise
Service Group common stock, or approximately 98% of the shares of Ninth
Enterprise Service Group common stock to be outstanding immediately after the
closing of the merger, calculated assuming the issuance of 6,930,000 shares of
Ninth Enterprise Service Group common stock to the Wiremedia.com shareholders in
the merger and based upon 130,000 outstanding shares of Ninth Enterprise Service
Group common stock outstanding as of the date of the closing of the merger.
The agreement provides that at the closing of the merger, Ninth Enterprise
Service Group will
o Change its name to Wiremedia.com
o Adopt Wiremedia.com articles and bylaws
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o Elect, effective upon the effectiveness of the merger, new officers and
a new board of directors to consist of the current officers and current
directors of Wiremedia.com
The agreement provides that Wiremedia.com's shareholders who vote against the
merger are entitled to dissenters' rights with respect to the proposed the
receipt shares of Ninth Enterprise Service Group common stock as set forth in
Florida law. The agreement also provides for the payment to us of a Merger Fee
of approximately $55,000.
None of the shares of Ninth Enterprise Service Group common stock outstanding
prior to the closing of the merger will be converted or otherwise modified in
the merger and all of such shares not otherwise returned to us as provided in
the merger agreement will be outstanding capital stock of Ninth Enterprise
Service Group after the closing of the merger.
The merger will be consummated promptly after this information
statement/prospectus is declared effective by the SEC and upon the satisfaction
or waiver of all of the conditions to the closing of the merger. The merger will
become effective on the date and time a properly executed articles of merger are
filed with the offices of the secretary of state of Florida. Thereafter,
Wiremedia.com will be merged and Ninth Enterprise Service Group, with the result
that Wiremedia.com will cease to exist and Ninth Enterprise Service Group will
be the surviving corporation in the merger.
Fractional shares.
As of the date of this information statement/prospectus, there were no
fractional shares of Wiremedia.com's common stock outstanding. Because each
outstanding share of Wiremedia.com's common stock will be entitled to receive
one share of Ninth Enterprise Service Group's common stock under the terms of
the merger agreement, there will be no fractional shares issued in the merger.
Bulletin board listing
Ninth Enterprise Service Group will be subject to the reporting requirements
of the securities exchange act of 1934 after the merger as a result of its
filing of a form 8-A electing to be a reporting company subject to the
requirements of the 1934 act.
Upon closing of the merger, Ninth Enterprise Service Group will seek to
become listed on the over the counter bulletin board under the symbol "*symbol".
If and when listed, the Wiremedia.com's shareholders will hold shares of a
publicly-traded Florida corporation subject to compliance with the reporting
requirements of the exchange act. Because the state of incorporation, articles
and bylaws of Ninth Enterprise Service Group will be the same as those of
Wiremedia.com prior to the merger, the rights of shareholders of Wiremedia.com
will not change as a result of the merger.
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Background of the merger
Ninth Enterprise Service Group. As discussed under Ninth Enterprise Service
Group Business, Ninth Enterprise Service Group was formed primarily to serve as
a vehicle to acquire a private company desiring to become an SEC reporting
company in order thereafter to secure a listing on the over the counter bulletin
board.
Contacts between the Parties
In late 1999, Mr. Colby Fede, President of Wiremedia.com entered into
discussions with Mr. Michael T. Williams, Ninth Enterprise Service Group's
President. After some additional discussions between the parties, Wiremedia.com
indicated that it would be interested in discussing a possible business
combination with Ninth Enterprise Service Group. Thereafter, there were numerous
telephone conversations between the companies relating to various aspects of the
potential merger, including in-depth discussions concerning the steps that
needed to be taken to close the merger.
Following these discussions, representatives of Ninth Enterprise Service Group
and Wiremedia.com negotiated the basic structure, terms and conditions of the
merger. Of the $55,000 merger fee to be paid to us by Wiremedia.com under the
terms of the merger agreement, Mr. Williams will receive $10,000 for his role as
current president and director. The remaining $45,000 will be paid to Williams
Law Group for legal services in preparing this registration statement.
Upon formation, Mr. Williams was issued 1,000,000 shares. In connection with the
merger, we agreed to effect a reverse split such that Mr. Williams' Trust will
own 130,000 shares prior to the closing of the merger. In addition, the
agreement called for Wiremedia.com to retain the NASD member firm of Harrison
Douglas as financial advisor to it in the transaction. They shall be paid
$30,000 and receive 130,000 shares of Wiremedia.com before the merger for acting
as financial advisor. Although not rendering a formal fairness opinion, as
financial advisor to the board of Wiremedia.com, Harrison Douglas has agreed to
advise Wiremedia.com's board as to whether it believes the merger will
accomplish Wiremedia.com's objectives. In addition, Harrison Douglas will also
be available to respond to any concerns or answer any questions the
Wiremedia.com board might have during the acquisition process.
After having reached resolution on all open issues, a preliminary merger
agreement was drafted and Wiremedia.com convened a special meeting of its board
of directors at which the agreement of merger and the other transactions
required by the merger agreement were discussed and reviewed. Thereafter, the
board of directors of Wiremedia.com unanimously adopted and approved the
preliminary agreement and the transactions required by the merger agreement. A
merger agreement is currently being drafted.
Neither of the respective boards of Directors of Ninth Enterprise Service
Group or Wiremedia.com requested or received, or will receive, an opinion of an
independent investment banker as to whether the merger is fair, from a financial
point of view, to Ninth Enterprise Service Group and its stockholders
Wiremedia.com and its shareholders.
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Reasons for the merger
Ninth Enterprise Service Group' reasons for the merger.
In considering the merger, the Ninth Enterprise Service Group board took note
of the fact that Wiremedia.com could produce audited financial statements and
other information necessary for the filing of this information
statement/prospectus and agreed to pay a merger fee to us, the Ninth Enterprise
Service Group board determined that the merger proposal was fair to, and in the
best interests of, Ninth Enterprise Service Group and the Ninth Enterprise
Service Group's stockholders.
Wiremedia.com's reasons for the merger.
o Increase the visibility of Wiremedia.com's business, which could be
helpful in further developing and commercializing Wiremedia.com's
products.
o Facilitate Wiremedia.com's ability to raise capital in the public
markets.
o Potentially improve Wiremedia.com's shareholders' ability to sell their
shares in the over-the-counter market.
Interests of certain persons in the merger
Upon the closing of the merger, the current directors and executive officers
of Wiremedia.com will become the directors and executive officers of the
surviving corporation.
Material Federal Income Tax Consequences
The following discussion summarizes the material federal income tax
consequences of the merger that are generally applicable to holders of
Wiremedia.com's common stock. This discussion is based on currently existing
provisions of the Internal Revenue code of 1986, existing and proposed Treasury
Regulations thereunder and current administrative rulings and court decisions,
all of which are subject to change. Any such change, which may or may not be
retroactive, could alter the tax consequences to the Wiremedia.com shareholders,
as described herein.
Wiremedia.com's shareholders should be aware that this discussion does not
deal with all federal income tax considerations that may be relevant to
particular shareholders in light of their particular circumstances, such as
shareholders who are dealers in securities, banks or insurance companies, are
subject to the alternative minimum tax provisions of the code, are foreign
persons, are tax-exempt entities, are taxpayers holding stock as part of a
conversion, straddle, hedge or other risk reduction transaction, or who acquired
their shares in connection with stock option or stock purchase plans or in other
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compensatory transactions. In addition, the following discussion does not
address the tax consequences of the merger under foreign, state or local tax
laws or the tax consequences of transactions effectuated prior to, concurrently
with or after the merger as a result of its filing of a form 8-A electing to be
a reporting company subject to the requirements of the 1934 act, whether or not
such transactions are in connection with the merger. Accordingly, all
shareholders are urged to consult their own tax advisors as to the specific
consequences of the merger to them, including the applicable federal, state,
local and foreign tax consequences of the merger in their particular
circumstances.
Neither Ninth Enterprise Service Group nor Wiremedia.com has requested, or
will request, a ruling from the Internal Revenue Service, IRS, with regard to
any of the federal income tax consequences of the merger. It is the opinion of
Williams Law Group, P.A., counsel to Ninth Enterprise Service Group, that the
merger will constitute a reorganization under Section 368(a) of the code. The
tax opinion is based on certain assumptions, as well as representations received
from Wiremedia.com, Ninth Enterprise Service Group and certain shareholders of
Wiremedia.com and will be subject to the limitations discussed below. Of
particular importance are the assumptions and representations relating to the
continuity of interest requirement discussed below. Moreover, the tax opinions
will not be binding on the IRS nor preclude the IRS from adopting a contrary
position. The tax description set forth below has been prepared and reviewed by
Williams Law Group, and in their opinion, to the extent such descriptions
relates to statements of law, it is correct in all material respects.
Subject to the limitations and qualifications referred to herein, and as a
result of the merger's qualifying as a reorganization, the following federal
income tax consequences should, under currently applicable law, result:
No gain or loss will be recognized for federal income tax purposes by the
holders of Wiremedia.com common stock upon the receipt of Ninth Enterprise
Service Group common stock solely in merger for such Wiremedia.com common
stock in the merger, except to the extent that cash is received by the
exercise of dissenters' rights.
The aggregate tax basis of the Ninth Enterprise Service Group common stock
so received by Wiremedia.com shareholders in the merger will be the same
as the aggregate tax basis of the Wiremedia.com common stock surrendered
in merger therefore.
The holding period of the Ninth Enterprise Service Group common stock so
received by each Wiremedia.com shareholder in the merger will include the
period for which the Wiremedia.com common stock surrendered in merger
therefore was considered to be held, provided that the Wiremedia.com
common stock so surrendered is held as a capital asset at the closing of
the merger of the merger.
A holder of Wiremedia.com common stock who exercises dissenters' rights with
respect to a share of Wiremedia.com common stock and receives a cash payment for
such share generally should recognize capital gain or loss, if such share was
held as a capital asset at the closing of the merger, measured by the difference
between the shareholder's basis in such share and the amount of cash received,
provided that such payment is not essentially equivalent to a dividend within
the meaning of Section 302 of the code nor has the effect of a distribution of a
dividend within the meaning of Section 356(a)(2) of the code after giving effect
to the constructive ownership rules of the code. A sale of shares under an
exercise of dissenters' rights generally will not be so treated if, as a result
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of such exercise, the shareholder exercising dissenters' rights owns no shares
of capital stock of the Ninth Enterprise Service Group, either actually or
constructively within the meaning of Section 318 of the code, immediately after
the merger.
Neither Ninth Enterprise Service Group nor Wiremedia.com will recognize gain
solely as a result of the merger.
Characterizing the merger as a reorganization is dependent on certain
requirements. One key requirement is that there is a continuity of interest with
respect to the business of Wiremedia.com . In order for the continuity of
interest requirement to be met, shareholders of Wiremedia.com must not, under a
plan or intent existing at or prior to the closing of the merger of the merger,
dispose of so much of their Wiremedia.com common stock in anticipation of the
merger, plus the Ninth Enterprise Service Group common stock received in the
merger that the Wiremedia.com shareholders, as a group, would no longer have a
significant equity interest in the Wiremedia.com business being conducted by the
us after the merger .
Wiremedia.com shareholders will generally be regarded as having a significant
equity interest as long as the Ninth Enterprise Service Group common stock
received in the merger, in the aggregate, represents a substantial portion of
the entire consideration received by the Wiremedia.com shareholders in the
merger. This requirement is frequently referred to as the continuity of interest
requirement. If the continuity of interest requirement is not satisfied, the
merger would not be treated as a reorganization. The law is unclear as to what
constitutes a significant equity interest or a substantial portion. The IRS
ruling guidelines require eighty percent continuity, although such guidelines do
not purport to represent the applicable substantive law. Accordingly, certain
Wiremedia.com shareholders will be asked to execute and deliver to Wiremedia.com
a continuity of interest certificates prior to the closing of the merger. The
continuity of interest certificates obtained from such shareholders contemplate
that the eighty percent standard will be applied. If such requirement is not
satisfied, the merger will not be treated as a reorganization.
A successful IRS challenge to the reorganization status of the merger
would result in significant tax consequences. For example,
o Wiremedia.com would recognize a corporate level gain or loss on the deemed
sale of all of its assets equal to the difference between
the sum of the fair market value, as of the closing of the merger, of
the Ninth Enterprise Service Group common stock issued in the
amount of the liabilities of Wiremedia.com assumed by Ninth
Enterprise Service Group in the Wiremedia.com's basis in such
assets
o Wiremedia.com shareholders would recognize gain or loss with respect to
each share of Wiremedia.com common stock surrendered equal to the
difference between the shareholder's basis in such share and the fair
market value, as of the closing of the merger, of the Ninth Enterprise
Service Group common stock received in merger therefore.
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In such event, a shareholder's aggregate basis in the Ninth Enterprise Service
Group common stock so received would equal its fair market value and the
shareholder's holding period for such stock would begin the day after the merger
is consummated.
Even if the merger qualifies as a reorganization, a recipient of Ninth
Enterprise Service Group common stock would recognize income to the extent that,
for example, any such shares were determined to have been received in merger for
services, to satisfy obligations or in consideration for anything other than the
Wiremedia.com common stock surrendered. Generally, such income is taxable as
ordinary income upon receipt. In addition, to the extent that Wiremedia.com
shareholders were treated as receiving, directly or indirectly, consideration
other than Ninth Enterprise Service Group common stock in merger for such
shareholder's common stock gain or loss would have to be recognized.
This discussion does not address the tax consequences of the merger to
holders of Wiremedia.com warrants and options, who, as a result of the merger,
will receive Ninth Enterprise Service Group warrants and options. Holders of
such securities should consult their tax advisors with respect to such tax
consequences.
Termination.
At any time prior to the Effective Date, the merger agreement may be terminated,
and the merger abandoned under certain circumstances, including:
o By mutual consent of Ninth Enterprise Service Group and Wiremedia.com
o By either party if any of the other party's representations and warranties
contained in the merger agreement shall be or shall have become inaccurate, or
if any of the other party's covenants contained in the merger agreement
shall have been breached
o By either party if a court of competent jurisdiction or other
governmental body shall have issued a final and nonappealable order,
decree or ruling, or shall have taken any other action, having the
effect of permanently restraining, enjoining or otherwise prohibiting
the merger
o By Wiremedia.com if the consents have been solicited and the merger
agreement shall not have been adopted and approved by the required vote
o By Wiremedia.com if Wiremedia.com reasonably determines that the timely
satisfaction of any condition to its obligations to consummate the
merger has become impossible or unlikely.
Dissenters' Rights
The following summary of dissenters' rights under Florida law is qualified
in its entirety by reference to chapter 607, Florida Statutes.
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Failure to strictly follow the procedures set forth therein may result in
the loss, termination or waiver of dissenters' rights. A Wiremedia.com
shareholder who fails to sign and return a proxy card disapproving and
withholding authorization for the merger or to attend the Wiremedia.com special
meeting and vote his or her shares against the merger will not have a right to
exercise dissenters' rights. A Wiremedia.com shareholder who desires to exercise
his or her dissenters' rights must also submit a written demand for payment to
Wiremedia.com before the date of the Wiremedia.com special meeting.
Section 607.1303 of Florida law provides the following procedure for exercise
of dissenters' rights.--
o The corporation shall deliver a copy of ss. 607.1301, 607.1302, and
607.1320 to each shareholder simultaneously with any request for the
shareholder's written consent or, if such a request is not made,
within 10 days after the date the corporation received written
consents without a meeting from the requisite number of shareholders
necessary to authorize the action.
o Within 10 days after the shareholders' authorization date, the
corporation shall give written notice of such authorization or
consent or adoption of the plan of merger, as the case may be, to
each shareholder who did not vote for, or consent in writing to, the
proposed action.
o Within 20 days after the giving of notice to him or her, any
shareholder who elects to dissent shall file with the corporation a
notice of such election, stating the shareholder's name and address,
the number, classes, and series of shares
as to which he or she dissents, and a demand for payment of the fair
value of his or her shares. Any shareholder failing to file such
election to dissent within the period set forth shall be bound by
the terms of the proposed corporate action. Any shareholder filing
an election to dissent shall deposit his or her certificates for
certificated shares with the corporation simultaneously with the
filing of the election to dissent. The corporation may restrict the
transfer of uncertificated shares from the date the shareholder's
election to dissent is filed with the corporation.
o Upon filing a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment for dissenting and shall not
be entitled to vote or to exercise any other rights of a
shareholder.
In accordance with the foregoing requirement, the text of the relevant sections
is set forth below:
607.1301 Dissenters' rights; definitions provides as follows:
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"Corporation" means the issuer of the shares held by a dissenting shareholder
before the corporate action or the surviving or acquiring corporation by
merger or share exchange of that issuer.
"Fair value," with respect to a dissenter's shares, means the value of the
shares as of the close of business on the day prior to the shareholders'
authorization date, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
o "Shareholders' authorization date" means the date on which the
shareholders' vote authorizing the proposed action was taken, the date
on which the corporation received written consents without a meeting
from the requisite number of shareholders in order to authorize the
action, or, in the case of a merger pursuant to s. 607.1104, the day
prior to the date on which a copy of the plan of merger was mailed to
each shareholder of record of the subsidiary corporation.
607.1302 Right of shareholders to dissent provides as follows:
o Any shareholder of a corporation has the right to dissent from, and
obtain payment of the fair value of his or her shares in the event of,
any of the following corporate actions:
o Consummation of a plan of merger to which the corporation is a party, f
the shareholder is entitled to vote on the merger, or
o If the corporation is a subsidiary that is merged with its parent under
s. 607.1104, and the shareholders would have been entitled to vote on
action taken, except for the applicability of s. 607.1104;
o Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation, other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or
exchange pursuant to s. 607.1202, including a sale in dissolution but
not including a sale pursuant to court order or a sale for cash
pursuant to a plan by which all or substantially all of the net
proceeds of the sale will be distributed to the shareholders within 1
year after the date of sale;
o As provided in s. 607.0902(11), the approval of a control-share
acquisition;
o Consummation of a plan of share exchange to which the corporation is a
party as the corporation the shares of which will be acquired, if the
shareholder is entitled to vote on the plan;
o Any amendment of the articles of incorporation if the shareholder is
entitled to vote on the amendment and if such amendment would adversely
affect such shareholder by:
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o Altering or abolishing any preemptive rights attached to any of his or
her shares;
o Altering or abolishing the voting rights pertaining to any of his or
her shares, except as such rights may be affected by the voting rights
of new shares then being authorized of any existing or new class or
series of shares;
o Effecting an exchange, cancellation, or reclassification of any of his
or her shares, when such exchange, cancellation, or reclassification
would alter or abolish the shareholder's voting rights or alter his or
her percentage of equity in the corporation, or effecting a reduction
or cancellation of
o accrued dividends or other arrearages in respect to such shares;
o Reducing the stated redemption price of any of the shareholder's
redeemable shares, altering or abolishing any provision relating to any
sinking fund for the redemption or purchase of any of his or her
shares, or making any of his or her shares subject to redemption when
they are not otherwise redeemable;
o Making noncumulative, in whole or in part, dividends of any of the
shareholder's preferred shares which had theretofore been cumulative;
o Reducing the stated dividend preference of any of the shareholder's
preferred shares; or
o Reducing any stated preferential amount payable on any of the
shareholder's preferred shares upon voluntary or involuntary
liquidation; or
o Any corporate action taken, to the extent the articles of incorporation
provide that a voting or nonvoting shareholder is entitled to dissent
and obtain payment for his or her shares.
o A shareholder dissenting from any amendment specified in paragraph
(1)(e) has the right to dissent only as to those of his or her shares
which are adversely affected by the amendment.
o A shareholder may dissent as to less than all the shares registered in
his or her name. In that event, the shareholder's rights shall be
determined as if the shares as to which he or she has dissented and his
or her other shares were registered in the names of different
shareholders.
o Unless the articles of incorporation otherwise provide, this section
does not apply with respect to a plan of merger or share exchange or a
proposed sale or exchange of property, to the holders of shares of any
class or series which, on the record date fixed to determine the
shareholders entitled to vote at the meeting of shareholders at which
such action is to be acted upon or to consent to any such action
without a meeting, were either registered on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc., or held of record by not fewer than 2,000 shareholders.
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o A shareholder entitled to dissent and obtain payment for his or her
shares under this section may not challenge the corporate action
creating his or her entitlement unless the action is unlawful or
fraudulent with respect to the shareholder or the corporation.
Accounting Treatment
For accounting purposes, the merger will be treated as an acquisition by a
predecessor corporation.
Merger Procedures
Unless otherwise designated by a Wiremedia.com shareholder on the
transmittal letter, certificates representing shares of Ninth Enterprise Service
Group common stock issued to Wiremedia.com shareholders will be issued and
delivered to the tendering Wiremedia.com shareholder at the address on record
with Wiremedia.com . In the event of a transfer of ownership of shares of
Wiremedia.com common Stock represented by certificates that are not registered
in the transfer records of Wiremedia.com , the shares may be issued to a
transferee if such certificates are delivered to the Transfer Agent, accompanied
by all documents required to evidence such transfer and by evidence satisfactory
to the Transfer Agent that any applicable stock transfer taxes have been paid.
If any certificates shall have been lost, stolen, mislaid or destroyed, upon
receipt of
o An affidavit of that fact from the holder claiming such certificates to
be lost, mislaid or destroyed, Such bond, security or indemnity as the
surviving corporation and the merger agent may reasonably require
o Any other documents necessary to evidence and effect the bona fide
merger, the merger agent shall issue to holder the shares into which
the shares represented by such lost, stolen, mislaid or destroyed
o Certificates have been converted.
Neither Ninth Enterprise Service Group, Wiremedia.com , nor the Transfer Agent
is liable to a holder of Wiremedia.com's common stock for any amounts paid or
property delivered in good faith to a public official under any applicable
abandoned property law. Adoption of the merger agreement by the Wiremedia.com's
shareholders constitutes ratification of the appointment of the Transfer Agent.
After the closing of the merger, holders of certificates will have no
rights with respect to the shares of Wiremedia.com common stock represented
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thereby other than the right to surrender such certificates and receive in
merger the shares of Ninth Enterprise Service Group common stock to which such
holders are entitled.
- --------------------------------------------------------------------------------
Insert MD&A
- --------------------------------------------------------------------------------
WIREMEDIA.COM'S BUSINESS
Wiremedia.com was incorporated in January 2000. In January 2000, Wiremedia
launched a proprietary technology that allows Internet based businesses to
produce and deploy customized, and integrated e-marketplace enabled websites.
During the remainder of calendar year 2000, Wiremedia's operating activities
will consist of recruiting personnel, upgrading its technology, building and
operating infrastructure, and aligning with companies that complement its
objectives. Wiremedia.com launched its website in March 2000, and will ship its
first product in July 2000. In February 2000, Wiremedia.com began working on
several strategic alliances with leading online and business-to-business product
and service marketers.
Wiremedia.com intends to become a leading provider of business-to-business
e-marketplace software and solutions which enable small to medium sized
companies to construct, deploy and maintain internet based B2B online electronic
marketplaces. Wiremedia.com will provide private-label sales leads and RFP
services to the online B2B marketplace by powering a network of websites that
bring buyers and sellers together through a shared database of goods and
services that are industry specific. Our e-marketplace solutions enable
businesses to launch fully configured, custom-branded and flexible internet
sales leads and RFP sites without investing in technology, personnel, or
infrastructure. By maintaining our private-label network sites on our servers,
we are able to aggregate the sales leads and RFPs from our networks sites and
distribute these opportunities across the Wiremedia.com network. The result is a
highly liquid sales lead and RFP service with a large number of potential
qualified buyers and a broad range of qualified sellers.
The Wiremedia.com network provides both a compelling marketplace for
businesses looking for qualified sales leads and buyers looking to purchase
products and services from qualified suppliers. Through our B2Bnetware
technology, we find and match the purchasing needs of buyers to that of
qualified sellers, seamlessly connecting both parties, thereby owning the
content pipeline between buyer and seller.
We intend to further enhance the value of our product offering by
developing, both internally and through strategic vendor relationships, a
further array of value-added, higher margin product and service offerings to
continue to address our ever changing customer demands.
BACKGROUND OF OUR BUSINESS
Value-added Internet services, including electronic commerce services,
represents one of the fastest growing segments of the business services market.
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The availability of Internet access, advancements in technologies required to
navigate the Internet, and the proliferation of content and applications
available over the Internet have attracted a rapidly growing number of Internet
users.
The interactive nature of the Internet allows online merchants to communicate
effectively with one another, and with customers, and allows advertisers to
target customer bases having specific demographic characteristics and interests.
As a result, the Internet is emerging as an attractive, and in many cases,
preferred medium for the transaction of business, including e-commerce
activities. Business-to-business electronic commerce, according to Forrester
Research, is projected to grow from $100 billion in 1999 to $1.3 trillion in
2003.
Our market is growing rapidly because the internet allows businesses to bypass
many of the traditional, inefficient means of conducting business by moving all
or part of the business operations online, they can cut operating cost, and
deploy products and services quicker then ever. In moving their operations
online, many businesses need solutions to help them establish and maintain a
presence online. Wiremedia.com provides such a solution.
Businesses are increasingly adding a variety of enhanced services and
applications to their basic Web site platforms, in order to more fully
capitalize on the power of the Internet. These services and applications allow
them to more efficiently communicate company information, expand and enhance
their distribution channels, increase productivity through back-office
automation and reduce costs. Wiremedia.com expects this trend to continue as
high-bandwidth, high functionality value-added services continue to be
developed, improve and proliferate and as Internet usage continues to expand.
Further, by provisioning its Web site with enhanced application tools, the
company can automate business processes such as sales order entry, shipping,
inventory management and customer service from this site. When conducting
electronic commerce over a Web site, a company typically will add security,
shopping cart, and payment processing capabilities to its basic Web site.
The Internet software service provider market is segmented into large
national or multinational providers such as Verio, which typically are full
service providers, and regional and local providers which generally offer a
smaller range of services and products and lack the ability to meet all the
needs of a business customer. We have specifically targeted the small and medium
sized business market for the provision of our Internet services. Industry
analysts have reported that small and medium sized businesses represent a
potential market of over seven million customers in the U.S.
OUR COMPETETIVE STRATEGY
Our competetive strategy of supplying software solutions and services to
customers on a revenue sharing basis is unique in the industry. In formulating
its business strategy, We believe that Wiremedia.com has a competitive advantage
in serving these business customers because we lower their cost to use and
implement our products and services without charging being charged an upfront
fee by Wiremedia.com.
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Wiremedia.com's goal is to be the premier, full-service provider of Internet
services to small and medium sized businesses. The key elements of our strategy
in accomplishing this goal are to develop and offer value-added products and
services to increase revenues. Small and medium sized businesses are
increasingly looking for value-added products and services that allow them to
further leverage the power of the Internet to expand markets, increase
productivity and reduce costs. We believe that our products and services give
us a competitive edge in offering high-margin, value-added Internet services
and bundled packages to meet the evolving needs of our current and future
customers. As a result, we believe that we will be able to derive increasing
revenue from these customers and increase profitability by selling an expanding
array of value-added services.
Examples of these Web-based value-added services include electronic commerce,
unified messaging, office and business process automation capabilities, audio
and video applications, automated Web site authoring tools and templates and
redundant "hot" sites across multiple national and international data centers.
We expect to provide these further value-added services through a combination of
internal development and packaging, acquisitions and new relationships with
Internet hardware, software and service companies.
We intend to create customer loyalty by:
o Comprehensive and high-quality product -We intend to provide our customers
with a product that is easy to use, and implement into their Internet
commerce infrastructure. Customers will be able to download and self
install our product online.
o Innovative use of technology - We intend to provide our customers with
scalable and upgradeable technology. The Wiremedia.com software employs
unique technology which allows it to automatically customize and scale to
each client's specific needs.
o Broad selection, high-quality products - We intend to provide our
customers with complementary and supplementary technologies which will
serve as adjuncts to our current e-commerce technologies or as stand alone
supplements to our technology.
o A high level of customer service - We intend to provide Internet based
live chat customer service to our customers
o Competitive pricing - We intend to provide our product at no upfront fee
to our customer base, instead charging them on the per use basis.
o Personalized service - We intend to provide our customers with
technologies that will automatically customize to fit the client's needs.
PRODUCTS AND SERVICES
Wiremedia.com currently offers a comprehensive range of business Internet
services through value-added products and services. Wiremedia.com offers a core
suite of products and services. As its customers needs evolve, Wiremedia.com
intends to continue to develop a broad range of value-added products and
services independently, through acquisition, and through strategic relationships
with key vendors.
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Software products: Our software products include browsers, set up disks and
other solutions that permit customers to more effectively and easily integrate
our e-commerce solutions into their website.
Electronic Commerce Solutions: Electronic commerce provides businesses the
ability to sell products and services on the Internet. The electronic commerce
or e-commerce capability can be added to an existing Web site or it can be the
basis for a Web site, starting with the customer's product catalog. The
principle basic components of an e-commerce enabled Web site include:
o A Web site
o A catalog of the products to be sold from the site, including prices and
inventory -- a secure means of accepting orders from customers visiting
the site
o A secure means of accepting payment for those orders -- a means of
calculating the appropriate tax and shipping costs attributable to the
order
o Transaction reporting capability
o A means of reconciling these transactions with the company's accounting
records
Wiremedia.com "intends to offer" a variety of e-commerce packages.
Our entry level "B2Bnetware" product is designed to provide private-label sales
leads and RFP services to the online B2B marketplace by powering a network of
websites that bring buyers and sellers together through a shared database of
goods and services that are industry specific. The "B2Bnetware Extra" product is
for the more sophisticated network partners who desires an unlimited number of
customization These network partners will receive more highly customized and
more flexible internet sales leads and RFP sites.
We have relationships with numerous providers of the various components of
our e-commerce solutions, including tools for catalog and site creation,
merchant accounts, digital certificates, transaction processing and numerous
additional components that are required to build a completely commerce enabled
Web site. We will continue to invest in creating a greater suite of e-commerce
packages as this market develops.
Web Site Design: Web site design is the development of the Web site content
that will be displayed on the Web site when it is being viewed on the Internet.
We rely principally on our resellers to create the Web sites for our customers.
In addition to relying on the Web design services of our resellers, we offer Web
design services to a select set of our customers. This may entail development of
a basic Web page through to the development of a sophisticated e-commerce Web
site.
We believe that more advanced Web-site based application products will
continue to expand as businesses require more sophisticated on-line commerce
capabilities. We are continually seeking to acquire technology from third
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parties to incorporate with our existing solutions to provide more and more
functionality to our commerce product offerings, as well as exploring additional
Web-based services through internal development. In particular, our efforts are
focused on expanded Web-site based electronic commerce capabilities, unified
messaging and virtual offices, audio and video appliances, automated Web site
authoring tools and templates, basic automated marketing tools, and redundant
hot"sites across multiple national and international data centers. We continue
to assess potential opportunities to extend new offerings as they become
available, and to evaluate our ability to implement these solutions in a
cost-effective way while maintaining quality of service for our customers.
We intend to build and increase our revenues by:
o Expanding our revenue-sharing commerce relationships.
o Expanding the number and scope of our fee-based premium membership services.
o Adding additional fee based technical support services to for our clients.
o Expanding the number and scope of our fee-based premium membership services.
MARKETING
Wiremedia.com's marketing focuses on stimulating demand for Wiremedia.com's
services through on line advertising, which consists of consists of general
rotation and keyword-specific Web banner advertisements. The significant
flexibility of online advertising allows the Company to quickly adjust its
advertising plans in response to seasonal and promotional activities.
In the future we may also rely on marketing communications and public relations.
We may focus traditional media efforts on advertisements in major business and
technical publications, television commercials, radio spots and direct mail.
Other marketing vehicles may include collateral materials, trade shows, direct
response programs and management of our Web site. Public relations will focus on
cultivating industry analyst and media relationships with the goal of securing
broad media coverage and public recognition of the Wiremedia.com brand name.
SALES AND DISTRIBUTION
Wiremedia.com intends to utilize multiple distribution channels in order to
extend its reach and leverage its service capabilities.
Wiremedia.com will use a combination of direct sales, online marketing,
telemarketing, value-added resellers and private label resellers.
Direct Sales. Direct marketing techniques will be used to target customers
that would achieve substantial benefit from the business applications afforded
by the Internet. Some direct marketing tactics include direct mail,
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telemarketing, seminars and trade show participation. We work with key vendors
to assist in these direct marketing efforts. We co-market with these vendors
through direct mail programs, joint seminar development and joint trade show
involvement.
Online Sales. We intend to have have an extensive online marketing program,
consisting of general rotation and keyword-specific Web banner advertisements,
which stimulate interest in and leads for our products and services. Much of
this online activity directs prospects to our online Web sites from which
prospects may make a product selection and order a product online. We are able
to generate a substantial amount of sales of our Web hosting products through
this selling technique as a result of the high degree of automation built into
our Web site provisioning process.
Resellers and Indirect Sales. We believe that indirect sales channels
contribute significantly to our growth, and have developed three primary
reseller partner programs that provide us with a formal indirect distribution
strategy.
The benefits that we derive from these programs including greater market
reach without fixed overhead costs, and the ability to use partners to assist in
the delivery of complete solutions to meet customer needs. In addition to local
partnerships, we are working with several national companies to expand our
indirect sales capability.
CUSTOMERS
Our customers will be primarily small to medium size businesses. Industry
analysts have reported that small and medium sized businesses represent a
potential market of over seven million customers in the U.S. We have
specifically targeted the small and medium sized business market for the
provision of our Internet services because:
o A small percentage of this market currently utilizes the Internet, but
that number is increasing rapidly and is expected to be one of the fastest
growing segments of the Internet industry.
o These businesses have rapidly expanding Internet needs, as they and their
customers look more and more to the Internet for information, as a
standard mode of communication, and to conduct business in increasingly
sophisticated and cost-effective ways.
o These companies often look to an Internet software provider to fulfill
these needs, because they typically lack the technology expertise,
information technology resources, capital, personnel, or ability to bear
the time-to-market and operational risks required to install, maintain and
monitor their own Web servers and Internet access.
Businesses that have outsourced their Internet requirements tend to become quite
dependent on their Internet software provider and tend to change Internet
software providers relatively infrequently.
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Under the terms of contracts, we receive a percentage of their net sales using
our products and services, generally 10%. In general, these contracts can be
terminated upon 120 days notice.
TECHNOLOGY AND NETWORK OPERATIONS
We have developed proprietary software that allows us to provide our services on
an efficient and cost-effective basis by automating the following back-end
functions:
o Order-taking and processing
o Customer billing via credit cards, check, bank transfer and accounts
receivable
o Account provisioning and activation
o Server management and monitoring
o Coordination of the electronic mail subsystem to integrate electronic mail
forwarding, multiple electronic mail accounts on a single web site and
autoresponders
o Inherent distributor-dealer-customer hierarchy of all data
o Support for third-party feature plug-ins
In addition, we provide a front-end interface that allows a customer to set
up accounts, change account parameters, check Web site statistics quickly and
easily and verify billing information. Our product was engineered to maximize
automation to achieve high levels of scalability, and the modular design allows
additional server groups to be supported easily. Language and branding
independence enables international value-added resellers and OEMs to localize
for foreign languages and customize the interface quickly and with minimal
effort.
Data Centers. We currently utilize space in a data center located in
Alexandria, Va. Wiremedia.com's data center includes environmental controls,
back-up generators, Cisco routers and switches, and continuous monitoring
capabilities to ensure high-quality service with minimal interruptions.
NATIONAL SUPPORT SERVICES
Wiremedia.com is developing national support services designed to increase
operational efficiencies and enhance the quality, consistency and scalability of
Wiremedia.com's services. These support services will include 24/7 customer
technical support and service, financial information management through a
central, standardized accounting system and a sophisticated billing and
collections system.
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Customer Technical Support. The support center team is using a leading
customer support trouble ticketing and workflow management system offered by
Digital Nation. The system enables us to track, route, and report on customer
issues. It provides significant benefit in ensuring quality and timely care to
customers. Based on information received through the trouble ticketing system,
as well as through the centralized billing and collections system, we are able
to monitor network reliability and outage experiences. Wiremedia.com will not,
as a general matter, provided service warranties or offered a standard service
credit policy.
Financial Information Management. We will seek to convert all of our
acquired Internet service provider operations to the PeopleSoft(TM) financial
reporting system and the ADP payroll/human resources system, in order to provide
a central, standardized accounting system. These proposed enhancements are part
of our initiative to implement continuous improvement methodology and to create
a learning organization.
Billing and Collections. We will seek to implement the Kenan Systems' EC
Arbor billing solution which offers high quality, flexibility,
cost-effectiveness and scalability. Kenan is a leading billing solutions
provider to the telecommunications industry, providing accurate, timely, and
easy-to-understand invoicing.
LEGAL PROCEEDINGS
We are not a party to or aware of any pending or threatened lawsuits or other
legal actions.
EMPLOYEES
As of January 31, 2000, Wiremedia.com employed approximately two people,
including full-time and part-time employees at our corporate headquarters in
Florida. Over the course of the next twelve months, Wiremedia intends to staff
10 employees in the areas of Sales, 10 employees in the area of product
development and 10 employees in the area of administration. We consider our
employee relations to be good. None of our employees are covered by a collective
bargaining agreement.
MANAGEMENT
The names and ages of our executive officers and directors as of January 31,
2000 are as follows:
- --------------------------------------------------------------------------------
Name Age Position
- --------------------------------------------------------------------------------
Colby R Fede 27 President/CEO/Director
------------ CFO/Director
- --------------------------------------------------------------------------------
Irene MacAllister 26
- --------------------------------------------------------------------------------
Mr. Colby R Fede joined us upon formation in January 2000. Mr. Fede has been
associated with Biztalk.com as founder since September 1999. From December 1997
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to December 1999, Mr. Fede served as the Business Development Director for
Netmedia Interactive. Prior to that time, he was a full-time student. Mr. Fede
received a B.A. in Sociology from the University of Florida in May of 1997.
Biztalk.com gathers and distributes information, called content, to members of
the Biztalk.com website. Biztalk.com focuses on small to medium sized
business-to-business activities. In contrast, Wiremedia.com is an application
service provider. Wiremedia.com deploys electronic marketplace services to a
network of internet websites.
Ms. Irene MacAllister joined us upon formation in January 2000. Ms. MacAllister
has been associated with Biztalk.com as CFO since September 1999. From January
1998 to December 1999, Ms. MacAllister served as the assistant chief financial
officer for Netmedia Interactive. Prior to that time, she was a full-time
student. Ms. MacAllister received a B.A in Sociology from the University of
Florida in December 1996.
Directors serve for a one year term. Our Bylaws currently provide for a Board of
Directors comprised of two directors.
Employment Agreements
We entered into an employment agreement dated February, 2000 with Colby Fede
under which he acts as our president and CEO. The agreement becomes effective as
of the date we receive more than $500,000 of gross investment capital, which has
not yet occurred. As of the date of this prospectus, we have raised
approximately $70,000 of this amount. When the agreement becomes effective, he
will receive a base rate of compensation of $70,000.00 per year.
The agreement is for a period of two 2 years, subject to earlier termination. If
employment is terminated without reasonable cause as defined in the agreement or
because of employee's disability, as determined by employer in good faith, then
he shall be entitled to severance compensation equal to his then-current base
salary and benefits for a period of 24 months.
He is only required to devote 50% of his business time to our business. He is
subject to a covenant not to compete in our business anywhere in the world
during the term of the agreement and for 24 months after termination under
certain circumstances.
Under the agreement, he will be issued 200,000 Preferred Stock Series A which
may, under certain conditions, be converted into 2,000,000 shares of Common
Stock.
We entered into an employment agreement dated February, 2000 with Irene
MacAllister under which she acts as our vice president and COO. The agreement
becomes effective as of the date we receive more than $500,000 of gross
investment capital, which has not yet occurred. As of the date of this
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prospectus, we have raised approximately $70,000 of this amount. When the
agreement becomes effective, she will receive a base rate of compensation of
$60,000.00 per year. Other terms are the same as Mr. Fede's agreement, except
she will be issued 50,000 shares preferred stock series a which may, under
certain conditions, be converted into 500,000 shares of common stock.
She is only required to devote 50% of her business time to our business. She is
subject to a covenant not to compete in our business anywhere in the world
during the term of the agreement and for 24 months after termination under
certain circumstances.
Board Compensation
Our directors do not receive cash compensation for their services as directors,
although some directors are reimbursed for reasonable expenses incurred in
attending board or committee meetings.
Board Committees
We have no compensation committee or other board committee performing
equivalent functions. Mr. Fede, our current chief executive officer, and Ms
MacAllister, our CFO, participated in deliberations of our board of directors
concerning executive officer compensation.
RELATED PARTY TRANSACTIONS WITH DIRECTORS, OFFICERS AND 5% STOCKHOLDERS
RELATED PARTY TRANSACTIONS WITH DIRECTORS, OFFICERS AND 5% STOCKHOLDERS
In January, 2000, we issued 5,000,000 shares to our CEO Mr. Fede, and
1,000,000 shares to Ms. MacAllister, our CFO, each of whom are founders. Each
received their shares for approximately $37,750 in cash.
Mr. Fede, our CEO, provides various equipment and a portion of his home for
office space for no consideration. The value of this equipment and office
space are considered to be insignificant.
All future transactions between Wiremedia.com, Inc. and its officers,
directors or 5% shareholders, and their respective affiliates, will be on
terms no less favorable than could be obtained from unaffiliated third
parties and will be approved by a majority of any independent, disinterested
directors.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of our Common Stock as of April 15, 2000 by
o Each shareholder known by us to own beneficially more than 5% of the common
stock
o Each executive officer
o Each director and all directors and executive officers as a group:
- --------------------------------------------------------------------------------
Name Number of Shares Percentage Percentage
before merger after merger
- --------------------------------------------------------------------------------
Colby R Fede 5,000,000 70 68.5
- --------------------------------------------------------------------------------
Irene MacAllister 1,000,000 15 14.5
- --------------------------------------------------------------------------------
All directors and named 6,000,000 85 83
executive officers as a
group (2 persons)
- --------------------------------------------------------------------------------
(1) This table is based upon information derived from our stock records.
Unless otherwise indicated in the footnotes to this table and subject to
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community property laws where applicable, we believe that each of the
shareholders named in this table has sole or shared voting and investment power
with respect to the shares indicated as beneficially owned. Applicable
percentages are based upon 6,800,000 of Common Stock outstanding as of April 15,
2000.
DESCRIPTION OF WIREMEDIA.COM'S CAPITAL STOCK
----------------------------------------------------------------------
Authorized Capital Stock Shares Of Capital Stock Outstanding
----------------------------------------------------------------------
50,000,000 6,800,000
----------------------------------------------------------------------
20,000,000 250,000
----------------------------------------------------------------------
Common Stock
We are authorized to issue 50,000,000 shares of no par common stock. As of April
15, 2000, there were shares of common stock outstanding held of record by 52
stockholders.
The holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. The common stock
has no preemptive or conversion rights or other subscription rights. There are
no sinking fund provisions applicable to the common stock. The outstanding
shares of common stock are, and the shares of common stock to be issued upon
completion of this offering will be, fully paid and non-assessable.
Preferred Stock
We are authorized to issue 20,000,000 shares of preferred stock. We have agreed
to issue 250,000 shares of Convertible Preferred Stock Series A to management
upon filing of the related Certificate of Rights and Preferences with the
Secretary of State of Florida. These shares have the following rights and
preferences:
o The holder may convert each shares of Convertible Preferred Stock - Series
A into 10 shares common shares convertible at any time, in whole or in
part, at any time for period commencing October 23, 2000 and ending on
December 31, 2010.
o The shares shall become convertible upon such time there are five thousand
or more registered subscribers to Wiremedia.com or its affiliate internet
websites. No additional consideration is payable upon conversion. If such
event has not occurred by termination date, then the right to convert
shall also be terminated.
o The right to convert shall not be exercisable until Wiremedia.com
completes a listing of its common shares on the bulletin board or similar
stock exchange. The shares are forfeited to us for no consideration the
foregoing is not completed within two years of the date of issuance of the
shares.
o The shares shall have a preference over holders of common stock upon
liquidation equal to $.001 per share.
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There are no other shares of preferred stock outstanding. Issuance of preferred
stock with voting and conversion rights may adversely affect the voting power of
the holders of common stock, including voting rights of the holders of common
stock. In certain circumstances, an issuance of preferred stock could have the
effect of decreasing the market price of the common stock. We currently have no
plans to issue any additional shares of preferred stock.
Dividends
We have never paid any dividends and do not expect to do so after the closing of
the merger and thereafter for the foreseeable future.
Transfer Agent and Registrar
We are the transfer agent and registrar for our common stock.
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NINTH ENTERPRISE SERVICE GROUP'S BUSINESS
History and Organization
We were organized under the laws of the state of Florida in March, 1999.
Since inception, our primary activity has been directed to organizational
efforts. We were formed as a vehicle to acquire a private company desiring to
become an SEC reporting company in order thereafter to secure a listing on the
over the counter bulletin board.
Operations
We were organized for the purposes of creating a corporate vehicle to seek,
investigate and, if such investigation warrants, engage in business combinations
presented to us by persons or firms who or which desire to become an SEC
reporting company. We will not restrict our search to any specific business,
industry or geographical location.
We do not currently engage in any business activities that provide any cash
flow. The costs of identifying, investigating, and analyzing business
combinations will be paid with money in our treasury or loaned by management.
This is based on an oral agreement between management and us.
Employees
We presently have no employees. Our officer and director is engaged in business
activities outside of us, and the amount of time he will devote to our business
will only be between five, 5, and twenty, 20, hours per person per week. It is
anticipated that management will devote the time necessary each month to our
affairs of until a successful business opportunity has been acquired.
Selected Financial Data
The following information concerning our financial position and operations is as
of and for the period ended December 31, 1999
Total assets $ 0
Total liabilities 0
Equity 0
Sales 0
Net loss 3,079
Net loss per share 0.00
Management Discussion And Analysis Or Plan Of Operation
We are a development stage entity, and have neither engaged in any
operations nor generated any revenues to date. We have no assets. Our expenses
to date, all funded by a capital contributions from management, are $3,079.
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Substantially all of our expenses that must be funded by management will be
from our efforts to identify a suitable acquisition candidate and close the
acquisition. Management has orally agreed to fund our cash requirements until
an acquisition is closed. So long as management does so, we will have
sufficient funds to satisfy our cash requirements. This is primarily because we
anticipate incurring no significant expenditures. Before the conclusion of an
acquisition, we anticipate our expenses to be limited to accounting fees, legal
fees, telephone, mailing, filing fees, occupational license fees, and transfer
agent fees.
We do not intend to seek additional financing. At this time we believe that
the funds to be provided by management will be sufficient for funding our
operations until we find an acquisition and therefore do not expect to issue any
additional securities before the closing of a business combination.
Properties.
We are presently using the office of Michael T. Williams, 2503 W. Gardner
Ct., Tampa FL, at no cost as our office. Such arrangement is expected to
continue only until a business combination is closed, although there is
currently no such agreement between us and Mr. Williams. We at present own no
equipment, and do not intend to own any.
Security Ownership of Certain Beneficial Owners and Management.
- --------------------------------------------------------------
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of February 28, 2000 by
o Each shareholder known by us to own beneficially more than 5% of the common
stock
o Each executive officer
o Each director and all directors and executive officers as a group:
- --------------------------------------------------------------------------------
Name Number of shares Percentage Number of shares Percentage
Pre-Merger(1) before after merger(1)(2) after merger
merger
- --------------------------------------------------------------------------------
Michael T. Williams(1) 1,000,000 100% 130,000 2%
2503 W. Gardner Ct.
Tampa FL 33611
- --------------------------------------------------------------------------------
All directors and 1,000,000 100% 130,000 2%
named executive
oficers as a group
(one person)
- --------------------------------------------------------------------------------
This table is based upon information derived from our stock records. Unless
otherwise indicated in the footnotes to this table and subject to community
property laws where applicable, we believe that each of the shareholders named
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in this table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned. Applicable percentages are based upon
1,000,000 shares of Common Stock outstanding as of February 28, 2000.
(1) Owned by the Williams Blind Trust, with beneficiaries as Tenants by the
Entireties of Michael Williams and Donna Williams, his wife. Under the terms of
the trust, all sales decisions will be made exclusively by the trustee and no
details of the trust's holdings or sales will be disclosed to the
beneficiaries.
(2) In connection with the merger, we have agreed to effect a reverse split such
that Mr. Williams' Trust will own 130,000 shares prior to the closing of the
merger.
Mr. Williams may be deemed our founder, as that term is defined under the
securities act of 1933.
Directors and Executive Officers.
- --------------------------------
The following table and subsequent discussion sets forth information about our
director and executive officer, who will resign upon the closing of the
acquisition transaction. Our director and executive officer was elected to his
position in April, 1999.
Name Age Title
Michael T. Williams 51 President, Treasurer and Director
Michael T. Williams responsibilities will include management of our
operations as well as our administrative and financial activities. Since 1975
Mr. Williams has been in the practice of law, initially with the U.S.
Securities and Exchange Commission until 1980, and since then in private
practice. He was also chief executive officer of Florida Community Cancer
Centers, Dunedin, FL from 1991-1995. He received a BA from the University of
Kansas and a JD from the University of Pennsylvania.
Executive Compensation.
The following table sets forth all compensation awarded to, earned by, or paid
for services rendered to us in all capacities during the period ended December
31, 1999, by our other executive officers whose salary and bonus for period
ended December 31, 1999 exceeded $100,000.
Summary Compensation Table
Long-Term Compensation Awards
Name and Principal Position Annual Compensation - 1999
- --------------------------- --------------------------
Salary, $, Bonus, $, Number of Shares
---------- --------- Underlying
Options, #,
56
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Michael T. Williams, None None None
President
We have agreed orally to pay Michael T. Williams $10,000 of salary for all
services rendered and to be rendered from the date of our incorporation until
the acquisition closes.
Certain Relationships and Related Transactions.
The sum $45,000 will be paid to Williams Law Group for legal services in
preparing this registration statement.
Upon formation, Mr. Williams was issued 1,000,000 shares. In connection with the
merger, we agreed to effect a reverse split such that Mr. Williams' Trust will
own 130,000 shares prior to the closing of the merger.
Legal Proceedings.
We not a party to or aware of any pending or threatened lawsuits or other
legal actions.
Indemnification of Directors and Officers.
Our director is bound by the general standards for directors provisions in
Florida law. These provisions allow him in making decisions to consider any
factors as he deems relevant, including our long-term prospects and interests
and the social, economic, legal or other effects of any proposed action on the
employees, suppliers or our customers, the community in which the we operate
and the economy. Florida law limits our director's liability.
We have agreed to indemnify our director, meaning that we will pay for
damages they incur for properly acting as director. Insofar as indemnification
for liabilities arising under the securities act may be permitted to directors,
officers or persons controlling the registrant under the foregoing provisions,
the registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against the public policy and is
therefore, unenforceable.
Provisions With Possible Anti-Takeover Effects
Section 607.0902 of Florida law restricts the voting rights of certain shares
of a corporation's stock when those shares are acquired by a party who, by such
acquisition, would control at least one-fifth of all voting rights of the
corporation's issued and outstanding stock. The statute provides that the
acquired shares, the control shares, will, upon such acquisition, cease to have
any voting rights. The acquiring party may, however, petition the corporation to
have voting rights re-assigned to the control shares by way of an acquiring
person's statement submitted to the corporation in compliance with the
requirements of the statute. Upon receipt of such request, the corporation must
submit, for shareholder approval, the acquiring person's request to have voting
rights re-assigned to the control shares. Voting rights may be reassigned to the
57
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control shares by a resolution of a majority of the corporation's shareholders
for each series And series of stock. If such a resolution is approved, and the
voting rights re-assigned to the control shares represent a majority of all
voting rights of the corporation's outstanding voting stock, then, unless the
corporation's articles of incorporation or Bylaws provide otherwise, all
shareholders of the corporation will be able to exercise dissenter's rights in
accordance with Florida law.
A corporation may, by amendment to its articles of incorporation or
bylaws, provide that, if the party acquiring the control shares does not submit
an acquiring person's statement in accordance with the statute, the corporation
may redeem the control shares at any time during the period ending 60 days after
the acquisition of control shares. If the acquiring party files an acquiring
person's statement, the control shares are not subject to redemption by the
corporation unless the shareholders, acting on the acquiring party's request,
deny full voting rights to the control shares.
The statute does not alter the voting rights of any stock of the
corporation acquired in any of the following manners:, i, under the laws of
intestate succession or under a gift or testamentary transfer;, ii, under the
satisfaction of a pledge or other security interest created in good faith and
not for the purpose of circumventing the statute;, iii, under either a share
exchange or share exchange if the corporation is a party to the agreement or
plan of exchange or share exchange;, iv, under any savings, employee stock
ownership or other benefit plan of the corporation or, v, under an acquisition
of shares specifically approved by the board of directors of the corporation.
DESCRIPTION OF NINTH ENTERPRISE SERVICE GROUP'S CAPITAL STOCK
----------------------------------------------------------------------
Authorized Capital Stock Shares Of Capital Stock Outstanding
----------------------------------------------------------------------
50,000,000 1,000,000
----------------------------------------------------------------------
20,000,000 none
----------------------------------------------------------------------
Common Stock
We are authorized to issue 50,000,000 shares of no par common stock. As of
December 31, 1999, there were 1,000,000 shares of common stock outstanding held
of record by 1 stockholder. There will be 6,930,000 shares of common stock
outstanding after giving effect to the issuance of the shares of common stock
under this prospectus.
The holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. The common stock
has no preemptive or conversion rights or other subscription rights. There are
no sinking fund provisions applicable to the common stock. The outstanding
shares of common stock are, and the shares of common stock to be issued upon
completion of this offering will be, fully paid and non-assessable.
Preferred Stock
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We are authorized to issue 20,000,000 shares of Series A preferred stock. There
are no shares of preferred stock outstanding. Except for the 250,000 shares of
Series A preferred stock to be issued to holder of the same number of shares of
preferred stock with the same rights and preferences in Wiremedia.com, we
currently have no plans to issue any additional shares of preferred stock.
The 250,000 shares of preferred stock series A which we will issue to
Wiremedia.com management are convertible for no consideration when we have
aggregated five thousand or more registered subscribers to or our affiliate
internet websites.
Dividends
We have never paid any dividends and do not expect to do so after the closing of
the merger and thereafter for the foreseeable future.
Transfer Agent and Registrar
We are the transfer agent and registrar for our common stock.
COMPARISON OF RIGHTS OF NINTH ENTERPRISE SERVICE GROUP
STOCKHOLDERS AND WIREMEDIA.COM SHAREHOLDERS
Because Ninth Enterprise Service Group will change its state of incorporation,
articles or articles and bylaws to be the same as those of Wiremedia.com, the
rights of shareholders of Wiremedia.com will not change as a result of the
merger.
AVAILABLE INFORMATION
Wiremedia.com is not and until the effectiveness of this registration statement
Ninth Enterprise Service Group was not, subject to the reporting requirements of
the Exchange Act and the rules and regulations promulgated thereunder, and,
therefore, do not file reports, information statements or other information with
the Commission. Under the rules and regulations of the Commission, the
solicitation of proxies from the shareholders of Wiremedia.com to approve the
merger constitutes an offering of Ninth Enterprise Service Group common stock to
be issued in connection with the merger. Accordingly, Ninth Enterprise Service
Group has filed with the Commission a registration statement on Form S-4 under
the Securities Act, with respect to such offering from time to time, the
registration statement. This information statement/prospectus constitutes the
prospectus of Ninth Enterprise Service Group that is filed as part of the
Registration Statement in accordance with the rules and regulations of the
Commission. Copies of the registration statement, including the exhibits to the
Registration Statement and other material that is not included herein, may be
inspected, without charge, at the Public Reference Section of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, and
may be available at the following Regional Offices of the Commission:
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, New York, New York 10048. Copies of
such materials may be obtained at prescribed rates from the Public Reference
59
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Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549. Information on the operation of the Public Reference Room
may be obtained by calling the Commission at 1-800-SEC-0330. In addition, the
Commission maintains a site on the World Wide Web at http://www.sec.gov that
contains reports, information and information statements and other information
regarding registrants that file electronically with the Commission.
LEGAL MATTERS
The validity of the shares of Ninth Enterprise Service Group common stock being
offered by this information statement/prospectus and certain federal income tax
matters related to the exchange are being passed upon for Ninth Enterprise
Service Group by Williams Law Group, P.A., Tampa, FL. Mr. Williams is the sole
officer and director of and owns 1,000,000 shares pre merger and 130,000 shares
post merger of the stock of Ninth Enterprise Service Group.
FINANCIAL STATEMENTS OF WIREMEDIA.COM, INC.
Wiremedia.com, Inc.
(A Development Stage Enterprise)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Independent Auditors' Report 61
Financial Statements as of and for the period January 25, 2000
(date of incorporation) to February 29, 2000:
Balance Sheet 62
Statement of Operations 63
Statement of Stockholders' Deficit 64
Statement of Cash Flows 65
Notes to Financial Statements 66
- --------------------------------------------------------------------------------
60
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[Letterhead of Kingery, Crouse & Hohl P.A.]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of Wiremedia.com, Inc.:
We have audited the accompanying balance sheet of Wiremedia.com, Inc. (the
"Company"), a development stage enterprise, as of February 29, 2000, and the
related statements of operations, stockholders' deficit and cash flows for the
period January 25, 2000 (date of incorporation) to February 29, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates
made by management, as well as the overall financial statement presentation. We
believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of February 29,
2000, and the results of its operations and its cash flows for the period
January 25, 2000 (date of incorporation) to February 29, 2000 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Notes A and B to the
financial statements, the Company is in the development stage and will require a
significant amount of capital to commence its planned principal operations and
proceed with its business plan. As of the date of these financial statements, an
insignificant amount of capital has been raised, and as such there is no
assurance that the Company will be successful in its efforts to raise the
necessary capital to commence its planned principal operations and/or implement
its business plan. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are described in Note B. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
The Company, with the consent of its shareholders, has elected under the
Internal Revenue Code to be an S Corporation. In lieu of corporate income taxes,
the shareholders of an S Corporation are taxed on their proportionate share of
the Company's taxable income. Therefore, no provision or liability for income
taxes has been included in these financial statements.
Kingery, Crouse & Hohl, P.A.
May 3, 2000
Tampa, FL
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Wiremedia.com, Inc.
(A Development Stage Enterprise)
BALANCE SHEET AS OF FEBRUARY 29, 2000
- --------------------------------------------------------------------------------
ASSETS
Cash $ 19,900
Stock subscriptions receivable 1,400
------------
TOTAL $ 21,300
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES - Accrued expenses $ 56,900
------------
STOCKHOLDERS' DEFICIT:
Convertible preferred stock - No par value - 20,000,000 shares
authorized: zero shares issued and outstanding -
Common stock - No par value - 50,000,000 shares
authorized; 6,463,612 shares issued and outstanding 63,094
Common stock subscribed (40,000 shares) 1,400
Deficit accumulated during the development stage (100,094)
------------
Total stockholders' deficit (35,600)
------------
TOTAL $ 21,300
============
- --------------------------------------------------------------------------------
See notes to financial statements.
62
<PAGE>
Wiremedia.com, Inc.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the Period January 25, 2000 (date of incorporation)
to February 29, 2000
- --------------------------------------------------------------------------------
EXPENSES:
Professional fees $ 88,550
Programming costs 9,645
Other 1,899
-------------
NET LOSS $ 100,094
=============
NET LOSS PER SHARE:
Basic and diluted $ 0.02
=============
Weighted average number of shares 6,463,612
=============
- --------------------------------------------------------------------------------
See notes to financial statements.
63
<PAGE>
Wiremedia.com, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' DEFICIT
for the Period January 25, 2000 (date of incorporation)
to February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Common During the
Common Stock Development
Shares Cost Subscribed Stage Total
--------- -------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balances, January 25, 2000 (date of
(incorporation) 0 $ 0 $ 0 $ 0 $ 0
Issuance of common stock:
At inception 6,117,001 37,749 37,749
To others (at prices per share
ranging from $0.03 - $3.50) 341,111 19,900 19,900
To consultant for services rendered 5,500 5,445 5,445
Stock subscriptions sold (40,000 shares) 1,400 1,400
Net loss for the period January 25, 2000 (date
of incorporation) to February 29, 2000 (100,094) (100,094)
--------- -------- --------- ---------- ------------
Balances, February 29, 2000 6,463,612 $63,094 $ 1,400 $(100,094) $ (35,600)
========= ======== ========= ========== ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
64
<PAGE>
Wiremedia.com, Inc.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
for the Period January 25, 2000 (date of incorporation)
to February 29, 2000
- --------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (100,094)
Adjustment to reconcile net loss to net cash used
in operating activities:
Non-cash compensation 5,445
Increase in accrued liabilities 56,900
------------
NET CASH USED IN OPERATING ACTIVITIES (37,749)
------------
CASH FLOWS FROM FINANCING ACTIVITIES-
Proceeds from issuance of common stock 57,649
------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 19,900
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 0
------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 19,900
============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 0
============
Taxes paid $ 0
============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES -
Stock subscriptions receivable and common stock subscribed increased $1,400
as a result of subscriptions to purchase 40,000 shares of the Company's
common stock.
- --------------------------------------------------------------------------------
See notes to financial statements.
65
<PAGE>
Wiremedia.com, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
Wiremedia.com, Inc. (the "Company") was incorporated under the laws of the state
of Florida on January 25, 2000. The Company, which is considered to be in the
development stage as defined in Financial Accounting Standards Board Statement
No. 7, intends to provide business-to-business e-marketplace software and
solutions which enable small to medium sized companies to construct, deploy and
maintain internet based business to business online electronic marketplaces. The
planned principal operations of the Company have not commenced, therefore
accounting policies and procedures have not yet been established.
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements. The
reported amounts of revenues and expenses during the reporting period may be
affected by the estimates and assumptions management is required to make. Actual
results could differ from those estimates.
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company will require a
significant amount of capital to commence its planned principal operations and
proceed with its business plan. Accordingly, the Company's ability to continue
as a going concern is dependent upon its ability to secure an adequate amount of
capital to finance its planned principal operations and/or implement its
business plan. The Company's plans include a merger and a subsequent public
offering of its common stock, however there is no assurance that they will be
successful in their efforts to raise capital. This factor, among others, may
indicate that the Company will be unable to continue as a going concern for a
reasonable period of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
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NOTE C - INCOME TAXES
The Company has applied to the Internal Revenue Service to be taxed under
Subchapter S of the Internal Revenue Code. Management anticipates that such
election will be approved; accordingly no provision for income taxes has been
made in the accompanying financial statements because the results of operations
will flow through to the stockholders for inclusion in their personal tax
returns.
NOTE D - PROPOSED STOCK REGISTRATION AND MERGER
The Company has agreed to merge with Ninth Enterprise Service Group, Inc.
("NESG"). Pursuant to terms of the merger, the Company's stockholders would
receive an equal number of shares in NESG, and will hold in the aggregate
approximately 98% of the shares of the merged entity. NESG will change its name
to Wiremedia.com, Inc., adopt Wiremedia.com's articles and bylaws, and elect a
new board of directors to consist of the current directors of Wiremedia.com,
Inc. A registration statement will be filed with the Securities and Exchange
Commission for the registration of all the Company's outstanding shares after
giving effect to this merger.
In connection with this merger, the Company has agreed to pay fees of $55,000 to
NESG and/or its President for services in preparing the registration statement
as well as $30,000 and 130,000 shares of its stock, with an estimated fair
market value of $79,300, to its financial advisor. As of February 29, 2000, the
Company has incurred approximately $85,000 of these expenses and has paid
$30,000; the remaining $55,000 is included in accrued expenses in the
accompanying balance sheet. The balance of $79,300 will be expenses as incurred.
NOTE E - CONVERTIBLE PREFERRED STOCK
As of the date of this report, no shares of convertible preferred stock have
been issued. Upon issuance, the holders of convertible preferred shares (the
"Shares") shall have the right to convert each Share into ten shares of the
Company's common stock. The Shares may be converted during the period October
23, 2000 to December 31, 2010, provided that the Company (1) has at least 5,000
registered subscribers to its Internet web sites, and (2) has its common shares
listed on the bulletin board or similar stock exchange. The Shares shall be
forfeited to the Company for no consideration if such conditions are not
completed within two years of the date of the Share issuance. The holders of the
Shares will also have a preference over common stockholders with respect to
liquidation equal to $.001 per share.
NOTE F - OTHER RELATED PARTY TRANSACTIONS
No value has been ascribed to services and/or rent provided by the Company's
stockholders in the accompanying statement of operations. The value of these
services was not significant during the period January 25, 2000 (date of
incorporation) to February 29, 2000.
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NOTE G- COMMITMENTS
On February 1, 2000, the Company entered into two-year employment agreements
with its President and Vice-President. The agreements shall become effective as
of the date mutually agreed to in writing by both parties ("the Effective Date)
but in no event shall such date be more than two weeks following the date on
which the Company receives more than $500,000 of gross investment capital. The
employment agreements, which require total annual base salaries of approximately
$130,000, also contain provisions for the issuance of 250,000 shares of
convertible preferred stock (which under certain circumstances may be converted
into 2,500,000 shares of the Company's common stock - see Note E), bonuses,
other incentives and fringe benefits (as defined in the agreements).
NOTE H - LOSS PER SHARE
The Company computes net loss per share in accordance with SFAS No. 128
"Earnings per Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98
("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic net loss per
share is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of common shares outstanding during
the period. Diluted net loss per share is computed by dividing the net loss for
the period by the number of common and common equivalent shares outstanding
during the period. There were no common equivalent shares outstanding as of
December 31, 1999.
NOTE I - SUBSEQUENT EVENT
Subsequent to February 29, 2000 the Company received stock subscription
agreements for the purchase of 166,388 shares of the Company's common stock at
prices per share that range from $0.05 - $3.50 per share for total consideration
of $47,675.
- --------------------------------------------------------------------------------
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PART II--INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Florida Business Corporation Act. Section 607.0850(1) of the Florida
Business Corporation Act (the "FBCA") provides that a Florida corporation, such
as the Company, shall have the power to indemnify any person who was or is a
party to any proceeding (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 the corporation or is
or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise against liability incurred in connection with such proceeding,
including any appeal thereof, 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 proceeding, had no
reasonable cause to believe his conduct was unlawful.
Section 607.0850(2) of the FBCA provides that a Florida corporation
shall have the power to indemnify any person, who was or is a party to any
proceeding by or in the right of the corporation to procure a judgment in its
favor 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, partnership,
joint venture, trust or other enterprise, against expenses and amounts paid in
settlement not exceeding, in the judgment of the board of directors, the
estimated expense of litigating the proceeding to conclusion, actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation,
except that no indemnification shall be made under this subsection in respect of
any claim, issue, or matter as to which such person shall have been adjudged to
be liable unless, and only to the extent that, the court in which such
proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
Section 607.850 of the FBCA further provides that: (i) to the extent
that a director, officer, employee or agent of a corporation has been successful
on the merits or otherwise in defense of any proceeding referred to in
subsection (1) or subsection (2), or in defense of any proceeding referred to in
subsection (1) or subsection (2), or in defense of any claim, issue, or matter
therein, he shall be indemnified against expense actually and reasonably
incurred by him in connection therewith; (ii) indemnification provided pursuant
to Section 607.0850 is not exclusive; and (iii) the corporation may purchase and
maintain insurance on behalf of a director or officer 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
power to indemnify him against such liabilities under Section 607.0850.
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Notwithstanding the foregoing, Section 607.0850 of the FBCA provides
that indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute: (i) a violation of the
criminal law, unless the director, officer, employee or agent had reasonable
cause to believe his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful; (ii) a transaction from which the director, officer,
employee or agent derived an improper personal benefit; (iii) in the case of a
director, a circumstance under which the liability provisions regarding unlawful
distributions are applicable; or (iv) willful misconduct or a conscious
disregard for the best interests of the corporation in a proceeding by or in the
right of the corporation to procure a judgment in its favor or in a proceeding
by or in the right of a shareholder.
Section 607.0831 of the FBCA provides that a director of a Florida
corporation is not personally liable for monetary damages to the corporation or
any other person for any statement, vote, decision, or failure to act, regarding
corporate management or policy, by a director, unless: (i) the director breached
or failed to perform his duties as a director; and (ii) the director's breach
of, or failure to perform, those duties constitutes: (A) a violation of criminal
law, unless the director had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful; (B) a
transaction from which the director derived an improper personal benefit, either
directly or indirectly; (C) a circumstance under which the liability provisions
regarding unlawful distributions are applicable; (D) in a proceeding by or in
the right of the corporation to procure a judgment in its favor or by or in the
right of a shareholder, conscious disregard for the best interest of the
corporation, or willful misconduct; or (E) in a proceeding by or in the right of
someone other than the corporation or a shareholder, recklessness or an act or
omission which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton and willful disregard of human rights, safety, or
property.
Articles and Bylaws. The Company's Articles of Incorporation and the
Company's Bylaws provide that the Company shall, to the fullest extent permitted
by law, indemnify all directors of the Company, as well as any officers or
employees of the Company to whom the Company has agreed to grant
indemnification.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Item 2
1 Agreement and Plan of Merger and Reorganization *
Item 3
1 Articles of Incorporation of the Registrant.(1)
2 Bylaws of the Registrant (1)
3 Amended and Restated Articles of Incorporation of Registrant, to be
effective after consummation of the proposed Merger.
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4. Amended and Restated Bylaws of the Registrant, to be effective after
consummation of the proposed Merger.
Item 4
1 Form of Common Stock Certificate of the Registrant.(1)
2 Certificate of Designation of Rights and Preferences of Preferred Stock
Item 5
1 Legal Opinion of Williams Law Group, P.A.
Item 10
1. Employment Agreement with Colby Fede
2. Employment Agreement with Irene MacAllister
Item 23
1 Consent of KINGERY, CROUSE & HOHL, P.A..
2 Consent of WILLIAMS LAW GROUP, P.A. (to be included in Exhibits 5.1).
All other Exhibits called for by Rule 601 of Regulation S-1 are not
applicable to this filing.
Information pertaining to our Common Stock is contained in our Articles of
Incorporation and By-Laws.
* To be provided by amendment
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes:
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(1) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
Registration Statement through the date of responding to the request;
(2) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective;
(3) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder through
use of a prospectus which is a part of this registration statement, by any
person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(4) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (3) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of, State of, Tampa Florida
on May 11, 2000.
Ninth Enterprise Service Group, INC.
By: /s/ MICHAEL T. WILLIAMS.
------------------------------------
President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
- --------------------------------------------------------------------------------
SIGNATURE TITLE DATE
- --------------------------------------------------------------------------------
/s/ Michael T. Williams President and Treasurer May 11, 2000
- --------------------------------------------------------------------------------
72
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Date Filed: May 11, 2000 SEC File No.*
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
REGISTRATION STATEMENT
ON FORM S-4
UNDER
THE SECURITIES ACT OF 1934
Ninth Enterprise Service Group, INC.
(Consecutively numbered pages 73 through 130 of this Registration Statement)
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INDEX TO EXHIBITS
- --------------------------------------------------------------------------------
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
- --------------------------------------------------------------------------------
2.1 Agreement and Plan of Merger TBPBA
and Reorganization
- --------------------------------------------------------------------------------
3.1 Articles of Incorporation of Page 75
Registrant
- --------------------------------------------------------------------------------
3.2 Bylaws of Registrant Page 80
- --------------------------------------------------------------------------------
3.3 Amended Articles of Page 94
Incorporation of
Wiremedia.com, Inc.
- --------------------------------------------------------------------------------
3.4 Amended Articles of Page 96
Incorporation of
Wiremedia.com, Inc.
- --------------------------------------------------------------------------------
4.1 Form of Common Stock Information is
included in articles
and bylaws
- --------------------------------------------------------------------------------
4.2 Certificate of Designation of Page 109
Rights and Preferences of
Preferred Stock
- --------------------------------------------------------------------------------
5.1 Legal Opinion of Williams Law Page 111
Group
- --------------------------------------------------------------------------------
10.1 Employment Agreement - Colby Page 113
Fede
- --------------------------------------------------------------------------------
10.2 Employment Agreement - Irene
MacAllister Page 121
- --------------------------------------------------------------------------------
23.1 Consent of Kingery, Crouse &
Hohl, P.A. Page 129
- --------------------------------------------------------------------------------
23.2 Consent of Williams Law Group Included in 5
P.A. above
- --------------------------------------------------------------------------------
TBPBA - To be provided by amendment
74
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EXHIBIT 3.1
ARTICLES OF INCORPORATION
75
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ARTICLES OF INCORPORATION
OF
Ninth Enterprise Service Group, Inc.
ARTICLE I - NAME AND MAILING ADDRESS
The name of this corporation is Ninth Enterprise Service Group, Inc. . and
the mailing address of this corporation is 2503 W. Gardner Ct. Tampa Fl 33611.
ARTICLE II - DURATION
This corporation shall have perpetual existence.
ARTICLE III - PURPOSE
This corporation is organized to include the transaction of any or all
lawful business for which corporations may be incorporated under Chapter 607,
Florida Statutes (1975) as presently enacted and as it may be amended from time
to time.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 50,000,000 shares of no par value
common stock, which shall be designated as "Common Shares" and Twenty Million
shares of no par value preferred stock, which shall be designated as "Preferred
Shares."
The Preferred Shares may be issued in such series and with such rights,
privileges, and preferences as determined solely by the Board of Directors.
ARTICLE V - INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation is
2503 W. Gardner Ct. Tampa Fl 33611, and the name of the initial registered agent
of this corporation at that address is Michael T. Williams.
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ARTICLE VI - INITIAL BOARD OF DIRECTORS
This corporation shall have One director(s) initially. The number of
directors may be either increased or decreased from time to time by the Bylaws,
but shall never be less than one (1). The name(s) and address(es) of the initial
director(s) of this corporation are:
NAME ADDRESS
Michael T. Williams 2503 W. Gardner Ct. Tampa Fl 33611
ARTICLE VII - INCORPORATOR(S)
The name and address of the person(s) signing these Articles of
Incorporation is (are):
NAME ADDRESS
Michael T. Williams 2503 W. Gardner Ct. Tampa Fl 33611
ARTICLE VIII - INDEMNIFICATION
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
ARTICLE IX - AMENDMENT
This corporation reserves the right to amend or repeal any provisions
contained in these Articles of Incorporation, or any amendment thereto, and any
right conferred upon the shareholders is subject to this reservation.
ARTICLE X - AFFILIATED TRANSACTIONS AND CONTROL
SHARE ACQUISITIONS
The Corporation expressly elects not to be governed by Sections 607.0901
and 607.0902 of the Florida Business Corporations Act, relating to affiliated
transactions and control share acquisitions, respectively.
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IN WITNESS WHEREOF, the undersigned incorporator(s) has (have) executed
these Articles of Incorporation this April 6, 1999.
-------------------------------
Michael T. Williams
78
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CERTIFICATE DESIGNATING REGISTERED AGENT
AND STREET ADDRESS FOR SERVICE OF PROCESS
WITHIN FLORIDA
Pursuant to Florida Statutes Section 48.091, Ninth Enterprise Service
Group, Inc., desiring to organize under the laws of the State of Florida, hereby
designates Michael T. Williams, located at 2503 W. Gardner Ct. Tampa Fl 33611 as
its registered agent to accept service of process within the State of Florida.
ACCEPTANCE OF DESIGNATION
The undersigned hereby accepts the above designation as registered agent
to accept service of process for the above-named corporation, at the place
designated above, and agrees to comply with the provisions of Florida Statutes
Section 48.091(2) relative to maintaining an office for the service of process.
-------------------------------
Michael T. Williams
79
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EXHIBIT 3.2
BYLAWS
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BYLAWS
OF
Ninth Enterprise Service Group, Inc.
ARTICLE I - MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of this
corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting of shareholders for any year
shall be held no later than thirteen (13) months after the last preceding annual
meeting of shareholders. Business transacted at the annual meeting shall include
the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall be
held when directed by the Board of Directors, or when requested in writing by
the holders of not less than ten percent (10%) of all the shares entitled to
vote at the meeting. A meeting requested by shareholders shall be called for a
date not less than ten (10) or more than sixty (60) days after the request is
made, unless the shareholders requesting the meeting designate a later date. The
call for the meeting shall be issued by the Secretary, unless the President,
Board of Directors, or shareholders requesting the meeting designate another
person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten (10) nor more than
sixty (60) days before the meeting, either personally or by first class mail, by
or at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
Section 5. Notice of Adjourned Meetings. When a meeting is adjourned to
another time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and at the adjourned
meeting any business may be transacted that might have been transacted on the
original date of the meeting. If, however, after the adjournment the Board of
Directors fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given as provided in this section to each shareholder
of record on the new record date entitled to vote at such meeting.
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Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholder of any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
(60) days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty (60) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the date on which
the particular action requiring such determination of shareholders is to be
taken.
If the stock transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten (10) days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten (10) days prior to such meeting, shall be kept on file at
the registered office of the corporation, at the principal place of business of
the corporation or at the office of the transfer agent or register of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially complied
with, the meeting on demand of any shareholder in person or by proxy, shall be
adjourned until the requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not affect the
validity of any action taken at such meeting.
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Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series a majority of the shares of such class or
series shall constitute a quorum for the transaction of such item of business by
that class or series.
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing by
the shareholder or his duly authorized attorney-in-fact.
At each election for directors, every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected at
that time and for whose election he has a right to vote.
Shares standing in the name of another corporation, domestic or foreign,
may be voted by the officer, agent, or proxy designated by the bylaws of the
corporate shareholder; or, in the absence of any applicable bylaw, by such
person as the Board of Directors of the corporate shareholder may designate.
Proof of such designation may be made by presentation of a certified coy of the
bylaws or other instrument of the corporate shareholder. In the absence of any
such designation, or in case of conflicting designation by the corporate
shareholder, the chairman of the board, president, any vice president, secretary
and treasurer of the corporate shareholder shall be presumed to possess, in that
order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing gin the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
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Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of redeemable
shares has been mailed to the holders thereof and a sum sufficient to redeem
such shares has been deposited with a bank or trust company with irrevocable
instruction and authority to pay the redemption price to the holders thereof
upon surrender of certificates therefor, such shares shall not be entitled to
vote on any matter and shall not be deemed to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after the expiration of eleven (11) months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise provided by
law.
The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two (2) or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one (1) is present then that one, may exercise all the
powers conferred by the proxy; but if the proxy holders present at the meeting
are equally divided as to the right and manner of voting in any particular case,
the voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing a
substitute to act in his place.
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Section 11. Voting Trusts. Any number of shareholders of this corporation
may create a voting trust for the purpose of conferring upon a trustee or
trustees the right to vote or otherwise represent their shares, as provided by
law. Where the counterpart of a voting trust agreement and the copy of the
record of the holders of voting trust certificates has been deposited with the
corporation as provided by law, such documents shall be subject to the same
right of examination by a shareholder of the corporation, in person or by agent
or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by any
holder or record of voting trust certificates either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Section 12. Shareholders' Agreements. Two (2) or more shareholders, of
this corporation may enter an agreement providing for the exercise of voting
rights in the manner provided in the agreement or relating to any phase of the
affairs of the corporation as provided by law. Nothing therein shall impair the
right of this corporation to treat the shareholders of record as entitled to
vote the shares standing in their names.
Section 13. Action by Shareholders Without a Meeting. Any action required
by law, these bylaws, or the articles of incorporation of this corporation to be
taken at any annual or special meeting of shareholders of the corporation, or
any action which may be taken at any annual or special meeting of such
shareholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted. If
any class of shares is entitled to vote thereon as a class, such written consent
shall be required of the holders of a majority of the shares of each class of
shares entitled to vote as a class thereon and of the total shares entitled to
vote thereon.
Within ten (10) days after obtaining such authorization by written
consent, notice shall be given to those shareholders who have not consented in
writing. The notice shall fairly summarize the material features of the
authorized action and, if the action be a merger, consolidated or sale or
exchange of assets for which dissenters rights are provided under this act, the
notice shall contain a clear statement of the right of shareholders dissenting
therefrom to be paid the fair value of their shares upon compliance with further
provisions of this act regarding the rights of dissenting shareholders.
ARTICLE II - DIRECTORS
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and business and affairs of the corporation shall
be managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this
state or shareholders of this corporation.
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Section 3. Compensation. The Board of Directors shall have authority
to fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as a
director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one (1) or more officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which the
director reasonably believes to be within such person's professional or expert
competence, or
(c) a committee of the board upon which he does not serve, duly designated
in accordance with a provision of the articles of incorporation or the bylaws,
as to matters within its designated authority, which committee the director
reasonable believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. The corporation shall have at least one (1) director.
The minimum number of directors may be increased or decreased from time to time
by amendment to these bylaws, but no decrease shall have the effect of
shortening the terms of any incumbent director and no amendment shall decrease
the number of directors below one (1), unless the stockholders have voted to
operate the corporation.
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Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter, the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term for
which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors fixed
by these bylaws shall constitute a quorum for the transaction of business. The
act of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one (1) or more of its directors or any
other corporation, firm, association or entity in which one (1) or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
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(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or
shareholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one (1) or more other
committees each of which, to the extent provided in such resolution shall have
and may exercise all the authority of the Board of Directors, except that no
committee shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes
of proxy solicitation or otherwise,
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to issue
or sell, shares or designate the terms of a series of a class of shares, except
that the Board of Directors, having acted regarding general authorization for
the issuance or sale of shares, or any contract therefor, and, in the case of a
series, the designation thereof, may, pursuant to a general formula or method
specified by the Board of Directors, by resolution or by adoption of a stock
option or other plan, authorize a committee to fix the terms of any contract for
the sale of the shares and to fix the terms upon which such shares may be issued
or sold, including, without limitation, the price, the rate or manner of payment
of dividends, provisions for redemption, sinking fund, conversion, voting or
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one (1) or more directors as alternate members of any
such committee, who may act in the place and stead of any member or members at
any meeting of such committee.
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Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings by the
Board of Directors shall be held without notice. Written notice of the time and
place of special meetings of the Board of Directors shall be given to each
director by either personal delivery, telegram or cablegram at least two (2)
days before the meeting or by notice mailed to the director at least five (5)
days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of any such adjourned meeting shall be given to the directors who were not
present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two (2) directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken at a
meeting of the directors of a corporation, or any action which may be taken at a
meeting of the directors or a committee thereof, may be taken without a meeting
if a consent in writing, setting forth the action so to be taken, signed by all
of the directors, or all the members of the committee, as the case may be, is
filed in the minutes of the proceedings of the board or of the committee. Such
consent shall have the same effect as a unanimous vote.
ARTICLE III - OFFICERS
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Section 1. Officers. The officers of this corporation shall consist of a
president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two (2) or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notice of meetings out, and
perform such other duties as may be prescribed by the Board of Directors or the
President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or appointed
by the Board of Directors may be removed by the board whenever in its judgment
the best interest of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the Board
of Directors, unless the bylaws shall have expressly reserved such power to the
shareholders.
Removal of any officer shall be without prejudice to the contract rights,
if any, of the person so removed; however, election or appointment of an officer
or agent shall not of itself create contract rights.
ARTICLE IV - STOCK CERTIFICATES
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Section 1. Issuance. Every holder of shares in this corporation shall be
entitled to have a certificate, representing all shares to which he is entitled.
No certificate shall be issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice-President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice-President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares which are restricted as to the sale,
disposition or other transfer of such shares shall state that such shares are
restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the fact thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder or record of by his duly authorized attorney, and the signature of
such person has been guaranteed by a commercial bank or trust company or by a
member of the New York or American Stock Exchange.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation shall
issue a new stock certificate in the place of any certificate previously issued
if the holder of record of the certificate (a) makes proof in affidavit form
that it has been lost, destroyed or wrongfully taken; (b) requests the issue of
a new certificate before the corporation has notice that the certificate has
been acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the corporation may direct, to
indemnify the corporation, the transfer agent, and registrar against any claim
that may be made on account of the alleged loss, destruction, or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
corporation.
ARTICLE V - BOOKS AND RECORDS
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Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a records of its
shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have been
a holder of record of shares or of voting trust certificates therefor at least
six (6) months immediately preceding his demand or shall be the holder of record
of, or the holder of record of voting trust certificates for, at least five
percent (5%) of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four (4) months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five (5) years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
ARTICLE VI - DIVIDENDS
The Board of Directors of this corporation may, from time to time, declare
and the corporation may pay dividends on its shares in cash, property or its own
shares, except when the corporation is insolvent or when the payment thereof
would render the corporation insolvent or when the declaration or payment
thereof would be contrary to any restrictions contained in the articles of
incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
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earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus, and the amount per share paid
from such surplus shall be disclosed to the shareholders receiving the same
concurrently with the distribution.
(b) Dividends may be declared and paid in the corporation's own treasury
shares.
(c) Dividends may be declared and paid in the corporation's own authorized
but unissued shares out of any unreserved and unrestricted surplus of the
corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such
shares shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without a par value, such
shares shall be issued at such stated value as shall be fixed by the Board of
Directors by resolution adopted at the time such dividend is declared, and there
shall be transferred to stated capital at the time such dividend is paid an
amount of surplus equal to the aggregate stated value so fixed in respect of
such shares; and the amount per share so transferred to stated capital shall be
disclosed to the shareholders receiving such dividend concurrently with the
payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
ARTICLE VII - CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation as
it appears on page 1 of these bylaws.
ARTICLE VIII - AMENDMENTS
These bylaws may be repealed or amended, and new bylaws may be adopted, by
the Board of Directors.
End of bylaws adopted by the Board of Directors.
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EXHIBIT 3.3
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF Wiremedia.com, Inc.
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AMENDED AND RESTATED ARTICLES OF INCORPORATION OF Wiremedia.com, Inc.
The ARTICLES OF INCORPORATION OF Wiremedia.com, Inc. filed January 25, 2000
are amended and restated in their entirety to read as follows:
ARTICLE I - NAME, PRINCIPAL OFFICE AND MAILING ADDRESS
The name of this corporation is Wiremedia.com, Inc. and the principal office and
mailing address of this corporation is 1355 WEST PALMETTO PARK ROAD, SUITE 180,
BOCA RATON, FL 33486.
ARTICLE II - PURPOSE
This corporation is organized to include the transaction of any or all lawful
business for which corporations may be incorporated under Chapter 607, Florida
Statutes (1975) as presently enacted and as it may be amended from time to time.
ARTICLE III -REGISTERED AGENT
The address of the registered agent of this corporation is 343 ALMERIA AVENUE,
CORAL GABLES, FL 33134, and the name of the registered agent is SPIEGEL &
UTRERA, P.A..
ARTICLE IV - ELECTION OF BOARD OF DIRECTORS
Directors are elected by a plurality of the votes cast by the shares entitled to
vote in the election at a meeting at which a quorum is present.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 50,000,000 shares of no par value common
stock, which shall be designated as "Common Shares" and 20,000,000 shares of no
par value preferred stock, which shall be designated as "Preferred Shares." The
Preferred Shares may be issued in such series and with such rights, privileges,
and preferences as determined solely by the Board of Directors.
ARTICLE VI - AFFILIATED TRANSACTIONS / CONTROL SHARE ACQUISITIONS
The Corporation expressly elects not to be governed by Sections 607.0901 and
607.0902 of the Florida Enterprise Corporations Act, relating to affiliated
transactions and control share acquisitions, respectively.
- --------------------
- ------------------------------ ---------------------------------
Colby, Fede /President Date
Prepared By: Michael T. Williams, Esq. 2503 W. Gardner Ct. Tampa FL 33611
Florida Bar: 300322 Phone and Fax: 813.831.9348 Fax Audit# (((H00000017417 7)))
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EXHIBIT 3.4
AMENDED AND RESTATED BYLAWS OF Wiremedia.com, Inc.
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AMENDED AND RESTATED BYLAWS
Wiremedia.com, Inc.
ARTICLE I - MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of this
corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting of shareholders for any year
shall be held no later than thirteen (13) months after the last preceding annual
meeting of shareholders. Business transacted at the annual meeting shall include
the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall be
held when directed by the Board of Directors, or when requested in writing by
the holders of not less than ten percent (10%) of all the shares entitled to
vote at the meeting. A meeting requested by shareholders shall be called for a
date not less than ten (10) or more than sixty (60) days after the request is
made, unless the shareholders requesting the meeting designate a later date. The
call for the meeting shall be issued by the Secretary, unless the President,
Board of Directors, or shareholders requesting the meeting designate another
person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State ofFlorida.
Section 4. Notice. Written notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten (10) nor more than
sixty (60) days before the meeting, either personally or by first class mail, by
or at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
Section 5. Notice of Adjourned Meetings. When a meeting is adjourned to
another time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and at the adjourned
meeting any business may be transacted that might have been transacted on the
original date of the meeting. If, however, after the adjournment the Board of
Directors fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given as provided in this section to each shareholder
of record on the new record date entitled to vote at such meeting.
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-130-
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholder of any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
(60) days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty (60) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the date on which
the particular action requiring such determination of shareholders is to be
taken.
If the stock transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten (10) days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten (10) days prior to such meeting, shall be kept on file at
the registered office of the corporation, at the principal place of business of
the corporation or at the office of the transfer agent or register of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially complied
with, the meeting on demand of any shareholder in person or by proxy, shall be
adjourned until the requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not affect the
validity of any action taken at such meeting.
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Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series a majority of the shares of such class or
series shall constitute a quorum for the transaction of such item of business by
that class or series.
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares.Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting
of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing by
the shareholder or his duly authorized attorney-in-fact.
At each election for directors, every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected at
that time and for whose election he has a right to vote.
Shares standing in the name of another corporation, domestic or foreign,
may be voted by the officer, agent, or proxy designated by the bylaws of the
corporate shareholder; or, in the absence of any applicable bylaw, by such
person as the Board of Directors of the corporate shareholder may designate.
Proof of such designation may be made by presentation of a certified coy of the
bylaws or other instrument of the corporate shareholder. In the absence of any
such designation, or in case of conflicting designation by the corporate
shareholder, the chairman of the board, president, any vice president, secretary
and treasurer of the corporate shareholder shall be presumed to possess, in that
order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing gin the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
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Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of redeemable
shares has been mailed to the holders thereof and a sum sufficient to redeem
such shares has been deposited with a bank or trust company with irrevocable
instruction and authority to pay the redemption price to the holders thereof
upon surrender of certificates therefor, such shares shall not be entitled to
vote on any matter and shall not be deemed to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after the expiration of eleven (11) months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise provided by
law.
The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two (2) or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one (1) is present then that one, may exercise all the
powers conferred by the proxy; but if the proxy holders present at the meeting
are equally divided as to the right and manner of voting in any particular case,
the voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing a
substitute to act in his place.
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Section 11. Voting Trusts. Any number of shareholders of this corporation
may create a voting trust for the purpose of conferring upon a trustee or
trustees the right to vote or otherwise represent their shares, as provided by
law. Where the counterpart of a voting trust agreement and the copy of the
record of the holders of voting trust certificates has been deposited with the
corporation as provided by law, such documents shall be subject to the same
right of examination by a shareholder of the corporation, in person or by agent
or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by any
holder or record of voting trust certificates either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Section 12. Shareholders' Agreements. Two (2) or more shareholders, of
this corporation may enter an agreement providing for the exercise of voting
rights in the manner provided in the agreement or relating to any phase of the
affairs of the corporation as provided by law. Nothing therein shall impair the
right of this corporation to treat the shareholders of record as entitled to
vote the shares standing in their names.
Section 13. Action by Shareholders Without a Meeting. Any action required
by law, these bylaws, or the articles of incorporation of this corporation to be
taken at any annual or special meeting of shareholders of the corporation, or
any action which may be taken at any annual or special meeting of such
shareholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted. If
any class of shares is entitled to vote thereon as a class, such written consent
shall be required of the holders of a majority of the shares of each class of
shares entitled to vote as a class thereon and of the total shares entitled to
vote thereon.
Within ten (10) days after obtaining such authorization by written
consent, notice shall be given to those shareholders who have not consented in
writing. The notice shall fairly summarize the material features of the
authorized action and, if the action be a merger, consolidated or sale or
exchange of assets for which dissenters rights are provided under this act, the
notice shall contain a clear statement of the right of shareholders dissenting
therefrom to be paid the fair value of their shares upon compliance with further
provisions of this act regarding the rights of dissenting shareholders.
ARTICLE II - DIRECTORS
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and business and affairs of the corporation shall
be managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
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Section 3. Compensation. The Board of Directors shall have authority
to fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as a
director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one (1) or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which the
director reasonably believes to be within such person's professional or expert
competence, or
(c) a committee of the board upon which he does not serve, duly designated
in accordance with a provision of the articles of incorporation or the bylaws,
as to matters within its designated authority, which committee the director
reasonable believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. The corporation shall have at least one (1) director.
The minimum number of directors may be increased or decreased from time to time
by amendment to these bylaws, but no decrease shall have the effect of
shortening the terms of any incumbent director and no amendment shall decrease
the number of directors below one (1), unless the stockholders have voted to
operate the corporation.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter, the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term for
which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
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Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors fixed
by these bylaws shall constitute a quorum for the transaction of business. The
act of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one (1) or more of its directors or any
other corporation, firm, association or entity in which one (1) or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or
shareholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one (1) or more other
committees each of which, to the extent provided in such resolution shall have
and may exercise all the authority of the Board of Directors, except that no
committee shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise,
(c) fill vacancies on the Board of Directors or any committee thereof,
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(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to issue
or sell, shares or designate the terms of a series of a class of shares, except
that the Board of Directors, having acted regarding general authorization for
the issuance or sale of shares, or any contract therefor, and, in the case of a
series, the designation thereof, may, pursuant to a general formula or method
specified by the Board of Directors, by resolution or by adoption of a stock
option or other plan, authorize a committee to fix the terms of any contract for
the sale of the shares and to fix the terms upon which such shares may be issued
or sold, including, without limitation, the price, the rate or manner of payment
of dividends, provisions for redemption, sinking fund, conversion, voting or
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one (1) or more directors as alternate members of any
such committee, who may act in the place and stead of any member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings by the
Board of Directors shall be held without notice. Written notice of the time and
place of special meetings of the Board of Directors shall be given to each
director by either personal delivery, telegram or cablegram at least two (2)
days before the meeting or by notice mailed to the director at least five (5)
days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of any such adjourned meeting shall be given to the directors who were not
present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two (2) directors.
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Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken at a
meeting of the directors of a corporation, or any action which may be taken at a
meeting of the directors or a committee thereof, may be taken without a meeting
if a consent in writing, setting forth the action so to be taken, signed by all
of the directors, or all the members of the committee, as the case may be, is
filed in the minutes of the proceedings of the board or of the committee. Such
consent shall have the same effect as a unanimous vote.
ARTICLE III - OFFICERS
Section 1. Officers. The officers of this corporation shall consist of a
president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two (2) or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notice of meetings out, and
perform such other duties as may be prescribed by the Board of Directors or the
President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or appointed
by the Board of Directors may be removed by the board whenever in its judgment
the best interest of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the Board
of Directors, unless the bylaws shall have expressly reserved such power to the
shareholders.
Removal of any officer shall be without prejudice to the contract rights,
if any, of the person so removed; however, election or appointment of an officer
or agent shall not of itself create contract rights.
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ARTICLE IV - STOCK CERTIFICATES
Section 1. Issuance. Every holder of shares in this corporation shall be
entitled to have a certificate, representing all shares to which he is entitled.
No certificate shall be issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice-President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice-President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares which are restricted as to the sale,
disposition or other transfer of such shares shall state that such shares are
restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the fact thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder or record of by his duly authorized attorney, and the signature of
such person has been guaranteed by a commercial bank or trust company or by a
member of the New York or American Stock Exchange.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation shall
issue a new stock certificate in the place of any certificate previously issued
if the holder of record of the certificate (a) makes proof in affidavit form
that it has been lost, destroyed or wrongfully taken; (b) requests the issue of
a new certificate before the corporation has notice that the certificate has
been acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the corporation may direct, to
indemnify the corporation, the transfer agent, and registrar against any claim
that may be made on account of the alleged loss, destruction, or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
corporation.
ARTICLE V - BOOKS AND RECORDS
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
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This corporation shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a records of its
shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have been
a holder of record of shares or of voting trust certificates therefor at least
six (6) months immediately preceding his demand or shall be the holder of record
of, or the holder of record of voting trust certificates for, at least five
percent (5%) of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four (4) months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five (5) years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
ARTICLE VI - DIVIDENDS
The Board of Directors of this corporation may, from time to time, declare
and the corporation may pay dividends on its shares in cash, property or its own
shares, except when the corporation is insolvent or when the payment thereof
would render the corporation insolvent or when the declaration or payment
thereof would be contrary to any restrictions contained in the articles of
incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus, and the amount per share paid
from such surplus shall be disclosed to the shareholders receiving the same
concurrently with the distribution.
(b) Dividends may be declared and paid in the corporation's own treasury
shares.
(c) Dividends may be declared and paid in the corporation's own authorized
but unissued shares out of any unreserved and unrestricted surplus of the
corporation upon the following conditions:
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(1) If a dividend is payable in shares having a par value, such
shares shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without a par value, such
shares shall be issued at such stated value as shall be fixed by the Board of
Directors by resolution adopted at the time such dividend is declared, and there
shall be transferred to stated capital at the time such dividend is paid an
amount of surplus equal to the aggregate stated value so fixed in respect of
such shares; and the amount per share so transferred to stated capital shall be
disclosed to the shareholders receiving such dividend concurrently with the
payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
ARTICLE VII - CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation as
it appears on page 1 of these bylaws.
ARTICLE VIII - AMENDMENTS
These bylaws may be repealed or amended, and new bylaws may be adopted, by
the Board of Directors.
End of bylaws adopted by the Board of Directors.
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EXHIBIT 4.2
Certificate of Designation of Rights and Preferences
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Certificate of Designation of Rights and Preferences
Wiremedia.com Inc., a Florida corporation, whose address is 1355 West
Palmetto Park Road # 180, Boca Raton, FL 33486 ("Corporation") hereby designates
the following rights and Preferences for its Convertible Preferred Stock, Class
A ("Convertible Preferred Stock").
1. Conversion and Issuance of Convertible Preferred Stock. No shares of
Convertible Preferred Stock may be issued until this Certificate is filed with
the Secretary of State of Florida. When issued, The Holder(s) shall have the
right (the "Right") in its sole and absolute discretion to convert each shares
of Convertible Preferred Stock - Series A issued by the Corporation (the
"Shares") into 10 shares common shares of Corporation (the "Equity").
2. Time of Conversion. The Shares shall be convertible at any time, in whole or
in part, at any time for period commencing October 23, 2000 and ending on
December 31, 2010. The shares shall become convertible upon such time that there
are Five Thousand or more registered subscribers to Wiremedia.com or its
affiliate internet websites. No additional consideration is payable upon
conversion. If such event has not occurred by termination date, then the right
to convert shall also be terminated.
3. Method of Conversion. The conversion shall be effected by a written note
signed by an authorized representative of Holder or its assigns which shall (a)
state Holder's election to exercise the Right; (b) the person in whose name the
common share certificate is to be registered, its address and social security
number; (c) be delivered in person or by certified mail to Corporation.
4. Assignability of Shares; Forfeiture; Liquidation Preference. The Shares may
be assigned by Holder at any time by providing to Corporation a written notice
of assignment. The Right to convert shall not be exercisable until the
Corporation completes a listing of its common shares on the bulletin board or
similar stock exchange. The Shares shall be forfeited to Corporation for no
consideration the foregoing is not completed within two years of the date of
issuance of the Shares. The Shares shall have a preference over holders of
Common Stock of the Corporation upon liquidation equal to $.001 per share.
5. Representations and Warranties of Corporation. Upon exercise of the Right,
the Equity interest in Corporation shall be free and clear of all liens, claims,
charges and encumbrances. The amount of Equity subject to the Right shall be
adjusted for splits, dividend, recapitalization, or similar events just as if it
had been converted into common shares. Corporation agrees to indemnify and hold
harmless Holder in connection with any claim, loss, damage or expense, including
attorneys' fees, trial and appellate levels, in connection with any breach of
the foregoing.
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EXHIBIT 5.1
Legal Opinion of Williams Law Group
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WILLIAMS LAW GROUP, P.A.
2503 West Gardner Court
Tampa, FL 33611
May 8, 2000
Ninth Enterprise Service Group, Inc.
Via Telefax
Re: Registration Statement on Form S-4
Gentlemen:
I have acted as your counsel in the preparation on a Registration Statement
on Form S-4 (the "Registration Statement") filed by you with the Securities and
Exchange Commission covering shares of Common Stock of Ninth Enterprise Service
Group, Inc. (the "Stock").
In so acting, I have examined and relied upon such records, documents and
other instruments as in our judgment are necessary or appropriate in order to
express the opinion hereinafter set forth and have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity to original documents of all documents submitted to us
certified or photostatic copies.
Based on the foregoing, I am of the opinion that:
The Stock, when issued and delivered in the manner and/or the terms
described in the Registration Statement (after it is declared effective), will
duly and validly issued, fully paid and nonassessable;
I hereby consent to the reference to my name in the Registration Statement
under the caption "Legal Matters" and to the use of this opinion as an exhibit
to the Registration Statement. In giving this consent, I do not hereby admit
that I come within the category of a person whose consent is required under
Section7 of the Act, or the general rules and regulations thereunder.
Very truly yours,
Michael T. Williams
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EXHIBIT 10.1
EMPLOYMENT AGREEMENT - COLBY FEDE
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WIREMEDIA.COM EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 01st day of February, 2000 (the "Agreement"), by
and between Wiremedia.com, Inc., a Florida corporation ("Employer"), and Colby
Fede ("Employee"). WITNESSETH: WHEREAS, Employer desires to employ Employee and
Employee desires to be employed by Employer as Vice President of Marketing; and
WHEREAS, Employer recognizes the need of the knowledge, talents and assistance
of Employee and desires to enter into this Agreement to secure the foregoing.
NOW, THEREFORE, in consideration of the promises herein contained, the parties
covenant and agree as follows:
1. EMPLOYMENT. Employer agrees to employ Employee and Employee agrees to be
employed by Employer and to perform work as determined by Employer, as
President and CEO of Employer, on the terms and conditions set forth in
this Agreement. This Agreement shall be effective as of the date mutually
agreed to in writing by both parties (the "Effective Date") but in no
event shall it be more than two weeks following the date on which the
Employer receives more than $500,000 of gross investment capital.
2. COMPENSATION. Employer agrees to employ Employee at the base rate of
compensation of seventy thousand and No/Dollars ($70,000.00) per year.
Compensation is to be paid twice per month.Compensation is to be reviewed by
Board of Directors on an annual basis. In addition to the base compensation,
Employer agrees to pay or provide Employee with the following:
A. Expenses. Reimbursement for reasonable expenses actually incurred by
Employee in the furtherance of Employer's business, including, but
not limited to, telephone calls (including business related calls on
Employee's cellular phone and business related long distance calls),
entertainment, attendance at conferences, conventions and
institutes, provided proper itemization of said expenses is
furnished to Employer by Employee. All such expenditures shall be
subject to the reasonable control of Employer.
B. Medical and Disability Benefits. Employee and his spouse shall be
entitled to participate in Employer's medical program, Employer-paid
disability and other benefit programs as other executives of
Employer are entitled to participate in, as is in place from time to
time. If Employee desires to include any family members other than
his spouse in the medical plan, Employee shall be responsible for
all additional costs.
C. Additional Benefits. Employee shall be entitled to participate in
and receive such additional benefits as Employer shall from time to
time make available to its executive employees including, without
limitation, profit sharing,stock purchase, stock option, automobile
allowance, and other incentive plans.
D. Preferred Stock, Class C. Pursuant to the "Agreement " dated
February 01, 2000, employee shall be entitled to receive 200,000
Preferred Stock, Class C which may, under certain conditions (to be
detailed within the "Certificate of Designation of Rights and
Preferences" and "Irrevocable Voting Trust" agreements), be
converted into 2,000,000 shares of Common Stock.
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E. Bonus. Employee shall be entitled to receive cash or stock option bonuses
for exceeding pre-tax profit targets, set by the Board of directors. The
amount of bonus shall be determined by the Board of Directors .
3. DUTIES. Employee agrees to perform work as determined by the Board of
Directors, subject to the direction of Employer and agrees to subject
himself at all times during the Term (as hereinafter defined) to the
direction and control of Employer in respect to the work to be performed.
Employee shall devote 50% of his full business time and attention to the
furtherance of Employer's best interests. In that regard, and as further
consideration for this Agreement, Employee agrees to comply with, and abide
by, such rules and directives of Employer as may be reasonably established
from time to time, and recognizes the right of Employer, in its reasonable
discretion, to change, modify or adopt new policies and practices affecting
the employment relationship, not inconsistent with this Agreement, as
deemed appropriate by Employer. During the term of Employee's employment,
Employee will not undertake any new business ventures, partnerships,
consulting arrangements or other enterprise or business other than those on
behalf of Employer, without Employer's prior written consent.
4. WORKING FACILITIES. Employee shall be furnished with office space,
secretarial services, and such other facilities and services suitable to
Employee's position and adequate for the performance of Employee's duties.
5. AGENCY. Employee shall have no authority to enter into any contracts
binding upon Employer, except as authorized in writing, in advance, by
Employer.
6. TERM OF EMPLOYMENT; SEVERANCE.
A. Employee's employment hereunder shall commence as of the Effective Date
hereof and continue for a period of two (2) years thereafter (the "Term").
B. Anything herein to the contrary notwithstanding, Employee's employment
hereunder may be terminated at any time and for any reason by either party
upon not less than one hundred twenty (120) days' prior written notice to
the other party. It is understood and acknowledged that Employer shall have
the right to effectuate such termination at will, with or without
Reasonable Cause (as hereinafter defined). Any such termination shall be
effective as of the end of such one hundred twenty (120) day period (the
"Final Date"). If Employee's employment shall be terminated with reasonable
cause, then Employee shall be entitled to (i) severance compensation equal
to Employee's then-current base salary and benefits (which for purposes
hereof shall include all compensation payable hereunder, of any type) for a
period equal to the Severance Period (as defined below)
C. If Employee's employment hereunder shall be terminated by Employer without
Reasonable Cause pursuant to paragraph 6.B. or because of Employee's
disability, as determined by Employer in good faith, then Employee shall be
entitled to (i) severance compensation equal to Employee's then-current
base salary and benefits (which for purposes hereof shall include all
compensation payable hereunder, of any type) for a period equal to the
Severance Period (as defined below). Such severance compensation payments
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consisting of cash shall be paid in a lump sum plus any outstanding
benefits and allocated bonuses on or before the Final Date. The severance
compensation are intended to be in lieu of all other payments to which
Employee might otherwise be entitled in respect of termination of
Employee's employment without Reasonable Cause or in respect of any action
by Employer constituting Good Reason for voluntary termination.
D. If Employee's employment hereunder shall be terminated for Reasonable Cause
pursuant to paragraph 6.C., or if Employee voluntarily terminates
Employee's employment without Good Reason, Employee shall be entitled to
receive Employee's base salary as accrued through the effective date of
such termination, and shall be entitled to any Severance Benefits or other
amounts in respect of such termination.
E. Reasonable Cause," as used herein, shall mean Employee's involvement in any
action or inaction involving fraud resulting in a personal benefit in
excess of any payments to which Employee is entitled hereunder, dishonesty,
or material violation of Corporation policy and procedures. Employee shall
vacate the offices of Employer on such effective date.
F. "Good Reason," as used herein, means the occurrence of any of the following
events without Employee's consent: i. a material diminution in Employee's
duties and responsibilities; ii. a reduction in Employee's base salary;
iii. a forced relocation; or 79 iv. a Change of Control (as defined below)
if Successor Employer (as defined in paragraph H below) fails to assume
this Agreement in its entirety.
G. "Severance Period," as used herein, means (i) twenty four months (24)
months.
H. H. "Change of Control" means a sale outside the ordinary course of business
of more than fifty percent (50%) of the assets of or equity interests in
Employer to any person or entity.
7. COMPLIANCE WITH LAWS. Employee will comply with all federal and state laws,
rules and regulations relating to any of Employee's responsibilities and
duties with Employer and will not violate any such laws, rules and
regulations.
8. COVENANT NOT TO COMPETE.
Employee agrees to conform to the following concerning non-competition.
A. Employer undertakes to train Employee and to give Employee confidential
information and knowledge about Employer's business policies, accounts
procedures and methods. For the purposes of this Agreement, the term
"confidential information" shall include but is not limited to any list of
suppliers, customers, investors, stockholders, including their names,
addresses, phone numbers, amount of investments and similar information. In
addition, any operational information of Employer, including but not
limited to information on Employer's methods of conducting business,
profits and/or losses of Employer, marketing material and any information
that would reasonably be considered proprietary or confidential in nature.
Employer has established a valuable and extensive trade in its products and
services, which business has been developed at a considerable expense to
Employer. The nature of the business is such that the relationship of its
customers with Employer must be maintained through the close personal
contact of its employees.
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B. Employee desires to enter into or continue in the employ of Employer and by
virtue of such employment by Employer, Employee will become familiar with
the manner, methods, secrets and confidential information pertaining to
such business. During the Term, Employee will continue to receive
additional confidential information of the same kind. Through
representatives of Employer, Employee will become personally acquainted
with the business of Employer and its methods of operation.
C. In consideration of the employment or continued employment of Employee as
herein provided, the training of Employee by Employer, and the disclosure
by Employer to employee of the knowledge and confidential information
described above, Employer requests and Employee makes the covenants
hereinafter set forth. Employee understands and acknowledges that such
covenants are required for the fair and reasonable protection of the
business of Employer carried on in the area to which the covenants are
applicable and that without the limited restrictions on Employee's
activities imposed by the covenants, the business of Employer would suffer
irreparable and immeasurable damage. The covenants on the part of Employee
shall be construed as an agreement independent of any other provision of
this Agreement, and existence of any claim or course of action whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the enforcement by Employer of the covenants.
D. Employee agrees that during the term of Employee's employment and for the
period of twelve (12) months immediately following the termination of
employment (which said time period shall be increased by any time during
which Employee is in violation of this Agreement) Employee will not, within
the territory hereinafter defined, directly or indirectly, for Employee, or
on behalf of others, as an individual on Employee's own account, or as an
employee, agent, or representative for any other person, partnership, firm
or corporation: i. Compete with the business of Employer by engaging or
participating in or furnishing aid or assistance in competition with the
business of Employer. 80 ii. Engage, in any capacity, directly or
indirectly, in or be employed by any business similar to the kind or nature
of business conducted by Employer during the employment. iii. For the
purposes of this paragraph 8, the business of Employer shall be limited to
the (1) Internet based e-commerce software solutions (2) Internet
Business-to-Business Incubator(3) and (3) any business that the Employer
enters into during the Term.
E. The territory referred to in this paragraph 8 shall be the entire World.
F. Each restrictive covenant is separate and distinct from any other covenant
set forth in this paragraph. In the event of the invalidity of any
covenant, the remaining obligation shall be deemed independent and
divisible. The parties agree that the territory set forth is reasonable and
necessary for the protection of Employer. In the event any term or
condition is deemed to be too broad or unenforceable, said provision shall
be deemed reduced in scope to the extent necessary to make said provision
enforceable and binding.
G. The provisions of this paragraph 8 shall not apply if Employee's employment
is terminated by Employer without Reasonable Cause or by Employee for Good
Reason.
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9. INDUCING EMPLOYEE OF EMPLOYER TO LEAVE. Any attempt on the part of
Employee to induce others to leave Employer's employ or any efforts by
Employee to interfere with Employer's relationship with other employees
would be harmful and damaging to Employer. Employee expressly agrees that
during the term of Employee's employment and for a period of twelve (12)
months thereafter (provided said time period shall be increased by any
time during which Employee is in violation of this Agreement), Employee
will not in any way directly or indirectly:
A. Induce or attempt to induce an employee to sever his or his employment
with Employer;
B. Interfere with or disrupt Employer's relationship with other employees; and
C. Solicit, entice, take away or employ any person employed with Employer,
excluding people Employee brings to Employer.
10. CONFIDENTIAL INFORMATION. It is understood between the parties hereto that
during the term of employment, Employee will be dealing with confidential
information, as defined above, which is Employer's property, used in the
course of its business. Employee will not disclose to anyone, directly or
indirectly, any of such confidential information or use such information
other than in the course of Employee's employment. All documents that
Employee prepares, or confidential information that might be given to
Employee in the course of employment, are the exclusive property of
Employer and shall remain in Employer's possession on the premises. Under
no circumstances shall any such information or documents be removed without
Employer's written consent first being obtained.
11. RETURN OF EMPLOYER'S PROPERTY. On termination of employment, regardless of
how termination is effected, or whenever requested by Employer, Employee
shall immediately return to Employer all of Employer's property used by
Employee rendering services hereunder or otherwise that is in Employee's
possession or under Employee's control.
12. VACATION. Employee shall be entitled to a vacation period of four (4) weeks
per calendar year. Employee shall take the vacation at such time during the
year and for such period as reasonable. All vacations should be taken in
the year earned. No vacations may be accrued without written permission of
the Board of Directors.
13. REFERENCES. Employer agrees that, upon termination of this Agreement, it
will, upon written request of Employee, furnish references to third
parties, including prospective employers, regarding Employee. However,
Employee acknowledges that it is Employer's policy to confirm employment
only and not to release any additional information without a written
release from Employee.
14. NOTICES. All notices, requests, consents, and other communications under
this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or the date mailed, postage
prepaid by certified 81 mail, return receipt requested, or faxed and
confirmed, if addressed to the respective parties as follows:
If to Employer:
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Wiremedia.com, Inc.
1355 W Palmetto Pk Rd , Suite 180
Boca Raton, Florida 33486
Attention: Board of Directors
If to Employee:
Colby R Fede
1355 W Palmetto Pk Rd , Suite 180
Boca Raton, Florida 33486
Either party may change its address for the purpose of receiving notices,
demands, and other communications by giving written notice to the other
party of the change.
15. VOLUNTARY AGREEMENT. Employee represents that he has not been pressured,
misled or induced to enter this Agreement based upon any representation by
Employer not contained herein.
16. PROVISIONS TO SURVIVE. The parties hereto acknowledge that many of the
terms and conditions of this Agreement are intended to survive the
employment relationship. Therefore, any terms and conditions that are
intended by the nature of the promises or representations to survive the
termination of employment shall survive the term of employment regardless
of whether such provision is expressly stated as so surviving.
17. MERGER. This Agreement represents the entire Agreement between the parties
and shall not be subject to modification or amendment by any oral
representation, or any written statement by either party, except for a
dated written amendment to this Agreement signed by Employee and an
authorized officer of Employer.
18. VENUE AND APPLICABLE LAW. This Agreement shall be enforced and construed in
accordance with the laws of the State of Florida, and venue for any action
or arbitration under this Agreement shall be Kent County, Florida.
19. SUBSIDIARIES AND AFFILIATED ENTITIES. Employee acknowledges and agrees that
Employer has or may have various subsidiaries and affiliated entities. In
rendering services to Employer, Employee will have considerable contact
with such subsidiaries and affiliates. Therefore, Employee agrees that all
provisions of paragraphs 7, 8, 9 and 10 shall apply to all such
subsidiaries and affiliates.
20. PERSONNEL INFORMATION. Employee shall not divulge or discuss personnel
information such as salaries, bonuses, commissions and benefits relating to
Employee or other employees of Employer or any of its subsidiaries with any
other person except the Executive Committee and the Board of Directors of
Employer.
21. ASSIGNMENT. This Agreement shall not be assignable by either party without
the written consent of the other party; provided, however, that this
Agreement shall be assignable to any corporation or entity which purchases
the assets of or succeeds to the business of Employer (a "Successor
Employer"). Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns. IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above written.
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Employer:
Wiremedia.com
Name: Colby Fede
Signature:_______________
Title: President and CEO
Employee:
Name: Colby Fede
Signature_________________
120
<PAGE>
EXHIBIT 10.2
EMPLOYMENT AGREEMENT - IRENE MACALLISTER
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WIREMEDIA.COM EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 01st day of February 2000 (the "Agreement"), by
and between Wiremedia.com, Inc., a Florida corporation ("Employer"), and Irene
MacAllister ("Employee"). WITNESSETH: WHEREAS, Employer desires to employ
Employee and Employee desires to be employed by Employer as Vice President of
Marketing; and WHEREAS, Employer recognizes the need of the knowledge, talents
and assistance of Employee and desires to enter into this Agreement to secure
the foregoing. NOW, THEREFORE, in consideration of the promises herein
contained, the parties covenant and agree as follows:
22. EMPLOYMENT. Employer agrees to employ Employee and Employee agrees to be
employed by Employer and to perform work as determined by Employer, as Vice
President of Marketing of Employer, on the terms and conditions set forth
in this Agreement. This Agreement shall be effective as of the date
mutually agreed to in writing by both parties (the "Effective Date") but in
no event shall it be more than two weeks following the date on which the
Employer receives more than $500,000 of gross investment capital.
23. COMPENSATION. Employer agrees to employ Employee at the base rate of
compensation of sixty thousand and No/Dollars ($60,000.00) per year.
Compensation is to be paid twice per month. Compensation is to be reviewed
by Board of Directors on an annual basis. In addition to the base
compensation, Employer agrees to pay or provide Employee with the
following:
A. Expenses. Reimbursement for reasonable expenses actually incurred by
Employee in the furtherance of Employer's business, including, but not
limited to, telephone calls (including business related calls on Employee's
cellular phone and business related long distance calls), entertainment,
attendance at conferences, conventions and institutes, provided proper
itemization of said expenses is furnished to Employer by Employee. All such
expenditures shall be subject to the reasonable control of Employer.
B. Medical and Disability Benefits. Employee and his spouse shall be entitled
to participate in Employer's medical program, Employer-paid disability and
other benefit programs as other executives of Employer are entitled to
participate in, as is in place from time to time. If Employee desires to
include any family members other than her spouse in the medical plan,
Employee shall be responsible for all additional costs.
C. Additional Benefits. Employee shall be entitled to participate in and
receive such additional benefits as Employer shall from time to time make
available to its executive employees including, without limitation, profit
sharing, stock purchase, stock option, automobile allowance, and other
incentive plans.
D. Preferred Stock, Class C. Pursuant to the "Agreement " dated February 01,
2000, employee shall be entitled to receive 50,000 Preferred Stock, Class C
which may, under certain conditions (to be detailed within the "Certificate
of Designation of Rights and Preferences" and "Irrevocable Voting Trust"
agreements), be converted into 500,000 shares of Common Stock.
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E. Bonus. Employee shall be entitled to receive cash or stock option bonuses
for exceeding pre-tax profit targets, set by the Board of directors. The
amount of bonus shall be determined by the Board of Directors.
24. DUTIES. Employee agrees to perform work as determined by the Board of
Directors, subject to the direction of Employer and agrees to subject
herself at all times during the Term (as hereinafter defined) to the
direction and control of Employer in respect to the work to be performed.
Employee shall devote 50% of her full business time and attention to the
furtherance of Employer's best interests. In that regard, and as further
consideration for this Agreement, Employee agrees to comply with, and abide
by, such rules and directives of Employer as may be reasonably established
from time to time, and recognizes the right of Employer, in its reasonable
discretion, to change, modify or adopt new policies and practices affecting
the employment relationship, not inconsistent with this Agreement, as
deemed appropriate by Employer. During the term of Employee's employment,
Employee will not undertake any new business ventures, partnerships,
consulting arrangements or other enterprise or business other than those on
behalf of Employer, without Employer's prior written consent.
25. WORKING FACILITIES. Employee shall be furnished with office space,
secretarial services, and such other facilities and services suitable to
Employee's position and adequate for the performance of Employee's duties.
26. AGENCY. Employee shall have no authority to enter into any contracts
binding upon Employer, except as authorized in writing, in advance, by
Employer.
27. TERM OF EMPLOYMENT; SEVERANCE.
A. Employee's employment hereunder shall commence as of the Effective Date
hereof and continue for a period of two (2) years thereafter (the "Term").
B. Anything herein to the contrary notwithstanding, Employee's employment
hereunder may be terminated at any time and for any reason by either party
upon not less than one hundred twenty (120) days' prior written notice to
the other party. It is understood and acknowledged that Employer shall have
the right to effectuate such termination at will, with or without
Reasonable Cause (as hereinafter defined). Any such termination shall be
effective as of the end of such one hundred twenty (120) day period (the
"Final Date"). If Employee's employment shall be terminated with reasonable
cause, then Employee shall be entitled to (i) severance compensation equal
to Employee's then-current base salary and benefits (which for purposes
hereof shall include all compensation payable hereunder, of any type) for a
period equal to the Severance Period (as defined below)
C. If Employee's employment hereunder shall be terminated by Employer without
Reasonable Cause pursuant to paragraph 6.B. or because of Employee's
disability, as determined by Employer in good faith, then Employee shall be
entitled to (i) severance compensation equal to Employee's then-current
base salary and benefits (which for purposes hereof shall include all
compensation payable hereunder, of any type) for a period equal to the
Severance Period (as defined below). Such severance compensation payments
consisting of cash shall be paid in a lump sum plus any outstanding
benefits and allocated bonuses on or before the Final Date. The severance
compensation are intended to be in lieu of all other payments to which
Employee might otherwise be entitled in respect of termination of
Employee's employment without Reasonable Cause or in respect of any action
by Employer constituting Good Reason for voluntary termination.
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<PAGE>
D. If Employee's employment hereunder shall be terminated for Reasonable Cause
pursuant to paragraph 6.C., or if Employee voluntarily terminates
Employee's employment without Good Reason, Employee shall be entitled to
receive Employee's base salary as accrued through the effective date of
such termination, and shall be entitled to any Severance Benefits or other
amounts in respect of such termination.
E. "Reasonable Cause," as used herein, shall mean Employee's involvement in
any action or inaction involving fraud resulting in a personal benefit in
excess of any payments to which Employee is entitled hereunder, dishonesty,
or material violation of Corporation policy and procedures. Employee shall
vacate the offices of Employer on such effective date.
F. "Good Reason," as used herein, means the occurrence of any of the following
events without Employee's consent: i. a material diminution in Employee's
duties and responsibilities; ii. a reduction in Employee's base salary;
iii. a forced relocation; or 79 iv. a Change of Control (as defined below)
if Successor Employer (as defined in paragraph H below) fails to assume
this Agreement in its entirety.
G. "Severance Period," as used herein, means the lesser of (i) twenty four
(24) months.
H. H. "Change of Control" means a sale outside the ordinary course of business
of more than fifty percent (50%) of the assets of or equity interests in
Employer to any person or entity.
28. COMPLIANCE WITH LAWS. Employee will comply with all federal and state laws,
rules and regulations relating to any of Employee's responsibilities and
duties with Employer and will not violate any such laws, rules and
regulations.
29. COVENANT NOT TO COMPETE.
Employee agrees to conform to the following concerning non-competition.
A. Employer undertakes to train Employee and to give Employee confidential
information and knowledge about Employer's business policies, accounts
procedures and methods. For the purposes of this Agreement, the term
"confidential information" shall include but is not limited to any list of
suppliers, customers, investors, stockholders, including their names,
addresses, phone numbers, amount of investments and similar information. In
addition, any operational information of Employer, including but not
limited to information on Employer's methods of conducting business,
profits and/or losses of Employer, marketing material and any information
that would reasonably be considered proprietary or confidential in nature.
Employer has established a valuable and extensive trade in its products and
services, which business has been developed at a considerable expense to
Employer. The nature of the business is such that the relationship of its
customers with Employer must be maintained through the close personal
contact of its employees.
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B. Employee desires to enter into or continue in the employ of Employer and by
virtue of such employment by Employer, Employee will become familiar with
the manner, methods, secrets and confidential information pertaining to
such business. During the Term, Employee will continue to receive
additional confidential information of the same kind. Through
representatives of Employer, Employee will become personally acquainted
with the business of Employer and its methods of operation.
C. In consideration of the employment or continued employment of Employee as
herein provided, the training of Employee by Employer, and the disclosure
by Employer to employee of the knowledge and confidential information
described above, Employer requests and Employee makes the covenants
hereinafter set forth. Employee understands and acknowledges that such
covenants are required for the fair and reasonable protection of the
business of Employer carried on in the area to which the covenants are
applicable and that without the limited restrictions on Employee's
activities imposed by the covenants, the business of Employer would suffer
irreparable and immeasurable damage. The covenants on the part of Employee
shall be construed as an agreement independent of any other provision of
this Agreement, and existence of any claim or course of action whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the enforcement by Employer of the covenants.
D. Employee agrees that during the term of Employee's employment and for the
period of twelve (12) months immediately following the termination of
employment (which said time period shall be increased by any time during
which Employee is in violation of this Agreement) Employee will not, within
the territory hereinafter defined, directly or indirectly, for Employee, or
on behalf of others, as an individual on Employee's own account, or as an
employee, agent, or representative for any other person, partnership, firm
or corporation: i. Compete with the business of Employer by engaging or
participating in or furnishing aid or assistance in competition with the
business of Employer. 80 ii. Engage, in any capacity, directly or
indirectly, in or be employed by any business similar to the kind or nature
of business conducted by Employer during the employment. iii. For the
purposes of this paragraph 8, the business of Employer shall be limited to
the (1) Internet based e-commerce software solutions (2) Internet
Business-to-Business Incubator and (3) any business that the Employer
enters into during the Term.
E. The territory referred to in this paragraph 8 shall be the entire World.
F. Each restrictive covenant is separate and distinct from any other covenant
set forth in this paragraph. In the event of the invalidity of any
covenant, the remaining obligation shall be deemed independent and
divisible. The parties agree that the territory set forth is reasonable and
necessary for the protection of Employer. In the event any term or
condition is deemed to be too broad or unenforceable, said provision shall
be deemed reduced in scope to the extent necessary to make said provision
enforceable and binding.
G. The provisions of this paragraph 8 shall not apply if Employee's employment
is terminated by Employer without Reasonable Cause or by Employee for Good
Reason.
30. INDUCING EMPLOYEE OF EMPLOYER TO LEAVE. Any attempt on the part of
Employee to induce others to leave Employer's employ or any efforts by
125
<PAGE>
Employee to interfere with Employer's relationship with other employees
would be harmful and damaging to Employer. Employee expressly agrees that
during the term of Employee's employment and for a period of twelve (12)
months thereafter (provided said time period shall be increased by any
time during which Employee is in violation of this Agreement), Employee
will not in any way directly or indirectly:
A. Induce or attempt to induce an employee to sever his or her employment
with Employer;
B. Interfere with or disrupt Employer's relationship with other employees;
and
C. Solicit, entice, take away or employ any person employed with Employer,
excluding people Employee brings to Employer.
31. CONFIDENTIAL INFORMATION. It is understood between the parties hereto that
during the term of employment, Employee will be dealing with confidential
information, as defined above, which is Employer's property, used in the
course of its business. Employee will not disclose to anyone, directly or
indirectly, any of such confidential information or use such information
other than in the course of Employee's employment. All documents that
Employee prepares, or confidential information that might be given to
Employee in the course of employment, are the exclusive property of
Employer and shall remain in Employer's possession on the premises. Under
no circumstances shall any such information or documents be removed without
Employer's written consent first being obtained.
32. RETURN OF EMPLOYER'S PROPERTY. On termination of employment, regardless of
how termination is effected, or whenever requested by Employer, Employee
shall immediately return to Employer all of Employer's property used by
Employee rendering services hereunder or otherwise that is in Employee's
possession or under Employee's control.
33. VACATION. Employee shall be entitled to a vacation period of four (4) weeks
per calendar year. Employee shall take the vacation at such time during the
year and for such period as reasonable. All vacations should be taken in
the year earned. No vacations may be accrued without written permission of
the Board of Directors.
34. REFERENCES. Employer agrees that, upon termination of this Agreement, it
will, upon written request of Employee, furnish references to third
parties, including prospective employers, regarding Employee. However,
Employee acknowledges that it is Employer's policy to confirm employment
only and not to release any additional information without a written
release from Employee.
35. NOTICES. All notices, requests, consents, and other communications under
this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or the date mailed, postage
prepaid by certified 81 mail, return receipt requested, or faxed and
confirmed, if addressed to the respective parties as follows:
If to Employer:
Wiremedia.com, Inc.
1355 W Palmetto Pk Rd, Suite 180
126
<PAGE>
Boca Raton, Florida 33486
Attention: Board of Directors
If to Employee:
Irene MacAllister
1355 W Palmetto Pk Rd, Suite 180
Boca Raton, Florida 33486
Either party may change its address for the purpose of receiving notices,
demands, and other communications by giving written notice to the other
party of the change.
36. VOLUNTARY AGREEMENT. Employee represents that he has not been pressured,
misled or induced to enter this Agreement based upon any representation by
Employer not contained herein.
37. PROVISIONS TO SURVIVE. The parties hereto acknowledge that many of the
terms and conditions of this Agreement are intended to survive the
employment relationship. Therefore, any terms and conditions that are
intended by the nature of the promises or representations to survive the
termination of employment shall survive the term of employment regardless
of whether such provision is expressly stated as so surviving.
38. MERGER. This Agreement represents the entire Agreement between the parties
and shall not be subject to modification or amendment by any oral
representation, or any written statement by either party, except for a
dated written amendment to this Agreement signed by Employee and an
authorized officer of Employer.
39. VENUE AND APPLICABLE LAW. This Agreement shall be enforced and construed in
accordance with the laws of the State of Florida, and venue for any action
or arbitration under this Agreement shall be Palm Beach County, Florida.
40. SUBSIDIARIES AND AFFILIATED ENTITIES. Employee acknowledges and agrees that
Employer has or may have various subsidiaries and affiliated entities. In
rendering services to Employer, Employee will have considerable contact
with such subsidiaries and affiliates. Therefore, Employee agrees that all
provisions of paragraphs 7, 8, 9 and 10 shall apply to all such
subsidiaries and affiliates.
41. PERSONNEL INFORMATION. Employee shall not divulge or discuss personnel
information such as salaries, bonuses, commissions and benefits relating to
Employee or other employees of Employer or any of its subsidiaries with any
other person except the Executive Committee and the Board of Directors of
Employer.
42. ASSIGNMENT. This Agreement shall not be assignable by either party without
the written consent of the other party; provided, however, that this
Agreement shall be assignable to any corporation or entity which purchases
the assets of or succeeds to the business of Employer (a "Successor
Employer"). Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns. IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above written.
127
<PAGE>
Employer:
Wiremedia.com
Name: Colby Fede
Signature: _______________
Title: President and CEO
Employee:
Name: Irene MacAllister
Signature: _________________
128
<PAGE>
EXHIBIT 23.1
Consent of Accountants
129
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Registration Statement on Form 10 of
our report dated May 3, 2000 relating to the financial statements of
Wiremedia.com, Inc., as of and for the period ended February 29, 2000, which
appear in such Registration Statement.
Tampa, Florida
May 9, 2000
KINGERY CROUSE & HOHL P.A.
130
<PAGE>
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<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-25-2000
<PERIOD-END> FEB-29-2000
<CASH> 19,900
<SECURITIES> 0
<RECEIVABLES> 1,400
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,300
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,300
<CURRENT-LIABILITIES> 56,900
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0
0
<COMMON> 64,494
<OTHER-SE> (100,094)
<TOTAL-LIABILITY-AND-EQUITY> 0
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<CGS> 0
<TOTAL-COSTS> 100,094
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