As filed with the Securities and Exchange Commission on
January 26, 1999
Registration No. 333-67439
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
AMENDMENT NO. 2
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________________
DYNAMICWEB ENTERPRISES, INC.
(Name of Small Business Issuer in Its Charter)
New Jersey 7372 22-2267658
(State or other Juris- (Primary Standard (I.R.S. Employer
diction of Incorpora- Industrial Classif- Identification
tion or Organization ication Code Number) Number)
DynamicWeb Enterprises, Inc.
271 Route 46 West
Building F, Suite 209
Fairfield, New Jersey 07004
(973) 244-1000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Steven L. Vanechanos, Jr.
Chief Executive Officer
DynamicWeb Enterprises, Inc.
271 Route 46 West
Building F, Suite 209
Fairfield, New Jersey 07004
(973) 244-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Stephen F. Ritner, Esquire Irwin A. Kishner, Esquire
Scott H. Spencer, Esquire Herrick, Feinstein, LLP
Stevens & Lee 2 Park Avenue
One Glenhardie Corporate Center New York, New York 10016
1275 Drummers Lane (212) 592-1435
P.O. Box 236
Wayne, Pennsylvania 19087
(610) 964-1480
___________________________
Approximate date of commencement of proposed sale to the public:
From time to time, at the discretion of the selling shareholders,
after the effective date of this Registration Statement.
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, other than securities
offered only in connection with dividend or interest reinvestment
plans, 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,
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 registration statement
filed pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering. [__]
If delivery of the prospectus is expected to be made
pursuant to Rule 434 please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
=================================================================
Proposed Proposed
Title of Each Amount Maximum Maximum
Class of Secur- to be Offering Aggregate Amount of
ities to be Regis- Price Per Offering Registra-
Registered tered(1) Unit(1) Price(1) tion Fee
_________________________________________________________________
Common Stock 3,000 $2.43 $7,290 $2.15
- -----------------------------------------------------------------
Common Stock 769,230 $ 2.43 $1,869,229 $551.42
issuable upon
conversion of
convertible
preferred stock(2)
_________________________________________________________________
Common Stock 162,500 $6.00 $975,000 $287.62
issuable upon
exercise of
warrants(3)
_________________________________________________________________
Common Stock 45,000 $5.50 $247,500 $73.01
issuable upon
exercise of
options of
Perry & Co.(4)
_________________________________________________________________
Common Stock 45,000 $5.50 $247,500 $73.01
issuable upon
exercise of
options of
Joel Arberman.(4)
=================================================================
(1) Estimated pursuant to Rule 457(a) solely for purposes of
calculating the Registration Fee.
(2) Calculated pursuant to Rule 457(g)(3) in accordance with
paragraph (c), using the average of the bid and asked prices
on November 10, 1998, solely for the purposes of calculating
the Registration Fee.
(3) Calculated pursuant to Rule 457(g)(1) using a fixed exercise
price of $6.00 per share for the Common Stock, solely for
the purposes of calculating the Registration Fee.
(4) Calculated pursuant to Rule 457(g)(1) using a fixed exercise
price of $5.50 per share for the Common Stock, solely for
the purposes of calculating the Registration Fee.
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 become
effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
=================================================================
<PAGE>
Cross Reference Table
Location in Prospectus of
Information Required by Part I of Form S-2
Item
No. Caption Location in Prospectus
1 Front of the Registration Outside Front Cover Page
Statement and Outside Front
Cover Page of Prospectus
2 Inside Front and Outside Back Inside Front Cover Page,
Cover Pages of Prospectus Where You Can Find More
Information About
DynamicWeb Enterprises,
Inc.
3 Summary Information and Risk Factors
Risk Factors
4 Use of Proceeds Not Applicable
5 Determination of Offering Offering Price
Price
6 Dilution Not Applicable
7 Selling Security Holders Selling Shareholders
8 Plan of Distribution Plan of Distribution
9 Description of Securities Description of Securities
10 Interests of Named Experts Legal Matters, Experts
and Counsel
11 Information with Respect to Where You Can Find More
Information About
DynamicWeb Enterprises,
Inc.
12 Incorporation of Certain Where You Can Find More
Information by Reference Information About
DynamicWeb Enterprises,
Inc.
13 Disclosure of Commission Disclosure of Commission
Position on Indemnification Position on
for Securities Act Indemnification for
Liabilities Securities Act
Liabilities
<PAGE>
PROSPECTUS
1,024,730 SHARES
DYNAMICWEB ENTERPRISES, INC.
COMMON STOCK
Shares Offered: This prospectus relates to a total of
1,024,730 shares of common stock, $.0001 par value, of DynamicWeb
Enterprises, Inc.
Offering Price: The shares will be offered for sale at market
prices from time to time.
Selling Shareholders: The shares are being offered by several
shareholders of DynamicWeb, not by DynamicWeb itself. The
several selling shareholders are acting individually, not as a
group. See "Selling Shareholders" for more information.
Trading Market: The Company's Common Stock is traded on the
National Association of Securities Dealers, Inc. ("NASD") Over-
the-Counter ("OTC") Bulletin Board under the symbol "DWEB."
Proceeds: DynamicWeb will not receive any of the proceeds from
sales made by the selling shareholders.
There are risks associated with the purchase of these
shares. An investor should carefully read the Risk Factors
section of this prospectus located at Page 3.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of the
prospectus. Any representation to the contrary is a criminal
offense.
The date of this Prospectus is January __, 1999.
<PAGE>
TABLE OF CONTENTS
The Business of DynamicWeb Enterprises, Inc............... 1
Risk Factors.............................................. 3
Selling Shareholders...................................... 10
Plan of Distribution...................................... 14
Description of Securities to be Registered................ 15
Where You Can Find More Information
About DynamicWeb Enterprises, Inc.................... 16
Legal Matters............................................. 18
Experts................................................... 18
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities....... 18
Financial Statements...................................... F-1
<PAGE>
THE BUSINESS OF DYNAMICWEB ENTERPRISES, INC.
DynamicWeb is involved in the business of "electronic
commerce." The term "electronic commerce" is a shorthand
expression for how businesses use computers to electronically
send and receive business documents. This allows businesses to
reduce or eliminate the paperwork involved in buying and selling
their products.
DynamicWeb develops and sells computer software
products and provides services to businesses to help them engage
in electronic commerce.
Background of the Industry
In electronic commerce, computers and
telecommunications take the place of paper documents, mail and
faxes. Businesses now use computers to electronically send and
receive a wide variety of business documents. These include, for
example, product catalogs, price lists, purchase orders and
invoices.
Electronic data interchange is a specific form of
electronic commerce. It refers to when a business transmits data
with its customers or its vendors in the course of a business
transaction. A typical example of electronic data interchange is
electronically placing a purchase order for merchandise with a
vendor, and having the vendor electronically confirm the order
and produce an invoice when the goods are shipped. The
computers of the buyer and the seller communicate and exchange
the relevant information. They use an agreed-upon or standard
format to do so.
In an earlier stage of electronic commerce, companies
that wanted to do business electronically needed to have an
arrangement with special type of computer network, called a
value-added computer network. A value-added network provides
standardized forms and acts as a kind of electronic post office,
where data and forms are exchanged, parties can communicate via
email, and funds can be electronically transferred.
Many value-added networks are still in place.
Companies, especially larger companies, continue to utilize them
for electronic commerce. DynamicWeb's product and service
offerings are capable of being integrated with a client's
existing use of a value-added network, or to bypass the need for
using a value-added network by using the Internet instead.
DynamicWeb's Products and Services
Primarily, our business is providing electronic
commerce services, including software for customers who want to
engage in electronic commerce. We function as the customer's
<PAGE 1> data service center in support of their electronic
commerce transactions. Second, we provide consulting services in
the area of electronic commerce.
We sell four principal electronic commerce packages:
- Our first package is called EDIxchange(sm)Buy or
Sell. It is a service that allows businesses that already are
set up to conduct electronic commerce transactions to offer
electronic commerce capability to their customers or suppliers
who do not yet have that capability.
- Our second package is called EDIxchange(sm). It is
a service that allows businesses to deal with each other
electronically through a document exchange network. We sell this
package primarily to customers who do not have an internal
electronic commerce capability.
- Our third package is called EDIxchange(sm)Support.
It is a portfolio of professional consulting services provided to
customers who wish to augment their in-house electronic commerce
resources. It includes on-site and remote consulting. It is
focused on developing and implementing electronic commerce
strategies, EC systems integration to existing legacy systems,
and EDI mapping services.
- Our fourth package is called EDIxchangeConnect(sm).
It is a combination of software and service. It is a narrower
product for companies that use the RealWorld and Synchronics
computerized accounting systems. It allows users of those
systems to either send or receive documents electronically
directly from within the accounting system. For example, a
company could electronically send the company's income statement
to another party. Additionally, we offer an option with
EDIxchange Connect(sm) that allows a business to electronically
create a shipping list or product list.
Current Customers
The following charts show some of our customers and the
packages that they are using.
EDIxchange(sm)Buy or Sell
Company Business
Rite Aid Pharmacy Retail pharmacy chain
Southern New England Bell
Telephone Communications
Service Merchandise Retail discount chain
Linens N' Things Retail home accessories
Great American Knitting Mills Makers of Gold Toe socks
GTE Supply Telecommunications distributor
<PAGE 2>
EDIxchange(sm)
Company Business
Soundesign Corp. Manufacturer of electronic equipment
Church & Dwight Manufacturers of Arm & Hammer Baking Soda
Royal Doulton Maker of fine china
Russ Berrie & Co. Manufacturer of Gift Items
EDIxchange(sm)Support
Company Business
Nabisco Consumer Goods
Toys R Us Toy Retailer
Recent Business Changes
In May 1998, we bought Design Crafting, Inc., a company
that provided electronic commerce consulting services. We felt
that the purchase of Design Crafting, Inc. would help us expand
our consulting services.
Before September of 1998, we had a business structure
that was composed of a parent company, DynamicWeb Enterprises,
Inc., and four subsidiaries. On September 30, 1998, we merged
all of the subsidiaries into the parent company to help
streamline the structure of our organization.
RISK FACTORS
The purchase of our common stock is very risky. You
should not invest any money you cannot afford to lose. Before
you buy our stock, you should carefully read this entire
prospectus. We have highlighted for you what we think are the
major risks which could most affect our business. There are
certainly other risks that could affect our business.
Continuous Losses
DynamicWeb has been engaged in the electronic commerce
business since only March of 1996. We have lost money every
quarter since that time. As of September 30, 1998, the end of
our latest fiscal year, we had lost a total of $6,532,000.
Prior Capital Depleted
We have had to sell a material amount of our stock to
raise capital to fund our prior losses and the costs of pursuing
our business plan. The proceeds of those stock sales are nearly
depleted. <PAGE 3>
We raised approximately $3.2 million net of expenses
when we sold our stock in a public offering in February 1998. As
of August 1998, we had spent the money from the sale to run the
company. We raised a net amount of $779,000 from the sale of the
first portion of the Preferred Stock to the Shaar Fund in August,
1998. By December of 1998, we had used that money to run the
company. We raised an additional net amount of $455,000 in the
sale of the second and final stage of the Preferred Stock in
December of 1998. We anticipate that money will last until
approximately March 1999.
Substantial Losses Expected
We expect to lose substantial amounts of money in the
near future. We have intentionally increased our expenses
substantially, and will continue to do so, by hiring more
employees and spending more money to develop and market our
products. Presently we have cash flow deficiencies of
approximately $200,000 per month. We cannot give any assurances
that our increased expenditures will result in sufficient
increases in sales to make us profitable.
Need for More Capital
Because we are losing money in our operations, unless
we raise a significant amount of new capital we will run out of
money. We estimate that our resources on hand will last until
approximately March 1999. We also estimate that we will need to
raise approximately $3,000,000 in order to continue operations
under our present business plan until the end of 1999.
There is no assurance that we will be able to raise new
capital. If we are not able to raise additional funding in a
timely manner, we may have to scale back our operations or
possibly cease operations. If we sell more common stock, the
interests of existing investors in DynamicWeb may be diluted,
meaning that their percentage ownership will be reduced.
Auditors' Going Concern Considerations
Our auditors' opinion on our financial statements as of
September 30, 1998, calls attention to substantial doubts as to
the ability of the Company to continue as a going concern. This
means that they question whether we can continue in business. If
we cannot continue in business, our common stockholders would
likely lose their entire investment. Our financial statements
are prepared on the assumption that we will continue in business.
They do not contain any adjustments to reflect the uncertainty
over our continuing in business.
<PAGE 4>
New Product Risk
In general, electronic commerce products and services
are new. DynamicWeb's particular products and services are very
new. These products and services may never gain enough
acceptance for us to make a profit selling them.
At this time, there is limited use of electronic
commerce products. As with any new product, its acceptance by
customers is unpredictable. Companies have used other
traditional means of doing business for many years. It is
difficult to convince companies to adopt new technology. We need
to convince a large number of industries that using electronic
commerce means is the best way for them to conduct business.
Dependence on the Internet
We have based our particular business strategy on the
development of the Internet. The Internet has a number of
specific problems that are of concern to our business. The main
ones are the security of information, access to and the
reliability of connections, and the speed of information
transmission.
The Internet is a way for a customer to use his or her
computer to access a worldwide network of computers. The
Internet allows a computer in one location to talk to or
communicate with a computer at any location in the world through
the network.
Improvements are needed in protecting information sent
through the Internet. The Internet lacks a uniform, consistent
way to keep company information sent via the Internet safe and
secure. Until this problem is addressed, use of the Internet to
conduct electronic commerce is likely to develop more slowly.
Similarly, people perceive problems with access to the
Internet, the reliability of the Internet and the speed of
transferring information. Until those issues are addressed, use
of the Internet to conduct electronic commerce is likely to
develop more slowly.
The Internet improvements are not under our control.
We must depend on others to address these improvements.
At this time, the costs of using the Internet are based
on a monthly charge. For the monthly charge, a business can send
one or one million transactions over the network and the cost of
access does not change. We do not know if the favorable monthly
charge system will continue or if future government regulations
will drive up the cost of using the Internet.
Technology Changes
<PAGE 5>
Technological changes in the computer software industry
happen rapidly. If we do not respond to those changes quickly
and efficiently, we will not be a competitive company in the
industry. We face a significant danger because we presently only
have four groups of products to sell and they all provide
essentially one service.
Penny Stock
Our common stock recently has been a "Penny Stock." It
is relatively difficult for an investor to sell shares of a Penny
Stock.
Any stock which falls below $5.00 per share selling
price in the public market is called a "Penny Stock." Our
common stock traded below $5.00 per share throughout the last six
months of 1998, and near or under $5,00 during much of 1999. It
is much more difficult to sell a Penny Stock than other shares
that trade on a national market or stock exchange because of the
extra steps the broker/dealer must take before selling the stock.
A sale of Penny Stock does not usually take place as quickly as
a sale of shares that trade on a national market or stock
exchange. Because of the difficulty in dealing in Penny Stocks,
many broker\dealers are unwilling to participate in buying and
selling our shares.
A Penny Stock is subject to special rules issued by the
Securities and Exchange Commission that regulate how an investor
can purchase the shares. These rules are designed to protect
investors from gambling on cheap stocks in hopes of picking the
occasional big winner. Although there are exceptions to the
rules for certain institutional or high net worth individuals,
usually, the broker\dealer must: (a) determine the suitability of
the purchase for the particular investor; (b) provide a first
time investor in Penny Stock with a document disclosing the risks
of investing in this type of stock; and (c) have the purchase
approved by a compliance officer of the brokerage firm.
Because of the time required to comply with these
requirements it could become difficult for you to sell an
investment in DynamicWeb if our stock is subject to the Penny
Stock rules. You may want to sell your shares of the Company at
a time when you can show a profit, however by the time a sale of
your shares is approved, the stock price may have declined to the
point where you will have a loss on your investment.
Small Market for our Common Stock
It may be difficult for an investor to sell shares of
our common stock, since there is only a small market for our
common stock.
Our common stock has not been traded actively. The
investment community has not shown a great deal of interest in
<PAGE 6> our shares. Simply, there have been relatively few
buyers and sellers of our stock.
We have recently agreed to have our shares marketed
over the Internet. We are hoping that the additional public
exposure about us and our products would increase the interest in
our stock, but we have not seen a significant change in the
number of shares being traded.
Because we are not traded on a national exchange, the
quotation for the price of our stock is difficult for an investor
to obtain without professional help. Out stock quote is
generally not found in daily newspaper quotations.
Competition
The electronic commerce industry is intensely
competitive and changes rapidly. There are many larger, more
established companies such as Microsoft and IBM that sell
electronic commerce packages. We are faced with significant
competition from those companies that are already established in
the industry. They have significantly more resources than we do.
We expect competition to intensify in the industry.
Reliance on Other Software
We use software that is licensed from other companies
with our software products. The licensed software is an
essential part of our products. We do not have exclusive rights
to any of the essential software; it can be licensed to anyone,
including our competitors. Any of the essential software could
become unavailable or too expensive for us to use with our
products. If any of the essential software licenses becomes
unavailable, our products would have to be redesigned or new
software obtained. There can be no assurance that is possible.
Reliance on PERL
DynamicWeb's software is written using Practical
Extraction and Reporting Language ("PERL"). This language is
presently used to write software for use on the Internet.
Because the Internet design and standards for use are not
controlled by any certain organization or individual, the
continued use of PERL for Internet programs is not guaranteed.
If the programming language for the Internet were to change, we
could incur substantial expenses in an attempt to continue to
support and develop PERL.
Dependence on Distribution and Marketing Relationships
We do not have a large number of sales and marketing
employees. Consequently, our distribution channels are limited.
We need to achieve broad distribution of our products to generate
sales. We must maintain and develop relationships with leading
<PAGE 7> companies that market software products and electronic
commerce services.
Dependence on Intellectual Property Rights
We use software technology that was developed by us for
use on the Internet. We have applied for a patent on the
software, called NetCat, but have not yet been granted the
patent. We may not get the patent or even if we do it may not
sufficiently protect our rights in the technology. The patent
would not provide protection outside of the United States. Even
if the patent is granted, it may be challenged and we may have to
spend a significant amount of money to defend the patent.
Patent infringement litigation is common in the
electronic commerce industry. We don't think we are infringing
on any patents or other intellectual property rights. However, if
we are accused of violating another company's intellectual
property rights, we may have to spend significant amounts of
money defending ourselves.
Liability for Customers' Transactions; Availability of Insurance
We are responsible for the electronic exchange of many
types of business documents using our products and systems.
These documents include the operational documents of our
customers such as orders, invoices, shipping and payment
documents. If for any reason we were unable to provide our
service, we could be liable to our customers for their loss of
business. We carry insurance policies to try and protect us in
the event that we are sued by any customer for loss of business
due to our failure to provide contracted services. Although we
believe that we have adequate policies in effect, there is no
guarantee that they will be sufficient to cover all potential
losses.
Key Personnel
Our success will depend largely on retaining several of
our key senior management and technical personnel. This includes
our Chairman of the Board, Steven L. Vanechanos Jr., James D.
Conners, President of the Company and Kenneth R. Konikowski,
Executive Vice President of the Company. DynamicWeb requires key
personnel to sign a confidentiality and non-competition agreement
as part of their employment, but these do not protect us from the
loss of their knowledge and expertise were they to leave. We
have key man life insurance in the amount of $3,000,000 on Steven
L. Vanechanos, Jr.
Ability to Attract Qualified Personnel
We are a very small, service-based technology company.
We feel our success in the future is highly dependent on
attracting additional highly skilled personnel, particularly
<PAGE 8> those who can operate in a technical environment. The
market for these types of professionals is highly competitive and
more established companies are able to provide higher salaries
and better benefits than we are.
Obstacles to a Takeover of the Company
There are several provisions in our Certificate of
Incorporation and under New Jersey law that can operate to make
it more difficult for a third party to acquire DynamicWeb, where
the Board of Directors determine not to be acquired, even if the
shareholders are in favor of being acquired. Those are:
- The Board of Directors has the authority to
issue 5,000,000 shares of preferred stock without the approval of
the shareholders.
- Our system of election of the Board of
Directors in staggered classes.
- Provisions of New Jersey Law which prevent a
10% stockholder who has not received the prior approval of the
Board of Directors from engaging in a "business combination"
transaction with DynamicWeb for a period of five years after the
date on which the person became such a 10% stockholder.
Possible Volatility of Stock Price
Our stock price is particularly volatile, because of
its low price and because we are a technology company. Investors
react to news of operating results, innovations in the industry
and changes in general economic conditions. Stocks in the
technology industry are particularly volatile in their reaction
to these types of factors.
When there is a fluctuation in market price, there is
the possibility that our shareholders will blame us for taking
some inappropriate action. In the past these types of situations
have resulted in shareholder litigation. If this type of
shareholder action were to happen, it would cost us significant
amounts of money to litigate.
Substantial Options and Warrants Reserved
We have substantial warrants, options and conversion
rights outstanding. The exercise of any or all of the options,
warrants and rights may further dilute the net tangible book
value of your investment in DynamicWeb, or have a negative effect
on the market price of our common stock. Additionally, the
holders of the options and warrants may exercise them at a time
when DynamicWeb would have been able to sell the associated
shares to someone else at a higher price.
<PAGE 9>
We have an Employee Stock Option Plan. We can issue
options to purchase a total of 334,764 shares of common stock to
our employees and officers under this plan. To date, we have
issued all 334,764 options to employees under this plan, and the
Board of Directors has conditionally granted an additional 21,412
options, subject to shareholder approval of an increase in
authorized shares under this plan.
We also have a Stock Option Plan for Outside Directors
and we may issue a total of 78,254 options under this plan. We
have granted 31,296 options to outside directors to date.
We have granted warrants to existing shareholders to
purchase 125,000 shares of common stock at $6.00 a share in
return for a previous contribution of their common stock back to
the company.
Perry & Co. and its principal hold options to purchase
90,000 shares of common stock at $5.50 per share.
The Shaar Fund owns warrants for purchase of 137,500
shares of common stock at $6.00 a share in connection with a
private placement of Preferred Stock.
The Shaar Fund also presently holds 1,375 shares of
preferred stock which is presently convertible into approximately
269,607 shares of DynamicWeb common stock, based upon an assumed
conversion price of 85% of the $6.00 per share market price of
the common stock as of January 22, 1999. The number of shares of
common stock into which the preferred stock is convertible is a
function of the market price of the common stock; and if the
market price declines from its present level, the number of
shares of common stock into which it can be converted could
increase materially. Also, the conversion price declines over
time to 78% of market price. See "Selling Shareholders -- The
Shaar Fund."
SELLING SHAREHOLDERS
General
There are six selling shareholders. The selling
shareholders are acting individually, not as a group. None of
the selling shareholders or their affiliates has held any
position, office or other material relationship, other than as a
shareholder, with DynamicWeb. The identity of the selling
shareholders and the maximum number of shares of common stock
offered under this prospectus by each of them are as follows:
The Shaar Fund, Ltd. 906,730 shares(1)
Perry & Co. 45,000 shares
Joel Arberman 45,000 shares
Zazoff Associates, L.L.C. 10,000 shares
The Malachi Group, Inc. 8,500 shares
Peter Baxter, Jr. 9,500 shares <PAGE 10>
___________________
(1) This number of shares is the initial number that the Shaar
Fund has the right to require DynamicWeb to register for it. The
actual number of shares that the Shaar Fund will acquire and then
sell under this prospectus is determined, in part, by a formula
described below under "The Shaar Fund."
The above numbers of shares for each selling shareholder
represents 100% of the shares of common stock of DynamicWeb which
each person owns or has a right to acquire, except that the Shaar
Fund may acquire more than 906,730 shares of DynamicWeb common
stock if the actual conversion price for the conversion of the
preferred stock held by the Shaar Fund is less than $1.95 per
share.
None of the selling shareholders would own or have the right
to acquire any other shares of common stock of DynamicWeb after
this offering is complete, unless the actual conversion price for
the conversion of the preferred stock held by the Shaar Fund is
less than $1.95 per share. In that case, the Shaar Fund may
acquire more than 906,730 shares of DynamicWeb common stock.
The Shaar Fund
The Shaar Fund is offering up to 906,730 shares of common
stock of DynamicWeb that it has acquired or has the right to
acquire under the terms of convertible preferred stock and
warrants of DynamicWeb held by the Shaar Fund. This number
consists of the following two components:
- 137,500 shares of DynamicWeb common stock which the
Shaar Fund can acquire under warrants.
- 769,230 shares of common stock into which the
convertible preferred stock is assumed to be convertible. Under
DynamicWeb's agreement with the Shaar Fund, DynamicWeb is
required initially to register this number of shares. This
number is determined based upon the assumption that the
conversion of the convertible preferred stock into common stock
will occur at a conversion price of $1.95 per share.
The convertible preferred stock has a conversion value of
$1,000 per share. That conversion value is credited towards the
purchase of shares of common stock at an agreed-upon purchase or
conversion price. The applicable purchase or conversion price is
a discount to the market price of the common stock at the time of
conversion. Therefore, the higher the market price of DynamicWeb
common stock at the time of conversion, the fewer number of
shares will be acquired; and the lower the market price of
DynamicWeb common stock at the time of conversion, the greater
number of shares will be acquired.
The applicable purchase or conversion prices are as follows:
<PAGE 11>
(1) For preferred stock converted up to 180 days after
purchase, the lesser of $5.50 per share or 85% of the "market
price" of DynamicWeb common stock.
(2) For preferred stock converted between 180-360 days
after purchase, 80% of the market price of DynamicWeb common
stock.
(3) For preferred stock converted 360 days or more
after purchase, 78% of the market price of DynamicWeb common
stock.
For these purposes, the "market price" is the average of the
lowest 3 days closing bid prices of the common stock for the 20
trading days immediately preceding the conversion.
The Shaar Fund may elect when to convert the preferred
stock, except that all shares of preferred stock will be
converted automatically on August 7, 2000.
On December 3, 1998, it converted 125 shares of preferred
stock into 95,420 shares of common stock.
The shares being offered by the Shaar Fund are being
registered under registration rights and option agreement between
DynamicWeb and the Shaar Fund.
DynamicWeb is unable to determine the exact number of shares
that the Shaar Fund will actually sell pursuant to this
prospectus because the Shaar Fund has the discretion to determine
when and whether it will sell any shares under this prospectus,
and also because the actual number of shares which the Shaar Fund
will acquire by converting the convertible preferred stock is not
known.
Perry & Co.
Perry & Co. is offering shares of common stock of DynamicWeb
that it has acquired or has the right to acquire under the terms
of options of DynamicWeb held by Perry & Co. Perry & Co. has an
option to purchase 45,000 shares of DynamicWeb common stock at an
exercise price of $5.50 per share. The options were received as
compensation for services rendered in 1998.
The shares being offered by Perry & Co. are being registered
under registration rights provided for in an agreement for
investor relations services between DynamicWeb and Perry & Co.
DynamicWeb is unable to determine the exact number of shares
that Perry & Co. will actually sell pursuant to this prospectus
because Perry has the discretion to determine when and whether it
will sell any shares under this prospectus.
Joel Arberman <PAGE 12>
Mr. Arberman is offering shares of common stock of
DynamicWeb that he has acquired or has the right to acquire under
the terms of options of DynamicWeb held by Mr. Arberman. Mr.
Arberman has an option to purchase 45,000 shares of DynamicWeb
common stock at an exercise price of $5.50 per share. The
options were received as compensation for services rendered in
1998. Mr. Arberman is a principal of Perry & Co.
The shares being offered by Mr. Arberman are being
registered under registration rights provided for in an agreement
for investor relations services between DynamicWeb and Perry &
Co.
DynamicWeb is unable to determine the exact number of shares
that Mr. Arberman will actually sell pursuant to this prospectus
because he has the discretion to determine when and whether he
will sell any shares under this prospectus.
The Malachi Group, Inc.
The Malachi Group is offering shares of common stock of
DynamicWeb that it has acquired or has the right to acquire under
the terms of warrants of DynamicWeb held by Malachi. Malachi
holds warrants to purchase 8,500 shares of DynamicWeb common
stock at an exercise price of $6.00 per share. Those warrants
were received as compensation for services rendered in 1998.
The shares being offered by the Malachi Group are being
registered under registration rights provided for in an agreement
for investment banking services between DynamicWeb and Malachi.
DynamicWeb is unable to determine the exact number of shares
that Malachi will actually sell pursuant to this prospectus
because Malachi has the discretion to determine when and whether
it will sell any shares under this prospectus.
Peter Baxter, Jr.
Mr. Baxter is offering shares of common stock of DynamicWeb
that he has acquired or has the right to acquire under the terms
of warrants held by Mr. Baxter. Mr. Baxter holds 1,000 shares of
common stock and warrants to purchase an additional 8,500 shares
of DynamicWeb common stock at an exercise price of $6.00 per
share. The shares and warrants were received as compensation for
services rendered in 1998. Mr. Baxter is a principal of Malachi.
The shares being offered by Mr. Baxter are being registered
under registration rights provided for in an agreement for
investment banking services between DynamicWeb and Malachi.
DynamicWeb is unable to determine the exact number of shares
that Mr. Baxter will actually sell pursuant to this prospectus
because he has the discretion to determine when and whether he
will sell any shares under this prospectus. <PAGE 13>
Zazoff Associates, L.L.C.
Zazoff Associates is offering shares of common stock of
DynamicWeb that it has acquired or has the right to acquire under
the terms of warrants held by Zazoff. Zazoff holds 2,000 shares
of common stock and warrants to purchase an additional 8,000
shares of DynamicWeb common stock at an exercise price of $6.00
per share. The shares and warrants were received as compensation
for services rendered in 1998.
The shares being offered by Zazoff are being registered
under registration rights provided for in an agreement for
investment banking services between DynamicWeb and Zazoff.
DynamicWeb is unable to determine the exact number of shares
that Zazoff will actually sell pursuant to this prospectus
because it has the discretion to determine when and whether it
will sell any shares under this prospectus.
PLAN OF DISTRIBUTION
The registration statement of which this prospectus forms a
part has been filed to satisfy registration rights held by the
selling shareholders under agreements between DynamicWeb and the
selling shareholders. To DynamicWeb's knowledge, as of this
date, none of the selling shareholders has entered into any
agreement, arrangement or understanding with any particular
broker or market maker with respect to the shares offered by
them, nor does DynamicWeb know the identity of the brokers or
market makers which might participate in such offering.
The shares being registered and offered may be sold from
time to time by the selling shareholders. The selling
shareholders will act independently of DynamicWeb in making
decisions with respect to the timing, manner, and size of each
sale. The sales may be made on the OTC Bulletin Board or
otherwise, at prices and on terms then prevailing or at prices
related to the market price, or in negotiated transactions.
The shares may be sold by one or more of the following
methods:
(a) A block trade in which the broker-dealer engaged by
a selling shareholder will attempt to sell shares as agent but
may position and resell a portion of the block as principal to
facilitate the transaction.
(b) Purchases by the broker-dealer as principal and
resale by such broker or dealer for its account according to this
prospectus.
(c) Ordinary brokerage transactions and transactions in
which the broker solicits purchasers.
<PAGE 14>
To the best of the DynamicWeb's knowledge, none of the
selling shareholders has, as of this date, entered into any
arrangement with a broker or dealer for the sale of shares
through a block trade, special offering, or secondary
distribution of a purchase by a broker-dealer. In effecting
sales, broker-dealers engaged by a selling shareholder may
arrange for other broker-dealers to participate. Broker-dealers
may receive commissions or discounts from a selling shareholder
in amounts to be negotiated.
In offering the shares, the selling shareholders and any
broker-dealers who execute sales for the selling shareholders may
be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 in connection with such sales, and any
profits realized by the selling shareholders and the compensation
of such broker-dealer may be deemed to be underwriting discounts
and commissions.
Rule 10b-6 under the Securities and Exchange Act of 1934
prohibits participants in a distribution from bidding for or
purchasing for an account in which the participant has a
beneficial interest, any of the securities that are the subject
of the distribution. Rule 10b-7 under the Exchange Act governs
bids and purchases made to stabilize the price of a security in
connection with a distribution of the security.
There can be no assurance that any selling shareholder will
sell any or all of the shares of common stock registered under
this registration statement.
DESCRIPTION OF THE SECURITIES TO BE REGISTERED
General
DynamicWeb's authorized capital stock consists of
50,000,000 shares of common stock, $.0001 par value per share,
and 5,000,000 shares of undesignated preferred stock. As of the
date of this prospectus, there were 2,351,737 shares of common
stock issued and outstanding. As of December 31, 1998, the
common stock is held of record by approximately 392 stockholders.
Common Stock
Holders of common stock have the right to cast one
vote, in person or by proxy, for each share owned of record on
the record date on all matters submitted to a vote of the holders
of common stock, including the election of directors. Holders of
common stock do not have cumulative voting rights, which means
that holders of more than 50% of the outstanding shares voting
for the election of the class of directors to be elected by the
common stock can elect all of such directors, and, in such event,
the holders of the remaining shares of common stock will be
unable to elect any of DynamicWeb's directors.
<PAGE 15>
Holders of the common stock are entitled to share
ratably in such dividends as may be declared by the Board of
Directors out of funds legally available for dividends, when, as
and if declared by the Board of Directors and are also entitled
to share ratably in all of the assets of DynamicWeb available for
distribution to holders of shares of common stock upon the
liquidation, dissolution or winding up of the affairs of
DynamicWeb. Holders of common stock do not have preemptive,
subscription or conversion rights. All outstanding shares of
common stock are, and those shares of common stock offered here
will be, validly issued, fully paid and non-assessable.
WHERE YOU CAN FIND MORE INFORMATION ABOUT
DYNAMICWEB ENTERPRISES, INC.
This Registration Statement
DynamicWeb has filed with the Securities and Exchange
Commission a registration statement on Form S-2 together with all
amendments and exhibits under the Securities Act of 1933, as
amended, for the shares being offered. This prospectus, is only
a part of the registration statement and does not contain all of
the information given filed with the Securities and Exchange
Commission. Any statements in this prospectus concerning the
provisions of any contract or other document are not necessarily
complete and, in each instance, the complete details of each
contract or document are contained in the exhibits filed with the
registration statement. Refer to the exhibit of each contract or
document to obtain additional information. For additional
information about DynamicWeb and the shares being sold, refer to
the registration statement and the accompanying exhibits and
schedules.
For a fee, a copy of the registration statement, with
exhibits, may be obtained from the SEC's office in Washington, DC
at 450 Fifth Street, NW, Washington, DC 20549 or is available for
you to read at their office without charge.
Other SEC Filings
DynamicWeb is required by the Securities Exchange Act of
1934 to file reports, proxy statements, and other information
with the Securities and Exchange Commission. Reports, proxy
statements and other information filed with the SEC can be
inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, NW, Washington, DC 20549. For a
fee, copies of this material can be obtained from the Public
Reference Section of the Commission at its principal office at
450 Fifth Street, NW, Washington, DC 20549.
The Commission also maintains a World Wide Web site that
contains reports, proxy and information statements and other
information regarding issuers that file electronically with the
Commission. The address of the site is http://www.sec.gov.
<PAGE 16>
DynamicWeb incorporates by reference the following documents
filed with the Securities and Exchange Commission.
1. DynamicWeb's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 1998;
2. DynamicWeb's Current Report on Form 8-K filed on May
15, 1998 (as amended by Form 8-K/A No. 1 filed on July
15, 1998 and Form 8-K/A No. 2 filed on November 10,
1998);
3. DynamicWeb's Proxy Statement filed June 25, 1998; and
4. All other reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934
since September 30, 1998.
Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this prospectus to the
extent that a statement contained herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
Copies of Documents
This prospectus includes a copy of the our latest Form 10-
KSB. To each person who receives a prospectus, we will provide
upon request, without charge, a copy of the additional documents
listed above, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such
documents). Such requests should be made to: DynamicWeb
Enterprises, Inc., 271 Route 46 West, Building F, Suite 209,
Fairfield, New Jersey 07004. Telephone number (973) 244-1000.
Predictions and Other Forward-Looking Information
This prospectus and registration statement contain many
forward-looking statements and information that are based on the
beliefs and plans of DynamicWeb's management, on estimates and
assumptions made by DynamicWeb's management, or on information
currently available to DynamicWeb's management. Those forward-
looking statements and information are also contained in
DynamicWeb's other reports filed from time to time with the
Securities and Exchange Commission, including its Form 10-KSB for
the fiscal year ended September 30, 1998.
When used in those SEC documents, words such as
"anticipate," "believe," "estimate," "expect," "future,"
"intend," "plan" and similar expressions, as they relate to
<PAGE 17> DynamicWeb and its management, identify forward-looking
statements. Such statements reflect the current views of
DynamicWeb and its management with respect to future events.
They are subject to many risks, uncertainties and assumptions
relating to the future.
Some of those risks, uncertainties and assumptions include
DynamicWeb's operations and results of operations, competitive
factors and pricing pressures, shifts in market demand, the
performance and needs of the customers served by us, and the
costs of pursuing our business plan. Other risks and
uncertainties are specifically discussed in "Risk Factors"
elsewhere in this prospectus.
Should one or more of these risks or uncertainties
materialize, or should the underlying estimates or assumptions
prove incorrect, actual results or outcomes may vary
significantly from those anticipated, believed, estimated,
expected, intended or planned.
LEGAL MATTERS
Certain legal matters relating to the common stock
offered hereby have been passed upon for DynamicWeb by the law
firm of Stevens & Lee, Wayne, Pennsylvania and Lancaster,
Pennsylvania.
EXPERTS
The consolidated financial statements of DynamicWeb
Enterprises, Inc. and Design Crafting, Inc. incorporated by
reference or appearing in this prospectus and registration
statement have been audited by Richard A. Eisner & Company, LLP,
independent auditors, to the extent indicated in their reports on
those financial statements also appearing elsewhere in this
prospectus and registration statement or incorporated by
reference. In the case of the financial statements of
DynamicWeb, their report contains an explanatory paragraph with
respect to substantial doubt as to the ability of DynamicWeb to
continue as a going concern. Such financial statements have been
incorporated into this prospectus and registration statement by
reference or included in this prospectus and registration
statement in reliance upon such reports given upon the authority
of Richard A. Eisner & Company, LLP as experts in accounting and
auditing.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the company pursuant to the
provisions set forth in the company's articles of incorporation,
the company has been informed that in the opinion of the
<PAGE 18> Securities and Exchange Commission, such
indemnification is against public policy as expressed in the act
and is therefore unenforceable.
PAGE 19
<PAGE>
DESIGN CRAFTING, INC.
FINANCIAL STATEMENTS
September 30, 1997
PAGE F-1
<PAGE>
Contents
Page
Financial Statements
Independent auditors' report................................ 1
Balance sheet as of September 30, 1997...................... 2
Statements of income for the years ended
September 30, 1997 and 1996................................. 3
Statement of changes in stockholder's equity
for each of the years ended September 30, 1997
and 1996.................................................... 4
Statements of cash flows for the years ended
September 30, 1997 and 1996................................. 5
Notes to financial statements............................... 6
PAGE F-2
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Design Crafting, Inc.
We have audited the accompanying balance sheet of Design
Crafting, Inc. as of September 30, 1997, and the related
statements of income, changes in stockholder's equity and cash
flows for each of the years in the two year period then ended.
These financial statements are the responsibility of the
DynamicWeb's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements enumerated above present
fairly, in all material respects, the financial position of
Design Crafting, Inc. as of September 30, 1997, and the results
of its operations and its cash flows for each of the years in the
two-year period then ended, in conformity with generally accepted
accounting principles.
/s/ Richard A. Eisner & Company, LLP
Florham Park, New Jersey
July 10, 1998
PAGE F-3
<PAGE>
Balance Sheet
September 30, 1997
ASSETS
Current assets:
Cash $ 5,015
Accounts receivable 56,812
Prepaid expenses and other current assets 468
Total current assets 62,295
Equipment, net of accumulated depreciation of $6,662 4,602
$66,897
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $30,597
Taxes payable - current 1,480
Taxes payable - deferred 6,195
Total current liabilities 38,272
STOCKHOLDER'S EQUITY
Common stock, no par value, authorized 1,000
shares issued and outstanding 100 shares 1,000
Retained earnings 27,625
Total stockholder's equity 28,625
$66,897
PAGE F-4
<PAGE>
Statements of Income
Year Ended
September 30,
1997 1996
Revenues - services $462,541 $311,363
Cost of services 384,244 241,427
Gross profit 78,297 69,936
Expenses:
Selling, general and administrative 65,772 58,905
Income before taxes 12,525 11,031
Income taxes 3,250 2,870
Net income $ 9,275 $ 8,161
PAGE F-5
<PAGE>
Statements of Changes in Stockholder's Equity
<TABLE>
<CAPTION>
Common Stock
Number of Retained
Shares Amount Earnings Total
<S> <C> <C> <C> <C>
Balance, October 1, 1995 100 $1,000 $10,189 $11,189
Net income -- -- 8,161 8,161
Balance, September 30, 1996 100 1,000 18,350 19,350
Net income -- -- 9,275 9,275
Balance, September 30, 1997 100 $1,000 $27,625 $28,625
</TABLE>
PAGE F-6
<PAGE>
Statements of Cash Flows
<TABLE>
<CAPTION>
Year Ended
September 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 9,275 $ 8,161
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,948 648
Deferred income taxes 1,390 2,700
Changes in:
Accounts receivable (867) (29,993)
Prepaid expenses and other current assets 718 687
Accounts payable and accrued expenses (10,249) 18,691
Taxes payable 1,310 (725)
Net cash provided by operating activities 4,525 169
Cash flows from investing activities:
Purchase of equipment (6,902) (1,296)
Net decrease in cash (2,377) (1,127)
Cash, beginning 7,392 8,519
Cash, ending $ 5,015 $ 7,392
Supplemental disclosure of cash flow information:
Cash paid for:
Income taxes $ 550 $ 895
</TABLE>
PAGE F-7
<PAGE>
Note A - Summary of Significant Accounting Policies and Basis of
Presentation
[1] Operations:
Design Crafting, Inc. (the "Company") is a software
developer and provides services primarily to customers in
the distribution, retail and financial industries.
In 1997, two customers and in 1996 one customer accounted
for approximately 91% and 99% of revenues, respectively. As
of September 30, 1997, two customers represented 100% of
accounts receivable. No allowance for bad debts is required.
[2] Revenue recognition:
Revenue is recognized as the work is performed and services
are provided at the customer's locations.
[3] Use of estimates:
The financial statements were prepared on an accrual basis
in conformity with generally accepted accounting principles;
estimates and assumptions were utilized to quantify certain
components of the financial statements in the absence of
specific amounts of the respective assets, liabilities,
revenues and expenses. Actual results could differ from
those estimates.
[4] Equipment:
Equipment is recorded at cost less accumulated depreciation.
Depreciation is provided using accelerated and
straight-line methods over the estimated lives of the assets
(2 to 3 years).
[5] Income taxes:
The Company accounts for income taxes under the provisions
of Statement of Financial Accounting Standard No. 109
Accounting for Income Taxes ("SFAS 109") which requires use
of the liability method of Accounting for Income Taxes. The
liability method measures deferred income taxes by applying
enacted statutory rates in effect at the balance sheet date
to the differences between the tax bases of assets and
liabilities and their reported amounts in the financial
statements. Deferred income taxes arise from temporary
differences resulting primarily from income and expense
items being reported on an accrual basis for financial
statement purposes and on a cash basis for tax purposes. As
a result, the Company had deferred federal and state
liabilities of $6,195 as of September 30, 1997.
<PAGE F-8>
Note B - Employee Benefit Plans
The Company has a qualified simplified employee pension (SEP)
under Section 408(k) of the Internal Revenue Code. Employer
contributions under a SEP are discretionary and are excluded from
the participants taxable income to the extent of 15% of the
participant's compensation subject to limits. The Company's
contributions to the plan were $25,742 and $7,573 for the years
ended September 30, 1997 and 1996, respectively.
Note C - Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
Wages $18,486
Payroll taxes 2,544
Employee benefit plan 7,796
Other 1,771
$30,597
Note D - Income Taxes
Year Ended
September 30,
1997 1996
Current tax expenses:
Federal $1,120 $ 20
State 740 150
1,860 170
Deferred tax expenses:
Federal 830 1,700
State 560 1,000
1,390 2,700
Provision for taxes $3,250 $2,870
The differences between the statutory income tax rate of 34% and
the income taxes reported on the statement of income and retained
earnings are as follows:
<TABLE>
<CAPTION>
Year Ended September 30,
1997 1996
<S> <C> <C> <C> <C>
Statutory rate $ 4,259 34% $ 3,751 34%
Reduction due to graduated
income tax rate (2,380) (19) (2,096) (19)
State taxes, net of federal benefit 1,105 9 978 9
Other 266 2 237 2
Provision for taxes $ 3,250 26% $ 2,870 26%
</TABLE>
<PAGE F-9>
Note E - Business Combination
On May 1, 1998, the Company completed a merger with Dynamicweb
Enterprises, Inc. (Dynamicweb) by exchanging all of its issued
and outstanding stock for 92,500 shares of common stock of
Dynamicweb with a provision for up to an additional 10,000 shares
to be calculated under a formula based on the value at closing
and the realization of certain assets within 120 days of the
closing.
PAGE F-10
<PAGE>
DYNAMICWEB ENTERPRISES, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Financial Statements
On May 1, 1998, DynamicWeb Enterprises, Inc. and
subsidiaries (the "Company") completed a stock-for-stock exchange
transaction with Design Crafting, Inc. ("Design") which will be
accounted for as a purchase in accordance with Accounting
Principle Board No. 16. The following unaudited pro forma
condensed consolidated statement of operations for the year ended
September 30, 1997 and the unaudited pro forma consolidated
balance sheet as of September 30, 1997 are adjusted to give
effect to the combination with Design by the issuance by the
Company of 92,500 of its common shares in exchange for 100% of
the Design shares as if such transaction had occurred on
October 1, 1996 for the purposes of presenting pro forma
statement of operations data and as of September 30, 1997, for
presenting the pro forma balance sheet data.
The unaudited condensed pro forma consolidated balance sheet
and statement of operations should be read in conjunction with
the notes thereto and the audited financial statements of the
Company and Design and the notes thereto. The pro forma
information is not necessarily indicative of what the financial
position and results of operations would have been had the
transactions occurred earlier, nor do they purport to represent
the future financial position or results of operations of
DynamicWeb Enterprises, Inc. and subsidiaries.
Unaudited Pro Forma Condensed Financial Statement Adjustments
[1] To record the preliminary allocation of the purchase of
Design valued at $474,063. The pro forma information
includes the issuance of 92,500 shares of the Company's
common stock on May 1, 1998. It does not reflect any
contingently issuable shares, up to 10,000, that may be
issued in the event that the Company collects certain
amounts from the realization of certain assets reported on
the Design Crafting, Inc. balance sheet as of May 1, 1998.
[2] To record amortization of excess of cost over net
assets of acquired business over ten years.
[3] The pro forma weighted average number of shares
outstanding is as follows:
(a) Includes 654,597 shares of the Company's common
stock subsequently contributed by certain of the Company's
shareholders in exchange for 125,000 warrants.
<PAGE F-11>
(b) 92,500 shares issued in connection with the
purchase transaction as if they were outstanding for the
entire period presented.
PAGE F-12
<PAGE>
DynamicWeb Enterprises, Inc. and Subsidiaries
Pro Forma Consolidated Balance Sheet Data
Unaudited
<TABLE>
<CAPTION>
Historical
--------------------------------------
DynamicWeb
Enterprises, Inc. Design
and Subsidiaries Crafting, Inc. As Revised As Revised
as of as of Pro Forma Pro Forma
September 30, 1997 September 30, 1997 Adjustments Consolidated
------------------ ------------------ ----------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 188,270 $ 5,015 $ 193,285
Accounts receivable, less allowance for
doubtful accounts 100,425 56,812 157,237
Prepaid and other current assets 20,738 468 21,206
---------- -------- ----------
Total current assets 309,433 62,295 371,728
Property and equipment 284,512 4,602 289,114
Excess of cost over net assets of acquired
business $445,438 445,438
Patents and trademarks, less accumulated
amortization 21,808 21,808
Customer list, less accumulated amortization 83,333 83,333
Deferred registration costs 128,169 128,169
Other assets and fees 60,461 60,461
---------- -------- -------- ----------
$ 887,716 $ 66,897 $445,438 $1,400,051
========== ======== ======== ==========
LIABILITIES
Current liabilities:
Accounts payable $ 182,340 $ 182,340
Accrued expenses 165,941 $ 30,597 196,538
Current maturities of long-term debt 7,925 7,925
Loan payable - banks 24,049 24,049
Loans from stockholders 117,163 117,163
Deferred revenue 15,065 15,065
Subordinated notes payable 840,873 840,873
Taxes payable - current 1,480 1,480
Taxes payable - deferred 6,195 6,195
---------- -------- ----------
Total current liabilities 1,353,356 38,272 1,391,628
Long-term debt, less current maturities 185,811 185,811
---------- -------- ----------
1,539,167 38,272 1,577,439
---------- -------- ----------
CAPITAL DEFICIENCY
$ (1,000)(1)
Common stock 214 1,000 9 (1) 223
Additional paid-in capital 3,530,324 474,054 (1) 4,004,378
Unearned portion of compensatory stock options (204,000) (204,000)
Accumulated deficit (3,577,989) 27,625 (27,625)(1) (3,577,989)
---------- -------- -------- ----------
(251,451) 28,625 445,438 222,612
Less treasury stock (400,000) (400,000)
---------- -------- -------- ----------
Total capital deficiency (651,451) 28,625 445,438 (177,388)
---------- -------- -------- ----------
$ 887,716 $ 66,897 $445,438 $1,400,051
========== ======== ======== ==========
</TABLE>
PAGE F-13
<PAGE>
DynamicWeb Enterprises, Inc. and Subsidiaries
Pro Forma Consolidated Statement of Operations Data
Unaudited
<TABLE>
<CAPTION>
Historical
---------------------------------------
DynamicWeb
Enterprises, Inc. Design
and Subsidiaries Crafting, Inc. As Revised As Revised
for the year ended for the year ended Pro Forma Pro Forma
September 30, 1997 September 30, 1997 Adjustments Consolidated
(Unaudited)
<S> <C> <C> <C> <C>
Net sales:
System sales $ 116,106 $ 116,106
Services 521,071 $462,541 983,612
---------- -------- ----------
637,177 462,541 1,099,718
---------- -------- ----------
Cost of sales:
System sales 40,323 40,323
Services 213,180 384,244 597,424
---------- -------- ----------
253,503 384,244 637,747
---------- -------- ----------
Gross profit 383,674 78,297 461,971
---------- -------- ----------
Expenses:
Selling, general and administrative 1,854,686 65,772 $ 44,543 (2) 1,965,001
Research and development 234,808 234,808
---------- -------- -------- ----------
2,089,494 65,772 44,543 2,199,809
---------- -------- -------- ----------
Operating income (loss) (1,705,820) 12,525 (44,543) (1,737,838)
Purchased research and development (713,710) (713,710)
Interest expense (770,041) (770,041)
Interest income 5,068 5,068
---------- -------- -------- ----------
Income (loss) before income taxes (3,184,503) 12,525 (44,543) (3,216,521)
Income tax (expense) benefit 21,700 (3,250) 18,450
---------- -------- -------- ----------
Net income (loss) $(3,162,803) $ 9,275 $(44,543) $(3,198,071)
=========== ======== ======== ===========
Pro forma net loss per pro forma weighted
average number of shares outstanding $(2.16)
======
Pro forma weighted average number of shares
outstanding 1,386,383 (3)(a) 92,500 (3)(b) 1,478,883
========== ======== ===========
</TABLE>
PAGE F-14
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in
connection with filing this Registration Statement:
Securities and Exchange Commission filing fee....... $ 911.32
Printing and Engraving Expenses..................... 1,000.00
Accounting Fee and Expenses......................... 7,500.00
Legal Fees and Expenses............................. 25,000.00
Miscellaneous...................................... 500.00
Reimbursement of Legal Fees and Expenses to
Shaar Fund, Ltd................................... 5,000.00
Total.......................................... $39,911.32
Item 15. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation provides that
the Registrant shall indemnify any person who is or was a
director, officer, employee or agent of the Registrant to the
fullest extent permitted by the New Jersey Business Corporation
Act (the "NJBCA"), and to the fullest extent otherwise permitted
by law. The NJBCA permits a New Jersey corporation to indemnify
its directors, officers, employees and agents against liabilities
and expenses they may incur in such capacities in connection with
any proceeding in which they may be involved, unless a judgment
or other final adjudication adverse to the director, officer,
employee or agent in question establishes that his or her acts or
omissions (a) were in breach of his or her duty of loyalty (as
defined in the NJBCA) to the Registrant or its shareholders,
(b) were not in good faith or involved a knowing violation of law
or (c) resulted in the receipt by the director, officer, employee
or agent of an improper personal benefit.
Pursuant to the Registrant's Certificate of Incorporation
and the NJBCA, no director or officer of the Registrant shall be
personally liable to the Registrant or to any of its shareholders
for damages for breach of any duty owed to the Registrant or its
shareholders, except for liabilities arising from any breach of
duty based upon an act or omission (i) in breach of such
director's or officer's duty of loyalty (as defined in the NJBCA)
to the Registrant or its shareholders, (ii) not in good faith or
involving a knowing violation of law or (iii) resulting in
receipt by such director or officer of an improper personal
benefit.
In addition, the Registrant's Bylaws include provisions to
indemnify its officers and directors and other persons against
expenses, judgments, fines and amounts incurred or paid in
settlement in connection with civil or criminal claims, actions,
suits or proceedings against such persons by reason of serving or
<PAGE II-1> having served as officers, directors, or in other
capacities, if such person acted in good faith, and in a manner
such person reasonably believed to be in or not opposed to the
best interests of the Registrant and, in a criminal action or
proceeding, if he had no reasonable cause to believe that his/her
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contenders or its equivalent shall not, of itself,
create a presumption that the person did not act in good faith
and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the corporation or that he
or she had reasonable cause to believe his or her conduct was
unlawful. Indemnification as provided in the Bylaws shall be
made only as authorized in a specific case and upon a
determination that the person met the applicable standards of
conduct.
Item 16. Exhibits and Financial Statement Schedules.
EXHIBIT INDEX
Exhibit
Number Title
3.1.10 Amendment to the Certificate of Incorporation of
DynamicWeb Enterprises, Inc. dated August 6, 1998, as
filed with the State of New Jersey on August 7, 1998**
5.1 Form of Opinion of Stevens & Lee: Legality**
10.1 Release and Severance Agreement dated February 12, 1993
between Seahawk Capital Corporation and Robert S.
Friedenberg (incorporated by reference to Exhibit 10.2
to DynamicWeb's Annual Report on Form 10-K for the year
ended December 31, 1992).
10.2 Agreement dated February 24, 1995 between DynamicWeb
and Jonathan B. Lassers as to the purchase of common
stock (incorporated by reference to Exhibit 10.1 to
DynamicWeb's Current Report on Form 8-K dated as of
May 8, 1995).
10.3 Amendment Agreement dated May 1, 1995 between
DynamicWeb and Jonathan B. Lassers as to the purchase
of common stock and common stock purchase warrants
(incorporated by reference to Exhibit 10.2 to
DynamicWeb's Current Report on Form 8-K dated as of
May 8, 1995).
10.4 Agreement dated February 29, 1996 between DynamicWeb
and Jonathan B. Lassers as to the exchange of common
stock for his common stock purchase warrants
(incorporated by reference to Exhibit 10.4 filed with
DynamicWeb's Report on Form 10-KSB for the year ended
September 30, 1996). <PAGE II-2>
10.5 Stock Exchange Agreement dated as of December 31, 1994
among DynamicWeb, John C. Fitton and Seahawk Overseas
Exploration Corporation (incorporated by reference to
Exhibit 10.4 to DynamicWeb's Current Report on Form 8-K
dated as of May 8, 1995).
10.6 Stock Purchase Agreement dated March 5, 1996 among
DynamicWeb, DynamicWeb Transaction Systems, Inc.
("DWTS") and the shareholders of DWTS (incorporated by
reference to Exhibit 10.14 to DynamicWeb's Annual
Report on Form 10-KSB for the year ended December 31,
1995).
10.7 Amendment to Stock Purchase Agreement dated May 14,
1996 between DynamicWeb and DWTS (incorporated by
reference to Exhibit 10.14(A) to DynamicWeb's annual
Report on Form 10-KSB for the year ended December 31,
1995).
10.8 Amendment to Stock Purchase Agreement dated June 13,
1996 between DynamicWeb and DWTS (incorporated by
reference to Exhibit 10.14(B) to DynamicWeb's Form 10-
QSB for the period ended March 31, 1996).
10.9 Stock Purchase Agreement dated September 30, 1996 among
DynamicWeb, Megascore, Inc. and the shareholders of
Megascore, Inc. (incorporated by reference to Exhibit 1
to the DynamicWeb's Current Report on Form 8-K dated
November 30, 1996).
10.10 Stock Purchase Agreement dated November 30, 1996 among
DynamicWeb, Software Associates, Inc. and Kenneth R.
Konikowski (incorporated by reference to Exhibit 2 to
DynamicWeb's Current Report on Form -K dated
November 30, 1996).
10.11 Amendment to Stock Purchase Agreement dated April 7,
1997 between DynamicWeb and Kenneth R. Konikowski
(incorporated by reference to Exhibit 10.11 filed with
DynamicWeb's Report on Form 10-KSB for the year ended
September 30, 1996).
10.12 Lock-Up Agreement dated November 30, 1996 among
DynamicWeb, Steve L. Vanechanos, Jr. and Kenneth R.
Konikowski (incorporated by reference to Exhibit 10.12
filed with DynamicWeb's Report on Form 10-KSB for the
year ended September 30, 1996).
10.13 Employment Agreement dated December 1, 1996 between
DynamicWeb and Kenneth R. Konikowski (incorporated by
reference to Exhibit 10.13 filed with DynamicWeb's
Report on Form 10.KSB for the year ended September 30,
1996).
<PAGE II-3>
10.14 Employment Agreement dated May 1, 1998 between
DynamicWeb and Douglas Eadie **
10.15 DynamicWeb Enterprises, Inc. 1997 Employee Stock Option
Plan (incorporated by reference to Annex B to
DynamicWeb's Information Statement filed May 15, 1997,
pursuant to Section 14(c) of the Securities Exchange
Act of 1934).
10.16 DynamicWeb Enterprises, Inc. 1997 Stock Option Plan for
Outside Directors (incorporated by reference to Annex C
to DynamicWeb's Information Statement filed May 15,
1997, pursuant to Section 14(c) of the Securities
Exchange Act of 1934).
10.17 Lease Agreement dated November 1, 1996 between Beauty
and Barber Institute, Inc. and DynamicWeb Transaction
Systems, Inc. (incorporated by reference to
Exhibit 10.16 filed DynamicWeb's Report on Form 10-KSB
for the year ended September 30, 1996).
10.18 Lease Agreement dated November 1, 1994 between Software
Associates, Inc. and The Mask Group (incorporated by
reference to Exhibit 10.17 filed with DynamicWeb's
Report on Form 10-KSB for the year ended September 30,
1996).
10.19 Amendment No. 1 to Lease Agreement between Software
Associates, Inc. and The Mask Group (incorporated be
reference to Exhibit 3 to DynamicWeb's Form 8-K dated
September 9, 1997).
10.20 Employment Agreement dated August 26, 1997 between
DynamicWeb and James D. Conners (incorporated by
reference to Exhibit 1 to DynamicWeb's Form 8-K dated
September 9, 1997).
10.21 Form of financial Consulting Agreement between
DynamicWeb and H.J. Meyers & Co., Inc. (incorporated by
reference to Exhibit 10.20 to DynamicWeb's SB-2 filed
September 15, 1997).
10.22 Form of Mergers and Acquisition Agreement between
DynamicWeb and H.J. Meyers & Co., Inc. (incorporated by
reference to Exhibit 10.21 to DynamicWeb's SB-2 filed
September 15, 1997).
10.23 Letter of amendment dated November 20, 1997 amending
Stock Purchase Agreement dated April 7, 1997 between
DynamicWeb and Kenneth R. Konikowski (incorporated by
reference to Exhibit 10.22 to DynamicWeb's SB-2 filed
September 15, 1997).
<PAGE II-4>
10.24 Letter of Amendment dated December 15, 1997 amending
Stock Purchase Agreement dated April 7, 1997 between
DynamicWeb and Kenneth R. Konikowski (incorporated by
reference to Exhibit 10.23 to DynamicWeb's SB-2 filed
September 15, 1997).
10.25 Form of Warrant and Warrant Agreement with certain
shareholders of DynamicWeb (incorporated by reference
to Exhibit 10.24 to DynamicWeb's SB-2 filed
September 15, 1997).
10.26 Securities Purchase Agreement dated August 7, 1998
between DynamicWeb Enterprises, Inc. and Shaar Fund
Ltd.**
10.27 Registration Rights Agreement dated August 7, 1998
between DynamicWeb Enterprises, Inc. and Shaar Fund
Ltd.**
10.28 Service Agreement and Option Grant with Perry & Co.
dated April 2, 1998.**
10.29 Letter Agreement dated December 3, 1998 between
DynamicWeb Enterprises, Inc. and Shaar Fund Ltd.**
16.1 Letter on change in certifying account (R. Andrew
Gately & Co.) (incorporated by reference to
Exhibit 16.1 to DynamicWeb's Current Report on Form 8-K
dated February 19, 1997.
16.2 Letter on change in certifying accountant (Allen G.
Roth, P.A.) (incorporated by reference to Exhibit 16.2
to DynamicWeb's Current Report on Form 8-K dated
February 19, 1997, as amended by amendment dated
March 12, 1997).
23.1 Consent of Stevens & Lee (included in Exhibit 5.1)
23.2 Consent of Richard A. Eisner & Company, LLP*
* Filed herewith
** Previously filed
Item 17. Undertakings
(a) The undersigned DynamicWeb hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
<PAGE II-5>
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the registration statement.
(iii) To 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 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
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) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 ("Securities Act") may be
permitted to directors, officers and controlling persons of
DynamicWeb pursuant to the foregoing provisions, or otherwise,
DynamicWeb has been advised that in the opinion of the Securities
and Exchange Commission such indemnifications against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
labilities (other than the payment by DynamicWeb of expenses
incurred or paid by a director, officer or controlling person of
DynamicWeb 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,
DynamicWeb will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
PAGE II-6
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, DynamicWeb Enterprises, Inc. has duly caused this Amendment
No. 2 to the registration statement to be signed on its behalf by
the undersigned in the City of Fairfield, State of New Jersey on
January 25, 1999.
DYNAMICWEB ENTERPRISES, INC.
By:/s/ Steven L. Vanechanos, Jr.
Steven L. Vanechanos, Jr.
Chief Executive Officer
In accordance with the requirements of the Securities Act of
1933, as amended, this Amendment No. 2 to the registration
statement was signed below by the following persons and in the
capacities and on the dates stated.
/s/STEVEN L. VANECHANOS, JR. Chief Executive Jan. 25, 1999
Steven L. Vanechanos, Jr. Officer and Director
/s/ STEVE VANECHANOS, SR. Treasurer, Chief Jan. 25, 1999
Steve Vanechanos, Sr. Financial Officer,
and Chief Accounting
Officer, Director
/s/ F. PATRICK AHEARN* Director Jan. 25, 1999
F. Patrick Ahearn
/s/ DENIS CLARK* Director Jan. 25, 1999
Denis Clark
/s/ FRANK T. DiPALMA* Director Jan. 25, 1999
Frank T. DiPalma
/s/ ROBERT DROSTE* Director Jan. 25, 1999
Robert Droste
/s/ KENNETH R. KONIKOWSKI Director Jan. 25, 1999
Kenneth R. Konikowski
* By Steven L. Vanechanos, Jr., attorney-in-fact
PAGE II-7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Title
3.1.10 Amendment to the Certificate of Incorporation of
DynamicWeb Enterprises, Inc. dated August 6, 1998, as
filed with the State of New Jersey on August 7, 1998**
5.1 Form of Opinion of Stevens & Lee: Legality**
10.1 Release and Severance Agreement dated February 12, 1993
between Seahawk Capital Corporation and Robert S.
Friedenberg (incorporated by reference to Exhibit 10.2
to DynamicWeb's Annual Report on Form 10-K for the year
ended December 31, 1992).
10.2 Agreement dated February 24, 1995 between DynamicWeb
and Jonathan B. Lassers as to the purchase of common
stock (incorporated by reference to Exhibit 10.1 to
DynamicWeb's Current Report on Form 8-K dated as of
May 8, 1995).
10.3 Amendment Agreement dated May 1, 1995 between
DynamicWeb and Jonathan B. Lassers as to the purchase
of common stock and common stock purchase warrants
(incorporated by reference to Exhibit 10.2 to
DynamicWeb's Current Report on Form 8-K dated as of
May 8, 1995).
10.4 Agreement dated February 29, 1996 between DynamicWeb
and Jonathan B. Lassers as to the exchange of common
stock for his common stock purchase warrants
(incorporated by reference to Exhibit 10.4 filed with
DynamicWeb's Report on Form 10-KSB for the year ended
September 30, 1996).
10.5 Stock Exchange Agreement dated as of December 31, 1994
among DynamicWeb, John C. Fitton and Seahawk Overseas
Exploration Corporation (incorporated by reference to
Exhibit 10.4 to DynamicWeb's Current Report on Form 8-K
dated as of May 8, 1995).
10.6 Stock Purchase Agreement dated March 5, 1996 among
DynamicWeb, DynamicWeb Transaction Systems, Inc.
("DWTS") and the shareholders of DWTS (incorporated by
reference to Exhibit 10.14 to DynamicWeb's Annual
Report on Form 10-KSB for the year ended December 31,
1995).
10.7 Amendment to Stock Purchase Agreement dated May 14,
1996 between DynamicWeb and DWTS (incorporated by
reference to Exhibit 10.14(A) to DynamicWeb's annual
<PAGE II-8> Report on Form 10-KSB for the year ended
December 31, 1995).
10.8 Amendment to Stock Purchase Agreement dated June 13,
1996 between DynamicWeb and DWTS (incorporated by
reference to Exhibit 10.14(B) to DynamicWeb's Form 10-
QSB for the period ended March 31, 1996).
10.9 Stock Purchase Agreement dated September 30, 1996 among
DynamicWeb, Megascore, Inc. and the shareholders of
Megascore, Inc. (incorporated by reference to Exhibit 1
to DynamicWeb's Current Report on Form 8-K dated
November 30, 1996).
10.10 Stock Purchase Agreement dated November 30, 1996 among
DynamicWeb, Software Associates, Inc. and Kenneth R.
Konikowski (incorporated by reference to Exhibit 2 to
DynamicWeb's Current Report on Form -K dated
November 30, 1996).
10.11 Amendment to Stock Purchase Agreement dated April 7,
1997 between DynamicWeb and Kenneth R. Konikowski
(incorporated by reference to Exhibit 10.11 filed with
DynamicWeb's Report on Form 10-KSB for the year ended
September 30, 1996).
10.12 Lock-Up Agreement dated November 30, 1996 among
DynamicWeb, Steve L. Vanechanos, Jr. and Kenneth R.
Konikowski (incorporated by reference to Exhibit 10.12
filed with DynamicWeb's Report on Form 10-KSB for the
year ended September 30, 1996).
10.13 Employment Agreement dated December 1, 1996 between
DynamicWeb and Kenneth R. Konikowski (incorporated by
reference to Exhibit 10.13 filed with DynamicWeb's
Report on Form 10.KSB for the year ended September 30,
1996).
10.14 Employment Agreement dated May 1, 1998 between
DynamicWeb and Douglas Eadie **
10.15 DynamicWeb Enterprises, Inc. 1997 Employee Stock Option
Plan (incorporated by reference to Annex B to
DynamicWeb's Information Statement filed May 15, 1997,
pursuant to Section 14(c) of the Securities Exchange
Act of 1934).
10.16 DynamicWeb Enterprises, Inc. 1997 Stock Option Plan for
Outside Directors (incorporated by reference to Annex C
to DynamicWeb's Information Statement filed May 15,
1997, pursuant to Section 14(c) of the Securities
Exchange act of 1934).
<PAGE II-9>
10.17 Lease Agreement dated November 1, 1996 between Beauty
and Barber Institute, Inc. and DynamicWeb Transaction
Systems, Inc. (incorporated by reference to
Exhibit 10.16 filed with DynamicWeb's Report on
Form 10-KSB for the year ended September 30, 1996).
10.18 Lease Agreement dated November 1, 1994 between Software
Associates, Inc. and The Mask Group (incorporated by
reference to Exhibit 10.17 filed with DynamicWeb's
Report on Form 10-KSB for the year ended September 30,
1996).
10.19 Amendment No. 1 to Lease Agreement between Software
Associates, Inc. and The Mask Group (incorporated be
reference to Exhibit 3 to DynamicWeb's Form 8-K dated
September 9, 1997).
10.20 Employment Agreement dated August 26, 1997 between
DynamicWeb and James D. Conners (incorporated by
reference to Exhibit 1 to DynamicWeb's Form 8-K dated
September 9, 1997).
10.21 Form of financial Consulting Agreement between
DynamicWeb and H.J. Meyers & Co., Inc. (incorporated by
reference to Exhibit 10.20 to DynamicWeb's SB-2 filed
September 15, 1997).
10.22 Form of Mergers and Acquisition Agreement between
DynamicWeb and H.J. Meyers & Co., Inc. (incorporated by
reference to Exhibit 10.21 to DynamicWeb's SB-2 filed
September 15, 1997).
10.23 Letter of amendment dated November 20, 1997 amending
Stock Purchase Agreement dated April 7, 1997 between
DynamicWeb and Kenneth R. Konikowski (incorporated by
reference to Exhibit 10.22 to DynamicWeb's SB-2 filed
September 15, 1997).
10.24 Letter of Amendment dated December 15, 1997 amending
Stock Purchase Agreement dated April 7, 1997 between
DynamicWeb and Kenneth R. Konikowski (incorporated by
reference to Exhibit 10.23 to DynamicWeb's SB-2 filed
September 15, 1997).
10.25 Form of Warrant and Warrant Agreement with certain
shareholders of DynamicWeb (incorporated by reference
to Exhibit 10.24 to DynamicWeb's SB-2 filed
September 15, 1997).
10.26 Securities Purchase Agreement dated August 7, 1998
between DynamicWeb Enterprises, Inc. and Shaar Fund
Ltd.**
<PAGE II-10>
10.27 Registration Rights Agreement dated August 7, 1998
between DynamicWeb Enterprises, Inc. and Shaar Fund
Ltd.**
10.28 Service Agreement and Option Grant with Perry & Co.
dated April 2, 1998.**
10.29 Letter Agreement dated December 3, 1998 between
DynamicWeb Enterprises, Inc. and Shaar Fund Ltd.**
16.1 Letter on change in certifying account (R. Andrew
Gately & Co.) (incorporated by reference to
Exhibit 16.1 to DynamicWeb's Current Report on Form 8-K
dated February 19, 1997.
16.2 Letter on change in certifying accountant (Allen G.
Roth, P.A.) (incorporated by reference to Exhibit 16.2
to DynamicWeb's Current Report on Form 8-K dated
February 19, 1997, as amended by amendment dated
march 12, 1997).
23.1 Consent of Stevens & Lee (included in Exhibit 5.1)
23.2 Consent of Richard A. Eisner & Company, LLP*
* Filed herewith
** Previously filed
<PAGE II-11>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the
caption "Experts" and to the use of our report dated July 10,
1998 with respect to the financial statements of Design Crafting,
Inc. in the Registration Statement (Amendment No. 2 to Form S-2)
and related prospectus of DynamicWeb Enterprises, Inc. for the
registration of 1,024,730 shares of its common stock and to the
incorporation by reference therein of our report dated
November 30, 1998 (December 3, 1998 with respect to the last
paragraph of Note H[7]) with respect to the consolidated
financial statements of DynamicWeb Enterprises, Inc. and
subsidiaries included in its annual report (Form 10-KSB) for the
year ended September 30, 1998, filed with the Securities and
Exchange Commission.
Richard A. Eisner & Company, LLP
New York, New York
January 25, 1999
