AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 2000
REGISTRATION NO. 333-36786
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Ninth Enterprise Service Group, Inc.
(Exact name of registrant as specified in its charter)
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Florida 6770 59-3651748
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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
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. *[ ]
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CALCULATION OF REGISTRATION FEE
===============================================================================
Title of each Proposed maximum Propsed Maximum Amount of
class of Offering Price aggregate registration
securities to Amount to be Per Share offering price Fee
be registered registered
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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, *par 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.
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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
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EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
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PROSPECTUS
Ninth Enterprise Service Group, Inc.
Ninth Enterprise Service Group, Inc., a Florida corporation and Wiremedia.com,
Inc., a Florida corporation, have entered into a merger agreement. 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. When the merger
closes, Ninth Enterprise Service Group will change its name to Wiremedia.com and
will be the surviving corporation. It will then file to have its stock quoted on
the OTC Bulletin Board.
The following table contains comparative share information for shareholders of
Wiremedia.com and Ninth Enterprise Service Group immediately after the closing
of the merger.
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The former The current Total
shareholders of shareholders of
Wiremedia.com Ninth Enterprise
Service Group
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Number 6,800,000 130,000 6,930,000
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Percentage 98% 2% 100%
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The merger presents some risks. We suggest you review "Risk Factors" beginning
on page 9.
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 for
shareholders of Wiremedia.com /prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is ____, 2000.
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SUMMARY
This summary provides a brief overview of the key aspects of this offering.
The merger agreement is filed as an exhibit to this registration statement.
The Companies
Ninth Enterprise Service Group, Inc.
2503 W. Gardner Ct.
Tampa, FL 33611
Telephone: 813/831-9348
Ninth Enterprise Service Group was organized as a corporation under the laws of
the state of Florida in April, 1999. Since inception, its primary activity has
been directed to organizational efforts. It was 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. Ninth Enterprise Service Group has now identified
Wiremedia.com as the entity Ninth Enterprise Service Group wishes to acquire.
Ninth Enterprise Service Group is not searching for additional acquisition
candidates.
It has never offered or sold any securities in either a registered or
unregistered transaction except for issuing shares to its 14 stockholders upon
its formation.
Ninth Enterprise Service Group is not currently a company which is listed for
trading on the OTC Bulletin Board. Before securing approval of an application to
be listed on the OTC Bulletin Board, Ninth Enterprise Service Group must first
have this registration statement declared effective. Public Securities, an NASD
Market Maker, has agreed to file a form 211 to secure a listing on the OTC
Bulletin Board. Ninth Enterprise Service Group believes that the NASD will not
approve this application until this registration statement has been declared
effective. After this task has been accomplished, the NASD and the Market Maker
must resolve all outstanding issues that the NASD may have in order for trading
to commence.
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.
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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
More than 80% 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 more than 80% of Ninth Enterprise Service Group's common stock have
executed a written consent voting to approve the merger. No further consent 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% 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 prospectus. Based upon the ownership of more than 50% of Wiremedia.com
common stock by officers, directors and affiliates, it appears that a favorable
vote is assured.
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.
Dissenters' rights
Dissenters' rights of appraisal exist. In general, under Florida law, any
shareholder who does not give consent for the merger and files a written demand
for appraisal with Wiremedia.com within 20 days after receiving notice of the
merger will be paid the fair market value of the shares on the date of the
closing of the merger, as determined by the board of directors of Wiremedia.com.
If you wish to exercise these rights, you must not consent in writing or
otherwise vote in favor of the merger, must file a written demand within the
prescribed time period, and follow other procedures. These rights the way you
exercise them are discussed in greater detail beginning on page ___.
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.
Neither Wiremedia.com nor its holders of its common stock should recognize gain
or loss for federal income tax purposes as a result of the merger.
Other Information for Wiremedia.com Stockholders:
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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 contact:
Colby Fede, President
Wiremedia.com, Inc.
1355 W Palmetto Park Rd. Suite 180,
Boca Raton, FL 33486
Phone 561-362-8236
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 the financial
statements and the notes, which are included in this 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 August 31, 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
August 31
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2000
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Income Statement Data:
Revenues 0
General, administrative, and 180,086
selling expenses
Loss before taxes (180,086)
Income tax expense 0
Net loss (180,086)
Common Share Data:
Net loss per share 0.03
Book value (0.01)
Weighted average common shares
Outstanding (in 000s) 6,513,591
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Period end shares outstanding 6,604,900
(in 000s)
Balance Sheet Data:
Total assets 69,718
Working deficit (42,917)
Shareholders' deficit (42,917)
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 6,079
Net loss per share 0.00
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
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(unaudited)
Numerator - basic and diluted
LOSS per share
Net loss before and
after merger $ 180,086
=============
Denominator - Basic LOSS
per share
Common stock outstanding
before merger 6,800,000
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Common stock outstanding
after merger 6,930,000
=============
Basic and diluted loss per
share before Merger* $ 0.03
=============
Basic and diluted loss per
share after merger* $ 0.03
=============
* Convertible notes, convertible preferred stock, options and warrants are
considered anti-dilutive and not included in the above calculations
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RISK FACTORS
RISKS CONCERNING Wiremedia.com.
Wiremedia.com is a new company and has no operating history. Wiremedia.com's
e-commerce software and solutions have not been completely developed and may
never be successfully developed. These factors make it difficult to evaluate its
potential success in implementing its business plan and to forecast its
operating results. It may never achieve profitable operations.
Wiremedia.com was incorporated in January 2000, and, as such, has no operating
history. The Internet in general and the market for e-commerce software and
solutions is new and relatively uncertain. The new, competitive, fragmented and
rapidly changing nature of the e-commerce software and solutions market
increases these risks and uncertainties. Wiremedia.com cannot assure you that
its product development will be successful. Even if product development is
successful, Wiremedia.com does not know whether customers will use e-commerce
software and solutions. If they don't, its business will not be successful.
Wiremedia.com needs to obtain at least $2 million in additional financing in the
next 12 months or it may not be able to continue operations, in which case the
stock issued in the merger will probably have no value.
Wiremedia.com does not have sufficient working capital to continue operations
for the next 12 months. Wiremedia.com needs at least $2 million in financing
during the next 12 months or Wiremedia.com may have to cease operations. If
Wiremedia.com does not secure this additional financing in the next 12 months,
then shareholders of Wiremedia.com will probably lose their entire investment.
No source of this funding has currently been located.
Wiremedia.com has a history of losses and expects to incur future losses.
We incurred net losses from inception through June 30, 2000. As of June 30,
2000, we had an accumulated deficit of approximately $180,000. Wiremedia.com has
not achieved profitability and expect to continue to incur net losses for the
foreseeable future. Wiremedia.com expects to continue to devote substantial
resources to Wiremedia.com's product development, sales, marketing and customer
support activities. As a result, Wiremedia.com will need to generate significant
working capital until Wiremedia.com's solution is available for formal release.
At that time Wiremedia.com will need significant quarterly revenues to achieve
and maintain profitability. Wiremedia.com expects 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.
Wiremedia.com's ultimate success as a going concern primarily depends on market
acceptance of Wiremedia.com's e-commerce software and solutions. If there is not
sufficient acceptance, Wiremedia.com will go out of business and any investment
in Wiremedia.com's shares will be lost.
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Wiremedia.com's future financial performance will depend substantially on
Wiremedia.com's ability to develop and maintain market acceptance of
Wiremedia.com's e-commerce software and solutions, Wiremedia.com's Intranet
Prospecting Automation and Sales Management service, and new and enhanced
versions of Wiremedia.com's e-commerce software and solutions and other new
Wiremedia.com's e-commerce software and solutions. Wiremedia.com expects
subscriber revenues from Wiremedia.com's e-commerce software and solutions to
account for a substantial majority of Wiremedia.com's revenues for the
foreseeable future. As a result, factors which interfere with decisions
concerning pricing or demand for Wiremedia.com's e-commerce software and
solutions, such as competition, technological change or evolution in customer
preferences, could cause it never to attain profitable operations.
The market for Wiremedia.com's e-commerce software and solutions is still
emerging and continued growth in demand for and acceptance of Wiremedia.com's
e-commerce software and solutions remains uncertain. The success of
Wiremedia.com's business in the face of intense competition will depend on
growth of the overall market for Wiremedia.com's e-commerce software and
solutions. Wiremedia.com will spend considerable resources targeting small and
home-based business segments of the market, educating potential customers about
Wiremedia.com's e-commerce software and solutions and software solutions in
general and developing Wiremedia.com's 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 Wiremedia.com's e-commerce
software and solutions may not increase unless the market for Wiremedia.com's
e-commerce software and solutions continues to grow. If the market for
Wiremedia.com's 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 Wiremedia.com
estimates, Wiremedia.com's revenues and potential profits would be hurt.
Wiremedia.com's ability to compete effectively depends upon third parties
continuing to deliver, support and enhance current and new versions of software
incorporated into Wiremedia.com's products. Their failure to do so could reduce
or eliminate Wiremedia.com's revenues or profits.
Wiremedia.com plans to incorporate into Wiremedia.com's products, software that
may be licensed to it by third Parties, including Microsoft, Informix, Sun
Microsystems, BellSouth Communications, and various other providers of
infrastructure technology. Because Wiremedia.com's products incorporate, or are
created using, software and solutions developed and maintained by third parties,
we depend on the parties' abilities to deliver, support and enhance reliable
products, develop new products and respond to emerging industry standards and
other technological changes. It also plans to rely heavily on software
development tools to build many key components of Wiremedia.com's 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 Wiremedia.com's application programs, requiring a
substantial amount of time to rewrite Wiremedia.com's e-commerce software and
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solutions in a new language, which could have a material adverse effect on
Wiremedia.com's business, financial condition and operating results. The
third-party software currently incorporated into or used in Wiremedia.com's
products may become obsolete or incompatible with future versions of
Wiremedia.com's products. Wiremedia.com's sales could be reduced if
wiremedia.com is unable to replace that software with comparable or better
software.
Wiremedia.com intends to rely on strategic marketing alliances with online
providers. If we don't develop these relationships, or if they are not
successful, it could reduce or eliminate Wiremedia.com's revenues or profits.
Wiremedia.com plans to enter into marketing agreements to generate leads and
visitors to Wiremedia.com's website. We may not achieve sufficient online
traffic, or generate sufficient sales to realize economies of scale that justify
Wiremedia.com's planned significant fixed financial obligations to future
marketing relationships, or to satisfy Wiremedia.com's projected contractual
obligations necessary to prevent termination of any agreements. In addition,
these planned marketing agreements will not provide it with automatic renewal
rights upon expiration of their respective terms. The agreements if entered into
may not be renewed on commercially acceptable terms, or at all. Wiremedia.com's
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.
The demand for Wiremedia.com's e-commerce products and solutions is cyclical,
and as such, Wiremedia.com expects to experience fluctuations in Wiremedia.com's
quarterly operation results which could cause the trading price of
Wiremedia.com's stock to vary.
The level of demand for Wiremedia.com's 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, it should have greater revenues in this period
than other periods of the year, resulting in potentially significant variations
in Wiremedia.com's quarterly operating results from quarter to quarter.
We may not recognize revenue when anticipated, which may cause Wiremedia.com's
operating results and stock trading price to vary widely.
Wiremedia.com has not yet established a sales cycle for Wiremedia.com's
e-commerce products and solutions since it has just been developed. The sales
cycle for Wiremedia.com's product may be variable, typically ranging between a
few hours to several months from initial contact with the customer to the
acquisition of Wiremedia.com's 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 Wiremedia.com's
operating results to vary widely. Wiremedia.com believes 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
Wiremedia.com's budget cycles. To successfully sell Wiremedia.com's e-commerce
software and solutions, it generally must educate Wiremedia.com's potential
customers regarding the use and benefit of Wiremedia.com's e-commerce software
and solutions, which can require significant time and resources.
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Changes in accounting standards could reduce or eliminate Wiremedia.com's
reported revenues or profits.
Wiremedia.com recognizes 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.
Wiremedia.com will recognize customer support or maintenance revenues ratably
over the contract term, typically one year, and recognize revenues for
consulting and training Wiremedia.com's e-commerce software and solutions as
such Wiremedia.com's 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"). Wiremedia.com plans to
adopt SOP 97-2 effective July 1, 2000. Based on Wiremedia.com's interpretation
of SOP 97-2 and SOP 98-4, wiremedia.com believes Wiremedia.com's 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, implementation guidance could lead to unanticipated
changes in Wiremedia.com's planned revenues accounting practices, which changes
could materially adversely affect Wiremedia.com's business, financial condition
and operating results.
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.
Wiremedia.com's customers must renew their contracts annually. If customers do
not renew their contracts, Wiremedia.com's revenues would be hurt.
Wiremedia.com anticipates that it will derive a significant portion of its
revenues from the sale of its e-commerce software and solutions. As a result,
its quarterly operating results will depend heavily on sales revenues received
from customers within the quarter and on its ability to adjust spending in a
timely manner to compensate for any unexpected revenue shortfall. If customers
stop purchasing its products or if Wiremedia.com fails to obtain new customers
in any quarter, its revenues could be reduced.
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Third parties could independently develop technologies similar to or better than
those Wiremedia.com offers. Wiremedia.com's revenues could be reduced or
eliminated if this happens.
Third parties could independently develop technologies similar or superior to
Wiremedia.com's technologies but which do not violate any of Wiremedia.com's
intellectual property rights, such as its planned copyrights and trademarks.
This could cause Wiremedia.com to lose customers or potential customers. This is
particularly true for its customers who Wiremedia.com believes are interested in
the most sophisticated, up-to-date technologies.
Wiremedia.com's future revenues and profits will be substantially dependent upon
the widespread acceptance of the Internet as a medium for locating e-commerce
software and solutions by customers. The ultimate demand for use of e-commerce
software and solutions on the internet uncertain. If there is not sufficient
demand for e-commerce software and solutions, its business will not be
successful.
Rapid growth in the acceptance and use of the Internet for the sale of products
and services is a recent phenomenon. This acceptance and use may not continue.
Because global online commerce is new and evolving, Wiremedia.com cannot predict
whether the Web will prove to be a viable commercial marketplace in the long
term.
In order to develop and expand its customer base, Wiremedia.com must appeal to
customers who historically have used traditional means of locating customers. If
Wiremedia.com doesn't attract customers, its business will suffer.
Customers acquiring products and services similar to those Wiremedia.com offers
may be reluctant or slow to use Wiremedia.com's e-commerce software and
solutions, which would hurt its ability to generate revenues. Wiremedia.com
cannot guarantee that those customers using more traditional methods 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 customers 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. Wiremedia.com's
security measures may not prevent security breaches. The failure by
Wiremedia.com to prevent security breaches could harm its 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 Wiremedia.com to protect customer transaction data. Any such compromise
of its security could harm its reputation and, therefore, its business. In
addition, a party who is able to circumvent its security measures could
misappropriate proprietary information or cause interruptions in its operations.
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The success of Wiremedia.com's business marketing e-commerce software and
solutions will depend largely on the development and maintenance of web
infrastructure. Problems with development and maintenance of this infrastructure
could decrease the growth of customers of the web. It could also increase costs
of Wiremedia.com's products and services. These web-related infrastructure
problems could hurt Wiremedia.com's 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 as timely development of complementary products such as high speed
modems, for providing reliable access to Wiremedia.com's 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 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.
The web could be damaged by outages and other delays as a result of damage to
portions of its infrastructure. Heavy stress placed on systems could cause them
to operate at unacceptably low speed or fail. 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 its network
by a third party could also result in system failures or service interruptions.
Although it has not experienced any of these problems to date, outages and
delays that occur in the future could reduce the level of usage of the web as
well as the level of traffic to and revenues generated from e-commerce software
and solutions on its site.
Problems with web infrastructure could also increase costs of use of the web. If
it costs customers more to access the internet, there may be fewer customers
than anticipates. If it costs Wiremedia.com more to maintain its sites, its
prices may increase and demand may decrease.
Wiremedia.com's ability to successfully sell to customers and provide high
quality customer service largely depends on the efficient and uninterrupted
operation of its internal infrastructure. If Wiremedia.com's internal computer
and communications systems are inadequate or fail to perform, its business could
be hurt.
Substantially all of its management systems are located at its corporate offices
in Florida. Wiremedia.com contracts with a third party for mission critical
Internet connectivity, and these systems are located at a single location in
Arlington, Va. Wiremedia.com does not have a formal disaster recovery plan and
does not carry business interruption insurance to compensate Wiremedia.com for
losses that may occur. Any failure of these internal systems could cause its
business to be harmed.
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Application of existing laws and regulations governing issues such as property
ownership, copyrights and other intellectual property issues, taxation, libel,
obscenity and personal privacy by governmental agencies is uncertain. Any
adverse application of these laws and regulations or new laws or regulations
could reduce Wiremedia.com's revenues, increase the cost of doing business as a
result of litigation costs, increase service delivery costs, or otherwise harm
its business.
The vast majority of these laws and regulations governing Wiremedia.com's
operations 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. The federal government or one
or more states may attempt to impose these regulations upon Wiremedia.com in the
future, which could harm its business.
Several states have proposed legislation that would limit the uses of personal
user information gathered online or require online its various products and
services and those of its third party customers 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 Wiremedia.com does business or could create uncertainty in the marketplace.
This could reduce demand for its various products and services, increase the
cost of doing business as a result of litigation costs or increased service
delivery costs, or otherwise harm its business.
In addition, because its products and services are accessible worldwide, and
Wiremedia.com sells to customers worldwide, foreign jurisdictions may claim that
Wiremedia.com is required to comply with their laws. Wiremedia.com's failure to
comply with foreign laws could subject Wiremedia.com to penalties ranging from
fines to bans on its ability to offer its various products and services.
In the United States, companies are required to qualify as foreign corporations
in states where they are conducting business. If Wiremedia.com is required to
qualify and doesn't, its business could be hurt.
As a company conducting business on the internet, it is unclear in which states
Wiremedia.com is actually conducting business. Its failure to qualify as a
foreign corporation in a jurisdiction where Wiremedia.com is required to do so
could subject Wiremedia.com to taxes and penalties for the failure to qualify
and could result in its 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 its business, could harm
its business.
Wiremedia.com's business may be subject to sales and other taxes. A successful
assertion by one or more states or any foreign country that Wiremedia.com should
collect sales or other taxes on revenues generated from its operations could
harm its business.
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Wiremedia.com does not plan to collect sales or other similar taxes on revenues
generated from e-commerce software and solutions. One or more states may seek to
impose revenues tax collection obligations on companies such as Wiremedia.com
that engage in or facilitate online commerce. Several proposals have been made
at the state and local level that would impose additional taxes on revenues
generated from the sale of goods or services through the Internet. These
proposals, if adopted, could substantially impair the growth of electronic
commerce, and could diminish its opportunity to derive financial benefit from
its 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 its income, if any, or from collecting taxes that are due under
existing tax rules.
Because its products and services are accessible worldwide and Wiremedia.com may
sell to customers worldwide, foreign jurisdictions may claim that Wiremedia.com
is required to pay sales or other similar taxes.
Wiremedia.com's business may be harmed by litigation related to sale or use of
e-commerce software and solutions.
The law relating to the liability of providers of online products and services
for their activities and the activities of their customers is currently
unsettled. Wiremedia.com could be sued for any problems which occur in or result
from revenues generated from e-commerce software and solutions. These claims
have been brought, and sometimes successfully litigated, against online product
and service providers.
Any resulting litigation could:
o Be costly for Wiremedia.com.
o Divert management attention from the operation of its business.
o Result in increased costs of doing business.
o Lead to adverse judgment.
o Otherwise harm its business.
In addition, in the event that Wiremedia.com implements a greater level of
interconnectivity on its site, Wiremedia.com will not and cannot practically
screen all of the content generated or accessed by its customers, and
Wiremedia.com could be exposed to liability with respect to this content.
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Although Wiremedia.com plans to carry general liability insurance, it may not,
and even if it does, its insurance may not cover claims of these types or may
not be adequate to indemnify Wiremedia.com for all liability that may be
imposed.
If Wiremedia.com becomes liable for any of these claims, particularly liability
that is not covered by insurance or is in excess of insurance coverage,
Wiremedia.com could be directly harmed and Wiremedia.com may be forced to
implement new measures to reduce its exposure to this liability. This may
require Wiremedia.com to expend substantial resources and to discontinue some
product or service offerings. In addition, the increased attention focused upon
liability issues as a result of these lawsuits could harm its reputation or
otherwise harm the growth of its business.
Wiremedia.com may experience substantial demands and changes in the development
and expansion of its business and operations. If Wiremedia.com does not
successfully cope with problems arising from these demands and changes, its
business could be hurt.
Wiremedia.com anticipates that it will grow rapidly. This rapid growth is likely
to place a significant strain on its managerial, operating, financial and other
resources, including its ability to ensure customer satisfaction. For example,
as its customer base grows, and the need for high capacity Internet data
transmission capability expands, Wiremedia.com will need to acquire substantial
network capacity to support its needs. Its expansion efforts also require
significant time commitments from its senior management and place a strain on
their ability to manage existing business. Wiremedia.com also may be required to
manage multiple relationships with third parties as Wiremedia.com expands its
enhanced value product or service offerings. Its future performance will depend,
in part, upon its ability to manage this growth effectively. To that end,
Wiremedia.com will have to undertake the following improvements, among others:
o Implement additional management information systems capabilities
o Upgrade existing or develop new e-commerce software and solutions
o Further develop its operating, administrative and financial and accounting
systems and controls
o Improve coordination between its engineering, accounting, finance,
marketing and operations
o Hire and train additional personnel
Wiremedia.com may choose to expand its operations by developing and promoting
new or complementary e-commerce software and solutions or related revenues
formats, expanding the breadth and depth of e-commerce software and solutions
offered or expanding its market presence through relationships with third
parties.
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In addition, Wiremedia.com may broaden the scope and content of its site through
the acquisition of existing online customers of e-commerce software and
solutions. Although no such acquisitions are currently being negotiated, any
future acquisitions would expose Wiremedia.com to increased risks, including
risks associated with the assimilation of new operations, sites and personnel,
the diversion of resources from its 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.
Wiremedia.com's operating results primarily depend upon the support of
e-commerce software and solutions by its sales and customer service team. Its
failure to do so could reduce its revenues..
Wiremedia.com's success will continue to depend significantly on its ability to
rapidly and successfully deploy e-commerce software and solutions for its
customers and buyer customers. Its revenues and distribution strategy focuses
primarily on developing a direct inside sales team and, to a lesser extent,
developing an outside direct sales organization. Wiremedia.com will also have to
provide excellent customer service.
Wiremedia.com anticipates increased expenses as it expands its business. These
expenses may cause future operating results to fluctuate significantly and
possibly fail to meet or exceed the expectations of securities analysts or
investors, causing its stock price to decline.
Wiremedia.com plans to increase its operating expenses and to expand its product
development, sales, marketing and customer support activities. Its decisions
regarding its operating expenses and anticipated revenue trends may be
incorrect. Many of its expenses are relatively fixed in the short term.
Wiremedia.com may not be able to reduce its expenses if its revenues are lower
than anticipated, which could cause its operating results to be below the
expectations of public market analysts or investors, causing the price of its
common stock to fall after Wiremedia.com commences trading.
Wiremedia.com has taken no steps to adequately protect its proprietary rights or
avoid infringement of third party proprietary rights, which could result in
costly litigation. These costs would increase if Wiremedia.com did not prevail.
Any significant litigation could harm its business.
Wiremedia.com's success depends in part on its ability to protect its
proprietary rights. Wiremedia.com 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 e-commerce software and solutions and obtain and use
information that Wiremedia.com regard as proprietary. Other parties may breach
confidentiality agreements and other protective contracts with Wiremedia.com and
Wiremedia.com may not become aware of, or have adequate remedies in the event
of, such breach.
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To protect its proprietary rights, Wiremedia.com plans 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 Wiremedia.com has not signed such
agreements at this time. Wiremedia.com will employ security access tools
designed to restrict the unauthorized use of e-commerce software and solutions
but such tools may be difficult to enforce. It may be more difficult to protect
its proprietary rights outside the United States.
A third party may assert a claim that Wiremedia.com's technology violates its
intellectual property rights. As the number of e-commerce software and solutions
in its markets increases and product functionalities increasingly overlap,
Wiremedia.com 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 management's attention
and company resources, or require Wiremedia.com to pay damages or enter into
royalty or license agreements on terms that are not advantageous to it.
Wiremedia.com has not commenced any formal action to trademark its name. Others
may take its name, and this could cause Wiremedia.com to lose customers or
potential customers.
There is a chance technological changes will make Wiremedia.com's business
obsolete.
There can be no assurance that research and discoveries by others will not
render its operations noncompetitive or obsolete. Its business strategy is
subject to the risks inherent in the development of new products using new
technologies and approaches. There can be no assurance that unforeseen problems
will not develop with these technologies or applications, or that we will be
able to successfully address technological the challenges we encounter by using
alternative methods for generating revenues.
Wiremedia.com must retain and recruit key personnel. If we don't its business
could suffer because its revenues may be reduced if we cannot recruit or lose
these key employees.
Wiremedia.com's business is dependent on the services of Colby Fede and Irene
MacAllister. It anticipates the addition of several key employees during the
year 2000. It will seek to have key personnel subject to non-compete covenants,
but may find that employees will sign them or honor them. The loss of any of its
senior management or other key technical, customer support, revenues and
marketing personnel, particularly if lost to competitors, could harm its
business. Key executives have not yet functioned together as a formal management
team. Accordingly, its executive management's ability to function effectively as
a team is unproven.
Wiremedia.com's success also depends upon its ability to attract and retain
highly skilled management and other personnel. Competition for highly skilled
employees with technical, management, marketing, revenues, product development
and other specialized training is intense and Wiremedia.com may not be
successful in attracting and retaining these kinds of personnel. In addition, it
may experience increased costs in order to attract and retain skilled employees.
Wiremedia.com's management is only devoting 50% of their time to its business.
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Conflicts in interest in deciding how to devote their available time may cause
its business not to succeed or to be less successful due to reduced generation
of revenues than if they devoted full time to its business.
Under their employment agreements, Wiremedia.com's management is only required
to devote half of their business time to it and the other half will be devoted
to Biztalk.com, another business with which they are associated. Their devoting
less than full time to its business could reduce its revenues in the future.
Wiremedia.com's management has significant control over stockholder matters,
which may impact the ability of minority stockholders to influence
Wiremedia.com's activities.
Wiremedia.com's 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 its certificate of incorporation and
approval of significant corporate transactions. These persons will beneficially
own, in the aggregate, approximately 85% of its 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.
The price of Wiremedia.com's stock may fall if, after the merger,
Wiremedia.com's insiders sell a large number of their shares. It may also fall
if non-insiders sell their shares as well. This could reduce the price for which
Wiremedia.com's shareholders may be able to sell their shares.
After the merger, 2 of Wiremedia.com's 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 800,000
non-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.
One hundred thirty thousand of these post merger non-insider shares are owned by
Mr. Williams and his affiliates, which include his son, nieces and nephews,
family property trust and employee. These shares were issued upon formation of
Ninth Enterprise Service Group. In January 2000 the SEC staff announced that
shares of a blank check company were not eligible for resale under Rule 144 at
any time a company remained a blank check company. These 130,000 shares cannot
be resold under Rule 144 or otherwise until after this registration statement
has been declared effective and the merger closed. At that time, the shares will
be shares in an operating company and not a blank check company. At that time,
there will be available the kind of adequate public information that Rule 144
requires. In addition, these shares were issued as founder's shares upon
formation of Ninth Enterprise Service Group for investment purposes only, to
create an opportunity for wealth generation in the next generation of Mr.
Williams' family and his employee, not with any intent that they be resold in
any kind of securities distribution. Based upon the foregoing, these 130,000
shares are restricted securities eligible for resale under Rule 144 following
the closing of the merger.
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MERGER APPROVALS
On August 24, 2000, 2000, Michael T. Williams as the sole member of its board of
directors approved the merger proposal. Stockholders owning more than 90% of the
stock of Ninth Enterprise Service Group approved the merger proposal at the same
time.
On August 24, 2000, the board of directors of Wiremedia.com unanimously approved
the merger proposal. Based upon the ownership of more than 50% of Wiremedia.com
common stock by officers, directors and affiliates, it appears that a favorable
vote by stockholders of Wiremedia.com is assured.
MERGER TRANSACTION
The merger agreement provides 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. The
following table contains comparative share information for shareholders of
Wiremedia.com and Ninth Enterprise Service Group immediately after the closing
of the merger.
-------------------------------------------------------------------------
The former The current Total
shareholders of shareholders of
Wiremedia.com Ninth Enterprise
Service Group
-------------------------------------------------------------------------
Number 6,800,000 130,000 6.930,000
-------------------------------------------------------------------------
Percentage 98% 2% 100%
-------------------------------------------------------------------------
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's articles and bylaws
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 receipt
of shares of its name common stock as set forth in your state's law. The
agreement also provides for the payment to Ninth Enterprise Service Group of a
Merger Fee in the amount of $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 the shares of Ninth Enterprise Service Group will be
outstanding capital stock of Ninth Enterprise Service Group after the closing of
the merger.
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The merger will be consummated promptly after this 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 cease to
exist and Ninth Enterprise Service Group will be the surviving corporation in
the merger.
Fractional shares.
As of the date of this 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, its name will seek to become listed on the over the
counter bulletin board under the symbol "WIRM." 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.
Background of the merger
As discussed under Ninth Enterprise Service Group Business, Ninth Enterprise
Service Group was 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. Ninth
Enterprise Service Group agreed to acquire Wiremedia.com because this was
Wiremedia.com's objective.
Although other methods of achieving its objectives were available, including
alternate forms of SEC registration statements, Wiremedia.com chose the method
involving a reverse merger with Ninth Enterprise Service Group because it
believes the optimal way for it to achieve its objectives of becoming an SEC
reporting company in order thereafter to secure a listing on the over the
counter bulletin board is:
o To be acquired by an acquisition company
o To have securities to be issued to its shareholders upon the merger
registered on Form S-4
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o To have that registration statement declared effective before holding a
formal vote on the proposed merger
Wiremedia.com also believes this method is the optimal way for it to:
o Increase the visibility of Wiremedia.com's business, which could be
helpful in further developing and commercializing Wiremedia.com's
products.
Wiremedia.com believes that public, trading companies have greater
visibility than private companies.
o Facilitate Wiremedia.com's ability to raise capital in the public markets.
Wiremedia.com believes that public, trading companies have an easier
time raising capital than private companies.
o Potentially improve Wiremedia.com's stockholders' ability to sell their
shares in the over-the-counter market.
Wiremedia.com believes that public, trading companies provide
greater investor liquidity than private companies.
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
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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.
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 prospectus and agreed to pay a
merger fee to Ninth Enterprise Service Group, 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.
Wiremedia.com believes that public, trading companies have greater
visibility than private companies.
o Facilitate Wiremedia.com's ability to raise capital in the public markets.
Wiremedia.com believes that public, trading companies have an easier
time raising capital than private companies.
o Potentially improve Wiremedia.com's shareholders' ability to sell their
shares in the over-the-counter market.
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Wiremedia.com believes that public, trading companies provide
greater investor liquidity than private companies.
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 all the material federal income tax
consequences of the merger. This discussion is based on currently existing
provisions of the Internal Revenue code of 1986, existing and proposed Treasury
Regulations and current administrative rulings and court decisions, all of which
are subject to change. Any change, which may or may not be retroactive, could
alter the tax consequences to the Wiremedia.com shareholders, as described
below.
Wiremedia.com has addressed this opinion to most of the typical shareholders of
companies such as Wiremedia.com. However, some special categories of
shareholders listed below will have special tax considerations that need to be
addressed by their individual tax advisors:
o Dealers in securities
o Banks
o Insurance companies
o Foreign persons
o Tax-exempt entities
o Taxpayers holding stock as part of a conversion, straddle, hedge or other
risk reduction transaction
o Taxpayers who acquired their shares in connection with stock option or
stock purchase plans or in other compensatory transactions
We also do not address the tax consequences of the merger under foreign, state
or local tax laws.
We strongly urge 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 Industry Co. 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. The tax
opinions will not be binding on the IRS or preclude the IRS from adopting a
contrary position.
It is the opinion of Williams Law Group, P.A., counsel to Ninth Enterprise
Service Group Industry Co., that the merger will constitute a reorganization
under Section 368(a) of the code. The tax description set forth below has been
prepared and reviewed by Williams Law Group, and in their opinion, to the extent
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the description relates to statements of law, it is correct in all material
respects. In a prior filing of a similar transaction with the Securities and
Exchange Commission, the staff requested us to add a statement that the
following tax consequences are implicit in the firm's opinion that the merger is
a 368(a) reorganization.
As a result of the merger's qualifying as a reorganization, the following
federal income tax consequences will, under currently applicable law, result:
o 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 Industry Co. common stock solely in exchange for
Wiremedia.com common stock in the merger, except to the extent that cash
is received by the exercise of dissenters' rights.
o The aggregate tax basis of the Ninth Enterprise Service Group Industry Co.
common stock 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.
o The holding period of the Ninth Enterprise Service Group Industry Co.
common stock received by each Wiremedia.com shareholder in the merger will
include the period for which the Wiremedia.com common stock surrendered in
merger 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.
o A holder of Wiremedia.com common stock who exercises dissenters' rights
for the Wiremedia.com common stock and receives a cash payment for the
shares generally will recognize capital gain or loss, if the share was
held as a capital asset at the closing of the merger, measured by the
difference between the shareholder's basis in the share and the amount of
cash received, provided that the payment is not essentially equivalent to
a dividend within the meaning of Section 302 of the code or does not have
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.
o Neither Ninth Enterprise Service Group Industry Co. nor Wiremedia.com
will recognize gain solely as a result of the merger.
o There is a continuity of interest for IRS purposes with respect to the
business of Wiremedia.com. This is because shareholders of Wiremedia.com
have represented to us that they will 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 Industry Co.
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 Ninth Enterprise Service Group
Industry Co. after the merger. Its opinion is based upon IRS ruling
guidelines that require eighty percent continuity, although the
guidelines do not purport to represent the applicable substantive law.
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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
o the sum of the fair market value, as of the closing of the
merger, of the Ninth Enterprise Service Group Industry Co. common
stock issued in the merger plus the amount of the liabilities of
Wiremedia.com assumed by Ninth Enterprise Service Group Industry
Co.
and
o Wiremedia.com's basis in the 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 the share and the fair
market value, as of the closing of the merger, of the Ninth Enterprise
Service Group Industry Co. common stock received in merger therefore.
In this event, a shareholder's aggregate basis in the Ninth Enterprise Service
Group Industry Co. common stock so received would equal its fair market value
and the shareholder's holding period for this 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 Industry Co. common stock would recognize income to the
extent if, among other reasons any 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, 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 Industry Co. common
stock in merger for Wiremedia.com's shareholder's common stock, gain or loss
would have to be recognized.
It is a condition to Wiremedia.com's obligations to consummate the merger that
the holders of no more than 10% of the outstanding shares of Wiremedia.com's
common stock are entitled to dissenters' rights. If demands for payment are made
with respect to more than 10%, of the outstanding shares of Wiremedia.com's
common Stock, and, as a consequence more than 10% of the shareholders of
Wiremedia.com's become entitled to exercise dissenters' rights, then
Wiremedia.com will not be obligated to consummate the merger.
Termination.
At any time prior to closing, the merger agreement may be terminated, and the
merger abandoned under certain circumstances, including:
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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
--------------------------------------------------------------------------------
Florida, if Del, substitute Section 262, Delaware Business Law.
--------------------------------------------------------------------------------
The following summary of dissenters' rights under Florida law is qualified in
its entirety by reference to chapter 607, Florida Statutes. All material terms
of chapter 607 are summarized below. Ninth Enterprise Service Group has filed
copies of these statutes as exhibits to the registration statement.
Under Florida law, a Wiremedia.com shareholder who does not give consent for the
merger and otherwise does not vote for the merger and files a written demand for
appraisal with Wiremedia.com within 20 days after receiving notice will be paid
the fair market value of the shares on the date of the closing of the merger, as
determined by the board of directors of Wiremedia.com. If a Wiremedia.com
shareholders wishes to exercise these rights, he or she must not give written
consent to the merger and otherwise does not vote for the merger, must file the
written demand within the prescribed time period, and follow other procedures.
Within 20 days after Wiremedia.com has given notice, any shareholder of
Wiremedia.com who elects to dissent shall file with the corporation a notice of
the 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. Fair value means the value of the shares as
of the close of business on the day prior to the merger authorization date,
excluding any appreciation or depreciation in anticipation of the merger unless
exclusion would be inequitable.
Any shareholder failing to file this election to dissent within the 20 day
period is bound by the terms of the proposed merger. Any shareholder filing an
election to dissent must deposit his or her certificates for certificated shares
with Wiremedia.com simultaneously with the filing of the election to dissent.
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Upon filing a notice of election to dissent, the shareholder is thereafter
entitled only to payment for dissenting and is not entitled to vote or to
exercise any other rights of a shareholder.
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 the certificates are delivered to the transfer agent, accompanied
by all documents required to evidence the 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 the certificates to
be lost, mislaid or destroyed.
o The bond, security or indemnity as the parent corporation and the
merger agent may reasonably require.
o Any other documents necessary to evidence and effect the bona fide
merger, the transfer agent shall issue to holder the shares into which
the shares represented by the 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 thereby
other than the right to surrender the certificates and receive in merger the
shares of Ninth Enterprise Service Group common stock to which the holders are
entitled.
WIREMEDIA.COM'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND PLAN OF OPERATIONS
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Plan of operations
Wiremedia.Com, Inc. began implementing phases of its business plan in
January 2000. We began by purchasing domain names and have developed a database
of over 5,000 small businesses within various industry groups.
Our web site will present a variety of information that we believe will be
of interest to future customers. We will provide several categories of
information, including:
o our services - information about the various RFP services that we provide.
o rates - a section for potential customers to obtain quotes from us
o about us - a description and background of us
o employment - an explanation of the types of employees we are seeking
o news - current information about us
o contact us - our address, phone/fax number and email address
Since early June 2000, we began to identify technical & sales personnel that
could be hired as full-time employees. Other small companies have been
identified for strategic relationships or possible acquisitions due to the
complementary nature of their business and their desirable client base. Based
upon our recent conversations with qualified individuals, we are comfortable
that we can secure appropriate technical personnel and account representatives
as needed and in an economical manner, to satisfy a wide variety of possible
projects from future clients. To date, we have not hired any employees. We plan
to continue to identify suitable employees so that we have a wide range to
select from when we need them.
Revenues
We have not generated any revenues as of this date. We intend to generate
revenue by distributing a Request for Quote(RFP) service to many joint partner
websites. Our service will allow small business owners to place bids for
specific products or services it requires. Suppliers of the products or services
registered within our system will respond to the bids placed within the sytem.
We intend to bill the majority of our engagements on a per bid basis. Suppliers
will be billed each time to they bid on an RFP posted by a buyer. Residual
income will also be generated from leads that result in sales.
Cost of revenues
As we grow, our operating expenses will increase in connection with building
and maintaining our team of technical, sales, general and administrative staff
needed to support our growth.
Sales and marketing expenses will consist primarily of compensation for
account executives, travel, public relations, sales and other promotional
materials, trade shows, advertising, and other sales and marketing programs. We
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expect to continue to increase our sales and marketing expenses in absolute
dollars in future periods to promote our brand, to pursue our business
development strategy and to increase the size of our sales force.
General and administrative expenses will consist primarily of compensation
for personnel and fees for outside professional advisors. We expect that general
and administrative expenses will continue to increase in absolute dollars in
future periods as we continue to add staff and infrastructure to support our
expected domestic and international business growth and bear the increased
expense associated with being a public company.
We anticipate that we will incur net losses for the foreseeable future. The
extent of these losses will be contingent, in part, on the amount of net revenue
generated from clients. There can be no assurance that our operating losses will
not increase in the future or that we will ever achieve or sustain
profitability.
Limited operating history
Our limited operating history makes predicting future operating results very
difficult. We believe that you should not rely on our current operating results
to predict our future performance. You must consider our prospects in light of
the risks, expenses and difficulties encountered by companies in new and rapidly
evolving markets. We may not be successful in addressing these risks and
difficulties.
Our fiscal year ends December 31.
Results of operations
For the period January 25, 2000 to August 31, 2000, we did not generate any
operating revenues and incurred a cumulative net loss of approximately $180,000.
Our operating expenses consist primarily of professional compensation costs
including accounting fees, consulting fees as well as programming costs.
The results of operations for the period January 25, 2000 to August 31, 2000
are not indicative of the results for any future interim period. We expect to
expand our business and client base, which will require us to increase our sales
and marketing and to hire additional employees, which will result in increasing
expenses.
Liquidity and capital resources
During February and March 2000, we raised gross proceeds of $89,624 from
the sale of equity to our founders.
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Our operating and capital requirements have exceeded our cash flow from
operations as we have been building our business. During the period January 25,
2000 to August 31, 2000 we used cash of approximately $67,500 for operating,
which have been primarily funded by $89,624 in proceeds from the sale of stock
and loan of approximately $30,000 from our president. At Jaugust 31, 2000 our
cash balance was $52,618 and our accrued expenses were $82,155.
We expect to make expenditures of at least $250,000 during the twelve months
following the closing of this offering. These expenditures will be used to
continue web site development, recruiting employees, payroll, begin sales and
marketing and for general operating expenditures.
We have an accumulated deficit and negative working capital and accordingly,
our ability to continue as a going concern is dependent upon obtaining
additional capital and financing for our planned operations.
As a result of our limited operating history, we have limited meaningful
historical financial data upon which to base planned operating expenses.
Accordingly, our anticipated expense levels in the future are based in part on
our expectations as to future revenue. Revenues and operating results generally
will depend on the volume of, timing of and ability to complete transactions,
which are difficult to forecast. In addition, there can be no assurance that we
will be able to accurately predict our net revenue, particularly in light of the
intense competition for Internet RFP service providers, our limited operating
history and the uncertainty as to the broad acceptance of the web and Internet.
We may be unable to adjust spending in a timely manner to compensate for any
unexpected revenue shortfall or other unanticipated changes in our industry. Any
failure by us to accurately make predictions would have a material adverse
effect on our business, results of operations and financial condition
Material agreements
To date, we have not entered into any arrangements with any corporate
customer.
In February 2000, we entered into a two-year employment agreement with
Colby Fede, our President and Irene MacAllister, our Vice-President. Mr. Fede
will be compensated $70,000 per year and Mrs. MacAllister will be compensated at
the rate of $60,000 per year. The agreement also provides for the issuance of
700,000 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 up to 50% of the aggregate number of shares held of
Convertible Preferred Stock - Series A into 10 shares common shares for each
share of Convertible Preferred Stock - Series A held convertible at any time, in
whole or in part, upon such time that there are Five Thousand or more registered
subscribers to Wiremedia.com or its affiliate internet websites and the
remainder convertible upon such time that there are Ten Thousand or more
registered subscribers to Wiremedia.com or its affiliate internet websites.
As of August 31, 2000, Mr. Fede, President, has receive 25,000 shares of the
Company's common stock as compensation for services provided on behalf of the
company.
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WIREMEDIA.COM BUSINESS
Wiremedia.com has continued to register suppliers of goods and services and
potential buyers of goods and services into its Business-to-Business(B2B)
supplier directory. Once launched, the buyers of goods and services who register
to use the Request for Quote(RFP) service will have access to the B2B supplier
directory. Buyers will be able to post RFPs and suppliers will pay Wiremedia a
set fee for the right to bid on each RFP posted by buyers. Wiremedia.com will
also generate additional revenue by charging suppliers a percentage of the sales
transacted through the system.
Wiremedia.com believes the current facilities will be adequate for its
anticipated growth and that we will be able to obtain additional space as needed
on commercially reasonable terms.
LEGAL PROCEEDINGS
Wiremedia.com is not currently a party to any material legal proceedings.
WIREMEDIA.COM'S MANAGEMENT
The names and ages of the executive officers and directors as of June 30, 2000
are as follows:
--------------------------------------------------------------------------------
Name Age Position
--------------------------------------------------------------------------------
Colby R Fede 27 President/CEO/Director
CFO/Director
--------------------------------------------------------------------------------
Irene MacAllister 26
--------------------------------------------------------------------------------
Mr. Colby R Fede joined Wiremedia.com upon formation in January 2000. Mr. Fede
has been associated with Biztalk.com as founder since September 1999. From
December 1997 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 Wiremedia.com 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.
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Directors serve for a one year term. Its Bylaws currently provide for a Board of
Directors comprised of two directors.
Employment Agreements
Wiremedia.com entered into an employment agreement dated February, 2000 with
Colby Fede under which he acts as its 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,
Wiremedia.com has 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 its business. He is
subject to a covenant not to compete in its 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 550,000 shares of preferred stock Series
A which may, under certain conditions, be converted into 5,500,000 shares of
Common Stock.
Wiremedia.com entered into an employment agreement dated February, 2000 with
Irene MacAllister under which she acts as its 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
prospectus, Wiremedia.com has raised approximately $70,000 of this amount. When
the agreement becomes effective, he will receive a base rate of compensation of
$55,000.00 per year. Other terms are the same as Mr. Fede's agreement, except
she will be issued 150,000 shares of preferred stock series A which may, under
certain conditions, be converted into 1,500,000 shares of common stock.
She is only required to devote 50% of her business time to its business. She is
subject to a covenant not to compete in its business anywhere in the world
during the term of the agreement and for 24 months after termination under
certain circumstances.
Board Compensation
Wiremedia.com's directors does not receive cash compensation for their services
as directors, although some directors are reimbursed for reasonable expenses
incurred in attending board or committee meetings. In February 2000, Mr. Fede
purchased 60,000 shares of common stock at a price per share of $0.01. In
February 2000, Ms. MacAllister purchased 60,000 shares of common stock at a
price per share of $0.01.
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Board Committees
Wiremedia.com has no compensation committee or other board committee performing
equivalent functions. Mr. Fede, its current chief executive officer, and Ms
MacAllister, its CFO, participated in deliberations of its board of directors
concerning executive officer compensation.
WIREMEDIA.COM'S RELATED PARTY TRANSACTIONS
In January, 2000, Wiremedia.com issued 5,000,000 shares to its CEO Mr. Fede, and
1,000,000 shares to Ms. MacAllister, its CFO, each of whom are founders. Each
received their shares for approximately $37,750 in cash.
Mr. Fede 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.
WIREMEDIA.COM'S PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of its Common Stock as of June 30, 2000 by
o Each shareholder known by Wiremedia.com 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 its 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 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.
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DESCRIPTION OF WIREMEDIA.COM'S CAPITAL STOCK
----------------------------------------------------------------------
Authorized Capital Stock Shares Of Capital Stock Outstanding
----------------------------------------------------------------------
50,000,000 6,800,000
----------------------------------------------------------------------
20,000,000 700,000
----------------------------------------------------------------------
Common Stock
Wiremedia.com is 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
Wiremedia.com is authorized to issue 20,000,000 shares of preferred stock.
Wiremedia.com has agreed to issue 700,000 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 up to 50% of the aggregate number of shares held of
Convertible Preferred Stock - Series A into 10 shares common shares for
each share of Convertible Preferred Stock - Series A held convertible at
any time, in whole or in part, upon such time that there are Five Thousand
or more registered subscribers to Wiremedia.com or its affiliate internet
websites and the remainder convertible upon such time that there are Ten
Thousand or more registered subscribers to Wiremedia.com or its affiliate
internet websites.
o No additional consideration is payable upon conversion. If the event has
not occurred by termination date of December 31, 2010, 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 Wiremedia.com for no
consideration the foregoing is not completed within two years of the date
of filing of the Certificate of Designation of Rights and Preferences with
the Secretary of State of Florida.
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
Wiremedia.com has never paid any dividends and does not expect to does so after
the closing of the merger and thereafter for the foreseeable future.
Transfer Agent and Registrar
Wiremedia.com is the transfer agent and registrar for its common stock.
NINTH ENTERPRISE SERVICE GROUP'S BUSINESS
History and Organization
We were organized as a corporation under the laws of the state of Florida in
April, 1999. Since inception, its 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. The company Ninth Enterprise
Service Group has identified and agreed to acquire is Ninth Enterprise Service
Group.
Operations
We do not currently engage in any business activities that provide any cash
flow. The costs of identifying, investigating, and analyzing the merger with
Ninth Enterprise Service Group have been and will continue to be paid with money
in its treasury or loaned by management. This is based on an oral agreement
between management and us.
Employees
We presently have no employees. Its officer and director is engaged in business
activities outside of us. It is anticipated that management will devote the time
necessary each month to its affairs of until a successful business opportunity
has been acquired.
Selected Financial Data
The following information concerning its financial position and operations is as
of and for the period April 6, 1999 (date of incorporation) to June 30, 2000.
--------------------------------------------------------------------------------
Total assets $ 0
--------------------------------------------------------------------------------
Total liabilities 0
--------------------------------------------------------------------------------
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Equity 0
--------------------------------------------------------------------------------
Sales 0
--------------------------------------------------------------------------------
Net loss 6,079
--------------------------------------------------------------------------------
Net loss per share 0
--------------------------------------------------------------------------------
Management Discussion And Analysis Or Plan Of Operation
Ninth Enterprise Service Group is a development stage entity, and have neither
engaged in any operations nor generated any revenues to date. Ninth Enterprise
Service Group has no assets. Its expenses to date, all funded by management,
are $6,079. Ninth Enterprise Service Group has agreed to pay its
management's law firm a fee of $55,000, to be paid from the merger fee.
Substantially all of its expenses that must be funded by management have been
and will be from its efforts to identify a suitable acquisition candidate and
close the acquisition. Management has orally agreed to fund its cash
requirements until an acquisition is closed. So long as management does so, we
will have sufficient funds to satisfy its cash requirements. This is primarily
because we anticipate incurring no significant expenditures. Before the
conclusion of the acquisition of Ninth Enterprise Service Group, we its
expenses have been and will continue 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 its operations
until we close the acquisition of Ninth Enterprise Service Group and therefore
do not expect to issue any additional securities before the closing of the
acquisition of Ninth Enterprise Service Group.
Properties
Ninth Enterprise Service Group is presently using the office of Michael T.
Williams, 2503 W. Gardner Ct., Tampa FL, at no cost. 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 its Common Stock as of June 30, 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:
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--------------------------------------------------------------------------------
Name Number of Percentage Number of Percentage
Shares before Shares after merger
Pre-Merger(1) merger Post-Merger (1)
--------------------------------------------------------------------------------
Michael T. 1,000,000 100% 130,000 2%
Williams(1)
2503 W. Gardner Ct.
Tampa FL 33611
--------------------------------------------------------------------------------
All directors and 1,000,000 100% 130,000 2%
named executive
officers as a group
(one person)
--------------------------------------------------------------------------------
This table is based upon information derived from its 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
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 June 30, 2000.
(1) Includes 104,000 shares owned by the Williams 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. Includes 2,000 shares owned by Brandon Williams Revocable Trust.
Brandon is the son of Mr. and Mrs. Williams. Also includes 2,000 shares each
owned by 10 of Mr. and Mrs. Williams nieces and nephews, current and to-be, and
a trust related to a family property in Vermont of which Mr. and Mrs. Williams
are currently a beneficiary and one employee of Mr. Williams' law firm. Mr.
Williams disclaims beneficial ownership of these 26,000 shares. In connection
with the merger, we agreed to effect a reverse split such that Mr. Williams'
Trust will own 104,000 shares prior to the closing of the merger. The shares
held by other shareholders are subject to anti-dilution provisions and thus
won't be affected by this reverse split.
Mr. Williams may be deemed its 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 its
director and executive officer, who will resign upon the closing of the Ninth
Enterprise Service Group merger. Its director and executive officer was elected
to his position in April, 1999.
Name Age Title
Michael T. Williams 52 President, Treasurer and Director
Since 1975 Mr. Williams has been in the practice of law, initially with the US
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.
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Executive Compensation
The following table sets forth all compensation awarded to, earned by, or paid
for services rendered to Ninth Enterprise Service Group in all capacities during
the period ended December 31, 1999, by its executive officer.
Summary Compensation Table
Name and Principal Annual Compensation - 1999
Position Salary, $, Bonus, $, Number of Shares Underlying
---------- --------- Options, #,
-----------
Michael T. Williams, None None None
President
Certain Relationships and Related Transactions
Ninth Enterprise Service Group has agreed to pay Williams Law Group a fee of
$55,000 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 102,000 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
Its 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 its long-term prospects and interests
and the social, economic, legal or other effects of any proposed action on the
employees, suppliers or its customers, the community in which the we operate and
the economy. Florida law limits its director's liability.
Ninth Enterprise Service Group has agreed to indemnify its director, meaning
that we will pay for damages they incur for properly acting as director. The SEC
believes that this indemnification may not be given for violations of the
securities act of 1933.
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
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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
control shares by a resolution of a majority of the corporation's shareholders
for each class 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:
o Under the laws of intestate succession or under a gift or testamentary
transfer
o Under the satisfaction of a pledge or other security interest created
in good faith and not for the purpose of circumventing the statute
o Under either a merger or merger if the corporation is a party to the
agreement or plan of exchange or merger
o Under any savings, employee stock ownership or other benefit plan of the
corporation
o 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 Common 1,000,000
----------------------------------------------------------------------
20,000,000 Preferred none
----------------------------------------------------------------------
Common Stock
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Ninth Enterprise Service Group is authorized to issue 50,000,000 shares of no
par common stock. As of June 30, 2000, there were 1,000,000 shares of common
stock outstanding held of record by 14 stockholders. 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
Ninth Enterprise Service Group is authorized to issue 20,000,000 shares of
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
Ninth Enterprise Service Group has 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
Ninth Enterprise Service Group is the transfer agent and registrar for its
common stock.
COMPARISON OF RIGHTS OF NINTH ENTERPRISE SERVICE GROUP
STOCKHOLDERS AND WIREMEDIA.COM SHAREHOLDERS
Because Ninth Enterprise Service Group will change its 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
Neither Wiremedia.com nor Ninth Enterprise Service Group are 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. Ninth Enterprise Service
Group has filed with the Commission a registration statement on Form S-4 under
the Securities Act. This 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
42
<PAGE>
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 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 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.
TABLE OF CONTENTS
-------------------------------------------------------------------------------
Pages
Independent Auditors' Report 44
Financial Statements as of and for the period January 25,
2000 (date of incorporation) to August 31, 2000:
Balance Sheet 45
Statement of Operations 46
Statement of Stockholders' Deficit 47
Statement of Cash Flows 48
Notes to Financial Statements 48
--------------------------------------------------------------------------------
43
<PAGE>
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 August 31, 2000, and the
related statements of operations, stockholders' deficit and cash flows for the
period January 25, 2000 (date of incorporation) to August 31, 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 August 31,
2000, and the results of its operations and its cash flows for the period
January 25, 2000 (date of incorporation) to August 31, 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.
KINGERY, CROUSE & HOHL, P.A.
September 25, 2000
Tampa, FL
44
<PAGE>
Wiremedia.com, Inc.
(A Development Stage Enterprise)
BALANCE SHEET AS OF AUGUST 31, 2000
--------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 52,618
Stock subscriptions receivable 17,100
---------------
TOTAL $ 69,718
===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES:
Due to Stockholder $ 30,480
Accrued and other liabilities 82,155
---------------
Total liabilities 112,635
---------------
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; 6,604,900 shares issued and outstanding 120,069
Common stock subscribed (65,100 shares) 17,100
Deficit accumulated during the development stage (180,086)
---------------
Total stockholders' deficit (42,917)
---------------
TOTAL $ 69,718
===============
--------------------------------------------------------------------------------
See notes to financial statements.
45
<PAGE>
Wiremedia.com, Inc.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the Period January 25, 2000 (date of incorporation)
to August 31, 2000
--------------------------------------------------------------------------------
EXPENSES:
Professional fees $ 144,405
Compensation expense 25,000
Programming costs 9,645
Other 1,036
-------------
NET LOSS $ 180,086
=============
NET LOSS PER SHARE:
Basic and diluted $ .03
=============
Weighted average number of shares 6,513,591
=============
--------------------------------------------------------------------------------
See notes to financial statements.
46
<PAGE>
Wiremedia.com, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' DEFICIT
for the Period January 25, 2000 (date of incorporation)
to August 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Common During the
Common Stock 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) 482,399 51,875 51,875
To consultant for services rendered 5,500 5,445 5,445
Stock subscriptions sold (65,100 shares) 17,100 17,100
Value of services provided by President 25,000 25,000
Net loss for the period January 25,
2000 (date of incorporation) to August
31, 2000 (180,086) (180,086)
---------- --------- ---------- -----------------------
Balances, August 31, 2000 6,604,900 $120,069 $ 17,100 $ (180,086) $ (42,917)
========== ========= ========== =======================
</TABLE>
--------------------------------------------------------------------------------
See notes to financial statements.
47
<PAGE>
Wiremedia.com, Inc.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
for the Period January 25, 2000 (date of incorporation)
to August 31, 2000
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (180,086)
Adjustment to reconcile net loss to net
cash used by operating activities:
Non-cash compensation 30,445
Increase in accrued and other liabilities 82,155
------------
NET CASH USED BY OPERATING ACTIVITIES (67,486)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from stockholder 30,480
Proceeds from issuance of common stock 89,624
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 120,104
------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 52,618
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 0
------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 52,618
============
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 $17,100
as a result of subscriptions to purchase 65,100 shares of the Company's
common stock.
-------------------------------------------------------------------------------
See notes to financial statements.
48
<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 has an accumulated
deficit of approximately $43,000 through August 31, 2000 and 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 (see Note D), however there is no assurance that
they will be successful in their efforts to raise capital. These factors, 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.
49
<PAGE>
NOTE C - INCOME TAXES
During the period January 25, 2000 (date of incorporation) to August 31, 2000,
the Company recognized losses for both financial and tax reporting purposes.
Accordingly, no deferred taxes have been provided for in the accompanying
statement of operations.
At August 31, 2000, the Company had a net operating loss carryforward of
approximately $155,000 for income tax purposes. The carryforward will be
available to offset future taxable income through the period ended August 31,
2020. The deferred income tax asset arising from this net operating loss
carryforward is not recorded in the accompanying balance sheet because the
Company established a valuation allowance to fully reserve such asset as its
realization did not meet the required asset recognition standard established by
SFAS 109.
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 $57,500 to
NESG and/or its President for services in preparing the registration statement
as well as $27,500 and 130,000 shares of its stock having an estimated fair
market value of $79,300 to its financial advisor. As of August 31, 2000, the
Company has incurred and expensed $139,655 under these arrangements; of such
amount $57,500 has been paid and the remaining $82,155 is included in accrued
and other liabilities in the accompanying balance sheet.
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.
50
<PAGE>
NOTE F - OTHER RELATED PARTY TRANSACTIONS
During the period January 25, 2000 (date of incorporation) to August 31, 2000,
the Company's President provided various services to the Company at no cost. The
Board of Directors has estimated that the value of these services approximated
$25,000, and accordingly such amount has been reflected as compensation expense
in the accompanying statement of operations. No value has been ascribed to
services provided by other stockholders and/or rent provided by the Company's
President in the accompanying statement of operations because the value of these
services and rent was not considered significant.
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
August 31, 2000.
--------------------------------------------------------------------------------
51
<PAGE>
NINTH ENTERPRISE SERVICE GROUP, INC.
INDEX TO JUNE 2000 QUARTERLY FINANCIAL STATEMENTS
Financial Statements (unaudited)
Balance Sheets as of June 30, 2000 and December 31, 1999....... 53
Statements of Operations for the three and six month periods
ended June 30, 2000 and the period April 6, 1999
(date of incorporation) to June 30, 1999 and 2000............. 54
Statement of Stockholders' Equity for the six months
ended Juen 30, 2000............................................ 55
Statement of Cash Flows for the three and six months ended
June 30, 2000 and the period April 6, 1999 (date of
incorporation) to June 30, 1999 and 2000..................... 56
Notes to Financial Statements.................................. 57
52
<PAGE>
NINTH ENTERPRISE SERVICE GROUP, INC.
(A Development Stage Enterprise)
BALANCE SHEET
---------------------------------------------------------------------------
June 30, December
2000 31, 1999
ASSETS (Unaudited) (Unaudited)
------ ----------- -----------
TOTAL ASSETS $ - $ -
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
TOTAL LIABILITIES $ - $ -
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock - no par value: 50,000,000 shares
authorized; 1,000,000 shares issued and
outstanding 79 79
Preferred stock - no par value: 20,000,000
shares authorized; no shares issued and
outstanding - -
Additional paid in capital 6,000 4,000
Deficit accumulated during the development stage (6,079) (4,079)
----------- -----------
Total stockholders' equity - -
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ -
=========== ===========
---------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
53
<PAGE>
NINTH ENTERPRISE SERVICE GROUP, INC.
A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Period
April 6, April 6,
Six Three 1999 (date 1999 (date
Months Months of of
Ended Ended incorporation)incorporation)
June 30, June 30, to June to June
2000 2000 30, 1999 30, 2000
--------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
EXPENSES:
Professional fees and expenses $ 2,000 $ 1,000 $ 2,000 $ 6,000
Organizational costs - - 79 79
--------- ----------- ------------- -------------
NET LOSS $ 2,000 $ 1,000 $ 2,079 $ 6,079
========= =========== ============= =============
NET LOSS PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
========= =========== ============= =============
</TABLE>
---------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
54
<PAGE>
NINTH ENTERPRISE SERVICE GROUP, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY
For the six months ended June 30, 2000
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid in Development
Shares Value Capital Stage Total
--------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balances,December 31, 1999 1,000,000 $ 79 $ 4,000 $ (4,079) $ -
Capital Contribution of Services - - 2,000 - 2,000
Net loss for the six
months ended June 30, 2000 - - - (2,000) (2,000)
--------- -------- ---------- ------------ -----------
Balances June 30, 2000 1,000,000 $ 79 $ 6,000 $ (6,079) $ -
========= ========= ========== ============ ===========
</TABLE>
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
55
<PAGE>
NINTH ENTERPRISE SERVICE GROUP, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Period
April 6, April 6,
Six Three 1999 (date 1999 (date
Months Months of of
Ended Ended incorporation) incorporation)
June 30, June 30, to June to June
2000 2000 30, 1999 30, 2000
--------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,000) $ (1,000) $ (2,079) $ (6,079)
Adjustments to reconcile net loss to
cash used in operating activities -
Contributed services and expenses 2,000 1,000 2,000 6,000
---------- ---------- ----------- -----------
NET CASH USED IN OPERATING ACTIVITIES - - (79) (79)
---------- ---------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock - - 79 79
---------- ---------- ----------- -----------
CASH PROVIDED BY FINANCING ACTIVITIES - - 79 79
---------- ---------- ----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS - - - -
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - - - -
---------- ---------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ - $ - $ - $ -
========== ========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ - $ - $ - $ -
========== ========== =========== ===========
Taxes paid $ - $ - $ - $ -
========== ========== =========== ===========
</TABLE>
-------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
56
<PAGE>
NINTH ENTERPRISE SERVICE GROUP, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
------------------------------------------------------------------------------
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
Ninth Enterprise Service Group, Inc., (we", "us", "our") was incorporated under
the laws of the state of Florida on April 6, 1999. We are considered to be in
the development stage, as defined in Financial Accounting Standards Board
Statement No. 7. We intend to investigate and, if such investigation warrants,
engage in business combinations. Our planned principal operations have not
commenced, therefore accounting policies and procedures have not yet been
established.
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 and
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Our accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principals for interim financial information
and the instructions to Form 10-QSB and Rule 10-1 of Regulation S-X of the
Securities and Exchange Commission (the "SEC"). Accordingly, these financial
statements do not include all of the footnotes required by generally accepted
accounting principals. In the opinion of management, all adjustments (consisting
of normal and recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the three and six months
ended June 30, 2000 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2000.
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. We have an accumulated deficit of
$6,079 as of June 30, 2000. We do not currently engage in business activities
that provide any cash flow, accordingly our ability to continue as a going
concern is dependent on our management's ability to fund our cash requirements
until a business combination is closed. These factors among others may indicate
that we will be unable to continue as a going concern for a reasonable period of
time.
The financial statements do not include any adjustments that might be necessary
if we are unable to continue as a going concern.
NOTE C - INCOME TAXES
During the period April 6, 1999 (date of incorporation) to June 30, 2000, we
recognized losses for both financial and tax reporting purposes. Accordingly, no
deferred taxes have been provided for in the accompanying statement of
operations.
NOTE D - RELATED PARTY TRANSACTION
Our President, who is also a shareholder, has agreed, in writing, to fund all of
our expenses until such time as an acquisition transaction is closed. None of
these funds expended on our behalf will be reimbursable to our President,
accordingly these amounts will be reflected in our financial statements as
contributed capital.
57
<PAGE>
NOTE E - PROPOSED MERGER
The Company has entered into a merger agreement with Wiremedia.com, Inc.
("Wiremedia") which it anticipates will close in the year 2000. In conjunction
with the merger the Company has agreed to effect a reverse stock split whereby
the stockholder of the Company will retain 130,000 shares outstanding after
such. In addition, Wiremedia has agreed to pay the expenses of the merger, which
include approximately $55,000 to a stockholder of the Company.
------------------------------------------------------------------------------
58
<PAGE>
Ninth Enterprise Service Group, Inc.
Prospectus
TABLE OF CONTENTS
SUMMARY.......................................................................5
RISK FACTORS..................................................................9
MERGER APPROVALS.............................................................21
MERGER TRANSACTION...........................................................21
Wiremedia.com MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..........................................29
Wiremedia.com BUSINESS.......................................................33
Wiremedia.com MANAGEMENT.....................................................33
RELATED PARTY TRANSACTIONS WITH DIRECTORS, OFFICERS AND 5%
STOCKHOLDERS.................................................................35
PRINCIPAL STOCKHOLDERS.......................................................35
DESCRIPTION OF Wiremedia.com CAPITAL STOCK...................................36
Ninth Enterprise Service Group'S BUSINESS....................................37
DESCRIPTION OF Ninth Enterprise Service Group'S CAPITAL STOCK................41
COMPARISON OF RIGHTS OF Ninth Enterprise Service Group STOCKHOLDERS
AND Wiremedia.com SHAREHOLDERS...............................................42
AVAILABLE INFORMATION........................................................42
LEGAL MATTERS................................................................43
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.
The date of this prospectus is **.
59
<PAGE>
PART II
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.
60
<PAGE>
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
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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 to:
1.File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
i.Include any prospectus required by section 10(a)(3) of the Securities
Act;
ii.Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement; and Notwithstanding the forgoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation From the low or high end of the estimated maximum offering range
may be reflected in the form of prospects filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the volume
and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement. iii.Include any additional or
changed material information on the plan of distribution.
2.For determining liability under the Securities Act, treat each post-effective
amendment as a new registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona fide offering.
3.File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
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 , on
October 16, 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.
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--------------------------------------------------------------------------------
SIGNATURE TITLE DATE
--------------------------------------------------------------------------------
/s/ Michael T. Williams President and Treasurer October 16,2000
--------------------------------------------------------------------------------
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Date Filed: October 16, 2000 SEC File No. 333-36787
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 67 through 120 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 67
Registrant
-----------------------------------------------------------------------
3.2 Bylaws of Registrant Page 72
-----------------------------------------------------------------------
3.3 Amended Articles of Page 86
Incorporation of
Wiremedia.com, Inc.
-----------------------------------------------------------------------
3.4 Amended Articles of Page 88
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 101
Rights and Preferences of
Preferred Stock
-----------------------------------------------------------------------
5.1 Legal Opinion of Williams Law Page 103
Group
-----------------------------------------------------------------------
10.1 Employment Agreement - Colby Page 105
Fede
-----------------------------------------------------------------------
10.2 Employment Agreement - Irene Page 112
MacAllister
-----------------------------------------------------------------------
23.1 Consent of Kingery, Crouse & Page 119
Hohl, P.A.
-----------------------------------------------------------------------
23.2 Consent of Williams Law Group Included in 5
P.A. above
-----------------------------------------------------------------------
TBPBA - To be provided by amendment
66
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