As filed with the Securities and Exchange Commission on December __, 2000.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
------------------------
NEW MEDIUM ENTERPRISES, INC.
(Name of Small Business Issuer in its Charter)
Nevada 7372 11-3502174
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Ethel Schwartz
Chief Executive Officer and President
4706 18th Avenue
Brooklyn, New York 11219
(718) 686-8600
(718) 686-0300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of communications to:
Barbara R. Mittman, Esq.
Grushko & Mittman, P.C.
551 Fifth Avenue, Suite 1601
New York, New York 10176
Telephone No.: (212) 697-9500
Facsimile No.: (212) 697-3575
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Each Class of Amount to be Registered Proposed Maximum Amount of
Securities to be Registered (2) Aggregate Offering Price (1) Registration Fee
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<S> <C> <C> <C>
Common Stock, par value $.001 per share 16,686,000 $16,686,000 $4,405.10
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</TABLE>
(1) Estimated pursuant to Rule 457(c) under the Securities Act of 1933 solely
for the purpose of computing the amount of the registration fee.
(2) Includes 6,083,000 shares of common stock and 10,603,000 shares of common
stock issuable upon conversion of certain common stock purchase warrants.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
Preliminary Prospectus Subject to Completion dated December __, 2000
New Medium Enterprises, Inc.
16,686,000 shares of common stock
----------------------------------------
o This is an offering of 16,686,000 shares of our common stock by
certain stockholders of New Medium Enterprises, Inc.
o The selling stockholders will receive all of the proceeds from the
sale of 6,083,000 of their shares, less any commissions or discounts
paid to brokers or other agents. We will not receive any of the
proceeds from the sale of these shares. We may, however, receive up to
$12,361,250 in proceeds from the exercise by certain selling
stockholders of warrants to purchase up to an aggregate of 10,603,000
shares of our common stock. The resale of the common stock underlying
these warrants is included in the registration statement of which this
prospectus forms a part.
The securities offered in this prospectus involve a high degree of risk. You
should carefully consider the factors described under the heading "Risk Factors"
beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
----------------------------------------
The date of this prospectus is ________________, 2000
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUMMARY............................................................2
RISK FACTORS..................................................................2
USE OF PROCEEDS...............................................................8
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.....................8
BUSINESS......................................................................9
MANAGEMENT...................................................................13
PRINCIPAL STOCKHOLDERS ......................................................14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............................15
OFFERING BY SELLING SECURITYHOLDERS..........................................16
DESCRIPTION OF SECURITIES....................................................20
PLAN OF DISTRIBUTION.........................................................21
NEVADA BUSINESS COMBINATION PROVISIONS.......................................22
INDEMNIFICATION OF DIRECTORS AND OFFICERS....................................22
WHERE YOU CAN FIND MORE INFORMATION..........................................23
TRANSFER AGENT...............................................................23
LEGAL MATTERS................................................................23
EXPERTS......................................................................23
INDEX TO FINANCIAL STATEMENTS...............................................F-1
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<PAGE>
PROSPECTUS SUMMARY
This prospectus summary highlights selected information contained elsewhere
in this prospectus. You should read the following summary together with the more
detailed information regarding our company and the shares of common stock being
sold in this offering, which information appears elsewhere in this prospectus.
ABOUT OUR COMPANY
We are a development stage company in the process of developing and
licensing proprietary software which enables vendors to conduct internet sales
through multiple vendors. We are also involved in the development of technology
which will enable telecom companies to provide super fast wireless internet
access, video on demand and audio visual conferencing services. We had been
focusing on business to consumer and business to business websites. However, in
mid 2000, as a result of adverse market conditions effecting internet shopping
sites, management made a decision to allocate substantially all of our resources
to the development of the proprietary software CodeTrek, which we plan to
license. We have also shifted our focus to the wireless telecommunications
sector, which we believe has significant growth opportunities.
On July 15, 2000, we formed Intellitain Media Inc., a wholly-owned
subsidiary which plans to produce high quality intellectually based media
entertainment targeted for families, schools and colleges and general audience
seeking intelligent based entertainment. We have allocated an investment of
approximately $10,000 to this entity.
In August, 2000, we acquired a 95% majority interest in Broadeo Wireless
Communications Assets. Broadeo, a developmental stage company which is in the
initial phase of design and development of a comprehensive system, which will
include wireless and intra-building networking gear as well as networking
protocols and signal processing algorithms to enable seamless integration of
digital data, voice and video communications.
How our company is organized
We were incorporated in Nevada on August 2, 1999 under the name
Shopoverseas.com, Inc. On July 10, 2000, we changed our name to New Medium
Enterprises, Inc.
Where you can find us
We are located at 4706 18th Avenue, Brooklyn, New York 11219. Our telephone
number is (718) 686-8600, our facsimile number is (718) 686-0300.
The Offering
Shares offered by the Selling Shareholders.................16,686,000 shares (1)
(1) Includes: (i) 6,083,000 shares of Common Stock issued to Subscribers
pursuant to the Subscription Agreements; and (ii) 10,603,000 shares of Common
Stock reserved for issuance pursuant to Warrants.
Shares Outstanding as of June 30, 2000.....................15,653,000 shares
Shares Outstanding as of November 30, 2000.................11,957,000 shares
(see "Subsequent Events")
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Shares Outstanding Assuming Exercise of All Outstanding
Warrants...................................................22,560,000 shares
Use of Proceeds - New Medium Enterprises, Inc. will not receive any proceeds
from the sale of the shares by the Selling Shareholders. However, New Medium
Enterprises, Inc. may receive up to $12,361,250 from exercise of the Warrants,
which will be used for acquisitions.
Summary Financial Information
9/30/2000 6/30/2000
--------- ---------
Balance Sheet Data:
Total Assets $1,579,616 $1,582,823
Total Liabilities 10,353 2,500
Total Stockholders' Equity 1,569,263 1,580,323
Statement of Operations:
Revenues -0- -0-
Expenses 54,028 145,703
Income (Loss) from Operations (38,060) (103,972)
Net Income (Loss) (38,060) (103,972)
Income (Loss) Per Share (.00) (.01)
Shares Used In Computing Net Income (Loss) Per Share 15,680,000 15,391,315
RISK FACTORS
This Prospectus contains forward-looking statements, which involve risks
and uncertainties. Such forward-looking statements include, but are not limited
to, statements regarding future events and our plans and expectations. New
Medium Enterprises, Inc.'s actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in the following risk factors and elsewhere in this
Prospectus. In addition to the other information in this Prospectus, the
following risk factors should be considered carefully in evaluating New Medium
Enterprises, Inc. and our business before purchasing the Common Stock offered by
this Prospectus.
An investment in our common stock is highly speculative and involves a high
degree of risk. Therefore, you should consider all of the risk factors discussed
below, as well as the other information contained in this document. You should
not invest in our common stock unless you can afford to lose your entire
investment and you are not dependent on the funds you are investing.
Please note that throughout this prospectus, the words "we", "our" or "us"
refer to New Medium Enterprises, Inc. and not to the selling stockholders.
Risk Factors Related to New Medium Enterprises, Inc.'s Operations
We Have Lost and May Continue to Lose Money, and If We Do Not Achieve
Profitability, We May Not Be Able to Continue Our Business.
Through September 30, 2000, we have generated no revenues from operations,
have incurred substantial expenses and have sustained losses. We have incurred a
net loss of $103,972 for the year
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ended June 30, 2000. Additionally, we have incurred a net loss of $38,060 for
the three-month period ended September 30, 2000. Losses have resulted
principally from costs incurred in connection with developing our CodeTrek(TM)
technology and software and wireless communication technologies and services
aimed at developing our business activities and from costs associated with our
administrative activities. We expect to incur additional losses for the
remainder of this year and next year.
In addition, we expect to continue to incur significant operating expenses.
As a result, we will need to generate significant revenues to achieve
profitability, which may not occur. We expect our operating expenses to increase
significantly as a result of our planned expansion. Since we have not yet
completed developing our software and technologies and we have no operating
history of marketing our services to the public, we cannot assure you that our
business will be profitable or that we will ever generate sufficient revenues to
meet our expenses and support our anticipated activities. Even if we do achieve
profitability, we may be unable to sustain or increase profitability on a
quarterly or annual basis in the future.
We expect to have quarter to quarter fluctuations in revenues, expenses,
losses and cash flow, some of which could be significant. Results of operations
will depend upon numerous factors, some of which are beyond our control,
including regulatory actions, market acceptance of our products and services,
new product and service introductions, and competition.
We are Dependent on Key Personnel and there is the Risk of Loss of Those
Personnel.
Our future success depends, in significant part, upon the continued service
of our senior management, Ethel Schwartz, who serves as our President, Chief
Executive Officer and Treasurer, and Eva Beilus, who is the Vice-President and
Secretary. The loss of any of these individuals, particularly in the early
stages of our operations, would hurt our business. We do not maintain key man
life insurance covering any of our personnel. Our future success also depends on
our continuing ability to attract and retain highly qualified personnel.
Competition for such personnel is intense, and we may experience difficulties in
attracting the required number of such individuals. There can be no assurance
that we will be able to attract or retain a sufficient number of highly
qualified employees in the future. If we are unable to hire and retain personnel
in key positions, our business could be negatively affected.
Risks Related to CodeTrek(TM)
Competition.
Our competitors are very large companies which are very well capitalized
and can tap their strong market values for further growth which may impede our
ability to generate enough sales to cover the costs of CodeTrek's development.
Funding.
The cost of completing the CodeTrek system and marketing it might be higher
than we anticipate, in which case we might not be able to obtain the needed
funds and might fail to successfully commercialize CodeTrek.
Quality.
The features and overall quality of the CodeTrek system might fail to
satisfy the requirements of the industry and those of the media covering this
industry, which may result in our failure to generate revenues from CodeTrek.
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<PAGE>
Risks Related to the Telecom Industry
We Have Limited Resources to Develop Telecom Hardware Which May Quickly Become
Obsolete.
In order to be successful, we must be able to introduce hardware, which is
superior to our competitors, which have been developing communications hardware
for many years. However, due to our limited resources, we will be unable to
dedicate significant funds to develop the telecom hardware. Even if we are able
to develop the telecom hardware, there is no assurance that it will be superior
to our competitors or that it won't quickly become obsolete.
We Must Successfully Manage the Integration of Acquisitions Which is Part of Our
Business Strategy.
We plan to make acquisitions of companies, which produce hardware for the
wireless industry. If we are successful in acquiring a company which we cannot
assure, we must be successful in integrating and effectively managing the
acquired company. Failure to do so may cause us to incur a loss of not only the
acquisition costs but also costs in operations relating to the acquisition,
which may hurt our business.
We Have Not Produced Any Working Prototypes.
New Medium Enterprises, Inc. has not produced any working prototypes and we
cannot assure that we can produce a product of commercial viability, or one,
which is not defective. The core technologies being researched by us might be to
be discovered a health or environmental hazard or an interference with the
operation of sensitive equipment resulting in consumer, industry or government
rejection and therefore our complete failure.
We Will Need Additional Capital to Finance Our Business Plan and Such Financing
May Be Unavailable or Too Costly.
Our ability to research and develop the core technologies we are planning
to utilize for our telecom infrastructure equipment is dependant on our ability
to secure financing and allocate sufficient funds required to support our
research and development activity, which may range from several millions to ten
of millions of dollars. Additional financing may not be available on favorable
terms or even at all. If we raise additional funds by selling stock, the
percentage ownership of our then current stockholders will be reduced. If we
cannot raise adequate funds to satisfy our capital requirements, we may have to
limit our operations significantly. Our ability to raise additional funds may
diminish if the public equity markets become less supportive of the telecom
industry.
Regulatory Uncertainty.
The Federal Communication Commission, or FCC, and various state public
utility and service commissions, regulate most of our potential domestic
customers. Changes to FCC regulatory policies may affect the accessibility of
services, and otherwise affect how telecommunications providers conduct their
business. These regulations may adversely affect our potential penetration into
certain markets. In addition, our business may be negatively affected by the
imposition of certain tariffs, duties and other import restrictions on
components, which we will obtain from non-domestic suppliers. Changes in current
or future laws or regulations, in the U.S. or elsewhere, could adversely affect
our business.
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<PAGE>
Risks Related to Offering
Management Beneficially Own Approximately 41.65% of Our Common Stock and Their
Interest Could Conflict With Yours.
Our directors and executive officers beneficially own approximately 41.65%
of our outstanding common stock. As a result, the directors and executive
officers collectively are able to substantially influence all matters requiring
stockholder approval, including the election of directors and approval of
significant corporate transactions. Such concentration of ownership may also
have the effect of delaying or preventing a change in control.
Future Sales of Common Stock by Our Existing Stockholders Could Adversely Affect
Our Stock Price.
As of the date of the filing, New Medium Enterprises, Inc. has 11,957,000
outstanding shares of Common Stock, not including 10,603,000 of Common Stock
issuable upon exercise of the Warrants. Out of the 11,957,000 shares outstanding
6,083,000 are being registered with this offering. The remaining 5,874,000
shares of common stocks, which are not being registered hereby, are "restricted
securities" as defined under Rule 144, substantially all of which are available
for sale in the public market, subject to the provisions of Rule 144 under the
Securities Act, or pursuant to this Registration Statement. In addition, certain
holders of the Restricted Shares are entitled to certain registration rights.
See "Registration Rights." Sales of substantial amounts of Common Stock in the
public market, or the perception that such sales will occur, could have a
material negative effect on the market price of our Common Stock. This problem
would be exacerbated if we issue Common Stock in exchange for equipment and
services.
Stock Option Plan May Dilute Shareholders.
The shareholders and Board of Directors of New Medium Enterprises, Inc.
adopted a 1999 Stock Option Plan with reference up to 5,000,000 common shares
under certain circumstances. The issuance of the 5,000,000 shares pursuant to
the 1999 Stock Option Plan may be further dilutive to shareholders. In addition
the Board of Directors may opt to adopt a similar plan for the year 2000, which
may further be dilutive to shareholders.
No Dividends Have Been Paid.
No dividends have been paid on any of our Common Stock and we do not expect
to pay any dividends in the foreseeable future.
Our Directors Have Limited Liability.
Under our Certificate of Incorporation, the directors cannot be held liable
to New Medium Enterprises, Inc. or to the stockholders for monetary damages for
breach of fiduciary duties except under certain limited circumstances.
Office Rent May Increase.
We are currently leasing approximately 850 square feet for our executive
offices at 4706 18th Avenue, Brooklyn, New York 11219, for $1,205.00 per month
pursuant to a Lease Agreement. The term of the Lease Agreement is one year
beginning October 1, 1999 through September 30, 2000 with an automatic
additional one year renewal from October 1, 2000 through September 30, 2001. In
the future, we may have to rent other space at a higher cost.
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We May Not Be Able to Obtain a Trading Market for Your Shares.
Trading in our Common Stock, if any, is intended to be conducted on the OTC
Bulletin Board or the NASDAQ SmallCap Market, after we obtain a listing, if
ever. Because we may not be able to obtain or maintain a listing on the NASDAQ
SmallCap or the OTC Bulletin Board, your shares may be difficult or impossible
to sell. However, if we are unable to qualify for this listing, or if we will
become unable to maintain our listing on the OTC Bulletin Board, we believe that
our stock will trade on over-the-counter market in the so-called "pink sheets".
Consequently, selling your Common Stock would be more difficult because only
smaller quantities of stock could be bought and sold, transactions could be
delayed, and security analysts' and news media's coverage of New Medium
Enterprises, Inc. may be reduced. These factors could result in lower prices and
larger spreads in the bid and ask prices for our stock.
We May Be Unable to Sell Stock in Some States Due to Blue Sky Regulations.
In order for our Common Stock to be resold, it must be registered with the
individual states. We cannot be assured that any or all stock registrations in
various states will be approved. If a registration is not approved, it will be
more difficult for you to sell your stock.
We May Not Be Able to Obtain Future Equity Financing.
Subsequent to the completion of this offering, we will require substantial
additional capital for research and development of the Broadeo's Broadband Media
Service (BMS) and to support future growth. We cannot be assured that additional
capital will be available or that, if available, such capital will be on
satisfactory terms.
Broker-Dealers May Be Unable to Sell Our Stock.
If our Common Stock is not listed on the NASDAQ SmallCap Market and/or any
stock exchange, it may become subject to rules that impose sales practice
requirements on broker-dealers. Consequently, the rule may affect the ability of
broker-dealers to sell your stock.
We require additional funds to achieve our current business strategy.
We need to raise additional funds through public or private debt or sale of
equity to develop and establish our proprietary e-commerce software -
CodeTrek(TM), our telecom hardware and our websites. Such financing may not be
available when needed. Even if such financing is available, it may be on terms
that are materially adverse to your interests with respect to dilution of book
value, dividend preferences, liquidation preferences, or other terms. If we are
unable to obtain financing on reasonable terms, we could be forced to delay,
scale back or eliminate certain product and service development programs. In
addition, such inability to obtain financing on reasonable terms could have a
material adverse effect on our business, operating results, or financial
condition to such extent that we are forced to restructure, file for bankruptcy,
sell assets or cease operations, any of which could put your investment dollars
at significant risk.
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USE OF PROCEEDS
As of the date of this filing, we have in excess of $870,000 in cash. The
following represents our best estimate as to how the proceeds will be expended.
New Medium Enterprises, Inc. reserves the right to redirect any portion of the
funds either amongst the items referred to below or to such other projects of
New Medium Enterprises, Inc. as management considers being in the best interest
of New Medium Enterprises, Inc.
We are actively pursuing acquisition possibilities in the wireless hardware
sector, that we believe will complement our activities in Broadeo Wireless
Communications. Concurrently we are also actively pursuing acquisition targets
in other high tech industries. Consequently we are budgeting our expenses
through 2001 to allow for a cash downpayment for an acquisition, with the hope
that we can structure an equity transaction with a prospective acquisition
target. We are budgeting $300,000 for an acquisition downpayment and costs and
$350,000 for salaries and administrative costs.
New Medium Enterprises, Inc. will not receive any of the proceeds from the
sale of shares by the Selling Shareholders. However, we may receive up to
$12,361,250 only if the Warrants are exercised. There is no assurance that the
Warrants will be exercised and that any proceeds may be received from these
Warrants.
Should we succeed in raising funds through the exercise of Warrants, we
plan to utilize a substantial portion of the funds raised for acquisitions, and
our activities in the wireless communications sector.
We believe we have sufficient funds available to operate until December,
2001 even without raising additional funds.
DIVIDENDS
We have never paid a cash dividend on our common stock. It is our present
policy to retain earnings, if any, to finance the development and growth of our
business. Accordingly, we do not anticipate that cash dividends will be paid
until our earnings and financial condition justify such dividends, and there can
be no assurance that we can achieve such earnings.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following is our plan of operation for the following 12 months, and
should be read in conjunction with our financial statements and notes thereto
appearing in this prospectus.
We are a development stage company in the process of developing proprietary
e-commerce software and telecom technology for faster wireless internet access.
The products and services that we intend to offer are described in the
"Business" description. We have generated no revenues.
We intend to meet our long-term liquidity needs through available cash and
cash flow as well as through additional financing from outside sources. We
anticipate that our existing working capital will be sufficient to fund our
operations at least through December 30, 2001.
During the next twelve months, we expect to spend an estimated $250,000 to
$600,000.
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We raised an aggregate of $1,619,000 (net of expenses) in connection with a
financing between August 1999 and January 30, 2000.
BUSINESS
Our Products and Services
Since our inception, we have allocated our resources to the following
businesses.
--------------------------------------------------------------------------------
1. E-Commerce Software Platform -- CodeTrek(TM).
2. Internet Operations & Websites
--------------------------------------------------------------------------------
(a) ShopUpscale.com,
(b) ShopOverseas.com
(c) FocusVenue.com
(d) AlertingShoppers.com
--------------------------------------------------------------------------------
3. Wireless Telecommunication- Acquisition of a majority interest in Broadeo
Wireless Technology.
4. Investment in Intellitain Media Inc
--------------------------------------------------------------------------------
1. CodeTrek (TM)
The CodeTrek(TM) e-commerce platform is a software system designed to
enable vendors to conduct Internet sales and marketing. The system allows
distributors to setup a version of the main site customized with their own look
and feel. CodeTrek includes a sophisticated sales force management system
designed to improve sales by efficient allocation of commissions earned by sales
agents, affiliates or partners.
CodeTrek supports full e-commerce implementations and includes the
following components:
o The browser (client) interface
o The server hosting the e-commerce site and managing the information
that is served to browsers
o The core e-commerce application with customizable business rules
o The database - which contains inventory information, transaction
records and sales force reports.
We intend to implement improvements to the system and to prepare it for
licensing as an e-commerce enabling software package to large enterprises that
share an integrated supply chain. CodeTrek is designed to serve the following
markets:
o Major brand distributors aiming to establish an ecommerce platform
with the ability to allow independent vendors to sell through their
own sites.
o Large supply chains of small to medium enterprises.
The preparation of CodeTrek for the commercial market includes additional
programming, testing, debugging and preparation of user documentation. We have
outsourced the development of CodeTrek and have completed the initial
programming stage. We are testing the system for bugs and are revising some of
the system's business rules. To date, we estimate that we have already invested
approximately $330,000 in its development.
2. Internet Websites:
(a) ShopUpscale.com- A business to consumer (B to C) site, featuring a
collection of unique and upscale merchandise imported specifically from those
countries around the world, which we thought were
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particularly known for their excellence in producing such product or
merchandise. The site is currently operational, but since no substantial
advertising budget has been allocated to it and we do not plan to allocate any
resources to it under the present market conditions, we do not anticipate
generating revenue from this operation. We may, in the future, consider selling
this site to a company with a complementary site that already has the customer
base.
(b) ShopOverseas.com- A series of business to business (B2B) exchanges, on
our vertical portal, ShopOverseas.com, which is designed to enable small and
intermediate businesses in a variety of industries to participate in coalition
buying as members of ShopOverseas.com Merchant Alliance Program known as "The
Pool". The platform is designed to serve (i) members of the Merchant Alliance
Program, (ii) members- Trading Partners, (iii) Facilitators such as financing
companies who can provide accounts receivable financing, factors, custom
brokers, freight forwarders, fulfillment centers, escrow companies, and services
such as proprietary wrapping and packaging supplies, custom ordered monograms,
merchant labels, etc. We own the following B2B internet domains.
b2b decorater.com
b2b fashionex.com
b2b jewelersexchange.com
b2b partyplanner.com
decoex.com
decoexchange.com
deco-ex.com
deco-exchange.com
upscaleb2b.com
decoratorsexchange.com
B2Bboys.com
B2Bextralarge.com
B2Bfashionportal.com
B2Bgirls.com
B2Bhardtofind.com
B2Bnewdesigners.com
B2Bnewfashion.com
B2Bnewstyles.com
B2Bteens.com
The site is in the early stages of development and is currently on hold,
pending a reversal of market conditions and a proven business model. We may, in
the future, consider selling this site to a company with a complementary site
that already has the customer base.
(c) FocusVenue.com - We began developing a site dedicated to focus groups
testing new products and services. The objective is to make available to other
online and offline companies our infrastructure which we are developing to
create a venue for on-line testing of products and merchandise to carefully
segmented groups in accordance to specific demographics and providing our
clients with selective reports intended to guide the client in its purchasing
and marketing decisions.
The site is designed to enable member merchants to get a pulse on potential
customer interest in the products and merchandise catalogued and to select such
products that appear to have wider acceptance within its target demographics.
Member merchants will be able to view individual focus member feedback and
receive an array of reports that will be helpful in determining marketability of
products and merchandise, which are likely to be popular with various segments
of demographics.
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Focus members will be carefully selected by us to fit specific criteria
which we believe will best serve our merchant buyers. Focus members will receive
special passwords that will enable them to log onto to our site and view our
products and merchandise in advance of its availability to prospective merchant
buyers, and provide feedback which when aggregated with other focus members,
will provide invaluable marketing oriented information to prospective merchant
buyers. New Medium Enterprises, Inc. believes that it can best serve its
merchant buyers by providing not only an interesting array of unique yet stylish
quality merchandise at competitive price, but by also including information that
will enable the merchant to have the benefit of prospective customer feedback on
the products offered.
New Medium Enterprises, Inc. believes that once developed and implemented,
its focus group component will have marketing attributes which New Medium
Enterprises, Inc. can market in and of itself to other businesses who can
utilize its focus group infrastructure in determining market acceptance of
products and services, and other studies. We are currently analyzing the
capability requirements for the FocusVenue live market research service and is
researching prospective strategic alliances. We have also registered and owns
the following domain names:
Gen Y Focus.com
Gen X Focus.com
FocusGuys.com
FocusKids.com
FocusMen.com
FocusMoms.com
FocusTeens.com
FocusTweens.com
FocusWomen.com
(d) AlertingShoppers.com The AlertingShoppers.com site is fully functional
and its free service should appeal to many online shoppers. AlertingShoppers.com
was designed as an online marketing channel which offers online consumers the
ability to subscribe to an opt-in email list and to receive discount vouchers
for popular shopping sites, an option which can result in annual savings of
hundreds of dollars. The strategy provided that we build a very large list of
opt-in email subscribers and to charge advertisers, through list brokers such as
DoubleClick and PostMasterDirect, on a per message basis. We do not intend to
invest in operating or promoting the service but will seek a strategic alliance
with a popular online service to manage and promote the site.
3. Wireless Communication:
In August 2000, we acquired a majority interest in Broadeo Wireless
Communications Assets. Broadeo, a developmental stage company is in the initial
phase of design and development of a comprehensive broadband communications
system. The system will include wireless networking gear and next generation
intelligent network switches designed for Internet Service Providers and
Telecomm carriers. Broadeo's broadband technologies are designed to enable
seamless integration of digital data, voice and video communications. Broadeo's
key product is its planned Broadband Multimedia Gateway (TM), a carrier-class
Active-Network system based on the new upcoming Internet Protocol version 6
standard. Broadeo `s Active-Network system is expected to significantly improve
the network efficiencies of distributed computing and multimedia applications by
utilizing "smart" switching technologies. We believes these technologies will
enable telecom carriers to provide their subscribers super fast Internet access,
Video-on-demand and Audio-Video conferencing services.
In conjunction with major content providers, Telcos, ISPs, operating system
developers and hardware manufacturers, Broadeo intends to develop a multimedia
infrastructure and a turn-key solution
-11-
<PAGE>
that will be used by media networks to provide a broadband monthly subscription
plan for movies, telephone and Internet access. Broadeo's Broadband Media
Service (BMS) aims at the business potential of unified broadband access and is
designed to provide Broadeo and its media partners a strong and sustainable
revenue stream from subscriptions and additional service fees. Broadeo's BMS
model frees both the company and the access provider (Telco, ISP etc.) from a
dependency on a single access technology.
Broadeo is also developing a Fixed Wireless Local Loop (FWLL) system that
is expected to be a superior alternative to cable, DSL, fiber-optic or wireless
optical for "last mile" broadband connectivity. The system is designed to
provide broadband access at bandwidths scalable from residential entertainment
services to corporate Dedicated Private Networks (DPN). Broadeo's Wireless Local
Loop operates in and above the LMDS (Local Multipoint Distribution Service)
frequency range.
LMDS is a digital wireless transmission system that works in the 28GHz
range in the U.S. and 24-40GHz overseas, providing bandwidths of 51.84-622.08
Mbps (OC-1 to OC-12), which is considerably greater than other broadband and
wireless services. Broadeo's unique system design has the potential of being
superior to competing platforms in terms of reliability, bandwidth, deployment
costs or deployment time. The technology seems to allocate bandwidth far more
efficiently than other point-to-multipoint wireless systems that consist of a
single transmitter wirelessly linked to many units.
4. Intellitain Media. On July 15, we formed a wholly-owned subsidiary,
Intellitain Media Inc., which began producing high quality intellectually based
media entertainment targeted for families, schools and colleges and general
audience seeking intelligent based entertainment. Intellitain's first production
is a game show designed for TV. We have allocated approximately $10,000 to this
entity to date.
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<PAGE>
MANAGEMENT
Directors and Executive Officers
The directors and executive officers of New Medium Enterprises, Inc. are as
follows:
Name Age Position
---- --- --------
Ethel Schwartz 50 President, Chief Executive
Officer, Treasurer and
Director
Eva Beilus 52 Vice-President of
Merchandising, Secretary
And Director
Hyman Schwartz 50 Director
Ethel Schwartz (age 50) has been President, Chief Executive Officer and
Treasurer since its inception. Ethel Schwartz has had a Wall Street career since
1978, during which time, for a period of eight years, she was a vice-president
and director of compliance, and managing officer for a mid-size New York Stock
Exchange member firm consisting of 13 branches and 120 personnel. During the
past five years she has also been an independent consultant to non-member
domestic and global financial services firms, attorneys for securities related
arbitration and public companies. Since March 1996, Ethel has been an officer
and director of Hyett Capital Ltd., an investment banking boutique focusing on
emerging growth companies where she has been responsible for raising capital for
in excess of 70 companies. She is currently registered with Grand Capital Corp.
on a part-time basis and holds the following NASD registrations, Series 27, 24,
8, 15, 5, 4, 7, 63. Ethel is a member of the Board of Arbitration of the NASD.
Eva Beilus (age 52) has been Vice-President and Secretary. Eva has been
involved in fashion merchandising for our Company. She has been a Secretary and
Director since its inception. Eva's long time experience as a shopper has
provided her with the inside, in-depth knowledge from a shopper's perspective of
the ultimate shopping experience which enables her to successfully anticipate
and accommodate shoppers desires and objectives. Her abilities in the area of
merchandising, socializing and schmoozing, enables her to foster relationships
with a broad spectrum of suppliers in all categories, both fashion and home
furnishings. Eva is responsible for product merchandising, for identifying new
product items and for overseeing the fulfillment of products ordered. Eva Beilus
is a sister to Ethel Schwartz.
Hyman Schwartz (age 50) has been Director since its inception. Hyman
Schwartz has been a stock broker at Josephthal Lyon & Ross from 1988 through
1997. Since March 1996, Hyman has been CEO of Hyett Capital Ltd., an investment
banking boutique focusing on emerging growth companies.
Executive Compensation
The officers and directors of New Medium Enterprises, Inc. will be
reimbursed only for documented out-of-pocket expenses and petty cash . New
Medium Enterprises, Inc. has entered into an employment agreement with Eva
Beilus in 1999 for an annual salary of $52,000.
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<PAGE>
All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors. Executive officers are
elected annually by the Board of Directors to hold office until the first
meeting of stockholders and until their successors are chosen and qualified.
Stock Options
We did not grant stock options in 1999. As of the date of this prospectus,
we have not granted stock options in 2000.
No executive officer held stock options during the 1999 fiscal year. As of
the date of this prospectus, no executive officer holds stock options.
Employment Agreement
As of the date of this prospectus, we have entered into written employment
agreements with two of our employees, Eva Beilus for an annual salary of $52,000
and Sam Beilus for an annual salary of $28,000.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of November 30, 2000, certain
transactions with respect to the beneficial ownership of the common stock by (1)
each person who beneficially owns more than five percent of our outstanding
shares, (2) each of our directors, (3) each Named Executive Officer and (4) all
of our executive officers and directors as a group. Except as otherwise
indicated, each person listed below has sole voting and investment power with
respect to the shares of common stock set forth opposite such person's name.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
Identity of Stockholder or Number of Shares Beneficially Percentage of Shares Owned Assuming
Group Owned (1) Exercise of All Warrants (2)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ethel Schwartz 1,660,000 7.37%
---------------------------------------------------------------------------------------------------------------
Hyman Schwartz 1,660,000 7.37%
---------------------------------------------------------------------------------------------------------------
Eva Beilus 1,660,000 7.37%
---------------------------------------------------------------------------------------------------------------
All Officer and Directors as a Group 4,980,000 22.11%
(3 persons)
---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Under the rules of the SEC, a person is deemed to be the beneficial owner
of a security if such person has or shares the power to vote or direct the
voting of such security or the power to dispose or direct the disposition
of such security. A person is also deemed to be a beneficial owner of any
securities if that person has the right to acquire beneficial ownership
within 60 days of the date hereof. Unless otherwise indicated by footnote,
the named entities or individuals have sole voting and investment power
with respect to the shares of common stock beneficially owned.
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<PAGE>
(2) Shares subject to warrants are considered outstanding only for the purpose
of computing the percentage of outstanding common stock which would be
owned by the optionee if the warrants were so exercised, but (except for
the calculation of beneficial ownership by all directors and executive
officers as a group) are not considered outstanding for the purpose of
computing the percentage of outstanding common stock owned by any other
person.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August, 1999, we entered into an agreement with Yard Productions, Inc.
to develop and produce the web sites to be located under our domain names. The
anticipated fee for the creation, development and setting up of the web site was
to be $150,000. We subsequently terminated the agreement and received a refund
in the amount of $38,000 out of the initial $50,000 deposit paid to Yard. The
termination of the agreement with Yard Production was amicable and with the
mutual consent of Yard Productions. We subsequently engaged the services of
333Media Inc. to develop the websites of New Medium Enterprises, Inc. To date,
we have paid approximately $ 230,000to 333 Media Inc.
On September 1, 1999, we entered into a one year consulting agreement with
Robert LeRea for $50,000 in cash.
In September, 1999, New Medium Enterprises, Inc. issued to Barbara R.
Mittman, 50,000 shares of Common Stock for legal services.
On November 1, 1999, we entered into a consulting agreement with Stratagram
Technology Group, Inc, to aid us in setting up our business and providing us
with technology consulting. As compensation, Stratagram receives $2,000 and
2,000 shares of common stock per week.
On January 1, 2000, we entered into an advisory agreement with D'Arezzo
Collection Inc. a boutique buyer and designer, to act as a member of our
advisory board. The agreement provided for the issuance of 10,000 shares of
common stock for each quarter. The agreement was subsequently terminated after
the issuance of 10,000 shares for the first quarter of 2000. No further shares
are required to be issued.
On January 15, 2000, we entered into a second agreement with Robert Le Rea
for $56,000 in cash, partially for a finders fee equal to 10% of cash raised in
the Series C Private Placement, and partially in payment for additional
consulting work.
On July 15, 2000, we formed a wholly-owned subsidiary, Intellitain Media
Inc., which began producing high quality intellectually based media
entertainment targeted for families, schools and colleges and general audience
seeking intelligent based entertainment. Intellitain's first production is a
game show designed for TV. We have allocated approximately $10,000 to this
entity to date.
In August, 2000, we acquired a majority interest in the assets of Broadeo
Wireless Communication from Stratagram Technology Group, Inc. In conjunction
with the acquisition, we issued warrants to purchase 500,000 shares of common
stock at $1.50 per share and 500,000 shares of common stock at $1.00 per share.
The Warrants are exercisable for a period of three years.
In October, 2000, Passy Holding purchased from Hyman and Ethel Schwartz
warrants to purchase 2,330,000 shares at exercise prices ranging from $.50 per
share to $1.50 per share. Israel Bornstein is a director of Passy Holding.
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<PAGE>
In October, 2000, Eva Beilus assigned 240,000 warrants exercisable at $.50
and 190,000 warrants exercisable at $1.50 to her son-in-law, Jacob Werczberger.
Eva Beilus also assigned 240,000 warrants exercisable at $.50 and 190,000
warrants exercisable at $1.50 to her sister-in-law, Helen Shimon. In addition,
Helen Shimon owns 100,000 warrants exercisable at $.50.
On October 20, 2000, New Medium Enterprises, Inc. entered into a Surrender
and Lockup Agreement with three of the principal shareholders of New Medium
Enterprises, Inc. in exchange for an aggregate of $3,750 proportionately paid to
the three principal shareholders representing the purchase price paid and the
par value of an aggregate 3,750,000 shares of common stock of New Medium
Enterprises, Inc. which the three investors surrendered and returned to New
Medium Enterprises, Inc. Addditionally, the three principal shareholders entered
into a lockup agreement in reference to the 750,000 shares of common stock
retained by them.
Effective November, 2000, two of the Directors of New Medium Enterprises,
Inc., Byron Lerner and Darrell Lerner, resigned from their positions as
directors.
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<PAGE>
OFFERING BY SELLING SECURITYHOLDERS
The following tables set forth certain information concerning each of the
selling securityholders. The shares are being registered to permit the selling
securityholders and their transferees or other successors in interest to offer
the shares from time to time
Selling securityholders are under no obligation to sell all or any portion
of their shares. Particular selling shareholders may not have a present
intention of selling their shares and may sell less than the number of shares
indicated. The following table assumes that the selling shareholders will sell
all of their shares.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
SELLING SHAREHOLDERS NUMBER OF SHARES NUMBER OF SHARES TO NUMBER OF SHARES OF PERCENT OF SHARES
OWNED PRIOR TO BE SOLD (1) COMMON STOCK OWNED OWNED AFTER OFFERING
OFFERING AFTER OFFERING (2) (2)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Windermere Fund (3)(a) 500,000 1,000,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Atlantic Bond Fund (4)(a) 500,000 1,000,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Sequoia Growth Fund (5)(a) 500,000 1,000,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
The Executive Fund (6)(a) 500,000 1,000,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Les Weinberg (a) 50,000 80,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Glenn Weinberg (a) 30,000 60,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Brian Slomiak (a) 30,000 60,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Randy Guttenberg (a) 50,000 100,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Scott Lederman (a) 40,000 80,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Adam Lederman (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Peter Muhlenberg (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Marie Ann Bishko (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Michael Klein (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Steven Girden (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Robert Weiss (a) 60,000 120,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Derek Slivka (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Lyle Slivka (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Barry Slivka (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Linda Slivka (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Steven Shore (a) 60,000 120,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Thomas Martin (a) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Bruce Lee (b) 20,000 50,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
David Lazarus (b) 40,000 100,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Darren Lazarus (b) 55,000 137,500 0 0%
------------------------------------------------------------------------------------------------------------------------------
Bernie Gelbard (b) 30,000 75,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Michael Rosenblum (b) 10,000 25,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Michael Orlando (b) 5,000 12,500 0 0%
------------------------------------------------------------------------------------------------------------------------------
Drew J. Smith (b) 5,000 12,500 0 0%
------------------------------------------------------------------------------------------------------------------------------
Eric Marseglia (b) 5,000 12,500 0 0%
------------------------------------------------------------------------------------------------------------------------------
Garry Marcus (b) 20,000 50,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Michael McPartland (b) 5,000 12,500 0 0%
------------------------------------------------------------------------------------------------------------------------------
Eric Berger (b) 35,000 87,500 0 0%
------------------------------------------------------------------------------------------------------------------------------
Gary Rosenberg (b) 10,000 25,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-17-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------
Solomon Mayer (b) 10,000 25,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Barry Mayer (b) 10,000 25,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Helping Hand W Hand, Inc. (7)(c) 10,000 20,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Moses Mayer (c) 10,000 20,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Benzion Fromer (c) 10,000 20,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
E.G.B. Pension Plan (8)(c) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Chabad Lubavitch (9)(c) 10,000 20,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Ian Altman (c) 30,000 60,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Eric Haas (c) 10,000 20,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Roger Altman (c) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
KTC of Rockland Berel Rosenfeld 10,000 20,000 0 0%
Signatory (c)
------------------------------------------------------------------------------------------------------------------------------
Bernard Rosenfeld (c) 10,000 20,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Andrew Savarino (c) 48,000 96,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Robert Kasovitz (c) 20,000 40,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Neil Neuman (c) 5,000 10,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Samuel Friedman (10) 750,000 950,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Passy Holding (11) 2,330,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Jacob N. Werczberger (12) 550,000 980,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Helen Shimon (13) 550,000 1,080,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Bob Lerea 75,000 475,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Barbara R. Mittman 50,000 250,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Rosa Klein 125,000 625,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Abraham Englander 50,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Herman & Judy Friedman 200,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
International Global Communications 750,000 0 0%
(14)
------------------------------------------------------------------------------------------------------------------------------
Darrell Lerner 750,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Paril Holding (15) 50,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Meir Gross 50,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Henry Reinhold 50,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Strategram Technology Group, Inc. 1,000,000 0 0%
(16)
------------------------------------------------------------------------------------------------------------------------------
Nathan Schwartz (17) 500,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
Martin Schwartz (17) 500,000 0 0%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) "A" unit consisted of 10,000 shares of the Company's common stock, and
10,000 Class A Common Stock Purchase (Class A Warrants). Each A warrant entitled
the warrant holder to purchase shares of the Company's Common Stock at $1.50 per
share. The warrants expire July 31, 2002. Shares offered include both common
shares and shares underlying the warrants.
(b) "B" unit consisted of 5,000 shares of the Company's common stock, and 7,500
Class B Common Stock Purchase (Class B Warrants). Each B warrant entitled the
warrant holder to purchase shares of the Company's Common Stock at $1.00 per
share. The warrants expire July 31, 2002. The warrants expire July 31, 2002.
Shares offered include both common shares and shares underlying the warrants.
(c) "C" unit consisted of 10,000 shares of the Company's common stock, and
10,000 Class D Common Stock Purchase (Class D Warrants). Each D warrant entitled
the warrant holder to purchase shares of the
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<PAGE>
Company's Common Stock at $1.25 per share. The warrants expire July 31, 2002. .
The warrants expire July 31, 2002. Shares offered include both common shares and
shares underlying the warrants.
(1) Assumes all warrants were exercised.
(2) Assumes all shares of common stock offered in this prospectus are sold and
no other shares of common stock are sold during the offering period.
(3) Shaniqua Woodside is listed as a director of Windermere Fund.
(4) Nancy Lake is listed as a director of Atlantic Bond Fund.
(5) Albert H. Davis is listed as a director of Sequoia Growth Fund
(6) Janis Galanis is listed as a director of The Executive Fund.
(7) Mayer Zaresi has investment control of Helping Hand in Hand, Inc.
(8) Stephen Wechsler has investment control of E.G.G. Pension Plan.
(9) Baila Gansburg is President and has investment control of Chabad Lubavitch.
(10) Samuel Friedman is a brother to Ethel Schwartz.
(11) Israel Bornstein is a director of Passy Holding and has investment control
of Passy Holding.
(12) Jacob N. Werczberger is a son in law of Eva Beilus.
(13) Helen Shimon is a sister in law to Eva Beilus.
(14) Byron R. Lerner is a director of International Global Communications and
has investment control of International Global Communications. Shares offered
for International Global Communications represent warrants to purchase 500,000
shares at $1.50, and warrants to purchase 100,000 shares at $.75 and warrants to
purchase 150,000 shares at $1.00. The authorized signatory for International
Global Communication is Byron Lerner.
(15) Joseph Goldenberg has investment control of Paril Holding.
(16) Barry Shisgal has investment control of Stratagram Technology Group, Inc.
(17) Nathan & Martin Schwartz are brothers to Hyman Schwartz.
Shares Eligible For Future Sale
As of the date of the filing New Medium Enterprises, Inc. has 11,957,000
outstanding shares of Common Stock, not including 10,603,000 of Common Stock
issuable upon exercise of the Warrants. Out of the 11,957,000 shares outstanding
6,083,000 are being registered with this offering. The remaining 5,874,000
shares of common stocks, which are not being registered hereby, are "restricted
securities" as defined under Rule 144, substantially all of which are available
for sale in the public market, subject to the provisions of Rule 144 under the
Securities Act, or pursuant to this Registration Statement. In
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<PAGE>
addition, certain holders of the Restricted Shares are entitled to certain
registration rights. See "Registration Rights."
In general, under Rule 144 as currently in effect, a person or persons
whose shares are aggregated, including an Affiliate, who has beneficially owned
Restricted Shares for at least one year is entitled to sell, within any
three-month period, a number of such shares that does not exceed the greater of:
(i) One percent of the outstanding shares of Common Stock; or
(ii) The average weekly trading volume in the Common Stock during the four
calendar weeks preceding the date on which notice of such sale is filed with the
Securities and Exchange Commission.
Sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about New Medium Enterprises, Inc. In addition, a person who is not an Affiliate
and has not been an Affiliate for at least three months prior to the sale and
who has beneficially owned Restricted Shares for at least two years may resell
such shares without regard to the requirements described above. New Medium
Enterprises, Inc. is unable to estimate the number of Restricted Shares that
ultimately will be sold under Rule 144 because the number of shares will depend
in part on the market price for the Common Stock, the personal circumstances of
the sellers and other factors. See "Risk Factors--Shares Eligible for Future
Sale" and "Risk Factors--Possible Volatility of Stock Price."
DESCRIPTION OF SECURITIES
The following is a summary description of our capital stock and certain
provisions of our certificate of incorporation and by-laws, copies of which have
been incorporated by reference as exhibits to the registration statement of
which this prospectus forms a part. The following discussion is qualified in its
entirety by reference to such exhibits.
General
Our authorized capital stock consists of 100,000,000 shares of common
stock, par value $.001 per share and 10,000,000 shares of preferred stock, par
value $.001 per share.
Common Stock
The holders of the common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Our
certificate of incorporation and by-laws do not provide for cumulative voting
rights in the election of directors. Accordingly, holders of a majority of the
shares of common stock entitled to vote in any election of directors may elect
all of the directors standing for election. Holders of common stock are entitled
to receive ratably such dividends as may be declared by the Board out of funds
legally available therefor. In the event of our liquidation or dissolution,
holders of common stock are entitled to share ratably in the assets remaining
after payment of liabilities. Holders of common stock have no preemptive,
conversion or redemption rights. All of the outstanding shares of common stock
are fully-paid and non-assessable.
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<PAGE>
PLAN OF DISTRIBUTION
The shares may be sold or distributed from time to time by the selling
stockholders or by pledgees, donees or transferees of, or successors in interest
to, the selling stockholders, directly to one or more purchasers (including
pledgees) or through brokers, dealers or underwriters who may act solely as
agents or may acquire shares as principals, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices, at negotiated
prices or at fixed prices, which may be changed. The distribution of the shares
may be effected in one or more of the following methods:
o ordinary brokers transactions, which may include long or short sales,
o transactions involving cross or block trades on any securities or market
where our common stock is trading,
o purchases by brokers, dealers or underwriters as principal and resale by
such purchasers for their own accounts pursuant to this prospectus,
o "at the market" to or through market makers or into an existing market for
the common stock,
o in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents,
o through transactions in options, swaps or other derivatives (whether
exchange listed or otherwise), or
o any combination of the foregoing, or by any other legally available means.
Brokers, dealers, underwriters or agents participating in the distribution
of the shares may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of shares for
whom such broker-dealers may act as agent or to whom they may sell as principal,
or both (which compensation as to a particular broker-dealer may be in excess of
customary commissions). The selling stockholders and any broker-dealers acting
in connection with the sale of the shares hereunder may be deemed to be
underwriters within the meaning of Section 2(11) of the Securities Act of 1933,
and any commissions received by them and any profit realized by them on the
resale of shares as principals may be deemed underwriting compensation under the
Securities Act of 1933. Neither the selling stockholders nor we can presently
estimate the amount of such compensation. We know of no existing arrangements
between the selling stockholders and any other stockholder, broker, dealer,
underwriter or agent relating to the sale or distribution of the shares.
We will not receive any proceeds from the sale of 6,083,000 commons shares
pursuant to this prospectus. We may, however, receive up to $12,361,250 in
proceeds from the exercise by certain selling stockholders of warrants to
purchase up to an aggregate of 10,603,000 shares of our common stock. The resale
of the common stock underlying these warrants is included in the registration
statement of which this prospectus forms a part. We have agreed to bear the
expenses of the registration of the shares, including legal and accounting fees.
We have informed the selling stockholders that certain anti-manipulative
rules contained in Regulation M under the Securities Exchange Act of 1934 may
apply to their sales in the market and have furnished the selling stockholders
with a copy of such rules and have informed them of the need for delivery of
copies of this prospectus.
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<PAGE>
The selling stockholders may also use Rule 144 under the Securities Act of
1933 to sell the shares if they meet the criteria and conform to the
requirements of such rule.
NEVADA BUSINESS COMBINATION PROVISIONS
Business Combination Law
Nevada has a business combination law which prohibits certain business
combinations between Nevada corporations and "interested stockholders" for three
years after the "interested stockholder" first becomes an "interested
stockholder" unless the corporation's board of directors approves the
combination in advance. For purposes of Nevada law, an "interested stockholder"
is any person who is (i) the beneficial owner, directly or indirectly, of ten
percent or more of the voting power of the outstanding voting shares of the
corporation, or (ii) an affiliate or associate of the corporation and at any
time within the three previous years was the beneficial owner, directly or
indirectly, of ten percent or more of the voting power of the then outstanding
shares of the corporation. The definition of the term "business combination" is
sufficiently broad to cover virtually any kind of transaction that would allow a
potential acquiror to use the corporation's assets to finance the acquisition or
otherwise to benefit its own interests rather than the interests of the
corporation and its other shareholders.
The effect of Nevada's business combination law is to potentially
discourage parties interested in taking control of the company from doing so if
it cannot obtain the approval of our board of directors.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Nevada Revised Statutes Section 78.7502 and 78.751, our articles of
incorporation and bylaws provide us with the power to indemnify any of our
directors, officers, employees or agents. The director, officer, employ or agent
must have conducted himself in good faith and reasonably believe that his
conduct was in, or not opposed to our best interests. In a criminal action the
director, officer, employee or agent must not have had a reasonable cause to
believe his conduct was unlawful. Advances for expenses may be made if the
director affirms in writing that he believes he has met the standards and that
he will personally repay the expense if it is determined he did not meet the
standards.
We will not indemnify a director or officer adjudged liable due to his
negligence or willful misconduct toward us, adjudged liable to us, or if he
improperly received personal benefit. Indemnification in a derivative action is
limited to reasonable expenses incurred in connection with the proceeding.
We have agreed to indemnify each of our directors and certain officers
against certain liabilities, including liabilities under the Securities Act of
1933.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions described above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person 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, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question
-22-
<PAGE>
whether such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
WHERE YOU CAN FIND MORE INFORMATION
Upon effectiveness of this registration statement we will commence filing
reports, proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any report, proxy statement or other
information we file with the Commission at the Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's Regional
Offices at 7 World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
You may obtain information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330. In addition, we will file electronic
versions of these documents on the Commission's Electronic Data Gathering
Analysis and Retrieval, or EDGAR, System. The Commission maintains a website at
http://www.sec.gov that contains reports, proxy statements and other information
filed with the Commission.
We have filed a registration statement on Form SB-2 with the Commission to
register shares of our common stock issued and issuable upon exercise of
warrants to be sold by the selling stockholders. This prospectus is part of that
registration statement and, as permitted by the Commission's rules, does not
contain all of the information set forth in the registration statement. For
further information with respect to us or our common stock, you may refer to the
registration statement and to the exhibits and schedules filed as part of the
registration statement. You can review a copy of the registration statement and
its exhibits and schedules at the public reference room maintained by the
Commission, and on the Commission's web site, as described above. You should
note that statements contained in this prospectus that refer to the contents of
any contract or other document are not necessarily complete. Such statements are
qualified by reference to the copy of such contract or other document filed as
an exhibit to the registration statement.
TRANSFER AGENT
The Transfer Agent and Registrar for the common stock is Olde Monmouth
Stock Transfer & Trust Company, 77 Memorial Parkway, Suite 101, Atlantic
Highlands, New Jersey 07716.
LEGAL MATTERS
The validity of the shares of common stock offered in this prospectus has
been passed upon for us by Grushko & Mittman, P.C., 551 Fifth Avenue, Suite
1601, New York, New York 10176.
EXPERTS
Our audited financial statements as of June 30, 2000 and unaudited
financial statements as of September 30, 2000 have been included in this
prospectus and in the registration statement filed with the Securities and
Exchange Commission in reliance upon the report of Nachum Blumenfrucht, CPA,
independent certified public accountant, upon his authority as expert in
accounting and auditing. Nachum Blumenfrucht, CPA's report on the financial
statements can be found at the end of this prospectus and in the registration
statement.
-23-
<PAGE>
--------------------------------------------------------------------------------
NEW MEDIUM ENTERPRISES, INC.
16,686,000
Shares
Common Stock
PROSPECTUS
You should rely only on the information contained in this document or that we
have referred you to. We have not authorized anyone to provide you with
information that is different. This prospectus is not an offer to sell common
stock and is not soliciting an offer to buy common stock in any state where the
offer or sale is not permitted.
____________, 2000
--------------------------------------------------------------------------------
-24-
<PAGE>
N. Blumenfrucht CPA PC
1040 East 22nd Street
Brooklyn, New York 11210
Tel. - 718-692-2743
Fax - 718-692-2203
The Board of Directors and Stockholders
New Medium Enterprises, Inc.
We have audited the accompanying balance sheet of New Medium Enterprises, Inc.
(A development stage company) as of June 30, 2000 and the related statements of
operations, stockholders' equity and cash flows for the period August 2, 1999
(inception) through June 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on theses financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide 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 New Medium Enterprises, Inc.
as of the June 30, 2000 and the results of its operations and its cash flows for
the period August 2, 1999 through June 30, 2000 in conformity with accounting
principles generally accepted in the United States.
/s/ [ILLEGIBLE]
Brooklyn, New York
October 11, 2000
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
BALANCE SHEET
JUNE 30, 2000
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents (note 2 ) $1,066,716
----------
Total Current Assets $1,066,716
Property and equipment ( note 2) 34,895
less: Accumulated depreciation 3,490 31,405
----------
Deferred offering costs (note 4) 40,000
Deferred tax asset (note 5) 0
Web site development costs/ Software Asset (note 6) 441,102
Other assets- security deposits (note 8) 3,600
----------
Total Assets $1,582,823
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses (note 7) $ 2,500
----------
Total Current Liabilities $ 2,500
COMMITMENTS AND CONTINGENCIES (note 8)
STOCKHOLDERS' EQUITY (note 9)
Preferred stock, $.001 par value, Authorized 10,000,000 shares ; none issued --
Common stock, $.001 par value, Authorized 100,000,000 shares;
Issued and outstanding 15,653,000 15,653
Additional paid in capital 1,668,642
Deficit accumulated during the development stage (103,972)
----------
Total Stockholders' Equity 1,580,323
----------
Total Liabilities and Stockholders' Equity $1,582,823
==========
</TABLE>
See accompanying notes to financial statements
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD AUGUST 2, 1999 (Inception) JUNE 30, 2000
<TABLE>
<CAPTION>
<S> <C> <C>
Cash flows from operating activities
Net loss ($103,972)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation $3,490
Changes in assets and liabilities:
accrued expenses 2,500
security deposit (3,600) 2,390
--------- ----------
Net cash used in operating activities (101,582)
Cash flows from investing activities
Purchase of fixed assets (34,895)
Web site development costs/ Software asset (416,102)
----------
Net cash used in financing activities (450,997)
Cash flows from financing activities
Proceeds from sale of A,B and C units 1,716,250
Offering costs-private placements (69,625)
Deferred offering costs-registration statement (40,000)
Proceeds from sale of shares and warrants to various
officers, founders and investors 12,670
---------
Net cash provided by financing activities 1,619,295
----------
Net increase in cash and cash equivalents 1,066,716
Cash and cash equivalents, beginning of period 0
----------
Cash and cash equivalents, June 30, 2000 $1,066,716
==========
Supplemental disclosures
Noncash investing and financing activities:
Issuance of common stock in exchange for services
in connection with web site development costs $25,000
=======
</TABLE>
See accompanying notes to financial statements
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
STATEMENT OF OPERATIONS
FOR THE PERIOD AUGUST 2, 1999 (Inception) JUNE 30, 2000
<TABLE>
<CAPTION>
<S> <C> <C>
REVENUES $0
OPERATING EXPENSES
General and administrative $142,213
Depreciation 3,490
--------
Total operating expenses 145,703
----------
Income (loss) from operations (145,703)
OTHER INCOME
Interest Income 41,731
----------
Loss before income taxes (103,972)
Income tax benefit (note 5) 0
NET LOSS ($103,972)
==========
LOSS PER COMMON SHARE- Basic and Diluted ($0.01)
==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 15,391,315
==========
</TABLE>
See accompanying notes to financial statements
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD AUGUST 2, 1999 (Inception) JUNE 30, 2000
<TABLE>
<CAPTION>
Retained
Additional Earnings
Per Share Common Stock Paid-in (Accumulated
Amount Shares Amount Capital Deficit) Totals
--------- ------ ------ ---------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Shares & warrants issued for cash, August 1999 $0.00 12,620,000 $12,620 $50 $12,670
Sale of 251 A units, August 1999 $0.50 2,510,000 2,510 1,252,490 1,255,000
Sale of 52 B units, August 1999 $0.75 260,000 260 194,740 195,000
Issuance of shares for services rendered, Dec. 1999 $0.50 16,000 16 7,984 8,000
Sale of 21.3 C units, January 2000 $1.25 213,000 213 266,037 266,250
Issuance of shares for services rendered, April 2000 $0.50 34,000 34 16,966 17,000
Offering costs-private placements (69,625) (69,625)
Net loss for period ended June 30, 2000 ($103,972) (103,972)
---------- ------- --------- --------- ---------
Balances, June 30, 2000 15,653,000 15,653 1,668,642 (103,972) 1,580,323
========== ======= ========= ========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - FORMATION AND BUSINESS OF THE COMPANY.
New Medium ENTERPRISES, INC. (the "Company) was organized on August 2, 1999 in
the State of Nevada under the name Shopoverseas.com, Inc. On July 10, 2000 the
name was changed to New Medium Enterprises, Inc. The financial statements
reflect the name New Medium Enterprises throughout. The Company's intension was
to operate as an Internet based E-commerce Company. Several websites were
formulated whose purpose was the sale of various goods and services to both
consumers and businesses. Additionally, the Company planned to market its own
proprietary Internet based software package to outside e-commerce companies. The
Company also intends to enter the wireless telecommunications area. As of the
June 30, 2000 the Company has not generated any revenues and is considered a
development stage company.
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal year
The Company has chosen June 30, as its fiscal year end.
Use of estimates
The preparation of financial statements in conformity with general accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities, revenue and expenses as
well as the disclosure of contingent assets and liabilities in the financial
statements. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents consists of cash, money market funds and other highly
liquid investments with a maturity of three months or less from the date of
purchase. The Company has not experienced any losses on its cash or cash
equivalents.
Property and equipment
Property and equipment (primarily computer hardware) are recorded at cost and
depreciated or amortized over the estimated useful lives of the assets (three to
five years) using the accelerated depreciation method allowed by the Internal
Revenue Code.
Revenue recognition
The Company recognizes revenue on the accrual basis as the related services are
provided to customers and when the customer is obligated to pay for such
services. Revenue from product sales is recognized when title transfers to
customers, primarily on shipment. For the year ended June 30, 2000 there were no
revenues.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Loss per share
In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share", the computation of net loss per share is based upon the
weighted average number of common shares issued and outstanding for the
reporting period. Common stock equivalents related to options, warrants and
convertible securities are excluded from the computation when the effect would
be antidiliutive
Recent accounting pronouncements
The Financial Accounting Standards Board (FASB) issued FASB 133, "Accounting for
Derivative Instruments and Hedging Activities", The Company does not engage in
derivative or hedging activities and does not expect the adoption of this new
pronouncement to have a material effect, if any, on its financial condition or
results of operations.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101 "Revenue Recognition in Financial Statements." SAB No.
101 summarizes certain staff views in applying generally accepted accounting
principles to revenue recognition in the financial statements. The
implementation of SAB 101 is not expected to have a significant impact on the
Company's future results of operations.
NOTE 3- LIQUIDITY & PROFITABILITY
As reflected in the accompanying financial statements, the Company incurred a
loss for the current period and expects to incur a loss in the next fiscal
period. Based upon the cash utilization rate and the plans for joint ventures
and acquisitions, it is management's opinion that the current capital base is
sufficient to maintain the Company for at least the following year.
Additionally, the Company is preparing a SB-2 registration statement. The
purpose of the registration is to permit certain shareholders to sell their
shares and warrants. Management is of the opinion that upon the successful
registration some warrants will be exercised resulting in an inflow of capital
to the Company.
NOTE 4- DEFERRED OFFERING COSTS
The Company is planning a SB-2 registration of some of its shares and all of its
outstanding warrants. Certain costs have been incurred in regard to this
registration. As of the balance sheet date these costs, which approximate $
40,000, are deferred pending completion of the offering. If the registration is
successful these expenditures would be charged against the proceeds. If the
registration is not completed, the deferred offering costs will be expensed. The
Company had also incurred costs in regard to the private placements totaling
$69,625. These have been charged against additional paid in capital.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 5 -INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 , (SFAS 109) " Accounting for Income Taxes." Under
the asset and liability method, deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory tax rates
applicable to future years to differences between the financial statements
carrying amounts and the tax bases of existing assets and liabilities. Under
SFAS 109, deferred tax assets may be recognized for temporary differences that
will result in deductible amounts in future periods. A valuation allowance is
recognized, if on the weight available evidence, it is more likely than not that
some portion or all of the deferred tax asset will not be realized. As of June
30, 2000 the Company had a Federal and State tax net operating loss of
approximately $545,000. The difference between book and taxable income is due to
timing differences in the recognition of the web site development costs. The
Company established a 100% valuation allowance equal to the net deferred tax
assets, as the Company could not conclude that it was more likely than not that
the deferred tax asset would be realized
NOTE 6- WEB SITE DEVELOPMENT COSTS/ SOFTWARE ASSET
The Company has incurred significant costs in the development of its web sites
and e-commerce capabilities. Management has elected to treat all Web Site
Development Costs under the guidance of the Emerging Issues Task Force (EITF).
The EITF recommends following the guidelines of Statement of Position 98-1.
Under SOP 98-1, software developed for internal use is capitalized during the
development stage and amortized over its useful life. The costs, which were
incurred by the Company, are considered application development stage costs,
which are capitalized and amortized. It is estimated that the useful life of
this asset should approximate three years. As the web site is not fully
developed amortization was not taken in the current financial period. The
Company will also sell these software programs, which it has developed, to third
parties. In such event the position of the Company is per the guidance of FASB
No. 86. Under FASB No. 86, once technological feasibility has been established,
all software production costs are capitalized and reported at the lower of
unamortized cost or net realizable value. When the product is available for
general release to its customers, amortization will begin. Management is of the
opinion that technological feasibility has been established for its product and
that following either the guidelines of FASB No. 86 or SOP 98-1 requires the
capitalization of these expenditures.
During the current period 50,000 shares of common stock were issued for services
rendered in relation to the development of the web site. Management has valued
these shares at $25,000, which approximates the value of services rendered.
NOTE 7-ACCRUED EXPENSES
Accrued expenses consist of state and local corporate taxes.
NOTE 8-COMMITMENTS AND CONTINGENCIES
The Company leases its current location at a monthly rent of $1,200. The lease
expires September 30, 2000, with an automatic twelve-month renewal.
The future minimum lease obligations through June 30, 2001 are $ 14,400.
Rent expense for the period ended June 30, 2000 was $10,800. The company
maintains a $3,600 security deposit with its landlord.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 8-COMMITMENTS AND CONTINGENCIES (continued)
In August 1999 the Company entered into an employment agreement with Eva Beilus,
an officer, for a gross annual salary of $52,000. For the year ended June 30,
2000 Mrs. Beilus received compensation of $47,000.
In September 1999 the Company entered into a one-year financial consulting
agreement with Robert LeRea. In January 2000 the Company entered into a second
agreement with LeRea where he was to be compensated for funds raised and
consulting work. As of June 30, 2000 Mr. LeRea received $26,625 in finders fees
for capital raised. These costs were included in offering costs, which was
charged against additional paid in capital. In addition to the above Mr. LeRea
received payments for the development of strategic alliances in the Internet
based market. These costs have been included in the intangible asset -Web Site
Development Costs.
On November 1, 1999 the Company entered into a consulting agreement with
Stratagram Technology Group Inc. (Stratagram), technology and business
consultants. Stratagram has helped in the development of the Company's web site
and e-commerce capabilities and is compensated at a rate of $2,000 and 2,000
shares per week. Through June 30, 2000 the Company has issued 40,000 shares to
an officer of Stratagram . These shares have been valued at $20,000, which
approximates the value of services rendered. These costs have been included in
the intangible asset- Web Site Development Costs. The Company can terminate its
contract at the Company's discretion with a four-week notice.
Legal Proceedings
There are no material legal proceedings to which the Company is a party to or
which any of their property is subject.
NOTE 9- STOCKHOLDERS' EQUITY
The Company's authorized capital stock consists of 100,000,000 shares of common
stock (par value of $.001) and 10,000,000 shares of non-voting preferred stock
(par value $.001).
The Company offered for sale 480 "A" units, 160 "B" units and 100 "C" units of
its securities.
A "A" unit consisted of 10,000 shares of the Company's common stock, and 10,000
Class A warrants. Each Class A warrant entitled the warrant holder to purchase
one share of the Company's common stock at $1.50. The warrants expire July 31,
2002. Each unit sold for $ 5,000.
A "B" unit consisted of 5,000 shares of the Company's common stock, and 7,500
Class B warrants. Each Class B warrant entitled the warrant holder to purchase
one share of the Company's common stock at $1.00. The warrants expire July 31,
2002. Each unit sold for $ 3,750.
A "C" unit consisted of 10,000 shares of the Company's common stock, and 10,000
Class D warrants. Each D warrant entitled the warrant holder to purchase one
share of the Company's common stock at $1.25. The warrants expire July 31, 2002.
Each unit sold for $12,500.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 9- STOCKHOLDERS' EQUITY (continued)
On August 20, 1999 the Company sold to various investors and officers 12,620,000
shares of common stock, 3,080,000 Class A warrants (exercisable at $1.50 per
share), 330,000 class B warrants (exercisable at $1.00 per share), 2,580,000 C
warrants exercisable at ($.50 per share). Total consideration received was
$12,670.
On September 2, 1999 the Company sold through a private placement 251 Class A
units for a total gross consideration of $1,255,000 and 52 B units for a total
gross consideration of $195,000.
In January 2000 the Company sold through a private placement 21.3 C units for a
total gross consideration of $266,250.
The Company incurred costs in regard to the private placements totaling $69,625.
These have been charged against additional paid in capital in the current
period.
The Company issued common stock to various individuals and companies in return
for services rendered. During the period ended June 30, 2000 50,000 common
shares were issued to various suppliers of services. These shares were valued at
$25,000, which approximates the value of the services rendered.
No preferred shares have been issued. It is within the discretion of the Board
of Directors to determine the preferences of the preferred stock. The Company
has not yet determined the preferences of the preferred stock.
The Company has not issued any options under its employee stock option plan.
NOTE 10-SUBSEQUENT EVENTS
On July 15, 2000 the Company formed Intellitian Media Inc., a subsidiary that
will market education and entertainment productions.
In August 2000 the Company acquired a majority stake in Broadeo Wireless
Communications Inc., a startup company that is involved in wireless
communications. The Company issued 500,000 B warrants exercisable at $1.00 per
share and 500,000 A warrants exercisable at $1.50 per share.
In September 2000 the Company issued an additional 54,000 common shares to
Stratagram .
In October 2000 the Company purchased 3,750,000 common shares from some of its
original investors for $3,750. The Company issued to these shareholders: 200,000
warrants exercisable at $.75 per share and 300,000 warrants exercisable at $1.00
per share. The 3,750,000 common shares were returned to the Company's treasury.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
BALANCE SHEET
SEPTEMBER 30, 2000
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $941,748
---------
Total Current Assets $941,748
Property and equipment 34,895
less: Accumulated depreciation 5,235 29,660
---------
Deferred offering costs 45,000
Deferred tax asset 0
Web site development costs/ Software Asset 558,402
Other assets- security deposits 4,806
----------
Total Assets $1,579,616
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $10,353
---------
Total Current Liabilities $10,353
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value, Authorized 10,000,000 shares ; none issued --
Common stock, $.001 par value, Authorized 100,000,000 shares;
Issued and outstanding 157,070,000 15,707
Additional paid in capital 1,695,588
Deficit accumulated during the development stage (142,032)
---------
Total Stockholders' Equity 1,569,263
----------
Total Liabilities and Stockholders' Equity $1,579,616
==========
</TABLE>
See accompanying notes to financial statements
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
STATEMENT OF OPERATIONS
FOR THE PERIOD JULY 1, 2000 - SEPT. 30, 2000
(UNAUDITED)
REVENUES $0
OPERATING EXPENSES
General and administrative $52,283
Depreciation 1,745
-------
Total operating expenses 54,028
----------
Income (loss) from operations (54,028)
OTHER INCOME
Interest Income 15,968
----------
Loss before income taxes (38,060)
Income tax benefit 0
NET LOSS ($38,060)
==========
LOSS PER COMMON SHARE- Basic and Diluted ($0.00)
==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 15,680,000
==========
See accompanying notes to financial statements
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 1, 2000 - SEPT. 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Cash flows from operating activities
Net loss ($38,060)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation $1,745
Changes in assets and liabilities:
accrued expenses 7,853
security deposit (1,206) 8,392
------- ---------
Net cash used in operating activities (29,668)
Cash flows from investing activities
Purchase of fixed assets 0
Web site development costs/ Software asset (90,300)
-------
Net cash used in financing activities (90,300)
Cash flows from financing activities
Deferred offering costs-registration statement (5,000)
-------
Net cash provided by financing activities (5,000)
---------
Net decrease in cash and cash equivalents (124,968)
Cash and cash equivalents, June 30, 2000 1,066,716
---------
Cash and cash equivalents, September 30, 2000 $941,748
=========
Supplemental disclosures
Noncash investing and financing activities:
Issuance of common stock in exchange for services
in connection with web site development costs $27,000
=========
</TABLE>
See accompanying notes to financial statements
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD AUGUST 2, 1999 (Inception) - SEPTEMBER 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Retained
Additional Earnings
Per Share Common Stock Paid-in (Accumulated
Amount Shares Amount Capital Deficit) Totals
--------- ------ ------ ---------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Shares & warrants issued for cash, August 1999 $0.00 12,620,000 $12,620 $50 $12,670
Sale of 251 A units, August 1999 $0.50 2,510,000 2,510 1,252,490 1,255,000
Sale of 52 B units, August 1999 $0.75 260,000 260 194,740 195,000
Issuance of shares for services rendered, Dec 1999 $0.50 16,000 16 7,984 8,000
Sale of 21.3 C units, January 2000 $1.25 213,000 213 266,037 266,250
Issuance of shares for services rendered, April 2000 $0.50 34,000 34 16,966 17,000
Offering costs-private placements (69,625) (69,625)
Net loss for period ended June 30, 2000 ($103,972) (103,972)
---------- ------ ---------- --------- ---------
Balances, June 30, 2000 15,653,000 15,653 1,668,642 (103,972) 1,580,323
Issuance of shares for services rendered, Sept. 2000 $0.50 54,000 54 26,946 27,000
Net loss for period ended September 30, 2000 (38,060) (38,060)
---------- ------ ---------- --------- ---------
Balances, September 30, 2000 15,707,000 $15,707 $1,695,588 ($142,032) $1,569,263
========== ======= ========== ========= ==========
</TABLE>
See accompanying notes to financial statements
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION AND FORMATION AND BUSINESS OF THE COMPANY
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation of the
Company's financial position at September 30, 2000, the results of operations
for the three months ended September 30, 2000, are included. Operating results
for the three-month period ended September 30, 2000 are not necessarily
indicative of the results that may be expected for the year ending June 30,
2001.
The information contained should be read in conjunction with audited financial
statements as of June 30, 2000 .
New Medium ENTERPRISES, INC. (the "Company) was organized on August 2, 1999 in
the State of Nevada under the name Shopoverseas.com, Inc. On July 10, 2000 the
name was changed to New Medium Enterprises, Inc. The financial statements
reflect the name New Medium Enterprises throughout. The Company's intension was
to operate as an Internet based E-commerce Company. Several websites were
formulated whose purpose was the sale of various goods and services to both
consumers and businesses. Additionally, the Company planned to market its own
proprietary Internet based software package to outside e-commerce companies. The
Company also intends to enter the wireless telecommunications area. As of the
September 30, 2000 the Company has not generated any revenues and is considered
a development stage company.
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal year
The Company has chosen June 30, as its fiscal year end.
Use of estimates
The preparation of financial statements in conformity with general accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities, revenue and expenses as
well as the disclosure of contingent assets and liabilities in the financial
statements. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents consists of cash, money market funds and other highly
liquid investments with a maturity of three months or less from the date of
purchase. The Company has not experienced any losses on its cash or cash
equivalents.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property and equipment
Property and equipment (primarily computer hardware) are recorded at cost and
depreciated or amortized over the estimated useful lives of the assets (three to
five years) using the accelerated depreciation method allowed by the Internal
Revenue Code.
Revenue recognition
The Company recognizes revenue on the accrual basis as the related services are
provided to customers and when the customer is obligated to pay for such
services. Revenue from product sales is recognized when title transfers to
customers, primarily on shipment. For the three months ended September 30, 2000
there were no revenues.
Loss per share
In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share", the computation of net loss per share is based upon the
weighted average number of common shares issued and outstanding for the
reporting period. Common stock equivalents related to options, warrants and
convertible securities are excluded from the computation when the effect would
be antidiliutive
Recent accounting pronouncements
The Financial Accounting Standards Board (FASB) issued FASB 133, "Accounting for
Derivative Instruments and Hedging Activities", The Company does not engage in
derivative or hedging activities and does not expect the adoption of this new
pronouncement to have a material effect, if any, on its financial condition or
results of operations.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101 "Revenue Recognition in Financial Statements." SAB No.
101 summarizes certain staff views in applying generally accepted accounting
principles to revenue recognition in the financial statements. The
implementation of SAB 101 is not expected to have a significant impact on the
Company's future results of operations.
NOTE 3- LIQUIDITY & PROFITABILITY
As reflected in the accompanying financial statements, the Company incurred a
loss for the current period and expects to incur a loss in the next fiscal
period. Based upon the cash utilization rate and the plans for joint ventures
and acquisitions, it is management's opinion that the current capital base is
sufficient to maintain the Company for at least the following year.
Additionally, the Company is preparing a SB-2 registration statement. The
purpose of the registration is to permit certain shareholders to sell their
shares and warrants. Management is of the opinion that upon the successful
registration some warrants will be exercised resulting in an inflow of capital
to the Company.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 4- DEFERRED OFFERING COSTS
The Company is planning a SB-2 registration of some of its shares and all of its
outstanding warrants. Certain costs have been incurred in regard to this
registration. As of the balance sheet date these costs, which approximate $
45,000, are deferred pending completion of the offering. If the registration is
successful these expenditures would be charged against the proceeds. If the
registration is not completed, the deferred offering costs will be expensed. The
Company had also incurred costs in regard to the private placements totaling
$69,625. These have been charged against additional paid in capital.
NOTE 5 -INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 , (SFAS 109) " Accounting for Income Taxes." Under
the asset and liability method, deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory tax rates
applicable to future years to differences between the financial statements
carrying amounts and the tax bases of existing assets and liabilities. Under
SFAS 109, deferred tax assets may be recognized for temporary differences that
will result in deductible amounts in future periods. A valuation allowance is
recognized, if on the weight available evidence, it is more likely than not that
some portion or all of the deferred tax asset will not be realized. As of June
30, 2000 the Company had a Federal and State tax net operating loss of
approximately $545,000. The difference between book and taxable income is due to
timing differences in the recognition of the web site development costs. The
Company established a 100% valuation allowance equal to the net deferred tax
assets, as the Company could not conclude that it was more likely than not that
the deferred tax asset would be realized
NOTE 6- WEB SITE DEVELOPMENT COSTS/ SOFTWARE ASSET
The Company has incurred significant costs in the development of its web sites
and e-commerce capabilities. Management has elected to treat all Web Site
Development Costs under the guidance of the Emerging Issues Task Force (EITF).
The EITF recommends following the guidelines of Statement of Position 98-1.
Under SOP 98-1, software developed for internal use is capitalized during the
development stage and amortized over its useful life. The costs, which were
incurred by the Company, are considered application development stage costs,
which are capitalized and amortized. It is estimated that the useful life of
this asset should approximate three years. As the web site is not fully
developed amortization was not taken in the current financial period. The
Company will also sell these software programs, which it has developed, to third
parties. In such event the position of the Company is per the guidance of FASB
No. 86. Under FASB No. 86, once technological feasibility has been established,
all software production costs are capitalized and reported at the lower of
unamortized cost or net realizable value. When the product is available for
general release to its customers, amortization will begin. Management is of the
opinion that technological feasibility has been established for its product and
that following either the guidelines of FASB No. 86 or SOP 98-1 requires the
capitalization of these expenditures.
During the current period 54,000 shares of common stock were issued for services
rendered in relation to the development of the web site. Management has valued
these shares at $27,000, which approximates the value of services rendered.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 7-ACCRUED EXPENSES
Accrued expenses consist of taxes, professional and office expenses.
NOTE 8-COMMITMENTS AND CONTINGENCIES
The Company leases its current location at a monthly rent of $1,200. The lease
expired September 30, 2000, with an automatic twelve-month renewal.
The future minimum lease obligations through June 30, 2001 are $ 10,800.
The company maintains a $3,600 security deposit with its landlord.
In August 1999 the Company entered into an employment agreement with Eva Beilus,
an officer, for a gross annual salary of $52,000. For the year ended June 30,
2000 Mrs. Beilus received compensation of $47,000.
In September 1999 the Company entered into a one-year financial consulting
agreement with Robert LeRea. In January 2000 the Company entered into a second
agreement with LeRea where he was to be compensated for funds raised and
consulting work. As of June 30, 2000 Mr. LeRea received $26,625 in finders fees
for capital raised. These costs were included in offering costs, which was
charged against additional paid in capital. In addition to the above Mr. LeRea
received payments for the development of strategic alliances in the Internet
based market. These costs have been included in the intangible asset -Web Site
Development Costs.
On November 1, 1999 the Company entered into a consulting agreement with
Stratagram Technology Group Inc. (Stratagram), technology and business
consultants. Stratagram has helped in the development of the Company's web site
and e-commerce capabilities and is compensated at a rate of $2,000 and 2,000
shares per week. Through September 30, 2000 the Company has issued 94,000 shares
to an officer of Stratagram . These shares have been valued at $47,000, which
approximates the value of services rendered. These costs have been included in
the intangible asset- Web Site Development Costs. The Company can terminate its
contract at the Company's discretion with a four-week notice.
Legal Proceedings
There are no material legal proceedings to which the Company is a party to or
which any of their property is subject.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 9- STOCKHOLDERS' EQUITY
The Company's authorized capital stock consists of 100,000,000 shares of common
stock (par value of $.001) and 10,000,000 shares of non-voting preferred stock
(par value $.001).
The Company offered for sale 480 "A" units, 160 "B" units and 100 "C" units of
its securities.
A "A" unit consisted of 10,000 shares of the Company's common stock, and 10,000
Class A warrants. Each Class A warrant entitled the warrant holder to purchase
one share of the Company's common stock at $1.50. The warrants expire July 31,
2002. Each unit sold for $ 5,000.
A "B" unit consisted of 5,000 shares of the Company's common stock, and 7,500
Class B warrants. Each Class B warrant entitled the warrant holder to purchase
one share of the Company's common stock at $1.00. The warrants expire July 31,
2002. Each unit sold for $ 3,750
A "C" unit consisted of 10,000 shares of the Company's common stock, and 10,000
Class D warrants. Each D warrant entitled the warrant holder to purchase one
share of the Company's common stock at $1.25. The warrants expire July 31, 2002.
Each unit sold for $12,500.
On August 20, 1999 the Company sold to various investors and officers 12,620,000
shares of common stock, 3,080,000 Class A warrants (exercisable at $1.50 per
share), 330,000 class B warrants (exercisable at $1.00 per share), 2,580,000 C
warrants exercisable at ($.50 per share). Total consideration received was
$12,670.
On September 2, 1999 the Company sold through a private placement 251 Class A
units for a total gross consideration of $1,255,000 and 52 B units for a total
gross consideration of $195,000.
In January 2000 the Company sold through a private placement 21.3 C units for a
total gross consideration of $266,250.
The Company incurred costs in regard to the private placements totaling $69,625.
These have been charged against additional paid in capital in the current
period.
The Company issued common stock to various individuals and companies in return
for services rendered. During the period ended June 30, 2000 50,000 common
shares were issued to various suppliers of services. These shares were valued at
$25,000, which approximates the value of the services rendered.
In September 2000 the Company issued an additional 54,000 common shares to
Stratagram .
In August 2000 the Company acquired a majority stake in Broadeo Wireless
Communications Inc., a startup company that is involved in wireless
communications. The Company issued 500,000 B warrants exercisable at $1.00 per
share and 500,000 A warrants exercisable at $1.50 per share. As of Sept 30, 2000
Broadeo had no operations
No preferred shares have been issued. It is within the discretion of the Board
of Directors to determine the preferences of the preferred stock. The Company
has not yet determined the preferences of the preferred stock.
The Company has not issued any options under its employee stock option plan.
<PAGE>
NEW MEDIUM ENTERPRISES, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 10-INVESTMENTS
On July 15, 2000 the Company formed Intellitian Media Inc., a subsidiary that
will market education and entertainment productions.
NOTE 11 - SUBSEQUENT EVENTS
In October 2000 the Company purchased 3,750,000 common shares from some of its
original investors for $3,750. The Company issued to these shareholders: 200,000
warrants exercisable at $.75 per share and 300,000 warrants exercisable at $1.00
per share. The 3,750,000 common shares were returned to the Company's treasury.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors, Officers, Employees and Agents.
Under Nevada Revised Statutes Section 78.7502 and 78.751, our articles of
incorporation and bylaws provide us with the power to indemnify any of our
directors, officers, employees or agents. The director, officer, employ or agent
must have conducted himself in good faith and reasonably believe that his
conduct was in, or not opposed to our best interests. In a criminal action the
director, officer, employee or agent must not have had a reasonable cause to
believe his conduct was unlawful. Advances for expenses may be made if the
director affirms in writing that he believes he has met the standards and that
he will personally repay the expense if it is determined he did not meet the
standards.
We will not indemnify a director or officer adjudged liable due to his
negligence or willful misconduct toward us, adjudged liable to us, or if he
improperly received personal benefit. Indemnification in a derivative action is
limited to reasonable expenses incurred in connection with the proceeding.
Article Tenth of the registrant's Certificate of Incorporation provides
that the registrant shall indemnify any and all persons whom it shall have power
to indemnify to the maximum extent permitted by Nevada law. Article VII of the
registrant's by-laws provides that the registrant shall indemnify authorized
representatives of the registrant to the fullest extent permitted by Nevada law.
The registrant's by-laws also permit the registrant to purchase insurance on
behalf of any such person against any liability asserted against such person and
incurred by such person in any capacity, or out of such person's status as such,
whether or not the registrant would have the power to indemnify such person
against such liability under the foregoing provision of the by-laws or under the
provisions of Nevada law.
Item 25. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered hereby. All such expenses
will be borne by the registrant; none shall be borne by any selling
stockholders.
Securities and Exchange
Commission registration fee $4,405.10
Legal fees and expenses (1) $42,500.00
Accounting fees and expenses (1) $____
Miscellaneous (1) $____
Total $____
-------------------------------
(1) Estimated.
Item 26. Recent Sales of Unregistered Securities.
In August, 1999, we entered into subscription agreements with various
subscribers. We closed on a total of $1,450,000 and issued a total of 2,770,000
shares and an aggregate of 6,390,000 Class A Warrants, 870,000 Class B Warrants,
and 2,880,000 Class C Warrants.
II-1
<PAGE>
In September, 1999, New Medium Enterprises, Inc. issued to Barbara R.
Mittman 50,000 shares of Common Stock for legal services.
In January 2000, we entered into subscription agreements with several
subscribers for Unit C. Each C Unit consisted of 10,000 shares of Common Stock,
$.001 par value and 10,000 Class D Warrants to purchase shares of Common Stock.
Each D Warrant is exercisable at any time from the date of its issuance to July
31, 2002 to purchase one share of Common Stock at $1.25 per share. We closed on
a total of $266,250 and issued 213,000 common shares and 213,000 Class D
Warrants.
Item 27. Exhibits and Financial Statement Schedules.
(a) Exhibits:
The following exhibits are filed as part of this registration statement:
Exhibit Description
------- -----------
3.1 Articles of Incorporation of New Medium Enterprises, Inc.
3.2 Articles of Amendment to the Articles of Incorporation of
New Medium Enterprises, Inc., dated July 10, 2000
3.3 By-laws of New Medium Enterprises, Inc.
4.1 (1) Specimen Certificate of the Company's common stock
5.1 Opinion of Grushko & Mittman, P.C.
10.1 1999 Stock Option Plan
10.2 Form of Subscription Agreement
10.3 Forms of Common Stock Purchase Warrant
23.1 Consent of Nachum Blumenfrucht, CPA
23.2 Consent of Grushko & Mittman, P.C.
24.1 Power of Attorney (included on page II-6 of the registration
statement)
27.1 Financial Data Schedule
----------
(1) To be filed by Amendment.
Item 28. Undertakings.
(A) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
II-2
<PAGE>
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information
set forth in the registration statement; and
(iii) Include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(B) Undertaking Required by Regulation S-B, Item 512(e).
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or controlling persons 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 Securities Act of 1933 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 that the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(C) Undertaking Required by Regulation S-B, Item 512(f)
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 12th day of December, 2000.
NEW MEDIUM ENTERPRISES, Inc.
By: /s/ Ethel Schwartz
------------------------
Ethel Schwartz
Chief Executive Officer, President and Director
POWER OF ATTORNEY
The undersigned directors and officers of New Medium Enterprises, Inc.
hereby constitute and appoint Ethel Schwartz, Eva Beilus and Hyman Schwartz and
each of them, with full power to act without the other and with full power of
substitution and resubstitution, our true and lawful attorneys-in-fact with full
power to execute in our name and behalf in the capacities indicated below any
and all amendments (including post-effective amendments and amendments thereto)
to this registration statement under the Securities Act of 1933 and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission and hereby ratify and confirm each
and every act and thing that such attorneys-in-fact, or any them, or their
substitutes, shall lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Ethel Schwartz Chief Executive Officer, December 12, 2000
----------------------- President and Director
Ethel Schwartz
/s/ Eva Beilus Vice-President of Merchandising, December 12, 2000
----------------------- Secretary and Director
Eva Beilus
/s/ Hyman Schwartz Director December 12, 2000
-----------------------
Hyman Schwartz
II-4
<PAGE>
EXHIBIT INDEX
Number Description of Exhibit
------ ----------------------
3.1 Articles of Incorporation of New Medium Enterprises, Inc.
3.2 Articles of Amendment to the Articles of Incorporation of
New Medium Enterprises, Inc., dated July 10, 2000
3.3 By-laws of New Medium Enterprises, Inc.
4.1 (1) Specimen Certificate of the Company's common stock
5.1 Opinion of Grushko & Mittman, P.C.
10.1 1999 Stock Option Plan
10.2 Form of Subscription Agreement
10.3 Forms of Common Stock Purchase Warrant
23.1 Consent of Nachum Blumenfrucht, CPA
23.2 Consent of Grushko & Mittman, P.C.
24.1 Power of Attorney (included on page II-6 of the registration
statement)
27.1 Financial Data Schedule
----------
(1) To be filed by Amendment.
II-5
