UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1999
---------------------------
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________________ to ____________________
Commission file number 0-1-12023
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LEVEL JUMP FINANCIAL GROUP, INC.
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(Name of Small Business Issuer in Its Charter)
Florida N/A
- - -------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
133 Richmond Street West - Suite 401
Toronto, Ontario, Canada M5H 2L3
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(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number: (416) 777-0477
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $.0025 per share
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days Yes X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $2,827,468.
As of March 17, 2000, the aggregate market value of the issuer's Common
Stock (based on its reported last sale price on the OTC Bulletin Board) held by
non-affiliates of the issuer was 3,657,496. At March 17, 2000, 8,061,500 shares
of issuer's Common Stock were outstanding.
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LEVEL JUMP FINANCIAL GROUP, INC.
1999 FORM 10-KSB ANNUAL REPORT
TABLE OF CONTENTS
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SECTION PAGE NO.
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PART I
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Item 1. Description of Business 3
Item 2. Description of Properties 9
Item 3 Legal Proceedings 9
Item 4. Submission of Matters to a Vote of Security Holders 10
PART II
- - --------
Item 5. Market for Common Equity and Related Stockholder Matters 10
Item 6. Management's Discussion and Analysis of Financial Condition and Results 12
of Operation
Item 7. Financial Statements and Supplementary Data 14
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 15
PART III
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Item 9. Directors and Executive Officers of the Registrant 16
Item 10. Executive Compensation 17
Item 11. Security Ownership of Certain Beneficial Owners and Management 19
Item 12. Certain Relationships and Related Transactions 20
PART IV
Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K 25
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Item 1. Description of Business
Organization
Level Jump Financial Group, Inc. is a Florida corporation that was incorporated
on January 8, 1980 with the name Skyfreight, Inc. On September 9, 1994 the name
was changed to Caldera Corporation Inc. and then on September 6, 1996 to Caldera
Corporation and then in early January 2000 to Level Jump Financial Group, Inc.
From 1980 until 1986, Caldera was engaged in the air freight business in Miami,
Florida. During 1994, the Caldera acquired options to purchase gold mining
leases located in Chile and in Alaska and on April 26, 1997 the leases were
transferred to Au International Inc. (a related party) in exchange for the
assumption of all of Caldera's liabilities. From April 1997 until October 1999,
Caldera had no business operations.
On October 20, 1999, the board of directors of Level Jump (at the time Caldera
Corporation) entered into an Agreement and Plan of Exchange with Level Jump
Financial Group, Inc. ("Level Jump Colorado"), a Colorado corporation, which was
consummated on October 28, 1999 whereby Level Jump issued 5,087,500 shares of
Common Stock in exchange for all 3,700,000 shares of common stock of Level Jump
Colorado. In addition, Level Jump agreed to assume obligations of Level Jump
Colorado to issue shares of Common Stock that could result in the issuance of
5,912,500 Shares under exchangeable share agreements and 2,750,000 Shares under
a Performance Equity Plan. As part of the transaction, the board of directors of
Level Jump Colorado were appointed to the board of directors of Level Jump and
former directors resigned from the board of directors. Prior to the acquisition
of Level Jump Colorado, Level Jump had no significant operations. The
transaction was accounted for as an issuance of stock for the net assets of
Level Jump Colorado, accompanied by a recapitalization. Level Jump Colorado's
assets were recorded at carryover basis and no goodwill was recorded from the
transaction. Level Jump Colorado's historical financial statements became those
of the company. On January 31, 2000, Level Jump completed a reorganization
whereby Level Jump Colorado was merged into Level Jump and all obligations of
Level Jump Colorado were assumed by Level Jump.
Level Jump Colorado was a Colorado corporation that was incorporated on March
29, 1999. The company was formed by the shareholders of thestockpage.com inc.
("thestockpage.com"), an Ontario corporation that was incorporated on August 27,
1997. On June 1, 1999, Level Jump Colorado acquired thestockpage.com. The
acquisition was accounted for on a continuity of interest basis as Level Jump
Colorado and thestockpage.com were controlled by the same shareholders before
and after the purchase and sale transaction.
General
Level Jump provides financial public relations services through its wholly owned
subsidiary, thestockpage.com. Through its wholly owned subsidiary, Level Jump
Asset Management, Inc., a Delaware corporation, Level Jump provides financial
consulting services. Level Jump is in the process of acquiring Southland
Securities Corporation, a Texas incorporated broker/dealer registered with the
Securities and Exchange Commission ("SEC") and the National Association of
Securities Dealers ("NASD"). Under its long- term business plan, Level Jump
intends to expand into on-line financial services including trading, banking,
investment banking, advisory services and insurance.
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Financial Public Relations
thestockpage.com provides Internet and traditional financial public relations
services to small and micro-cap companies typically listed on the
Over-the-Counter Bulletin Board ("OTC-BB"). Companies use financial public
relations to strengthen their profile within and generate interest from the
investment community. Targets of financial public relations include financial
analysts, hedge fund and investment fund managers, brokers, other money
managers, investment clubs, and high-net worth and regular investors.
thestockpage.com provides three levels of service to clients.
Premiere Service
The premiere service is a comprehensive six to twelve-month campaign that begins
with preparation of a client's investor relations materials and review of the
investor relations section of a company's web site. Once the client's image and
message has been refined, a company profile is sent to the approximately 50,000
members that have signed up for thestockpage.com's email newsletter. After the
profile is sent to thestockpage.com's member list, an advertising campaign is
executed consisting of on-line, print, radio and television advertising on
popular financial web sites, publications, radio and television shows.
thestockpage.com handles all incoming leads generated by the advertising
campaigns and represents the company to the investment community. All leads
generated from the campaign are quickly and efficiently followed-up with a
mail-out describing the company and follow-up call from one of
thestockpage.com's investor relations representatives. thestockpage.com has
built strong personal relationships with the small and micro-cap institutional
and broker community and uses personal contact to disseminate a company's
message to these important advisors and managers. thestockpage.com is
continuously building its contacts in the broker community though telemarketing
and other direct marketing approaches. Shortly after the campaign begins,
thestockpage.com will take the company on a North American road show to large
cities to meet the broker community in each city. In a typical campaign,
thestockpage.com will also take the company to investor trade shows and
expositions to present the company's message. Over the course of the six-month
campaign, company press releases are distributed to thestockpage.com's member
list. thestockpage.com also uses traditional public relations persons to
generate publicity for the company in the popular financial press. Upon
completion of the premiere service, thestockpage.com can provide traditional
investor relations described next.
Traditional Investor Relations
Traditional investor relations services consist primarily of shareholder
communications. thestockpage.com allows a company to outsource its investor
relations function to relieve the company of the time-consuming tasks of
communicating with shareholders, prospective investors, financial analysts and
other members of the investment community and explaining news events as they
happen. thestockpage.com has a call center that employs a number of seasoned
investor relations representatives that follow-up and address shareholder
queries on a timely basis. All calls are logged in thestockpage.com's database
and comments are passed back to the company for feedback and idea generation.
Call center staff are responsible for materials fulfillment to ensure the proper
communications reach the appropriate audience.
Press Release and Profile Dissemination
thestockpage.com offers companies the ability to email one-off profiles or press
releases to its 50,000 member list. This service is used by companies that want
quick exposure to a list of investors that has been built up over two years and
that are interested in the small and micro-cap markets.
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Web Site
As part of a major upgrade launched in February 1999, thestockpage.com began to
offer on its web site services that include charts, free-real-time stock quotes,
delayed stock, option and mutual fund quotes, market information, business and
financial news, and SEC information. These services are provided through an
agreement with InfoSpace.com. All services are free to members. The services add
an element of "stickiness" to thestockpage.com's web site and are used to
attract and retain new members.
Marketing
Since inception in August 1997, thestockpage.com has more than doubled its
revenues each year. This is a result of an increase in the price charged for the
premiere service as it has evolved to its comprehensive current offering.
thestockpage.com has attracted new clients primarily through word of mouth
referrals based on the company's performance record. thestockpage.com has not
actively marketed its services. The company pays a commission of up to 10
percent of the value of the service contract to third parties that introduce
thestockpage.com to clients. The company recently hired a full-time sales person
to actively solicit new business. thestockpage.com is preparing marketing
material and intends to step-up its marketing activities in 2000 to increase its
client base.
Economic Dependence
thestockpage.com generates its revenues from very few clients. In 1999, 1998 and
1997 respectively, the company took on eight, six and two clients. Also, the
company's investment portfolio is made up of very few securities. Since
thestockpage.com generates the majority of its revenue through its premiere
service, each contract is significant to thestockpage.com and is typically
non-recurring. There is significant risk that the company will be unable to
continue to find new clients and this could result in a substantial reduction in
revenues.
Compensation and Investments
thestockpage.com receives compensation in a combination of cash, restricted and
free-trading stock, and/or warrants. Typically, restricted stock cannot be sold
for a one-year period. Since all clients of thestockpage.com have been quoted on
the OTC-BB, there is substantial risk that the value of the investment portfolio
could drop substantially at any time. To date, the company's largest restricted
stock holding has increased substantially in value while the smaller holdings
have decreased in value. The warrants held by thestockpage.com require cash to
be paid by the company to exercise and are then restricted from resale for one
year after exercise. Unless the warrants are significantly in-the-money (the
stock price exceeds the exercise price), thestockpage.com will not typically
exercise the warrants. For larger exercise amounts, the company may need to
obtain external financing to pay the exercise price.
Competition
thestockpage.com competes with financial public relations companies and
traditional investor relations firms. There are numerous companies that provide
some or all of the financial public relations services that thestockpage.com
offers to its clients. Examples of companies in this sector include public
relations giants such as Burson-Marsteller and Fleishman-Hillard as well as
investor relations specialists such as the Barnes Organization. Many of these
companies have significantly larger financial resources than thestockpage.com.
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Staff
thestockpage.com currently employs eleven people and is expanding its staff to
over 24 people in the next few months. This expansion will enhance the
management, sales and call center to provide better service to a larger number
of clients.
On-line Financial Services
Level Jump is in the early stages of entry into on-line financial services. Over
time, the business plan envisions providing a comprehensive financial services
solution for consumers and small businesses in the United States and other
countries. The range of services that Level Jump intends to offer include:
o Financial Portal - quotes, portfolio, email alerts, news, charts, market
snapshot (North American and global indices, foreign currencies, most
actives, upgrades/downgrades, biggest gainers/losers, calendars), equities
(finder, IPO, insider trades, SEC, option chain), mutual funds (quote,
finder, profile), bonds, tax, legal, financial planning, investor
education.
o Brokerage - discount trading, retail-on-the-des institutional
market making.
o Corporate Finance - private placements, registered offerings.
o Banking - deposit products (all-in-one high interest checking, savings,
money market account, certificates of deposit, GICs), lending products
(mortgages, secured consumer loans, home equity loans), bill presentment
and payment, business services (cash management, secured and unsecured term
loans, secured and unsecured revolving lines of credit).
o Financial Advisory Services - private client, retail brokers,
mutual funds, hedge funds.
o Insurance - property and casualty, life, health auto, home, renters.
o Small Business Services (affiliate relationships) - credit
reports, equipment leasing, office supplies, general ledger services,
payroll services, travel agency services, etc.
o Financial Public Relations - complete on-line and traditional investor
relations services through thestockpage.com.
Level Jump's management has built up significant expertise in the small and
micro-cap markets over the past three years. It believes issuers and investors
in this market are underserved by investment banks and discount brokers and
intends to aggressively target this niche. By providing full-service financial
services, Level Jump will leverage into the broader market and look to appeal to
a wider population. Level Jump's subsidiary, thestockpage.com, has a 50,000
member newsletter list that will be actively targeted for financial services.
Current Progress
To date, Level Jump has taken the following actions:
o Level Jump has engaged Microforum, a large, reputable web development
firm to build the financial portal. Microforum's style is on
display at the current Level Jump splash page at http://www.leveljump.com.
Level Jump has identified the critical content providers for the financial
portal and has signed an agreement with North American Quotations to
provide all quotes for the web site. The initial launch of the financial
portal is targeted for June 2000. Level Jump intends to continue to use
Microforum as other services are added to the web site.
o Level Jump has signed a purchase agreement with Southland Securities
Corporation, a SEC/NASD registered broker/dealer. Closing is subject to the
approval of the change of control by the NASD. Level Jump has hired a
broker/dealer consultant to assist with the change of control process and
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the application is currently under review by the NASD. Southland has a
comprehensive securities license that will give Level Jump the platform it
needs to expand into the securities businesses indicated previously. Level
Jump has set-up a subsidiary called Level Jump Asset Management, Inc.
("LJAM"), entered into an office lease in New York, and hired two
individuals with previous brokerage experience in anticipation of the
acquisition of Southland. Upon closing of the Southland transaction, these
individuals will be moved to the broker/dealer. Level Jump is interviewing
for key positions for the broker/dealer including President, Vice President
Compliance and additional trading positions.
o Level Jump has engaged two senior banking consultants with over 60
years combined experience to assist in the formation of the Internet bank.
Currently, the consultants are evaluating the buy versus build versus
strategic alliance issue. Level Jump is in advanced discussions with a
large outsourcing company to provide the technology infrastructure for
Level Jump. This company has created a turnkey on-line banking technology
infrastructure through strategic relationships with established banking
system providers.
Technology
Level Jump management intends to outsource its Internet technology
infrastructure planning, implementation and maintenance to an experienced
provider. Level Jump is in negotiations with a large company that specializes in
high volume financial service transactions and is an expert at on-line bank
technology and operations. Outsourcing will allow Level Jump to reduce up-front
capital costs while creating a significant technology infrastructure. Microforum
is developing the financial portal, associated databases and applications
servers, and front-end look and feel across the web site. Level Jump is
evaluating on-line brokerage applications. Initially, Level Jump will use a
third-party clearing agent for securities processing. The outsourcing provider
will address all other major technology issues such as security and capacity
planning.
Future Actions
Level Jump is at an early stage in its planned entry into the on-line financial
services market. Although it believes there are significant opportunities in the
market, there are also thousands of existing on-line and traditional financial
services companies that are expanding rapidly on the Internet and that already
dominate their various segments. The financial services sector was one of the
earliest and most competitive areas of the Internet. Competitors with
significantly larger financial, technology and human resources are aggressively
operating in all areas of the financial services sector. In order to provide the
services described above in a reasonable period of time (one to three years),
Level Jump will need to do the following:
o Raise upwards of $25 million in equity capital. o Close the purchase of
Southland Securities.
o Purchase or build a bank with a national charter.
o Hire numerous consultants and staff with specific skill-sets for highly
specialized, regulated businesses.
o Integrate disparate technologies to provide a comprehensive, ubiquitous
financial services solution to customers.
o Attract a large number of customers to the web site through marketing and
public relations.
All aspects of Level Jump's plan are difficult to implement and will require
significantly greater resources than Level Jump currently has.
Competition
The financial services industry is subject to competition from other brokerage
firms, investment advisory and merchant banking firms, banks and insurance
companies. The provision of on-line services is particularly competitive because
each of the traditional sources of competition are extending their operations
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into Internet services, and there are additional companies that focus
exclusively on providing services through the Internet. Because of the amount of
competition, we will have to devote substantial efforts to obtaining and
retaining customers. We believe our base of 50,000 registered members of
thestockpage.com will give us some advantage in launching our services. Because
marketing Internet based services is radically different than marketing
conventional financial services, we intend to use aggressive public relations
and targeted media campaigns to differentiate ourselves from others and viral
marketing. We believe our experience in financial public relations will be
invaluable. Much of our success will depend on our capital resources and cash
flow because many of our competitors have substantially greater resources,
experience and access to capital and personnel.
To remain competitive Level Jump must continue to enhance and improve the
responsiveness, functionality and features of its web site. The online financial
portal industry is characterized by rapid technological change, changes in user
and customer preferences, frequent new product and service introductions and the
emergence of new industry standards and practices. Any of these could render
existing web sites and systems obsolete. Level Jump's success will depend on its
ability to license and internally develop trading technologies useful in its
business, to enhance its existing services, to develop new services and
technology that address the increasing sophisticated and varied needs of
consumers and to respond to technological advances and emerging industry
standards and practices.
Government Regulation
Financial services are subject to extensive federal and state regulation and to
various industry self regulatory bodies. Our operations relating to securities
are governed by laws administered by the Securities and Exchange Commission and
state agencies and self-regulatory organizations such as the NASD and the stock
exchanges. Operations relating to banking and insurance will be subject to other
federal and state regulatory bodies.
Federal Securities Regulation
Our investment advisory and broker-dealer activities require us to be registered
with the SEC and become a member firm of the NASD. Much of the regulation of
broker-dealers has been delegated to self-regulatory organizations, principally
the NASD Regulation, Inc. NASDR adopts rules that govern its members and
brokers, and it conducts periodic examinations of member firm operations.
Regulation will concern many areas of operations including net capital, sales
methods and supervision, trading practices, use and safekeeping of customer
funds and securities, record keeping and conduct of directors, officer and
employees.
State Securities Regulation
Investment advisors and securities firms are also subject to regulation by state
securities administrators in those states in which they conduct business. State
regulation concerns many of the same areas as does federal and self-regulatory
organization supervision.
The SEC, self-regulatory organizations, and state securities commissions may
conduct administrative proceedings which can result in censure, fines the
issuance of cease-and-desist orders or the suspension or expulsion of a
broker-dealer, its officers or employees. The principal purpose of regulation
and discipline of broker-dealers is the protection of customers and the
integrity of the securities markets.
The advent of Internet-based securities operations have created uncertainty on
the regulatory landscape. When enacted, the Securities Act of 1933 and the
Securities Exchange Act of 1934, which governs the offer and sale of securities
and the broker-dealers, did not contemplate the conduct of a securities business
through the Internet. Uncertainty regarding the application of these laws could
have a chilling effect on the growth of Internet-based securities firms.
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Further, the timing, scope and effect on the securities industry in general and
us in particular of new securities rules and regulations which may be
implemented on the state or federal level in response to the Internet cannot be
anticipated.
New rules or regulations imposed from time to time with respect to the
securities industry in general and Internet-based securities firms in particular
may limit our ability to participate in certain areas of the securities industry
or require us to incur significant expense in order to come into compliance with
such rules and regulations.
Proprietary Rights
Level Jump regards its copyrights, service marks, trademarks, trade dress, trade
secrets, and similar intellectual property as critical to its success and relies
on trademark and copyright law, trade secret protection, and confidentiality
and/or license agreements with its employees, customers, partners, and others to
protect its proprietary rights. Level Jump is pursuing the registration of its
trademarks and service marks in the United States and internationally. Effective
trademark, service mark, copyright, and trade secret protection may not be
available in every country in which Level Jump's products and services are made
available online. There can be no assurance that the steps taken by Level Jump
to protect its proprietary rights will be adequate or that third parties will
not infringe or misappropriate Level Jump's copyrights, trademarks, trade dress,
and similar proprietary rights. In addition, there can be no assurance that
other parties will not assert infringement claims against Level Jump.
Staff
Level Jump currently employs three people and LJAM employs two people. Level
Jump intends to hire a significant number of employees over the next year.
ITEM 2. DESCRIPTION OF PROPERTIES.
Level Jump's subsidiary, thestockpage.com, leases two office facilities in
Toronto; one is subject to a lease expiring in April, 2000 and one is on a
month-to-month lease. thestockpage.com has entered into a lease for 5,700 square
feet at a new location to consolidate its facilities in Toronto. This lease
commences April 1, 2000 and is for a period of five years, at an annual lease
payment of $95,000. The new address will be 121 Richmond Street West - 7th
Floor, Toronto, Ontario M5H 2K1
During 1999, Level Jump's subsidiary, LJAM entered into an agreement to lease
facilities in New York City, New York for a five-year period. The annual lease
payments are $55,000.
Level Jump believes that it has adequate space for its needs during 2000 and
into 2001.
ITEM 3. LEGAL PROCEEDINGS.
On April 30, 1998, thestockpage.com commenced a proceeding in Ontario Court
(General Division), Toronto, Ontario against three individuals seeking a
declaration that the said parties have no interest in thestockpage.com and that
the company and its principals were not indebted to the individuals in any
fashion. The court proceeding arose out of failed negotiations between
thestockpage.com and one individual in which it was proposed that the individual
acquire a 50% interest in thestockpage.com in exchange for a cash amount,
delivery of clients and financing for a second venture. After the negotiations
broke down, thestockpage.com commenced a proceeding on the basis of one of the
individual's allegations that he has an interest in thestockpage.com. The
individuals have claimed by way of counterclaim an interest in thestockpage.com
and a declaration that one individual is a beneficial owner of 50% of the equity
of thestockpage.com. In the alternative, the two other individuals are claiming
ownership of 60% of the equity of thestockpage.com. The proceeding is currently
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in the examination phase and thestockpage.com is unable to predict its ultimate
outcome. thestockpage.com believes the counterclaim filed by the three
individuals is without merit and intends to defend against it vigorously.
On January 26, 2000, thestockpage.com commenced a proceeding in Ontario Superior
Court of Justice, Toronto, Ontario against D.C.H. Technologies Inc. to collect
amounts owing pursuant to a Consulting Agreement relating to services performed
in 1998. The action alleges that the balance of 100,000 shares of common stock
owing to thestockpage.com pursuant to the Consulting Agreement, which was due
and payable one week after DCH became fully reporting with the SEC on or about
October 4, 1999, has not yet been remitted. The claim seeks specific performance
of delivery of 100,000 shares of common stock, or alternatively CDN$1,500,000 in
damages for breach of contract, as well as attorney fees. On March 7, 2000, DCH
filed a Statement of Defense and Counterclaim. The Counterclaim alleges that
thestockpage.com breached its contract with DCH and seeks damages for
US$5,000,000 for breach of contract and US$10,000,000 for deliberate
interference in economic relations. The proceeding is currently at a very early
stage and thestockpage.com is unable to predict its ultimate outcome.
thestockpage.com believes the counterclaim filed by DCH is without merit and
intends to defend against it vigorously.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On November 17, 1999, four shareholders holding 6,394,073 shares of common
stock, representing approximately 81% of the then outstanding shares of common
stock of Level Jump, executed and delivered their written consents to approve a
restated articles of incorporation making the following substantial changes:
o Change of name to Level Jump Financial Group, Inc.,
o Increase the capitalization of Level Jump to 200,000,000 shares of common
stock and 5,000,000 shares of preferred stock (currently without
designation),
o Elimination of pre-emptive rights of any capital stock,
o Provision that shareholders may act by written consent equal in number to
the votes required if the matter was submitted to a meeting of
shareholders,
o Provision that special meetings may be called by not less than 50% of the
votes eligible to act at the meeting,
o Limitations on shareholders proposals having submitted to shareholders upon
less than 120 days advance notice, including the submission of persons to
be elected directors, and
o Statements on the limitation of liabilities of directors and officers and
provision for indemnification.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Price Range of Common Stock
The common stock was accepted for trading on the OTC-BB on March 5, 1999. From
acceptance until January 14, 2000, the common stock traded under the symbol
CLDF. On January 14, 2000, the ticker symbol was changed to LJMP. The following
table shows the high and low bid prices of the common stock as reported by the
OTC-BB for the periods indicated.
High Low
Fiscal 1999
First Quarter (beginning March 5) $9.00 $1.00
Second Quarter $8.50 $6.50
Third Quarter $8.00 $4.00
Fourth Quarter $7.625 $4.00
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Fiscal 2000
First Quarter (until March 3, 2000) $7.4375 $2.00
The closing sale price of the common stock as reported on the OTC-BB on February
24, 2000 was $2.25 per share. As of that date there were 1,171 holders of record
of the common stock.
The market price of the common stock is likely to be highly volatile and could
be subject to wide fluctuations in response to quarterly variations in operating
results, announcements of technological innovations or new software, services or
products by Level Jump or its competitors, changes in financial estimates by
securities analysts or other events or factors, many of which are beyond its
control. In addition, the stock market has experienced significant price and
volume fluctuations that have particularly affected the market prices of equity
securities of many technology, Internet and services companies and that often
have been unrelated to the operating performance of such companies. These broad
market fluctuations may adversely affect the market price of the common stock.
In the past, following periods of volatility in the market price for a company's
securities, securities class action litigation sometimes has been instituted.
Such litigation could result in substantial costs and a diversion of management
attention and resources, which could have a material adverse effect on Level
Jump's business, financial condition and operating results.
Dividends
Level Jump has not declared or paid cash dividends on its capital stock during
the last five years. Prior to that time, existing management is unaware of any
dividend payments.
On May 25, 1999, prior to the acquisition of thestockpage.com by Level Jump
Colorado, thestockpage.com's board of directors declared and paid a dividend on
thestockpage.com's common shares of $264,941 from thestockpage.com's capital
dividend account and a special dividend on the stockpage.com's common shares of
$99,569. The total charge to retained earnings was $364,510.
Level Jump Colorado and thestockpage.com entered into a support agreement which
was assumed by Level Jump on January 31, 2000. The support agreement provides
that no dividends will be declared or paid on the Level Jump common stock unless
thestockpage.com simultaneously declares and pays an economically equivalent
dividend (after appropriate adjustments for currency translations) on the
exchangeable shares.
Level Jump currently intends to retain all of its earnings, if any, for use in
its business and does not anticipate paying any cash dividends in the
foreseeable future. The payment of any future dividends will be at the
discretion of the board of directors (subject to the support agreement) and will
depend upon a number of factors, including future earnings, the success of Level
Jump's business activities, capital requirements, the general financial
condition and future prospects of the company, general business conditions and
such other factors as the board of directors may deem relevant.
Recent Sales of Unregistered Securities
On January 24, 2000, Level Jump sold 178,000 shares to four accredited or
sophisticated investors under Regulation D Rule 506 of the Securities Act of
1933, as amended at a price of $2.50 per share. The net proceeds were $445,000
and will be used for general working capital.
On January 31, 2000, in connection with the merger of Level Jump Colorado into
Level Jump, the company issued one share each of the Class A Preferred Stock and
Class B Preferred Stock to the two holders of preferred stock of Level Jump
Colorado as an exchange of securities. The exchange was made on the basis of
Section 4(2) of the Securities Act of 1933, to accredited/sophisticated
investors.
11
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This document contains forward-looking statements, including statements
regarding Level Jump's strategy, financial performance and revenue sources which
involve risks and uncertainties. Actual results may differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including, but not limited to, those set forth in the risk factors section and
elsewhere in this Form 10-KSB.
Introduction
On October 20, 1999, the board of directors of Level Jump (at the time Caldera
Corporation) entered into an Agreement and Plan of Exchange with Level Jump
Colorado which was consummated on October 28, 1999 whereby Level Jump issued
5,087,500 shares of Common Stock in exchange for all 3,700,000 shares of common
stock of Level Jump Colorado. In addition, Level Jump agreed to assume certain
other obligations of Level Jump Colorado to issue shares of Common Stock that
could result in the issuance of 5,912,500 Shares under exchangeable share
agreements and 2,750,000 Shares under a Performance Equity Plan. As part of the
transaction, the board of directors of Level Jump Colorado were appointed to the
board of directors of Level Jump and former directors of Level Jump resigned
from the board of directors. On January 31, 2000, Level Jump completed a
reorganization whereby Level Jump Colorado was merged into Level Jump and all
obligations of Level Jump Colorado were assumed by Level Jump.
Prior to the acquisition, Level Jump had no significant operations. This
transaction was equivalent to the issuance of stock by Level Jump for the net
assets of Level Jump Colorado, accompanied by a recapitalization. Level Jump
Colorado's assets were recorded at carryover basis and no goodwill was recorded
from the transaction. Level Jump Colorado's historical financial statements
become those of Level Jump.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
For the year ended December 31, 1999, revenues increased by 165% to $2,827,468
from $1,067,971 for the prior fiscal year. All revenues were earned in
thestockpage.com from financial public relations services. The increase is
attributable to an increase in the average price charged per client to $403,924
from $177,995 and the pick-up of one additional client in 1999. During 1999,
thestockpage.com significantly enhanced its premiere financial public relations
service; this enhancement was well received by the market.
The gross profit as a percentage of revenues increased to 77% for the fiscal
year ended December 31, 1999 from 66% for the prior fiscal year. This increase
is attributable to economies of scale gains whereby direct client costs and
investor relations salaries did not increase in proportion to the increase in
average sales price per client. thestockpage.com does not anticipate significant
changes to its gross profit margins for the premiere service over the next year.
Operating expenses for the year ended December 31, 1999 were $1,432,528, an
increase from $1,149,226 in the prior fiscal year. Sales and marketing expenses
increased to $87,902 from $26,751 for the prior fiscal year. The increase is
attributable to a contract entered into between thestockpage.com and
InfoSpace.com whereby InfoSpace.com provides content for thestockpage.com's web
site and banner advertising in exchange for a monthly payment. Product
development costs decreased slightly to $10,480 from $11,364 for the prior
fiscal year. Product development costs are comprised solely of
thestockpage.com's web site development costs. thestockpage.com's web site was
redesigned in 1998 and again in 1999. General and administration expenses
increased to $971,139 from $307,497 for the prior fiscal year. The increase is
attributable to an allowance for doubtful accounts of $210,099 in the 1999
fiscal year, increases in staff salaries at Level Jump and LJAM, increases in
legal and audit fees, and increases in interest on financing and unpaid taxes.
Management compensation decreased to $363,007 from $803,614 in the prior fiscal
year. Management compensation is comprised of salaries, bonuses and employee
12
<PAGE>
profit sharing for the two original founders of thestockpage.com. The decrease
is attributable to a decision by management and the board of directors to reduce
current compensation to reduce cash outflows while Level Jump is growing.
For the year ended December 31, 1999, investment income decreased to $203,828
from $886,677 in the prior fiscal year. Investment income is primarily comprised
of capital gains on the sales of securities. Realized gains are dependent on
market and company specific conditions and can vary dramatically from quarter to
quarter and year to year. In fiscal year 1998, thestockpage.com realized
substantial gains from one particular company that experienced a large increase
in its stock price after the financial public relations campaign began. In
fiscal year 1999, thestockpage.com received comparatively more restricted stock
and warrants as compensation. At December 31, 1999, long-term investments with a
cost of $895,370 have a fair market value of $3,247,724.
The effective income tax rates were approximately 40.9% as compared to 26.3% for
the year ended December 31, 1998. In fiscal year 1999, Level Jump had lower
capital gains and higher income from operations than in fiscal year 1998. In
Canada, the tax jurisdiction of thestockpage.com, the tax rate on capital gains
is lower than the tax rate on income from business.
For the year ended December 31, 1999, Level Jump's net income was $553,439 as
compared to net income of $326,948 for the prior year.
Liquidity and Capital Resources
At December 31, 1999, Level Jump had net working capital of $1,023,714. The
principal sources of liquidity include short-term investments in marketable
securities, accounts receivable and amounts due from related parties.
On October 19, 1999, thestockpage.com obtained a $500,000 demand bank loan from
a Canadian financial institution. The loan provides for a variable interest rate
equal to the bank's U.S. base rate (similar to U.S. prime rate) plus 2.0% which
equaled 11% combined at December 31, 1999. Interest on the loan is to be paid
monthly. A balloon principal payment of $200,000 was made on February 28, 2000
and principal payments of $5,556 per month thereafter are to be made through to
maturity on September 30, 2004. The bank loan is specifically collateralized by
long-term investments with a book value of $300,000 and a fair market value of
$1,525,000 at December 31, 1999. The bank loan is secured by a general security
agreement providing a first charge over accounts receivable, inventory and
equipment. The bank loan agreement allows the bank to sell collateralized
investments to retire the bank loan when the investments become eligible for
resale if the stock price of the collateralized investments falls below $5.00
per share.
At December 31, 1999, Level Jump and its subsidiaries have current income taxes
payable of $628,453. The majority of this balance is payable by thestockpage.com
and arises because thestockpage.com receives restricted securities that it
recognizes as revenues for tax purposes when received but are not sold for
periods exceeding one year from the date of receipt. thestockpage.com
anticipates paying this liability as long-term investments come off restriction
and can be monetized.
Level Jump has a $1,432,152 deficit in cash from operating activities in fiscal
1999 compared to a deficit of $176,894 during fiscal 1998. The decrease in cash
generated from operations during fiscal 1999 is primarily due to the increase in
fees satisfied by securities, release from accrued liabilities, and accounts
receivable and the decrease in consulting and compensation expenses satisfied by
securities and accrued liabilities.
Net cash of $1,364,760 was generated by investing activities in fiscal 1999
primarily due to the decrease in due from related parties of $714,052 and the
proceeds from sales of marketable securities of $681,557. In 1998, net cash of
$134,318 was generated by investing activities primarily due to the proceeds
from sales of marketable securities of $680,981 which was partially offset by
the increase in due from related parties of $396,339 and the purchases of
marketable securities of $117,544.
13
<PAGE>
Net cash of $81,160 was generated by financing activities in fiscal 1999 due to
the increase in the bank loan of $500,000 which was partially offset by a
decrease in due to related parties of $58,030 and the payment of a dividend by
thestockpage.com of $364,510. In 1998, net cash of $47,926 was generated by
financing activities from an increase in due to related parties.
Level Jump expects to fund current operations and other cash expenditures
through the use of available cash, sales of marketable securities, and possible
new equity sources. Management believes that to realize its business plan, it
will need to raise significant external financing. If these funds are not
raised, Level Jump will have to scale back the implementation of its on-line
financial services strategy.
Year 2000
The Year 2000 Issue concerned the inability of information systems, whether due
to computer hardware or software, to properly recognize and process date
sensitive information relating to the year 2000 and beyond. Many of the world's
computer systems recorded years in a two-digit format. Such computer systems may
have been unable to properly interpret dates beyond the year 1999 which could
have lead to business disruptions in the United States and internationally.
Level Jump believes it is Year 2000 compliant, and there were no adverse events
that occurred and no contingency plans were required to be implemented relating
to the Year 2000 Issue at year-end 1999. Although it is now past January 1,
2000, and we have not experienced any adverse impact from the transition to the
year 2000, we cannot give any assurance that our operations or our suppliers and
customers have not been affected in a manner that is not yet apparent. As a
result, Level Jump will continue to monitor the Year 2000 Issue compliance of
itself and its suppliers and customers.
ITEM 7. FINANCIAL STATEMENTS.
Index to Consolidated Financial Statements: Page
------
Report of BDO Dunwoody LLP on the Consolidated Financial
Statements as of December 31, 1999 and 1998 and for the
years then ended ......................................... F-2
Consolidated Statements of Financial Condition as of December
31, 1999 and 1998 ........................................ F-3
Consolidated Statements of Operations for the years ended
December 31, 1999 and 1998................................ F-4
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 1999 and 1998............ F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1999 and 1998............................... F-7
Summary of Significant Accounting Policies.................. F-9
Notes to the Consolidated Financial Statements.............. F-14
14
<PAGE>
LEVEL JUMP FINANCIAL GHROUP, INC.
Consolidated Financial Statements
For the years ended December 31, 1999 and 1998
(in United States Dollars)
F-1
<PAGE>
Auditors' Report
- - --------------------------------------------------------------------------------
To the Shareholders of
Level Jump Financial Group, Inc.
We have audited the consolidated balance sheets of Level Jump Financial Group,
Inc. as at December 31, 1999 and 1998 and the consolidated statements of
operations, shareholders' equity and cash flows for the years ended December 31,
1999 and December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in Canada. Those standards require that we plan and perform an audit to obtain
reasonable assurance 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.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 1999
and 1998 and the results of its operations and its cash flows for the years
ended December 31, 1999 and December 31, 1998 in accordance with generally
accepted accounting principles in the United States.
/s/ BDO Dunwoody LLP
- - ---------------------------
BDO Dunwoody LLP, Chartered Accountants
Toronto, Ontario
January 28, 2000
F-2
<PAGE>
Level Jump Financial Group, Inc.
Consolidated Balance Sheets
(in United States dollars)
<TABLE>
Dec.31, Dec. 31,
1999 1998
-------------- -------------
<S> <C> <C>
Assets
Current
Cash and cash equivalents $ 19,426 $ 5,658
Investments in marketable securities (Note 3) 2,172,389 254,375
Accounts receivable, net of allowances
(1999 of $210,099, nil 1998) 290,944 19,289
Prepaid expenses and deposits 45,984 6,119
Deferred income taxes (Note 6) 71,474 -
Due from related parties (Note 12) 218,517 780,694
-------------- -------------
2,818,734 1,066,135
Investments in marketable securities (Note 3) 321,032 18,263
Fixed assets (Note 4) 42,556 26,032
Deferred income taxes (Note 6) 16,179 136
-------------- -------------
$ 3,198,501 $ 1,110,566
============== =============
Liabilities and Shareholders' Equity
Current
Accounts payable $ 65,657 $ 40,121
Accrued liabilities (Note 5) 16,306 478,156
Bank loan (Note 7) 500,000 -
Deferred income taxes (Note 6) 454,070 16,898
Deferred revenues 130,534 -
Due to related parties (Note 12) - 58,030
Income taxes payable (Note 6) 628,453 134,083
-------------- -------------
1,795,020 727,288
Deferred lease inducements 8,443 -
-------------- -------------
1,803,463 727,288
-------------- -------------
Shareholders' equity
Share capital
Authorized
4,999,998 Preferred shares, $.0025 par value
1 Preferred share, Class A, $.0025 par value
1 Preferred share, Class B, $.0025 par value
200,000,000 Common shares, $.0025 par value
Issued
1 Preferred share, Class A, $.0025 par value (Note 8) - -
1 Preferred share, Class B, $.0025 par value (Note 8) - -
7,863,500 Common shares (Notes 8 and 10) 19,659 -
100 Common shares - 72
Par value in excess of capital (16,419) -
Retained earnings (Note 9) 518,351 329,350
Accumulated other comprehensive income (loss) 873,447 53,856
-------------- -------------
1,395,038 383,278
-------------- -------------
$ 3,198,501 $ 1,110,566
============== =============
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
F-3
<PAGE>
Level Jump Financial Group, Inc.
Consolidated Statements of Operations
(in United States dollars)
<TABLE>
For the For the
Year Year
Ended Ended
Dec. 31, Dec. 31,
1999 1998
-------------- -------------
<S> <C> <C>
Revenue $ 2,827,468 $ 1,067,971
Cost of revenues 661,867 361,530
-------------- -------------
Gross profit 2,165,601 706,441
-------------- -------------
Operating expenses
Sales and marketing 87,902 26,751
Product development 10,480 11,364
General and administration 971,139 307,497
Management compensation 363,007 803,614
-------------- -------------
1,432,528 1,149,226
-------------- -------------
Income (loss) from operations 733,073 (442,785)
Investment income, net 203,828 886,677
-------------- -------------
Income before income taxes 936,901 443,892
Provision for income taxes 383,462 116,944
-------------- -------------
Net income for the period $ 553,439 $ 326,948
============== =============
Basic earnings per share (Note 11) $ 0.07 $ 0.09
Diluted earnings per share (Note 11) $ 0.05 $ 0.09
Shares used in per share
calculation - basic 7,863,500 3,700,000
Shares used in per share
calculation - diluted 11,950,458 3,700,000
============== =============
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
F-4
<PAGE>
Level Jump Financial Group, Inc.
Consolidated Statements of Shareholders' Equity
(in United States dollars)
For the years ended December 31, 1999 and 1998
<TABLE>
Accumulated
Other
Compre-
Par Value hensive Compre-
Preferred Shares Common Shares in Excess Retained Income hensive
Number Amount Number Amount of Capital Earnings (Loss) Total Income
------ ------ ----- ------ ---------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 - - 100 72 - 2,402 (2,325) 149
Comprehensive income
Net income - - - - - 326,948 - 326,948 $ 326,948
Net unrealized gains on
securities, net of
reclassification adjustment - - - - - - 56,181 56,181 56,181
(see disclosure)
--------
Comprehensive income $ 383,129
----------------------------------------------------------------------------------- ==========
Balance at December 31, 1998 - - 100 72 - 329,350 53,856 383,278
Dividends paid - - - - - (364,510) - (364,510)
Issuance of preferred share,
Class A 1 - - - - - - -
Issuance of preferred share,
Class B 1 - - - - - - -
Issuance of common shares - - 3,700,000 37,000 - - - 37,000
Change in par value (Note 8(b) - - - (33,300) - - - (33,300)
Exchange of common shares for
exchangeable preferred shares
in subsidiary - - (100) (72) - 72 - -
Recapitalization upon Reverse
Acquisition - - 1,387,500 9,018 (9,018) - - -
Acquisition of Caldera Corporation - - 2,776,000 6,941 (7,401) - - (460)
Comprehensive income
Net income - - - - - 553,439 - 553,439 $ 553,439
Net unrealized gain on securities,
net of reclassification adjustment - - - - - - 819,591 819,591 819,591
(see disclosure) ----------
Comprehensive income 1,373,030
-------------------------------------------------------------------------------- ==========
Balance at December 31, 1999 2 $ - 7,863,500 $ 19,659 $(16,419) $ 518,351 $873,447 $ 1,395,038
================================================================================
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
F-5
<PAGE>
Level Jump Financial Group, Inc.
Consolidated Statements of Shareholders' Equity (continued)
(in United States dollars)
For the years ended December 31, 1999
and 1998
Disclosure of reclassification adjustment:
Unrealized holding gains arising during the
twelve months ended December 31, 1998 $ 981,767
Less: Reclassification adjustment for realized
capital gains included in net income 890,463
-----------
Unrealized gains on securities 91,304
Less: Tax expense (35,123)
-----------
Net unrealized gains on securities $ 56,181
-----------
Unrealized holding gains arising during the year
ended December 31, 1999 $ 1,455,422
Less: Reclassification adjustment for realized
capital gains included in net income 230,184
------------
Unrealized gains on securities 1,225,238
Less: Tax expense (405,647)
------------
Net unrealized gain on securities $ 819,591
============
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
F-6
<PAGE>
Level Jump Financial Group, Inc.
Consolidated Statements of Cash Flows
(in United States dollars)
<TABLE>
For the For the
Year Year
Ended Ended
Dec. 31, Dec. 31,
1999 1998
-------------- -------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 553,439 $ 326,948
Adjustments to reconcile net income to net cash
provided by (used in) operations
Amortization 14,325 6,748
Bad debts 359,099 140,625
Release from accrued liabilities (196,750)
Deferred income taxes (55,992) (15,050)
Realized capital gains (230,184) (890,463)
Fees satisfied by securities (2,033,122) (1,067,971)
Consulting and compensation
expenses satisfied by securities 357,073 849,059
Changes in assets and liabilities
Accounts receivable (481,754) (12,991)
Prepaid expenses and deposits (39,865) (6,119)
Accounts payable 150,536 (116,218)
Accrued liabilities (461,850) 477,012
Deferred revenues 130,534 -
Income taxes 494,370 131,526
Deferred lease inducments 8,443 -
Other (454) -
-------------- -------------
(1,432,152) (176,894)
-------------- -------------
Cash flows from investing activities
Due from related parties 714,052 (396,339)
Purchase of fixed assets (30,849) (32,780)
Purchase of marketable securities - (117,544)
Proceeds from sale of marketable securities 681,557 680,981
-------------- -------------
1,364,760 134,318
-------------- -------------
Cash flows from financing activities
Due to related parities (58,030) 47,926
Proceeds from issuance of common shares 3,700 -
Proceeds from bank loan 500,000 -
Dividends (364,510) -
-------------- -------------
81,160 47,926
-------------- -------------
Net increase in cash and cash equivalents
during the period 13,768 5,350
Cash and cash equivalents, beginning of period 5,658 308
-------------- -------------
Cash and cash equivalents, end of period $ 19,426 $ 5,658
============== =============
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
F-7
<PAGE>
Level Jump Financial Group, Inc.
Consolidated Statements of Cash Flows (continued)
(in United States dollars)
<TABLE>
For the For the
Year Year
Ended Ended
Dec. 31, Dec. 31,
1999 1998
-------------- -------------
<S> <C> <C>
Supplementary cash flow information:
Cash paid for interest $ 10,904 $ 3,161
Cash paid for income tax 2,164 -
Supplementary schedule of non-cash investing
and financing activities:
Marketable securities provided to two officers and
directors for employee profit sharing plan - 360,443
Marketable securities loaned to two officers and
directors (included in due from related parties) 151,875 384,236
Marketable securities received for services not
rendered (included in accounts payable) 125,000 (125,000)
Loan satisfied by marketable securities (included
in accounts payable) - (31,339)
Deferred taxes on unrealized gains (losses) of
marketable securities - 33,669
-------------- -------------
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
F-8
<PAGE>
Level Jump Financial Group, Inc.
Summary of Significant Accounting Policies
(in United States dollars)
December 31, 1999 and 1998
--------------------------
Nature of Business
and Basis of Jump Financial Group, Inc. (the "Company") is developing
Presentation an Internet financial portal and on-line financial
services web site. The Company, through its wholly-owned
Canadian subsidiary thestockpage.com inc.
("thestockpage.com"), offers Internet based investor
relations services to publicly traded or listed companies.
The Company was incorporated on March 29, 1999 in the State
of Colorado.
On June 1, 1999 the Company acquired 100 percent of
thestockpage.com, a company that has been owned and operated
by the shareholders of the Company. thestockpage.com was
incorporated in Canada and began operations on August 28,
1997.
The acquisition of thestockpage.com has been accounted for
on a continuity of interest basis (Note 1), therefore the
financial statements reflect the financial position, results
of operations and changes in cash flows of thestockpage.com
to the date of the transaction and the combined financial
position, results of operations and changes in cash flows
from the date of incorporation of the Company.
On October 28, 1999 Caldera Corporation ("Caldera") acquired
all of the issued and outstanding common shares of the
Company and agreed to assume certain obligations with
respect to issuing additional common shares under
exchangeable share agreements and a performance equity plan
and issuing preferred shares under a voting agreement. In
exchange for the issued and outstanding common stock of the
Company, the shareholders of the Company were issued common
shares of Caldera in a number that gave the shareholders of
the Company control of Caldera. In addition, at the time of
the transaction, the board of directors of Caldera resigned
and the officers and directors of the Company were appointed
to the board of directors of Caldera. In January, 2000,
Caldera Corporation's name was formally changed to Level
Jump Financial Group, Inc.
Prior to Caldera's acquisition of the Company, Caldera had
no significant operations. This transaction was equivalent
to the issuance of stock by Caldera for the net assets of
the Company, accompanied by a recapitalization (Note 2). The
Company's assets were recorded at carryover basis and no
goodwill was recorded from the transaction. The Company's
historical financial statements become those of Caldera.
This accounting treatment results in the following:
(a) The consolidated financial statements are issued under
the name Level Jump Financial Group, Inc. as a
continuation of the financial statements of Level Jump.
(b) The number and class of oustanding shares reported on
December 31, 1999 are those of Caldera. The number and
class of outstanding shares reported on December 31,
1998 and 1997 are those of the Company.
F-9
<PAGE>
Level Jump Financial Group, Inc.
Summary of Significant Accounting Policies (Continued)
(in United States dollars)
December 31, 1999 and 1998
Nature of Business and
Basis of Presentation
(continued
(c) The results of operations of Caldera from October 28,
1999 onward are included in these consolidated
financial statements.
These consolidated financial statements have been prepared
by management in accordance with generally accepted
accounting principles in the United States.
The accompanying financial statements are stated in United
States dollars, the "functional currency" because the
majority of operations are conducted in the United States.
The Company and its subsidiaries maintain their books and
records in US dollars.
Principles of The accompanying consolidated financial statements
Consolidation include the accounts of the Company and its wholly
owned subsidiaries, Level Jump Asset Management, Inc.
and thestockpage.com.
Non-Monetary From time to time, the Company enters into transactions that
Transactions involve either the receipt or distribution of common shares
and/or options of public companies.
In instances where the Company receives one of a combination
of cash, common shares and/or options for the services it
provides, the Company values the common shares at the bid
price at the open of trading on the date a contract is
signed, and values the options on common shares using the
Black Scholes option pricing model using assumptions at the
date the contract is signed.
In instances where the Company pays out commissions or
consulting fees to individuals and investor relations firms
for services performed, the Company will distribute
securities held in other public companies as consideration.
These transactions are valued at the open price of the
securities issued on the earlier of the date the newsletter
is issued or, if a contract exists with the individual or
investor relations firm, the date the contract is signed.
The Company has compensated or loaned to its shareholders
and management one of a combination of cash and securities
held in other public companies. These transactions are
recorded as a loan or as management compensation on the date
the securities are transferred to the shareholders and are
valued at the price on the date of transfer.
F-10
<PAGE>
Level Jump Financial Group, Inc.
Summary of Significant Accounting Policies (continued)
(in United States dollars)
December 31, 1999 and 1998
Revenue Recognition Investor relations consulting revenues are recognized on the
date the Company issues its investment newsletter with the
client's profile.
Amounts received prior to the issuance of the newsletter are
recorded as deferred revenue.
Internet banner advertising revenues are recognized when
cash is received by the Company from a business partner that
provides market information to thestockpage.com's web site
and co-shares advertising revenues.
Cost of Revenues Cost of revenues include commissions which the Company pays
to individuals or companies that identify a customer that
contracts the Company to provide investor relations services
and are recorded when the related revenue has been
recognized.
Cash and Cash Cash and cash equivalents include cash and all highly
Equivalents liquid financial instruments with purchased maturities of
three months or less.
Investments All highly liquid instruments are classified as available-
for-sale and those with original maturities greater than
three months and current maturities less than twelve months
from the balance sheet date are considered short term
investments.
The Company's investments in common shares are classified as
available-for-sale. Freely tradable common shares are
considered short term investments as the Company intends to
hold them for less than twelve months from the balance sheet
date. Restricted common shares under applicable United
States securities laws are considered long term investments.
The Company's investments in freely tradable common shares
and common shares that are restricted from resale for less
than one year are reported at fair value based on quoted
market prices. Any realized gains or losses and "other than
temporary" declines in value, if any, on available-for-sale
securities are reported in investment income as incurred.
Realized gains and losses on the sales of investments
available-for-sale are determined using the specific
identification method.
F-11
<PAGE>
Level Jump Financial Group, Inc.
Summary of Significant Accounting Policies (continued)
(in United States dollars)
December 31, 1999 and 1998
Investments The Company's investments in common shares that are
(continued) restricted from resale for greater than one year are
reported at cost. Any "other than temporary" declines in
value, if any, are reported in investment income as
incurred. On the date restricted common shares become
eligible for resale through registration or in accordance
with Rule 144 of the Securities Act of 1933, the Company
considers these securities freely tradable, considers them
short term investments and reports them at fair value based
on quoted market prices.
The options are reported at fair value on the date the
contract is signed based on the Black Scholes option pricing
model. Any "other than temporary" declines in value, if any,
are reported in investment income as incurred.
Fixed Assets Fixed assets are recorded at cost less accumulated
amortization. Amortization is provided for at rates intended
to write off the assets over the estimated useful lives, as
follows:
Leasehold improvements - straight line over the term of the
lease
Computer equipment - 3 years straight line
Furniture and fixtures - 5 years straight line
Income Taxes The Company accounts for income taxes under the asset and
liability method as required by SFAS No. 109, "Accounting
for Income Taxes", issued by the Financial Accounting
Standards Board ("FASB"). Under this method, deferred income
tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the
financial reporting and tax bases of assets and liabilities.
Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to
be recovered or settled.
Share Options The Company applies the recognition and measurement
principles of Accounting Principles Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees", and the
disclosure provision of FASB SFAS No. 123, "Accounting for
Stock-Based Compensation", in accounting for stock options
granted to employees. Under APB 25, compensation cost is
recognized over the vesting period based on the difference,
if any, on the date of grant between the fair value of the
Company's stock and the amount an employee must pay to
acquire the stock.
Earnings Per Share Basic earnings (loss) per share is computed using the
weighted average number of common shares that are
outstanding during the period. Diluted earnings (loss) per
share is computed using the weighted average number of
common and common equivalent shares outstanding during the
period. Common equivalent shares consist of the incremental
common shares issuable upon the exercise of stock options
using the treasury stock method and the exchangeable
preferred shares issued and outstanding in thestockpage.com
which in turn can be exchanged into common shares of the
Company.
F-12
<PAGE>
Level Jump Financial Group, Inc.
Summary of Significant Accounting Policies (continued)
(in United States dollars)
December 31, 1999 and 1998
Impairment of Management reviews assets for impairment whenever events or
Assets changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Management assesses
impairment by comparing the carrying amount to individual
cash flows. If deemed impaired, measurement and recording of
an impairment loss is based on the fair value of the asset.
Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and
expenses during the reported period. Actual results could
differ from those estimates.
Allowance for
Doubtful Management reviews accounts receivable for collectibility on
Accounts an ongoing basis, and records an allowance for uncollectable
accounts. The establishment of the allowance relies on the
judgment of management, on historical precedent and
expectations as to future collections.
Deferred Lease Deferred lease inducments are being amortized over the term
Inducements of the lease.
Comprehensive In June 1997, the FASB issued SFAS No. 130, "Reporting
Income Comprehensive Income", which was adopted by the Company.
SFAS No. 130 establishes standards for reporting and display
of comprehensive income and its components in an entity's
financial statements. Comprehensive income as defined
includes all changes in equity (net assets) during a period
from non-owner sources. Accumulated other comprehensive
income, as presented on the accompanying balance sheets,
consists of the net unrealized gains on available-for-sale
securities, net of the related tax effect.
Recently Issued
Accounting
Standards In June 1998, the Financial Accounting Standards Board
issued SFAS 133, "Accounting for Derivative Instruments and
Hedging Activities". SFAS 133 requires companies to
recognize all derivative contracts as either assets or
liabilities in the balance sheet and to measure them at fair
value. If certain conditions are met, a derivative may be
specifically designated as a hedge, the objective of which
is to match the timing of gain or loss recognition on the
hedging derivative with the recognition of (i) the changes
in the fair value of the hedged asset or liability that are
attributable to the hedged risk or (ii) the earnings' effect
of the hedged forecast transaction. For a derivative not
designated as a hedging instrument, the gain or loss is
recognized in income in the period of change. SFAS 133, as
amended, is effective for the first fiscal quarter of all
fiscal years beginning after June 15, 2000. The Company is
currently evaluating the standard and has not yet determined
the impact on the financial results or condition of the
Company.
F-13
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
1. Acquisition of thestockpage.com inc.
On June 1, 1999, thestockpage.com inc.underwent an internal reorganization
whereby the two common shareholders exchanged all 100 common shares for
9,300,000 exchangeable preferred shares. The exchangeable preferred shares
can be exchanged on a one-for-one basis into 9,300,000 common shares of
Level Jump Financial Group, Inc. Immediately after the above transaction,
the Company entered into a Support Agreement and Voting and Exchange
Agreement which gives the exchangeable preferred shares economically
equivalent rights as the common shares of the Company with respect to
dividend payments, liquidation, reorganization, and changes. The Company
then immediately subscribed for and purchased 100 common shares of
thestockpage.com inc. for consideration of $100. In addition, the Company
issued one Class A and one Class B preferred shares to the previous common
shareholders of thestockpage.com. The Class A and B preferred shares give
the holders voting rights as if the holders were common shareholders of the
Company in a number equivalent to the number of exchangeable preferred
shares issued and outstanding.
This acquisition has been accounted for on a continuity of interest basis
since both companies were controlled by the same shareholders. The assets
and liabilities of thestockpage.com have been recorded at their carrrying
amounts. The financial statements present the accounts of thestockpage.com
to June 1, 1999 and the consolidated with Level Jump Financial Group, Inc.
from March 29, 1999, the Company's date of incorporation. The net assets of
thestockpage.com on the date of the acquisition, at their carrying amounts,
were as follows:
Cash and cash equivalents $ 128,856
Accounts receivable 550,000
Other current assets 186,856
Long-term assets 176,731
Current liabilities (585,614)
-----------------
Net assets $ 456,829
=================
2. Acquisition by Caldera Corporation
On October 28, 1999 the Company exchanged all 3,700,000 shares of common
stock issued and outstanding for 5,087,500 shares of common stock of
Caldera Corporation, a Florida incorporated company that is an SEC
registrant and that trades on the Over-the-Counter Bulletin Board. At the
time of exchange of shares, the existing board of directors of Caldera
resigned and the directors of the Company were appointed to the board of
Caldera.
Prior to the exchange of shares, thestockpage.com underwent an internal
reorganization whereby the two exchangeable preferred shareholders
exchanged 5,000,000 of their exchangeable preferred shares into 5,000,000
redeemable preferred shares. These can be redeemed at the option of
thestockpage.com for Canadian $0.265 (U.S. $0.1715). The redeemable
preferred shares are entitled to non-cumulative dividends at a rate per
annum of 12 percent of the redemption amount.
F-14
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
2. Acquisition by Caldera Corporation (continued)
At the time of the acquisition, Caldera agreed to assume the Company's
obligations with respect to thestockpage.com's exchangeable preferred
shares, the Support Agreement and Voting and Exchange Agreement and the
performance equity plan. Accordingly, the number of exchangeable preferred
shares issued by thestockpage.com increased from 4,300,000 to 5,912,500 and
are exchangeable into common shares of Caldera. Caldera has issued Class A
and Class B preferred shares to the Company's exchangeable preferred
shareholders that give the holders voting rights as if the holders were
common shareholders of Caldera in a number equivalent to the number of
exchangeable preferred shares issued and outstanding. All obligations were
assumed at a ratio of 1.375 Caldera shares to 1 Level Jump Financial Group,
Inc. share which is in proportion to the number of common shares of Caldera
issued per common share of the Company acquired. All of Level Jump's
obligations with respect to exchangeable preferred shares, the Support
Agreement and the Voting and Exchange Agreement and the performance equity
plan were cancelled.
Prior to Caldera's acquisition of the Company, Caldera had no significant
operations. The Company's assets were recorded at carryover basis and no
goodwill was recorded from the transaction. The net liabilities of Caldera
on the date of acquisition at their carrying amounts were as follows:
Cash and cash equivalents $ 40
Current liabilities (500)
--------------
Net liabilities $ (460)
==============
3. Investments in Marketable Securities
The cost and estimated market values of the Company's marketable securities
are as follows:
<TABLE>
Gross Gross Estimated
Unrealized Unrealized Market
December 31, 1999 Cost Gains Losses Value
-------------------- ---------------- --------------- --------------- -----------
<S> <C> <C> <C> <C>
Common shares $ 859,625 $ 1,362,726 $ (49,962) $ 2,172,389
================ =============== =============== ===========
December 31, 1998
-------------------- ---------------- --------------- --------------- -----------
Common shares $ 166,850 $ 143,775 $ (56,250) $ 254,375
================ =============== =============== ===========
</TABLE>
F-15
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
3. Investments in Marketable Securities (continued)
All investments in freely tradable common shares and common shares that are
restricted from resale for less than one year held by the Company have been
classified as available-for-sale and are being carried at the estimated
market value at December 31, 1999, 1998 and 1997. The net change in the net
unrealized holding gain (loss) was an increase of $819,591 and an increase
of $56,181 at December 31, 1999 and 1998 respectively.
All investments in common shares that are restricted from resale for
greater than one year and in options to purchase common shares have been
classified as long term investments and are being carried at cost. The
estimated market values are $1,498,349 and $171,314 as at December 31, 1999
and 1998, respectively.
Activity related to the sales and maturities of investments is as follows:
<TABLE>
Year Year
Ended Ended
Dec. 31, Dec. 31,
1999 1998
-------------- ---------------
<S> <C> <C>
Purchase of securities $ - $ 117,544
Fees satisfied by securities 2,033,122 1,067,971
Proceeds from sales and maturities of
investments 681,557 680,981
Consulting and compensation expenses
satisfied by securities 357,073 849,059
Gross realized gains 338,213 920,355
Gross realized losses (108,029) (29,892)
</TABLE>
F-16
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
4. Fixed Assets
Fixed assets consisted of the following:
<TABLE>
Dec. 31, Dec. 31,
1999 1998
--------------- ---------------
<S> <C> <C>
Leasehold improvements $ 6,750 $ -
Furniture and fixtures 11,419 10,771
Computer equipment 45,459 22,009
--------------- ---------------
63,628 32,780
Less: Accumulated amortization 21,072 6,748
--------------- ---------------
Net book value $ 42,556 $ 26,032
=============== ================
Amortization expense was $14,325 and $6,748 as at
December 31, 1999 and 1998, respectively.
5. Accrued Liabilities
Accrued liabilities consist of the following:
Dec. 31, Dec. 31,
1999 1998
--------------- ---------------
General and administrative expenses $ 6,929 $ -
Employees profit sharing plan - 360,443
Sales tax (24,500) (8,457)
Payable on share exchange 30,000 -
Shares received for services not rendered - 125,000
Payroll deductions 3,877 1,170
--------------- ---------------
$ 16,306 $ 478,156
=============== ===============
</TABLE>
F-17
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
6. Income Taxes
The Company's wholly owned subsidiary, thestockpage.com resides in the
Province of Ontario, Canada and is taxable at the federal and provincial
levels within Canada. In 1999, the Company has no taxes payable in any
other jurisdictions. The provision (benefit) for income taxes is composed
of the following:
<TABLE>
Dec.31, Dec. 31,
1999 1998
--------------- ---------------
<S> <C> <C>
Current:
Federal $ - $ -
State 1,678 -
Foreign 437,776 131,994
--------------- ---------------
439,454 131,994
--------------- ---------------
Deferred:
Federal - -
State - -
Foreign (55,992) (15,050)
--------------- ---------------
(55,992) (15,050)
--------------- ---------------
$ 383,462 $ 116,944
=============== ===============
</TABLE>
The following is a reconciliation of income tax computed at the federal
statutory rate to the provision for taxes:
<TABLE>
Year Year
Ended Ended
Dec. 31, Dec. 31,
1999 1998
--------------- ---------------
<S> <C> <C>
Tax expense computed at statutory rate $ 318,546 $ 150,923
Increase (reduction) in taxes resulting from:
Tax rate differential on foreign subsidiary 42,843 (33,979)
Valuation allowance on deferred tax assets 22,073 -
--------------- ---------------
$ 383,462 $ 116,944
=============== ================
</TABLE>
Income taxes payable as at December 31, 1999 includes approximately $35,751
of interest and penalties.
F-18
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
6. Income Taxes (continued)
In 1998 the Company's effective income tax rate is lower than what would be
expected if the federal statutory rate (34%) was applied to income from
continuing operations primarily because the Company was eligible for small
business deduction in Canada and the Company pays tax on only 75 percent of
capital gains in Canada.
Deferred income taxes reflect the tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The
components of the deferred income tax assets and liabilities are as
follows:
<TABLE>
Dec 31, Dec. 31,
1999 1998
--------------- ---------------
<S> <C> <C>
Current deferred income tax assets:
Short term investments in marketable securities $ - $ -
Net operating loss carryforwards 71,474 16,771
--------------- ---------------
71,474 16,771
--------------- ---------------
Current deferred income tax liabilities:
Short term investments in marketable securities 439,316 33,669
Deferred revenue 14,754 -
--------------- ---------------
Gross deferred tax liabilities 454,070 33,669
--------------- ---------------
Net current deferred tax assets (liabilities) $ (382,596) $ (16,898)
--------------- ---------------
Dec 31, Dec. 31,
1999 1998
--------------- ---------------
Non-current deferred income tax assets:
Fixed assets $ 1,405 $ 136
Organizational expenses 417 -
Net operating loss carryforwards 36,430 -
Valuation allowance (22,073) -
--------------- ---------------
Net non-current deferred income tax assets 16,179 136
=============== ===============
</TABLE>
F-19
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
6. Income Taxes (continued)
The net change in the deferred income tax asset valuation allowance was an
increase of $22,073 at December 31, 1999. The Company has provided for a
valuation allowance against deferred tax assets due to uncertainties as to
the Comany's ability to utilize its net operating losses. The Company
recorded no valuation allowance at December 31, 1998 and 1997. At December
31, 1999, the Company has net operating losses of approximately $242,870
which expire in varying amounts from 2014 through 2019.
A deferred income tax liability provision has not been booked for the
undistributed earnings of the Company's foreign subsidiary as all
undistributed earnings are expected to be reinvested in the subsidiary.
Determination of the deferred income tax liability that would have resulted
from a distribution of earnings was not practicable.
7. Bank Loan
On October 19, 1999, a subsidiary of the Company obtained a $500,000 demand
bank loan from a Canadian financial institution. The loan provides for a
variable interest rate equal to the bank's U.S. base rate (similar to U.S.
prime rate) plus 2.0%. As at December 31, 1999, the US prime rate was 9%.
Interest on the loan is to be paid monthly. A balloon principal payment of
$200,000 is to be made on February 28, 2000 and principal payments of
$5,556 per month thereafter are to be made through to maturity on September
30, 2004. The bank loan is specifically collateralized by long term
investments with a book value of $300,000 at December 31, 1999. The bank
loan is secured by a General Security Agreement providing a first charge
over accounts receivable, inventory and equipment. The bank loan agreement
allows the bank to sell collateralized investments to retire the bank loan
when the investments become eligible for resale if the stock price of the
collateralized investments falls below $5.00 per share.
Interest expense of $10,904 was incurred on the bank loan for the period
ended December 31, 1999.
Principal payments to be made over the next five years are as follows:
December 31, 1999
2000 $255,560
2001 66,672
2002 66,672
2003 66,672
2004 44,424
8. Shareholders' Equity
(a) Preferred Shares
At December 31, 1999, the Company had 5,000,000 authorized preferred
shares, $.0025 par value, of which two were issued and outstanding.
The Company had one Class A preferred share, $.0025 par value
authorized, issued and outstanding. The Class A preferred share
entitles a previous shareholder of thestockpage.com to voting rights
as if the holder was a common shareholder of the Company in a number
equivalent to the number of exchangeable preferred shares (see below)
of thestockpage.com held by the holder of the Class A preferred share.
There are no other rights attached to the Class A preferred share. At
December 31, 1999, the Class A preferred shareholder had voting rights
on the equivalent of 3,547,500 common shares of the Company.
F-20
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
8. Shareholders' Equity (continued)
(a) Preferred Shares (continued)
The Company had one Class B preferred share, $.0025 par value
authorized, issued and outstanding. The Class B preferred share
entitles a previous shareholder of thestockpage.com to voting rights
as if the holder was a common shareholder of the Company in a number
equivalent to the number of exchangeable preferred shares (see below)
of thestockpage.com held by the holder of the Class B preferred share.
There are no other rights attached to the Class B preferred share. At
December 31, 1999, the Class B preferred shareholder had voting rights
on the equivalent of 2,365,000 common shares of the Company.
(b) Common Shares
At December 31, 1999, the Company had 200,000,000 authorized common
shares, $0.0025 par value of which 7,863,500 were issued and
outstanding.
Prior to the reverse acquisition of Caldera Corporation, the Company
had 50,000,000 authorized common shares of which 3,700,000 were issued
and outstanding. On May 18, 1999, the Company changed the par value of
these common shares from $.01 to $.001 per common share resulting in
excess share capital of $33,300 which was subsequently distributed to
the shareholders.
(c) Exchangeable Preferred Shares of thestockpage.com
As described in Note 1, on June 1, 1999, thestockpage.com underwent an
internal reoganization which resulted in 100 common shares being
exchanged for 9,300,000 exchangeable preferred shares. As described in
Note 2, on October 14, 1999, thestockpage.com underwent a second
internal reorganization whereby the two exchangeable preferred
shareholders exchanged 5,000,000 of their exchangeable preferred
shares into 5,000,000 redeemable preferred shares.
As part of the merger agreement with Caldera Corporation June 1, 1999,
the Company entered into an agreement with thestockpage.com to allow
thestockpage.com to satisfy its obligations with respect to
exchangeable preferred shares issued by thestockpage.com to previous
common shareholders of thestockpage.com. The exchangeable preferred
shares entitle the holders to exchange on a one-for-one basis into
common shares of the Company. The exchangeable preferred shares are
economically equivalent to common shares of the Company and are
entitled to any dividends on common shares declared by the Company and
any liquidation proceeds similar to other common shares. The
exchangeable preferred shares have no voting rights in the Company. At
December 31, 1999, thestockpage.com had an unlimited number of
authorized exchangeable preferred shares, no par value, of which
5,912,500 were issued and outstanding. The issued and outstanding
shares of exchangeable preferred shares can be exchanged into
5,912,500 common shares of the Company.
F-21
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
9. Dividends
On May 25, 1999, prior to the acquisition of thestockpage.com by the
Company, thestockpage.com's board of directors declared and paid a dividend
on thestockpage.com's shares of $264,941 from thestockpage.com's capital
dividend account and a special dividend on thestockpage.com's common shares
of $99,569. The total charge to retained earnings was $364,510.
10. Stock Options
On May 1, 1999, the Company approved the 1999 Performance Equity Plan, a
fixed employee stock-based compensation plan that allows the Company to
grant incentive stock options, non-qualified stock options and stock
purchase rights to employees, officers and directors to purchase a maximum
of 2,750,000 common shares of the Company. Stock options granted under the
plans are for periods not to exceed ten years, and must be issued at prices
not less than 100%, for incentive and non-qualified stock options, of the
fair market value of the stock on the date of grant as determined by the
board of directors. The vesting period to exercise the option to purchase
stock is determined by the board of directors and ranges from one to five
years, subject to a holding period of not less than six months from the
date of grant of an award under this plan.
Activity under the Company's stock options plan is summarized as follows:
<TABLE>
Weighted
Average
Available Options Price Per
for Grant Outstanding Share
----------- ---------- ----------------
<S> <C> <C> <C>
Balance at December 31, 1998 - - $ -
Common shares reserved 2,750,000 - -
Options granted, option price equal to
fair market value (206,259) 206,259 0.51
Options granted, option price greater
than fair market value (1,375,000) 1,375,000 1.09
Options cancelled - - -
Options exercised - - -
---------- ---------- ---------------
Balance at December 31, 1999 1,168,741 1,581,259 $ 1.02
---------- ---------- ---------------
</TABLE>
F-22
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
10. Stock Options (continued)
The following table summarizes information concerning outstanding and
exercisable stock options at December 31, 1999.
<TABLE>
Options Outstanding Option Exercisable
----------------------------------------------- ------------------------------
Weighted Weighted Weighted
Average Average Average
Remaining Exercise Exercise
Number Contractual Price Number Price
Exercise Price Outstanding Life (in Years) Per Share Exercisable Per Share
- - ---------------- ------------- --------------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
$0.00 - $0.37 185,629 6.1 $0.36 60,157 $0.36
$038 - $0.91 550,000 4.8 0.82 275,000 0.73
$0.92 - $1.09 275,000 6.3 1.09 - -
$1.10 - $1.27 275,000 7.3 1.27 - -
$1.28 - $1.46 275,000 8.3 1.45 - -
$1.47 - $1.82 20,630 7.1 1.82 2,063 1.82
------------- --------------- --------- ----------- ---------
1,581,259 6.3 $1.02 337,220 $0.67
------------- --------------- --------- ----------- ---------
</TABLE>
The Company applies APB Opinion No. 25 in accounting for its fixed employee
stock compensation plan. Accordingly, no compensation expense has been
recognized for the year ended December 31, 1999. Had compensation expense
been determined based on the fair value at the grant dates as prescribed in
FASB SFAS No. 123, the Company's results would have been as follows:
Year
Ended
December 31,
1999
-------------
Net income
As reported $ 553,439
Pro forma 544,798
Basic earnings per share $0.07
Diluted eranings per share $0.05
Basic earnings per share as Pro forma $0.07
Diluted eranings per share as Pro forma $0.05
The fair value of each stock option grant was determined on the date of
grant. The weighted average fair market value of a stock option with an
exercise price equal to the estimated market price of a common share on the
date of grant for the year ended December 31,1999 was $0.0937. The weighted
average fair market value of a stock option with an exercise price that
exceeds the estimated market price of a common share on the date of grant
for the year ended December 31, 1999 was $0.00. The fair market value of
the stock options was determined using the Black Scholes option pricing
model, based on the following assumptions:
Year
Ended
December 31,
1999
------------
Dividend yield -
Risk-free interest rate 5.62%
Expected life 3.5 Years
Expected volatility 0.01%
Because additional stock options are expected to be granted each year, the
above pro forma disclosure is not representative of pro forma effects on
reported financial results for future years.
F-23
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
11. Earnings Per Share
The computation of basic and diluted earnings per share were as follows:
<TABLE>
Year Year
Ended Ended
Dec. 31, Dec. 31,
1999 1998
--------------- -----------------
<S> <C> <C>
Basic:
Net income attributable to common shares $ 553,439 $ 326,948
Weighed average common shares
outstanding (see (a)) 7,863,500 3,700,000
--------------- -----------------
Basic earnings per share $ 0.07 $ 0.09
--------------- -----------------
Diluted:
Adjusted income attributable to common
shares $ 553,439 $ 326,948
--------------- -----------------
Weighted average common shares
outstanding (see (b)) 11,312,458 3,700,000
Assumed exercise of stock options,
net of common shares assumed
repurchased with the proceeds 638,000 -
--------------- -----------------
Adjusted weighted average common
shares outstanding 11,950,458 3,700,000
--------------- -----------------
Diluted earnings per share $ 0.05 $ 0.09
--------------- -----------------
</TABLE>
(a) (i)The weighted average common shares outstanding during the 1997 and
1998 as used in the computation of basic earnings per share is
represented by 3,700,000 common shares issued.
(ii) The weighted average common shares outstanding during 1999 as
used in the computation of basic earnings per share is represented
by 7,863,500 common shares issued. The weighted average common
shares outstanding is comprised of the following:
Caldera shares outstanding prior to the
reverse merger 2,776,000
Shares issued as part of the reverse merger 5,087,500
---------
7,863,500
=========
(b) (i)The weighted average common shares outstanding during the year as
used in the computation of diluted earnings per share is represented
by 3,700,000 for the twelve months ended December 31, 1998.
F-24
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
11. Earnings Per Share (continued)
(ii) For the year ended December 31, 1999, the weighted average common
shares outstanding as used in the computation of diluted earnings
per share is represented by the sum of 7,863,500 common shares
issued and the weighted average of 5,912,500 exchangeable
preferred shares issued and outstanding in thestockpage.com since
June 1, 1999, which in turn can be exchanged into 5,912,500
common shares of the Company. The weighted average common shares
outstanding used in the computation of diluted earnings per share
is represented by the following:
Common shares for basic EPS 7,863,500
Exchangeable share obligation 3,448,958
----------
11,312,458
==========
12. Related Party Transactions
Included in amounts due from related parties as at December 31, 1999 are
loan receivables of $139,323 and $79,194 from two officers and shareholders
with no interest rate and a maturity date of March 31, 2000. At December
31, 1998, the Company had loan receivables of $555,423 and $225,271
respectively from two officers and shareholders with no interest rate and a
maturity date of September 15, 1999.
Included in amounts due to related parties at December 31, 1998 is a loan
in the amount of $53,836 made to a subsidiary of the Company, by Rolling
Capital Corporation, a corporation owned by the shareholders of the Company
with no interest and a maturity date of September 15, 1999. The amount was
paid in 1999.
All of the above amounts were recorded at the exchange value.
13. Concentrations of Credit Risk and Business Concentration
Financial instruments that potentially subject the Company to significant
concentration of credit risk consist primarily of cash and cash
equivalents, short and long term investments and accounts receivable.
At any point in time, the Company holds investments in very few issuers and
is subject to significant credit risk concentrations. The common shares
held by the Company are thinly traded and subject to significant price
fluctuations. Common shares that are restricted as to resale and options to
purchase common shares cannot be sold for time periods that can be as long
as two years.
Accounts receivable are unsecured and are derived from revenues earned from
customers primarily located in the United States. At any point in time,
substantially all of the accounts receivable balance may be comprised of
one customer. This exposes the Company to significant credit risk
concentrations. The Company performs evaluations of its customers and
maintains allowances for potential credit losses. The Company has set up an
allowance for potential credit losses of $210,099 at December 31, 1999. The
Company wrote off $149,000 and $140,625 to bad debt expense at December 31,
1999 and 1998.
F-25
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
13. Concentrations of Credit Risk and Business Concentration (continued)
At December 31, 1999, the Company had short and long term investments of
$2,493,419 and accounts receivable of $290,944 in five companies, with
individual issuer/customer balances of $1,649,300, $671,000, $229,688,
$187,500, and $46,875. At December 31, 1998, the Company had short and long
term investments of $272,638 and accounts receivable of $19,289 in 3
companies, with individual issuer/customer balances of, $203,888, $68,750
and $19,289.
14. Fair Value of Financial Instruments
Estimated fair value of the Company's financial instruments were as
follows:
Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998
Carrying Fair Carrying Fair
Amount Value Amount Value
Financial assets:
Cash and cash
equivalents $ 19,426 $ 19,426 $ 5,658 $ 5,658
Short term investments
in marketable securities 2,172,389 2,172,389 254,375 254,375
Accounts receivable 290,944 290,944 19,289 19,289
Due from related parties 218,517 218,517 780,694 780,694
Long term investments 321,032 1,498,349 18,263 171,314
Financial liabilities:
Accounts payable $ 65,657 $ 65,657 $ 40,121 $ 40,121
Accrued liabilities 16,306 62,550 478,156 421,906
Bank loan 500,000 500,000
Due to related parties - - 58,030 58,030
The carrying amount approximates fair value of cash and cash equivalents,
accounts receivable, accounts payable and due from/to related parties.
Short term investments are carried at fair value. Accounts receivable at
December 31, 1999 includes receivables of common shares and options to
purchase common shares. The fair value of the receivable was determined
using the closing market price of the common shares to be received and the
Black Scholes option pricing model. The fair value of long term investments
in options to purchase common shares was determined using the Black Scholes
option pricing model. Accrued liabilities at December 31, 1999 include a
payable for share exchange that is to be satisfied by delivering common
shares that the Company owns and that are included in long term
investments. Accrued liabilities at December 31, 1998 include a payable for
shares received for services not rendered that was satisfied by delivering
common shares that the Company owns and that are included in short-term
investments in marketable securities. The fair value of the payable for
share exchange and the payable for shares received for services not
rendered was determined using the closing market price of the common shares
to be delivered.
F-26
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
15. Employees Profit Sharing Plan
In 1998, a subsidiary of the Company set up an employee profit sharing plan
to compensate its key employees. Contributions to the plan were made at the
discretion of management and the subsidiary of the Company had no ongoing
obligations to fund the plan. Distributions from the plan to key employees
were made at the discretion of the plan trustees who are also management of
the subsidiary of the Company. At December 31, 1999, the subsidiary of the
Company had no balance owing for plan compensation. In January 1999, the
subsidiary of the Company paid $360,443 to the plan for expenses accrued in
1998. The subsidiary of the Company does not intend to continue the plan.
16. Commitments and Contingencies
(a) Operating Leases
During 1998, a subsidiary of the Company entered into an operating
lease agreement that provides the Company with office space in
Toronto, Ontario, Canada. The lease is for a period of two years with
an option to renew for an additional two year period. During 1999, a
subsidiary of the Company entered into a month-to-month sublease that
provides the Company with additional office space in Toronto. At
December 31, 1999, the Company has entered into a new five year lease
in Toronto with an option to renew for an additional five year period
and will not be renewing the two current office leases. During 1999,
the Company entered into an operating lease agreement that provides
the Company with office space in New York, New York. The lease is for
a period of four years and three months with an option to renew for a
five year period. In addition, in 1998 a subsidiary of the Company
entered into two vehicle leases as part of a compensation package for
two officers of the subsidiary of the Company in their roles as
management. A subsidiary of the Company also leases certain office
equipment. The rent expense totaled $15,911 and $10,131 at December
31, 1999 and December 31, 1998. Future minimum lease payments for the
next five years are as follows:
Dec. 31, 1999
2000 $ 132,414
2001 143,754
2002 143,396
2003 148,059
2004 96,385
(b) Contingent Liabilities
(i) A subsidiary of the Company and its management are involved in a
dispute with a third party regarding failed negotiations between
the subsidiary of the Company and its management to sell an
interest in the subsidiary of the Company to the third party.
Claims and counterclaims have been filed by the subsidiary of the
Company and the third party respectively. Management believes the
claims are without merit, and does not believe that the Company's
potential exposure related to this matter would have a material
adverse effect on the Company's financial position, results of
operations and cash flows.
(ii) Management is not currently aware of any other legal proceeds or
claims that the Company believes will have, individually or in
the aggregate, a material adverse effect on the Company's
financial position, results of operations and cash flows.
F-27
<PAGE>
Level Jump Financial Group, Inc.
Notes to Consolidated Financial Statements
(in United States dollars)
December 31, 1999 and 1998
17. Segment Information
The Company is engaged in one business segment - Internet financial portal
and investor relations services.
The following table presents information related to the Company by
geographic area:
United
Canada States
------------ -----------
For the year ended December 31, 1999
Revenue $ - $ 2,827,468
Operating income - 733,073
Assets 2,942,967 255,534
For the year ended December 31, 1998
Revenue $ - $ 1,067,971
Operating loss - (442,785)
Assets 1,110,566 -
18. Economic Dependence
Five customers accounted for 21%, 19%, 19%, 17%, and 12% of total revenues
for the year ended December 31, 1999 and five customers accounted for 28%,
26%, 17%, 12%, and 11% of total revenues for the year ended December 31,
1998.
19. Subsequent Events
Purchase of Southland Securities
On January 3, 2000, Level Jump entered into an agreement to purchase
Southland Securities Corporation, a Securities and Exchange Commission /
National Association of Securities Dealers registered broker/dealer.
Closing is subject to approval of the change of control by the appropriate
regulatory bodies. The purchase price for the transaction to be paid by the
Company is $320,000 and 30,000 common shares. $100,000 of the cash purchase
price and the 30,000 common shares will be held in escrow pending the
outcome to two arbitrations that Southland is a defendant. The purchase
price will be reduced by the amount, if any, that Southland is required to
pay upon completion of the arbitrations.
F-28
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
On November 15, 1999, Level Jump selected BDO Dunwoody, LLP to replace Andersen
Andersen & Strong as its independent public accountants.
BDO Dunwoody, LLP has acted as independent accountants for Level Jump Colorado
since inception, which became a wholly-owned subsidiary of Level Jump pursuant
to the merger on October 28, 1999. Level Jump believes that the change to BDO
Dunwoody, LLP as its independent accountants will centralize the audit of its
consolidated financial statements. The decision to change auditors was approved
by the Board of Directors.
Andersen Andersen & Strong's report on the financial statements of Level Jump
(formerly known as Caldera), for each of the past two fiscal years did not
contain any adverse opinion or disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles.
During the two most recent fiscal years, and the subsequent interim period,
there were no disagreements with Andersen Andersen & Strong on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
Andersen Andersen & Strong, would have caused Andersen Andersen & Strong to make
reference to thesubject matter of the disagreements in connection with their
audit report with respect to financial statements of Level Jump (formerly known
as Caldera) either individually or consolidated with Level Jump Colorado.
15
<PAGE>
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The persons listed below are the current directors and officers of Level Jump.
Name Age Director Since Position
Robert Landau 28 1999 President and Director
David Roff 28 1999 Treasurer, Vice President
and Director
Brice Scheschuk 28 1999 Vice President Finance,
Secretary and Director
Glen Akselrod 30 1999 Vice President and
Director
There are no family relationships among any of the directors or executive
officers of Level Jump.
Robert Landau is a co-founder of Level Jump and has been President since its
inception in March 1999. Mr. Landau is a co-founder of thestockpage.com and has
been President since its inception in August 1997. Mr. Landau designed the first
thestockpage.com web site and was one of the pioneers of on-line investment
newsletters. He has significant experience in capital markets, Internet
marketing, investor relations and web site design. Mr. Landau is responsible for
strategic direction and overall management of Level Jump and thestockpage.com.
He is also actively involved in sales to investor relations clients. Prior to
founding Level Jump and thestockpage.com, Mr. Landau worked for Watson Wyatt
from February 1995 to February 1998. Watson Wyatt is an actuarial consultant to
some of the largest pension plans in Canada. He has a Bachelor of Commerce -
Actuarial Science and Finance degree from the University of Toronto in Toronto,
Ontario, Canada.
David Roff, CA, is a co-founder of Level Jump and has been Vice President and
Treasurer since its inception in March 1999. Mr. Roff is a co-founder of
thestockpage.com. Mr. Roff designed the marketing campaigns that resulted in
member growth to over 30,000 members. He has significant experience in Internet
marketing, capital markets and financial management. Mr. Roff is responsible for
human resources, administration and internal operations at Level Jump and
thestockpage.com. He is a Canadian Chartered Accountant and previously worked
for Coopers & Lybrand (now PricewaterhouseCoopers) Consulting in Toronto from
May 1995 to March 1998 where he advised large financial institutions, investment
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<PAGE>
fund complexes and other organizations on technology and internal control
strategies. Mr. Roff has a Bachelor of Arts degree from the University of
Western Ontario in London, Ontario, Canada.
Brice Scheschuk, CA, is a co-founder of Level Jump and has been Vice President
Finance and Secretary since its inception in March 1999. Mr. Scheschuk joined
thestockpage.com in August 1998 as Vice President Finance. Mr. Scheschuk has
significant experience in areas that include corporate finance, financial
accounting, internal control and taxation. He is a Canadian Chartered Accountant
and previously worked for Coopers & Lybrand (now PricewaterhouseCoopers)
Consulting from May 1994 to August 1998 in Boston and Toronto where he advised
large banks, broker/dealers and investment fund complexes on business and
operations strategy, risk management, derivative products, internal control and
compliance, technology and business processes. Mr. Scheschuk has a Bachelor of
Commerce First Class Honors Finance degree from Dalhousie University in Halifax,
Nova Scotia, Canada.
Glen Akselrod is a co-founder of Level Jump and has been Vice President since
its inception in March 1999. Mr. Akselrod joined thestockpage.com in November
1998 as Vice President Investor Relations and oversaw the development and
co-branding of the revamped thestockpage.com web site, which was unveiled in
February 1999. Mr. Akselrod is responsible for investor relations at
thestockpage.com. Prior to joining thestockpage.com, he worked from October 1996
to October 1998 at Bel air Insurance Company and from March 1995 to October 1996
at State Farm Insurance Company, two property and casualty insurers, as an
analyst. Mr. Akselrod has a Bachelor of Science - Actuarial Science and
Economics degree from the University of Toronto in Toronto, Ontario, Canada.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
Level Jump and Form 5 and amendments thereto furnished to Level Jump, for the
fiscal year ended December 31, 1999, there were no directors, officers, or
beneficial owners of more than 10% of the Common Stock during such fiscal year
who failed to file on a timely basis reports required by Section 16(a) of the
Securities Exchange Act of 1934 during such fiscal year.
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth certain information concerning the compensation
paid during the fiscal years ended December 31, 1999, 1998 and 1997 to the
president and the other most highly compensated executive officer whose total
salary and bonus earned during the 1999 fiscal year exceeded $100,000.
Summary Compensation Table
Annual Compensation Long-Term Compensation
-------------------- ----------------------
Other
Name and Principal Annual Options/
Position Year Salary Comp. SARs (#)
Robert Landau 1999 53,504 216,000 (1) 618,750 (2)
President 1998 - 468,196 (1) -
1997 - - -
David Roff 1999 53,504 40,000 (1) 412,500 (2)
Treasurer and 1998 - 335,418 (1) -
Vice President 1997 - - -
17
<PAGE>
(1) Other annual compensation for Robert Landau: 1999 - forgiveness of an
investment loan of $156,000 and cash payment of $60,000; 1998 -
distributions of investments of $468,196. Other annual compensation for
David Roff: 1999 - cash payment of $40,000; 1998 - distributions of
investments of $335,418.
(2) Options granted by Level Jump Colorado and assumed by Level Jump.
Option Grants During 1999 Fiscal Year
Individual Grants
No. of % of Total
Securities Options
Underlying Granted to
Options Employees Exercise Expiration
Name Granted (#) in Fiscal Year Price ($) Date
Robert Landau 123,750 7.8 0.73 Apr. 30, 2004
123,750 7.8 0.91 Apr. 30, 2005
123,750 7.8 1.09 Apr. 30, 2006
123,750 7.8 1.27 Apr. 30, 2007
123,750 7.8 1.45 Apr. 30, 2008
David Roff 82,500 5.2 0.73 Apr. 30, 2004
82,500 5.2 0.91 Apr. 30, 2005
82,500 5.2 1.09 Apr. 30, 2006
82,500 5.2 1.27 Apr. 30, 2007
82,500 5.2 1.45 Apr. 30, 2008
The following table provides information related to options exercised by the
named executive officers during fiscal 1999 and the number of options held at
fiscal year-end.
<TABLE>
Value of Unexercised
Shares No. of Securities In-the-Money
Acquired on Value Underlying Options Options ($) (1)
Name Exercise (#) Realized ($) Exercisable Unexercis Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Robert Landau - - 123,750 495,000 505,000 1,798,000
David Roff - - 82,500 330,000 337,000 1,198,725
</TABLE>
(1) Value based on the closing price of $4.8125 on December 31, 1999, less the
option exercise price.
Management Employment Agreements and Compensation
On May 1, 1999, Level Jump and thestockpage.com signed written employment
agreements with Robert Landau and David Roff. Mr. Landau acts as the president
of the two companies and is compensated at an annual rate of $330,000. Mr. Roff
acts as the Vice President Operations and Administration and is compensated at
an annual rate of $256,000. Currently, each of these executives has amended
their employment agreements to reduce their salaries to approximately $60,000
under these agreements until April 30, 2000. On April 30, 2000, management will
reevaluate Level Jump's funding needs and may amend their agreements until such
time that Level Jump and thestockpage.com are funded in a manner to implement
the initial phases of their business plan.
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<PAGE>
Each of the employment agreements provides for a five-year employment term. Each
executive will be paid the annual salary indicated and will receive various
benefits including four weeks paid vacation, medical, dental and disability
insurance and reimbursement for the premiums of term life insurance in the face
amount of $1,000,000. At December 31, 1999, term life insurance had not yet been
taken by the employees and no premiums are payable by Level Jump. Each of the
executives may engage in other businesses, either individually or through
partnerships or corporations in which they have an interest, hold an office or
serve on boards of directors. Certain conflicts of interest may arise between
the company and the executives. The agreements may be terminated by the company
or executives at any time, or upon a showing of cause by the company or upon
good reason by the executive. If terminated by the company without reason, the
company will pay the salary amount for the full term of the agreement, otherwise
if for cause by the company or good reason by executives he will be paid one
year's salary. Upon death or disability, the executives will not be paid
anything after the date of termination. The executives are not subject to any
non-competition or non-disclosure obligations.
Remuneration of the Board of Directors
Directors who are not employees currently do not receive any compensation for
their duties as directors. All directors are reimbursed for any actual expense
incurred in attending meetings of the board of directors.
Stock Option Plan
The 1999 Performance Equity Plan of Level Jump Colorado was adopted by Level
Jump Colorado on May 1, 1999. Level Jumpassumed all of Level Jump Colorado's
obligations under the plan on January 31, 2000. Currently the plan provides for
2,750,000 shares of Common Stock to be reserved for issuance upon incentive or
non-qualified stock options, stock appreciation rights, restricted stock awards,
deferred stock and other stock based awards. Awards may be made to officers,
directors, key employees and consultants. The plan will terminate at such time
as no further awards may be granted and awards granted are no longer
outstanding, provided incentive options may only be granted until April 30,
2009. The plan is administered by the board of directors. The board of
directors, to the extent permitted by the provisions of the plan, has the
authority to determine the selection of participants, allotment of shares,
price, and other conditions of purchase of awards and administration of the plan
in order to attract and retain persons instrumental to the success of Level
Jump.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth as of March 3, 2000, the name, number of shares
beneficially owned, and the percentage of the total outstanding common stock
owned by (i) each of the officers and directors, (ii) the officers and directors
as a group, and (iii) each person known to be the beneficial owner of more than
5% of the total outstanding shares of common stock.
Number of Shares Percentage
Principal Stockholders Beneficially Owned Beneficially Owned
ZDG Holdings Inc. (1) 7,059,573 61.2
David Roff (2) 4,712,000 45.7
Brice Scheschuk (3) 825,000 10.5
Glen Akselrod (4) 825,000 10.5
All officer and directors (5) 12,581,573 89.5
(1) Includes 3,547,500 shares which may be issued upon exercise of the
retraction rights of thestockpage.com exchangeable shares. Includes 252,000
shares subject to a voting agreement and an option agreement with Mr. Brice
Scheschuk and 252,000 shares subject to a voting agreement and an option
agreement with Mr. Glen Akselrod. Includes 780,573 shares owned by Mr.
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<PAGE>
Landau and 123,750 shares subject to currently exercisable options issued
to Mr. Robert Landau under the 1999 Performance Equity Plan of Level Jump
and excludes 495,000 shares subject to options issued to Mr. Robert Landau
under the plan which vest in the future. ZDG Holdings Inc. is a corporation
wholly owned by the spouse of Mr. Landau, Ms. Marni Miller. Mr. Landau is
the sole director and president of ZDG Holdings Inc.
(2) Includes 2,365,000 shares which may be issued upon exercise of the
retraction rights of thestockpage.com exchangeable shares. Includes 168,000
shares subject to a voting agreement and an option agreement with Mr. Brice
Scheschuk and 168,000 shares subject to a voting agreement and an option
agreement with Mr. Glen Akselrod. Includes 82,500 shares subject to
currently exercisable options under the 1999 Performance Equity Plan of
Level Jump and excludes 330,000 shares subject to options under the plan
which vest in the future.
(3) Includes the 420,000 shares subject to voting agreements and option
agreements with ZDG Holdings Inc. and Mr. David Roff. Includes 34,375
shares subject to currently exercisable options under the 1999 Performance
Equity Plan of Level Jump and excludes 137,500 shares subject to options
under the plan which vest in the future.
(4) Includes 420,000 shares subject to voting agreements and option agreements
with ZDG Holdings Inc. and Mr. David Roff. Includes 34,375 shares subject
to currently exercisable options under the 1999 Performance Equity Plan of
Level Jump and excludes 137,500 shares subject to options under the plan
which vest in the future.
(5) Includes 275,000 shares subject to currently exercisable options under the
1999 Performance Equity Plan of Level Jump and excludes 1,100,000 shares
subject to options under the plan which vest in the future.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Purchase of thestockpage.com inc.
On June 1, 1999, Level Jump Colorado acquired all the issued and outstanding
common shares of thestockpage.com.
Transaction Mechanics
The acquisition comprised the following elements:
a) The articles of incorporation of thestockpage.com were amended to create a
class of non-voting Exchangeable Shares without nominal or par value,
b) Level Jump Colorado amended its charter to create two classes of Preferred
Stock, Class A Preferred Stock and Class B Preferred Stock, and
thestockpage.com subscribed for and was issued one share of each such
class,
c) thestockpage.com purchased from Messrs. Landau and Roff, the two previous
common shareholders of thestockpage.com, for cancellation all the issued
and outstanding common shares of thestockpage.com for consideration
consisting of 9,300,000 shares of Exchangeable Stock and the two shares of
Level Jump Preferred Stock referred to in b) above,
d) Level Jump Colorado subscribed for and was issued 100 common shares of
thestockpage.com,
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<PAGE>
e) Each of Messrs. Landau and Roff entered into a Voting and Exchange
Agreement with Level Jump Colorado and thestockpage.com, and
f) Level Jump Colorado and thestockpage.com entered into a Support Agreement.
On October 14, 1999, Messrs. Landau and Roff agreed to modify the terms of the
Exchangeable Shares of thestockpage.com to reduce the number of outstanding
shares from 9,300,000 to 4,300,000 and modify the corresponding agreements. In
exchange for the modification, Messrs. Landau and Roff were issued an aggregate
of 5,000,000 shares a new class of Preference Shares, no par value, of
thestockpage.com ("Preference Shares").
Description of Securities of Level Jump Colorado Preferred Shares and
thestockpage.com, Exchangeable Shares
Voting Rights of Exchangeable Shares and Level Jump Colorado Preferred Stock
Holders of Exchangeable Shares generally are not permitted to vote at meetings
of the shareholders of thestockpage.com (except, where required by law, as a
separate class). Level Jump Colorado will be the only voting shareholder of
thestockpage.com.
Each share of the Class A Preferred Stock and Class B Preferred Stock of Level
Jump Colorado (the "Special Voting Shares") will in the aggregate carry the
number of votes, exercisable at any meeting at which Level Jump stockholders are
entitled to vote or in a consent action, the number of votes equal to the number
of outstanding Exchangeable Shares not owned by Level Jump Colorado or its
subsidiaries and affiliates Except as to matters on which applicable law or
Articles of Incorporation require a separate vote, the Special Voting Shares
will vote with the Common Stock as a single class.
Level Jump Colorado will send to the holders of Special Voting Shares the notice
of each meeting at which Level Jump Colorado stockholders are entitled to vote,
together with the related meeting materials, at the same time as Level Jump
Colorado sends such notice and materials to the Level Jump Colorado
stockholders. Level Jump Colorado will also send to the holders of Special
Voting Shares copies of all information statements, interim and annual financial
statements, reports and other materials sent by Level Jump Colorado to the Level
Jump Colorado stockholders at the same time as such materials are sent to the
Level Jump Colorado stockholders.
All rights of a holder of Special Voting Shares to exercise votes attached to
the Special Voting Shares will cease upon the exchange, redemption or other
cancellation of Exchangeable Shares for shares of Common Stock.
Dividend Rights of the Exchangeable Shares
Under the share provisions of the Exchangeable Shares, holders of Exchangeable
Shares will be entitled to receive dividends which are intended, so far as
possible, to be functionally and economically equivalent to those declared on
Level Jump Colorado shares of Common Stock. The record date for the
determination of the holders of Exchangeable Shares entitled to receive payment
of, and the payment date for, any dividend declared on Exchangeable Shares shall
be the same dates as the record date and payment date, respectively, for the
corresponding dividend on Level Jump Colorado shares of Common Stock.
Retraction Rights of the Exchangeable Shares
Pursuant to the share provisions of the Exchangeable Shares, subject to
applicable law and an overriding retraction call right of Level Jump Colorado
described below, holders of Exchangeable Shares shall be entitled at any time to
require thestockpage.com to retract any or all such Exchangeable Shares and to
receive, for each Exchangeable Share, an amount equal to the market price of a
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<PAGE>
share of Level Jump Colorado Common Stock, plus an additional amount equal to
declared and unpaid dividends which shall be satisfied by Level Jump causing to
be delivered to such holder one share of Level Jump Colorado Common Stock for
each such Exchangeable Share and paying to such holder the amount in respect of
declared and unpaid dividends.
Upon receipt of a retraction request, the stockpage.com shall immediately notify
Level Jump Colorado of such request. Level Jump Colorado shall thereafter have
two business days in which to notify thestockpage.com that it intends to
exercise its overriding retraction call right to purchase all, but not less than
all, of the Exchangeable Shares submitted by the holder thereof for retraction.
The purchase price for each such Exchangeable Share purchased by Level Jump
Colorado shall be an amount equal to the market price of a share of Common
Stock, plus an additional amount equal to declared and unpaid dividends, and
shall be satisfied by Level Jump Colorado causing to be delivered to such holder
one share of Level Jump Colorado Common Stock for each such Exchangeable Share
and paying to such holder the amount in respect of the declared and unpaid
dividends.
Liquidation Exchange Rights related to the Exchangeable Shares
Pursuant to each Voting and Exchange Agreement, upon the occurrence and during
the continuance of an Insolvency Event, with respect to thestockpage.com, a
holder of Exchangeable Shares may require Level Jump Colorado to purchase any or
all of the Exchangeable Shares held by the holder. Insolvency Event is defined
to include (i) any insolvency or bankruptcy proceeding instituted by or against
thestockpage.com, including any such proceeding under the Companies Creditors
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada), (ii)
the admission in writing by the stockpage.com of its inability to pay its debts
generally as they become due and (iii) the inability of thestockpage.com, as a
result of solvency requirements of applicable law, to redeem any Exchangeable
Shares tendered for retraction. Immediately upon the occurrence of an Insolvency
Event or any event which may, with the passage of time or the giving of notice,
become an Insolvency Event, thestockpage.com and/or Level Jump Colorado will
give written notice thereof to the holders of Exchangeable Shares.
Level Jump Colorado is granted the overriding right, in the event of and
notwithstanding the proposed voluntary or involuntary liquidation, dissolution
or winding-up of thestockpage.com, to purchase all, but not less than all, of
the Exchangeable Shares then outstanding and, upon the exercise by Level Jump
Colorado of such right, the holders of Exchangeable Shares will be obligated to
sell such shares to Level Jump Colorado. The purchase by Level Jump Colorado of
all the outstanding Exchangeable Shares upon the exercise of such right will
occur on the effective time of the voluntary or involuntary liquidation,
dissolution or winding-up of thestockpage.com. The purchase price payable by
Level Jump Colorado for each Exchangeable Share will be equal to the market
price of a share of Level Jump Colorado common stock as of the last business day
immediately prior to the effective time of such voluntary or involuntary
liquidation, dissolution or winding up of thestockpage.com plus an additional
amount equal to declared and unpaid dividends and shall be satisfied by Level
Jump Colorado causing to be delivered to such holder one share of Level Jump
Colorado Common Stock for each such Exchangeable Share and paying to such holder
the amount in respect of declared and unpaid dividends.
If, as a result of solvency provisions of applicable law, thestockpage.com is
unable to redeem all Exchangeable Shares specified in a retraction request and
provided that Level Jump Colorado has not exercised its retraction call right
with respect to such shares and the holder of Exchangeable Shares has not
revoked the retraction request, the holder will be deemed to have exercised his
right to require Level Jump Colorado to purchase the Exchangeable Shares and
Level Jump Colorado will be required to purchase such shares from the holder in
the manner set forth above.
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Automatic Exchange Rights in the Event of the Insolvency of
Level Jump Colorado Related to the Exchangeable Shares
Under each Voting and Exchange Agreement, in the event of the voluntary or
involuntary liquidation, dissolution or winding-up of Level Jump Colorado, Level
Jump Colorado will be required to purchase each outstanding Exchangeable Share
for a purchase price equal to the market price of a share of Level Jump Colorado
Common Stock as of the last business day immediately prior to the effectiveness
of such voluntary or involuntary liquidation, dissolution or winding up of Level
Jump Colorado, plus an additional amount equal to declared and unpaid dividends,
which shall be satisfied by Level Jump Colorado causing to be delivered to such
holder one share of Level Jump Colorado Common Stock for each such Exchangeable
Share and paying to such holder the amount in respect of declared and unpaid
dividends.
Certain Restrictions of the Exchangeable Shares
While any of the Exchangeable Shares are outstanding, and dividends thereon
resulting from distribution by Level Jump Colorado are unpaid, thestockpage.com
cannot, without the approval of the holders of two-thirds of the Exchangeable
Shares obtained under Ontario Law, take any of the following actions:
O pay dividends on the common stock or other junior ranking shares,
redeem, retract or purchase or make a capital distribution on the common
stock or other junior ranking shares,
O redeem or purchase any other shares of thestockpage.com ranking equally
with or junior to the Exchangeable Shares with respect to the payment of
dividends, or
O issue any Exchangeable Shares or other equally Ranking shares, other than
as required upon a dividend Or distribution by Level Jump Colorado.
Anti-dilution Rights of the Exchangeable Shares
The Exchangeable Shares are subject to adjustment as to number based upon
changes in the capitalization of Level Jump Colorado, in the event of stock
dividends or split-ups and are exchangeable into any securities into which the
Common Stock of Level Jump Colorado is converted in connection with any merger
or combination. In addition the Exchangeable Shares are entitled to receive the
cash equivalent of any property distributed on the Common Stock of Level Jump
Colorado or securities distributed in respect of the Common Stock of Level Jump
Colorado.
Support Agreement Related to the Exchangeable Shares
Level Jump Colorado and thestockpage.com have entered into a Support Agreement.
The Support Agreement provides that no dividends will be declared or paid on the
Level Jump Colorado Common Stock unless thestockpage.com simultaneously declares
and pays an economically equivalent dividend (after appropriate adjustments for
currency translations) on the Exchangeable Shares. The Support Agreement also
provides that Level Jump Colorado will do all things necessary to ensure that
thestockpage.com will be able to make all payments on the Exchangeable Shares
required in the event of the liquidation, dissolution or winding-up of
thestockpage.com or the retraction of Exchangeable Shares by a holder.
The Support Agreement also provides that, without the prior approval of
thestockpage.com and the holders of the Exchangeable Shares, Level Jump Colorado
will not distribute additional Level Jump Colorado Common Stock or rights to
subscribe therefor or other assets or evidences of indebtedness to all or
substantially all holders of Level Jump Colorado common stock nor change the
Level Jump Colorado Common Stock nor effect any reorganization or other
transaction affecting the Level Jump Colorado Common Stock, unless the same or
an economically equivalent distribution on, or change to, the Exchangeable
Shares (or in the rights of the holders thereof) is made simultaneously.
23
<PAGE>
The Support Agreement also provides that so long as there remain outstanding any
Exchangeable Shares not owned by Level Jump Colorado or any of its affiliates,
Level Jump Colorado will be and remain the direct or indirect beneficial owner
of all outstanding shares of thestockpage.com other than the Exchangeable
Shares.
With the exception of administrative changes for the purposes of adding
covenants for the protection of the holder of the Exchangeable Shares, making
certain necessary amendments or curing ambiguities or clerical errors (in each
case provided that the board of directors of each of Level Jump Colorado and
thestockpage.com is of the opinion that such amendments are not prejudicial to
the interests of the holders of the Exchangeable Shares), the Support Agreement
may not be amended without the approval of the holders of the Exchangeable
Shares.
Level Jump Colorado has agreed that it will not, and it will cause its
subsidiaries and affiliates not to, exercise any voting rights attached to
Exchangeable Shares owned by it or any of its subsidiaries or affiliates on any
matter considered at meetings of holders of Exchangeable Shares (including any
approval sought from such holders in respect of matters arising under the
Support Agreement).
Voting and Exchange Agreements Relating to the Exchangeable Shares
Level Jump Colorado and thestockpage.com have entered into a Voting and Exchange
Agreement with each of Robert Landau and David Roff, pursuant to which each of
Mr. Landau and Mr. Roff will be granted (i) voting rights with respect to
matters presented to stockholders and (ii) rights relating to the exchange of
Exchangeable Shares for shares of Common Stock.
Preference Shares
The Preference Shares of thestockpage.com include 5,000,000 issued and
outstanding shares. These shares do not have any voting rights except as
required by law, but they are entitled to receive notice of all meetings of the
stockholders of thestockpage.com called to approve a termination of the company
or sale of substantially all the assets. The Preference Shares are entitled to
receive dividends, subject to the prior rights of the Exchangeable Shares, at
the non-cumulative rate of 12% per annum of the redemption amount, currently
CD$0.265 (US$0.1715) per share ("Redemption Amount"), when and as declared by
the board of directors. The Preference Shares are subject to redemption by
thestockpage.com, in whole or in part upon payment of the Redemption Amount and
declared but unpaid dividends. In the event of a liquidation, dissolution or
winding-up of thestockpage.com, subject to the rights of higher ranking shares,
the Preference Shares are entitled to payment of the Redemption Amount prior to
any payment in respect of junior ranking securities.
Purchase of Level Jump Colorado
On October 20, 1999, the board of directors of Level Jump (at the time Caldera
Corporation) entered into an Agreement and Plan of Exchange with Level Jump
Colorado, which was consummated on October 28, 1999 whereby Level Jump issued
5,087,500 shares of Common Stock in exchange for all 3,700,000 shares of common
stock of Level Jump Colorado. As part of the transaction, the board of directors
of Level Jump Colorado were appointed to the board of directors of Level Jump
and former directors resigned from the board of directors. In addition, the
former officers offered for sale and sold to a number of persons including Mr.
Landau and Mr. Roff, additional shares of Common Stock in a separate
transaction. In this transaction, Mr. Landau acquired 780,573 shares of Common
Stock and Mr. Roff acquired 526,000 shares of Common Stock.
In addition, the Company agreed to assume certain other obligations of Level
Jump Colorado to issue shares of Common Stock that could result in the issuance
of 5,912,500 Shares under Exchangeable Share agreements and 2,750,000 Shares
under a Performance Equity Plan.
24
<PAGE>
On January 31, 2000, Level Jump Colorado was merged with and into the Company.
Under the Plan of Merger, the Company assumed the obligations of Level Jump
Colorado, including those under the various agreements relating to the
Exchangeable Shares and issued Class A Preferred Stock and Class B Preferred
Stock in exchange for the outstanding preferred stock of Level Jump Colorado and
the rights of Level Jump Colorado were transferred to Level Jump.
Loans to/from Related Parties
The Company or its subsidiaries may lend funds to directors and officers. At
December 31, 1999, the Company had loans outstanding to related parties of
$218,517 down from $780,694 the year prior. These loans are unsecured, require
no interest payments, and have set maturity dates. In the past, the Company has
extended the maturity dates and may continue to do so.
The Company or its subsidiaries may borrow funds from related parties. At
December 31, 1999, the Company had no borrowings outstanding from related
parties. At December 31, 1998, the Company had borrowed $58,030 from Rolling
Capital Corporation, a company that owned by the officers and directors of
thestockpage.com. The amount was repaid by the Company in 1999.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits Filed.
See Exhibit Index appearing later in this Report.
(b) Reports on Form 8-K.
Form 8-K dated November 4, 1999. Disclosure required by Item 1,
Item 2, and Item 7 for the reverse acquisition of Caldera
Corporation by Level Jump Financial Group, Inc. (Colorado).
Form 8-K/A dated November 8, 1999. Amendment to Item 7 exhibits
filing the 1999 Performance Equity Plan.
Form 8-K dated November 15, 1999. Disclosure required by Item 4
of Form 8-K for the change of independent accountant from
Andersen, Andersen & Strong to BDO Dunwoody, LLP.
Form 8-K/A dated December 17, 1999. Disclosure required by Item 7
of the audited financial statements of Level Jump Financial
Group, Inc. for the nine months ended September 30, 1999, the
year ended December 31, 1998 and for the period from inception to
December 31, 1997 and pro forma (Colorado) for the nine months
ended September 30, 1999 and the year ended December 31, 1998.
Form 8-K dated January 21, 2000. Copy of press release announcing
the execution of the acquisition agreement for the purchase of
Southland Securities Corporation.
25
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LEVEL JUMP FINANCIAL GROUP, INC.
(Registrant)
Dated: March 20, 2000
/s/ Robert Landau
By: ____________________________________
Name: Robert Landau
Title: President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
Name Title Date
- - ---- ----- ----
<S> <C> <C>
/s/ Robert Landau President and Director March 20, 2000
- - -----------------
Robert Landau
/s/ David Roff Treasurer and Director March 20, 2000
- - --------------
David Roff
/s/ Brice Scheschuk Secretary and Director March 20, 2000
- - -------------------
Brice Scheschuk (Principal Financial and
Accounting Officer)
/s/ Glen Akselrod Director March 20, 2000
- - -----------------
Glen Akselrod
</TABLE>
26
<PAGE>
EXHIBIT INDEX
<TABLE>
Incorporated
Exhibit By Reference No. in
Number Description from Document Document Filings
- - ------ ----------- ------------- -------- -------
<S> <C> <C> <C> <C>
3.1 Amended and Restated Certificate of -- -- Filed
Incorporation Herewith
3.2 Amendment to Amended and Restated -- -- Filed
Certificate of Incorporation Herewith
3.3 By-Laws A --
4.1 Form of Common Stock Certificate A --
4.2 Voting Agreement between ZDG Holdings B 4.1
Inc. and Brice Scheschuk, dated October
26, 1999 relating to 252,000 (183,272)
shares of Common Stock.
4.3 Voting Agreement between ZDG Holdings B 4.2
Inc. and Glen Akselrod, dated October 26,
1999 relating to 252,000 (183,272) shares
of Common Stock
4.4 Voting Agreement between David Roff and B 4.3
Brice Scheschuk, dated October 26, 1999
relating to 168,000 (122,181) shares of
Common Stock.
4.5 Voting Agreement between David Roff and B 4.4
Glen Akselrod, dated October 26, 1999
relating to 168,000 (122,181) shares of
Common Stock.
4.6 Option Agreement between ZDG Holdings B 4.5
Inc. and Brice Scheschuk, dated October
26, 1999 relating to 252,000 (183,272)
shares of Common Stock
4.7 Option Agreement between ZDG Holdings B 4.6
Inc. and Glen Akselrod, dated October 26,
1999 relating to 252,000 (183,272) shares
of Common Stock
4.8 Option Agreement between David Roff and B 4.7
Brice Scheschuk, dated October 26, 1999
relating to 168,000 (122,181) shares of
Common Stock
4.9 Option Agreement between David Roff and B 4.8
Glen Akselrod, dated October 26, 1999
relating to 168,000 (122,181) shares of
Common Stock
4.10 Voting and Exchange Agreement among B 4.9
thestockpage.com inc., Level Jump and
Robert Landau
</TABLE>
27
<PAGE>
<TABLE>
Incorporated
Exhibit By Reference No. in
Number Description from Document Document Filings
- - ------ ----------- ------------- -------- -------
<S> <C> <C> <C> <C>
4.11 Voting and Exchange Agreement among B 4.10
thestockpage.com inc., Level Jump and
David Roff
4.12 Support Agreement between Level Jump B 4.11
and thestockpage.com inc.
10.1 Employment Agreement between Level B 10.1
Jump and Mr. Robert Landau
10.2 Employment Agreement between Level B 10.2
Jump and Mr. David Roff
10.3 Performance Equity Plan of Level Jump C 10.3
Financial Group, Inc. dated May 1, 1999
10.4 Articles of Merger Level Jump Financial -- -- Filed
Group, Inc. (Colorado) and Level Jump Herewith
Financial Group, Inc. (Florida)
10.5 Amending Agreement to Voting and -- -- Filed
Exchange Agreement dated June 1, 1999 Herewith
among Registrant, thestockpage.com inc.
and ZDG Holdings
10.6 Amending Agreement to Voting and -- -- Filed
Exchange Agreement dated June 1, 1999 Herewith
among Registrant, thestockpage.com inc.
and David Roff
10.7 Amending Agreement to Support -- -- Filed
Agreement dated June 1, 1999 Herewith
10.8 Amendment to Robert Landau Employment -- -- Filed
Agreement Herewith
10.9 Amendment to David Roff Employment Filed
Agreement Herewith
21.1 Subsidiaries of Registrant -- -- Filed
Herewith
27 Financial Data Schedule -- -- Filed
Herewith
99.1 Statement of Risk Factors -- -- Filed
Herewith
</TABLE>
- - ---------------------
A. Registrant's Registration Statement on Form 10 (File No. 0-27728).
A. Registrant's Form 8-K filed November 4, 1999.
B. Registrant's Form 8-K/A filed November 8, 1999.
28
EXHIBIT 3.1
CERTIFICATE FOR
AMENDING AND RESTATING
ARTICLES OF INCORPORATION
OF
CALDERA CORPORATION
Pursuant to the provisions of Section 607.194, Florida Statutes, this
Florida Profit corporation adopts the attached Amended and Restated Articles of
Incorporation.
First: Articles 1 through 7 of the Articles of Incorporation, as amended
prior to the date hereof, are deleted in their entirety and replaced by the
attached Amended and Restated Articles of Incorporation.
Second: The effective date of the Amended and Restated Articles of
Incorporation is immediately upon acceptance for filing by the Secretary of
State of Florida.
Third: The Amended and Restated Articles of Incorporation was adopted by
the Board of Directors and shareholders. The number of shares for which consents
were given by the shareholders approving the Amended and Restated Articles of
Incorporation were sufficient for its approval and notice of the action taken by
consent has been given to the shareholders not giving their consent.
Executed this 31st day of December 1999.
/s/ Robert G. Landau
____________________________
Robert G. Landau
President
<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
LEVEL JUMP FINANCIAL GROUP, INC.
FIRST: The name of the corporation (herein referred to as the "Corporation") is:
Level Jump Financial Group, Inc.
SECOND: The address of the Corporation is 133 Richmond Street West, Suite 401,
Toronto, Ontario M5H 2L3.
THIRD: The purposes of the Corporation are to engage in, promote, conduct, and
carry on any lawful acts or activities for which corporations may be organized
under the Florida 1989 Business Corporation Act.
FOURTH: The total number of shares of capital stock of all classes which the
Corporation shall have authority to issue is 205,000,000 shares, of which
5,000,000 shares shall be Preferred Stock, par value $.0025 per share, and
200,000,000 shares shall be Common Stock, par value $.0025 per share.
III. Preferred Stock
A. Shares of Preferred Stock may be issued at such time or times and for
such consideration as the Board of Directors may determine. All shares of any
one series shall be of equal rank and identical in all respects.
B. Authority is hereby expressly granted to the Board of Directors to fix
from time to time, by resolution or resolutions providing for the establishment
and/or issuance of any series of Preferred Stock, the designation of the series
and the powers, preferences, and rights of the shares of the series, and the
qualifications, limitations, or restrictions thereof, including the following:
1. The distinctive designation and number of shares comprising the
series, which number may, except where otherwise provided by the Board of
Directors in creating the series, be increased or decreased from time to time by
action of the Board of Directors, but not below the number of shares then
outstanding;
2. The rate of dividends, if any, on the shares of that series, whether
dividends shall be noncumulative, cumulative to the extent earned, or
cumulative, and if cumulative, from which date or dates, whether dividends shall
be payable in cash, property, or rights, or in shares of the Corporation's
capital stock, and the relative rights of priority, if any, of payment of
dividends on shares of that series over shares of any other series;
3. Whether the shares of that series shall be redeemable and, if so, the
terms and conditions of the redemption, including the date or dates upon or
after which they shall be redeemable, the event or events upon or after which
they shall be redeemable or at whose option they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary under
<PAGE>
different conditions and at different redemption dates, or the property or
rights, including securities of any other corporation, payable in case of
redemption;
4. Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series and, if so, the terms and amounts payable into
the sinking fund;
5. The rights to which the holders of the shares of that series shall be
entitled in the event of voluntary or involuntary liquidation, dissolution, or
winding-up of the Corporation, and the relative rights of priority, if any, of
payment of shares of that series in any such event;
6. Whether the shares of that series shall be convertible into or
exchangeable for shares of stock of any other class or any other series and, if
so, the terms and conditions of the conversion or exchange, including the rate
or rates of conversion or exchange, the date or dates upon or after which they
shall be convertible or exchangeable, the duration for which they shall be
convertible or exchangeable, the event or events upon or after which they shall
be convertible or exchangeable or at whose option they shall be convertible or
exchangeable, and the method, if any, of adjusting the rates of conversion or
exchange in the event of a stock split, stock dividend, combination of shares,
or similar event;
7. Whether the issuance of any additional shares of the series, or of any
shares of any other series, shall be subject to restrictions as to issuance, or
as to the powers, preferences, or rights of any such other series; and
8. Any other preferences, privileges, and powers and relative,
participating, optional, or other special rights and qualifications,
limitations, or restrictions of the series, as the Board of Directors may deem
advisable and as shall not be inconsistent with the provisions of this Articles
of Incorporation and to the full extent now or hereafter permitted by the laws
of the State of Florida.
IV. Common Stock
A. After the requirements with respect to preferential dividends, if any,
on any series of Preferred Stock, then, and not otherwise, the holders of Common
Stock shall receive, to the extent permitted by law and to the extent the Board
of Directors shall determine, such dividends as may be declared from time to
time by the Board of Directors.
B. After distribution in full of the preferential amount upon liquidation,
dissolution or winding up of the Corporation or other rights of priority, if
any, to be distributed to the holders of any series of Preferred Stock, the
holders of the Common Stock shall be entitled to receive such of the remaining
assets of the Corporation of whatever kind available for distribution to the
extent the Board of Directors shall determine.
C. Except as may be otherwise required by law or by this Article of
Incorporation, each holder of Common Stock shall have one vote in respect of
each share of such stock held by him on all matters voted upon by the
shareholders.
D. The Common Stock shall not be cumulatively voted in the election of
directors.
FIFTH: No holder of shares of the Corporation of any class, now or hereafter
authorized, shall have any preferential or preemptive right to subscribe for,
purchase, or receive any shares of stock of the Corporation of any class, now or
hereafter authorized, or any options or warrants for such shares or any rights
<PAGE>
to subscribe to or purchase such shares, or any securities convertible into or
exchangeable for such shares, which may at any time or from time to time be
issued, sold, or offered for sale by the Corporation.
SIXTH: The address of the Corporation's registered office is 1406 Hays Street,
Suite 2, Talahassee, Fl. 32301. The name of the Corporation's registered agent
at such address is National Corporate Research Ltd., Inc.
SEVENTH: The private property or assets of the shareholders of the Corporation
shall not to any extent whatsoever be subject to the payment of the debts of the
Corporation.
EIGHTH: Elections of directors need not be by written ballot unless otherwise
provided in the By-laws of the Corporation.
NINTH: The number of directors of the Corporation shall be such number as from
time to time shall be fixed by, or in the manner provided in, the By-laws of the
Corporation provided that there shall not be less than one director. None of the
directors need be a shareholder or a resident of the State of Florida.
TENTH: The books of the Corporation may be kept outside the State of Florida at
such place or places as may be designated from time to time by the Board of
Directors or in the By-laws of the Corporation, subject to any provision
contained in the statutes.
ELEVENTH: Any action required by law or by the Articles of Incorporation or
Bylaws of the Corporation to be taken at a meeting of the shareholders of the
Corporation or any other action which may be taken at a meeting of the
shareholders, may be taken without a meeting if a written consent setting forth
the action so taken, shall be signed by the holders of outstanding stock of each
voting group entitled to vote thereon having not less than the minimum number of
votes with respect to each voting group that would be necessary to authorize or
take such action at a meeting at which all voting groups and shareholders
entitled to vote thereon were present and voted.
TWELVTH: Special meetings of the shareholders of the Corporation for any purpose
or purposes may be called at any time by the board of directors or the persons
authorized by the bylaws or resolution of the board of directors or upon demand
by the holders of shares representing at least fifty percent of all the votes
entitled to be cast on any issue proposed to be considered at the meeting.
THIRTEENTH: At an annual meeting of shareholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
brought before the annual meeting (a) by, or at the direction of, a majority of
the directors, or (b) by any shareholder of the Corporation who complies with
the notice procedures set forth in this Article Thirteenth. For a proposal to be
properly brought before an annual meeting by a shareholder, the shareholder must
have given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a shareholder's notice must be delivered to, or mailed and
received at, the principal executive offices of the Corporation not less than
120 days prior to the scheduled annual meeting, regardless of any postponements,
deferrals or adjournments of that meeting to a later date; provided, however,
that if less than 120 days' notice or prior public disclosure of the date of the
scheduled annual meeting is given or made, notice by the shareholder to be
timely, must be so delivered or received not later than the close of business on
the tenth day following the earlier of the day on which such notice of the date
of the scheduled annual meeting was mailed or the day on which such public
disclosure was made. A shareholder's notice to the Secretary shall set forth as
<PAGE>
to each matter the shareholder proposes to bring before the annual meeting (a) a
brief description of the proposal desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (b)
the name and address, as they appear on the Corporation's books, or the
shareholder proposing such business and any other shareholders known by such
shareholder to be supporting such proposal, (c) the class and number of shares
of the Corporation's stock which are beneficially owned by the shareholder on
the date of such shareholder notice and by any other shareholders known by such
shareholder to be supporting such proposal on the date of such shareholder
notice, and (d) any financial interest of the shareholder in such proposal and
by any other shareholders known by such shareholder to be supporting such
proposal.
The presiding officer of the annual meeting shall determine and declare at
the annual meeting whether the shareholder proposal was made in accordance with
the terms of this Article Thirteenth. If the presiding officer determines that a
shareholder proposal was not made in accordance with the terms of this Article
Thirteenth, he or she shall so declare at the annual meeting and any such
proposal shall not be acted upon at the annual meeting.
This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers, directors and
committees of the board of directors, but, in connection with such reports, no
new business shall be acted upon at such annual meeting unless stated, filed and
received as herein provided.
FOURTEENTH: Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors. Nominations of persons
for election to the board of directors of the Corporation may be made (i) by the
board of directors or a nominating committee or person appointed by the board of
directors at any time or (ii) at a meeting of shareholders by any shareholder of
the Corporation entitled to vote for the election of directors at the meeting
who complies with the notice procedures set forth in this Article Fourteenth.
Such nominations, other than those made by or at the direction of the board of
directors, shall be made pursuant to timely notice in writing to the Secretary
of the Corporation. To be timely, a shareholder's notice must be delivered to,
or mailed and received at, the principal executive offices of the Corporation
not less than 120 days prior to the scheduled annual meeting, regardless of any
postponements, deferrals or adjournments of that meeting to a later date;
provided however, that if less than 120 days' notice or prior public disclosure
of the date of the scheduled annual meeting is given or made, notice by the
shareholder, to be timely, must be so delivered or received not later than the
close of business on the tenth day following the earlier of the day on which
such notice of the date of the scheduled annual meeting was mailed or the day on
which such public disclosure was made. A shareholder's notice to the Secretary
shall set forth (a) as to each person whom the shareholder proposes to nominate
for election or reelection as a director, (i) the name, age, business address
and residence address of the person, (ii) the principal occupation or employment
of the person, (iii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the person, and (iv) any other
information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to any rules or
regulations under the Securities Exchange Act of 1934, as amended; and (b) as to
the shareholder giving the notice (i) the name and address, as they appear on
the Corporation's books, of the shareholder, and (ii) the class and number of
shares of the Corporation's stock which are beneficially owned by the
shareholder on the date of such shareholder notice. The Corporation may require
any proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed
nominee to serve as a director of the Corporation.
The presiding officer of the annual meeting shall determine and declare at
the annual meeting whether the nomination was made in accordance with the terms
of this Article Fourteenth.
<PAGE>
If the presiding officer determines that a nomination was not made in accordance
with the terms of this Article Fourteenth, he or she shall so declare at the
annual meeting and any such defective nomination shall be disregarded.
FIFTEENTH: Subject to, and to the fullest extent permitted by Section 607.0831
of the Florida 1989 Business Corporation Act, as amended from time to time, no
director shall be personally liable to the Corporation or to any other person
for any statement, vote, decision, or failure to act, regarding corporate
management or policy, by a director. The Corporation shall indemnify any person
who is or was a director, officer, employee, or agent of the Corporation or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, or
other enterprise against liability incurred in connection with proceeding,
including any appeal thereof in accordance with and to the fullest extent as
provided by Section 607.0805 of the Florida 1989 Business Corporation Act, as it
may be amended from time to time. The indemnification set forth in this section
shall not be deemed exclusive of any other rights, indemnification and
advancement or expenses to which directors, officers, employees, fiduciaries and
agents may be entitled, under any provision of the Florida 1989 Business
Corporation Act or by-law of the Corporation, agreement, vote of shareholders or
otherwise.
SIXTEENTH: Notwithstanding anything contained in the Articles of Incorporation
to the contrary, the affirmative vote of at least 66-2/3% of the outstanding
shares of Common Stock of the Corporation shall be required to amend or repeal
Articles Thirteen, Fourteen and Sixteen of these Articles of Incorporation or to
adopt any provision inconsistent therewith.
EXHIBIT 3.2
Amendment to Designate Classes of Preferred Stock
to the
Amended and Restated Articles of Incorporation
of
Level Jump Financial Group, Inc.
Pursuant to Section 607.0602 of the Florida 1989 Business Corporation Act,
the Board of Directors of Level Jump Financial Group, Inc. ("Corporation") have
unanimously adopted on January 31, 2000 this Amendment to the Amended and
Restated Articles of Incorporation to designate the rights and preferences of
the Class A Preferred Stock and Class B Preferred Stock.
FIRST: The name of the corporation is Level Jump Financial Group, Inc.
SECOND: The following amendment to the Amended and Restated Articles of
Incorporation was adopted on January 31, 2000, as prescribed by Section 607.0602
of the Florida 1989 Business Corporation Act, by unanimous written action of the
board of directors where shares have been issued and shareholder action was not
required.
THIRD: This amendment is to be effective immediately.
FOURTH: Article FOURTH of the Certificate of Incorporation is hereby
amended to add new subsections, "C." and "D.", to read as follows:
C. Class A Preferred Stock.
(i) Designations and Amount. One share of the Preferred Stock of the
corporation, par value $.0025 per share, will constitute a class of Preferred
Stock designated as the "Class A Preferred Stock" ("Class A Preferred Stock").
(ii) Dividends and Distributions. The Class A Preferred Stock is not
entitled to receive any dividends or other distributions in cash, securities, or
other property, declared and paid by the Company.
(iii) Voting Rights. Except as otherwise required by law or by the
Certificate of Incorporation,
A. Each share of Class A Preferred Stock is entitled to vote on or
consent to each and every matter submitted to the shareholders of
the corporation for a vote or consent. Each share of Class A
Preferred Stock is entitled to cast that number of votes on
matters submitted to the shareholders of the corporation equal to
the number of issued and outstandingExchangeable Shares of
thestockpage.com inc., an Ontario corporation, owned of record by
the record holder of the Class A Preferred Stock, as of the
record date established by the corporation or by applicable law
for the shareholder meeting or consent by the shareholders of the
corporation. (For purposes of clarification, it is the intent
that the
<PAGE>
record owner of the Class A Preferred Stock and the Exchangeable
Shares be the same in order for the holder thereof to vote on any
matter before the holders of the Common Stock of the
corporation.) The vote or consent of the Class A Preferred Stock
will be together with the Common Stock of the corporation and not
separately as a class, except where a separate vote by class is
required by law or by the Certificate of Incorporation.
B. The corporation will mail or cause to be mailed to the record
owner of the Class A Preferred Stock, in the same manner as it
distributes any material to its holders of Common Stock, all
notices, materials, proxy statements, information statements and
other information distributed to the holders of the Common Stock.
The holder of the Class A Preferred Stock has the same rights as
the holders of the Common Stock, including but not limited to,
attendance at meetings of the Common Stock shareholders and
inspection of the books and records of the corporation.
C. The right to vote the Class A Preferred Stock will terminate upon
the surrender for cancellation, for any reason, of the
Exchangeable Shares of thestockpage.com inc.
(iv) Liquidation Preference. Upon any liquidation, dissolution or winding
up of the corporation, whether voluntary or involuntary, and subject to any
prior rights of holders of shares of Preferred Stock ranking senior to the Class
A Preferred Stock, the Class A Preferred Stock will be paid an amount equal to
$1.00, together with payment to any class of stock ranking equally with the
Class A Preferred Stock, and before payment to any class of stock ranking
equally with the Class A Preferred Stock, and before payment to any class of
stock ranking on liquidation junior to the Class A Preferred Stock.
(v) Ranking. The Class A Preferred Stock will rank pari passu with the
Class B Preferred Stock and will rank senior to all other classes of Preferred
Stock and the Common Stock of the corporation.
(vi) Conversion. The Class A Preferred Stock has no rights of conversion
into any other securities or property of the corporation.
D. Class B Preferred Stock.
(i) Designations and Amount. One share of the Preferred Stock of the
corporation, par value $.0025 per share, will constitute a class of Preferred
Stock designated as the "Class B Preferred Stock" ("Class B Preferred Stock").
(ii) Dividends and Distributions. The Class B Preferred Stock is not
entitled to receive any dividends or other distributions in cash, securities, or
other property, declared and paid by the Company.
(iii) Voting Rights. Except as otherwise required by law or by the
Certificate of Incorporation.
<PAGE>
A. Each share of Class B Preferred Stock is entitled to vote on or
consent to each and every matter submitted to the shareholders of
the corporation for a vote or consent. Each share of Class B
Preferred Stock is entitled to case that number of votes on
matters submitted to the shareholders of the corporation equal to
the number of issued and outstanding Exchangeable Shares of
thestockpagecom. inc, an Ontario corporation, owned of record by
the record owner of the Class B Preferred Stock, as of the record
date established by the corporation or by applicable law for the
shareholder meeting or consent by the shareholders of the
corporation. (For purposes of clarification, it is the intent
that the record owner of the Class B Preferred Stock and the
Exchangeable Shares be the same in order for the holder thereof
to vote on any matter before the holders of the Common Stock of
the corporation.) The vote or consent of the Class B Preferred
Stock will be together with the Common Stock of the corporation
and not separately as a class, except where a separate vote by
class is required by law or by the Certificate of Incorporation.
B. The corporation will mail or cause to be mailed to the record
owner of the Class B Preferred Stock, in the same manner as it
distributes any material to its holders of Common Stock, all
notices, materials, proxy statements, information statements and
other information distributed to the holders of the Common Stock.
The holder of the Class B Preferred Stock has the same rights as
the holders of Common Stock, including but not limited to,
attendance at meetings of the Common Stock shareholders and
inspection of the books and records of the corporation.
C. The right to vote the Class B Preferred Stock will terminate upon
the surrender for cancellation, for any reason, of the
Exchangeable Shares of thestockpage.com inc.
(iv) Liquidation Preference. Upon any liquidation, dissolution or winding
up of the corporation, whether voluntary or involuntary, and subject to any
prior rights of holders of shares of Preferred Stock ranking senior to the Class
B Preferred Stock, the Class B Preferred Stock will be paid an amount equal to
1.00, together with payment to any class of stock ranking equally with the Class
B Preferred Stock, and before payment to any class of stock ranking on
liquidation junior to the Class B Preferred Stock.
(v) Ranking. The Class B Preferred Stock will rank pari passu with the
Class A Preferred Stock and will rank senior to all other classes of Preferred
Stock and the Common Stock of the corporation.
(vi) Conversion. The Class B Preferred Stock has no rights of conversion
into any other securities or property of the corporation.
In witness whereof, the undersigned has executed this certificate this 31st
day of January, 2000.
LEVEL JUMP FINANCIAL GROUP, INC.
/s/ Robert Landau
By:_____________________________
Name: Robert Landau
Title: President
EXHIBIT 10.4
ARTICLES OF MERGER
of
LEVEL JUMP FINANCIAL GROUP, INC. (a Florida corporation)
and
LEVEL JUMP FINANCIAL GROUP, INC. (a Colorado corporation)
under the Florida 1989 Business Corporation Act
Pursuant to the provisions of Sections 607.1101 through 1104 of the Florida
1989 Business Corporation Act:
1. The name of the surviving corporation is "Level Jump Financial Group,
Inc." a Florida corporation.
2. The name of the merging corporation is "Level Jump Financial Group,
Inc.", a Colorado corporation.
3. The principal office of the surviving corporation is 133 Richmond
Street, West # 401, Toronto, Ontario, Canada, M5H 2L3.
4. The Plan of Merger is attached.
5. The merger will become effective on the date the Articles of Association
are filed with the Florida Department of State.
6. The Plan of Merger was adopted by the Board of Directors of Level Jump
Financial Group, Inc., a Florida corporation, the surviving corporation, on
January 31, 2000 and shareholder approval was not required.
7. The Plan of Merger was adopted by unanimous written consent by the Board
of Directors and the unanimous written consent of the holders of the common
stock, Class A Preferred Stock and Class B Preferred Stock of Level Jump
Financial Group, Inc., a Colorado corporation, the merging corporation, on
January 31, 2000.
8. The shareholders of the merging corporation have waived any dissenters
rights they may have in respect of the capital stock of the merging corporation.
LEVEL JUMP FINANCIAL GROUP, INC.
a Florida corporation
/s/ Robert Landau
By: __________________________
Name: Robert Landau
Title: President
LEVEL JUMP FINANCIAL GROUP, INC.
a Colorado corporation
/s/ Brice Scheschuk
By: __________________________
Name: Brice Scheschuk
Title: Secretary
<PAGE>
PLAN OF MERGER
of
LEVEL JUMP FINANCIAL GROUP, INC. (a Colorado corporation)
with and into
LEVEL JUMP FINANCIAL GROUP, INC. (a Florida corporation)
Plan of Merger, dated January 31, 2000, pursuant to Sections 607.1101-1104
of the Florida 1989 Business Corporation Act, and Section 7-111-107 of the
Colorado Business Corporations Act, between Level Jump Financial Group, Inc., a
Florida corporation as the surviving corporation (hereinafter "Surviving
Corporation"), and Level Jump Financial Group, Inc., a Colorado corporation, as
the merging corporation (hereinafter "Merging Corporation").
It is agreed:
1. The names of the constituent corporations are:
Level Jump Financial Group, Inc. [Florida]
Level Jump Financial Group, Inc. [Colorado]
2. The Merging Corporation shall be and hereby is merged with and into the
Surviving Corporation. The Surviving Corporation is the surviving corporation
and will be deemed to continue for all purposes whatsoever after the merger with
the Merging Corporation. The Surviving Corporation is a Florida corporation and
after the merger will continue to be governed by the laws of the State of
Florida.
3. The Amended and Restated Articles of Incorporation and by-laws of the
Surviving Corporation, as in effect upon the effective date of the merger, will
be the certificate of incorporation and by-laws of the Surviving Corporation,
until duly amended.
4. Upon such merger, (i) the separate corporate existence of the Merging
Corporation shall cease, (ii) the Surviving Corporation will become the owner,
without other transfer, of all rights and property of the Merging Corporation,
and (iii) the Surviving Corporation will become subject to all the liabilities,
obligations and penalties of the Merging Corporation. Without limiting any of
the foregoing, and solely for clarification, the Surviving Corporation shall
succeed to all the rights and obligations of the Merging Corporation and is
substituted therefore under (i) each of the S.86 Rollover Agreements with Robert
Landau and David Roff, (ii) each of the Voting and Exchange Agreements among
thestockpage, inc., Robert Landau and David Roff, (iii) the Support Agreement
with thestockpage, inc. and (iv) the 1999 Performance Equity Plan and the
individual award agreements issued thereunder.
5. The manner and basis of converting the outstanding shares of the capital
stock and rights to acquire capital stock of the Merging Corporation into
capital stock and rights to acquire capital stock of the Surviving Corporation
shall be as follows:
<PAGE>
(a) Each share of common stock, par value $.001, of the Merging
Corporation shall be canceled, and no cash or other consideration shall be paid
or delivered for the common stock of the Merging Corporation and the share
certificates representing the shares will be surrendered and canceled.
(b) Each share of Class A Preferred Stock, par value $.001, of the
Merging Corporation shall be exchanged for one share of Class A Preferred Stock,
par value $.0025, of the Surviving Corporation. The rights, privileges and
obligations of the Class A Preferred Stock are set forth in the Amended and
Restated Certificate of Incorporation.
(c) Each share of Class B Preferred Stock par value $.001, of the
Merging Corporation shall be exchanged for one share of Class B Preferred Stock,
par value $.0025, of the Surviving Corporation. The rights, privileges and
obligations of the Class B Preferred Stock are set forth in the Amended and
Restated Certificate of Incorporation.
(d) Each award of one share under the 1999 Performance Equity Plan of
the Merging Corporation shall be an award for 1.375 shares of common stock or
its equivalent of the Surviving Corporation such that the 1999 Performance Plan
will represent in aggregate 2,750,000 shares of Common Stock of the Surviving
Corporation.
(e) Each outstanding option for the purchase of one share of common
stock, par value $.001, of the Merging Corporation shall be exercisable for
1.375 shares of common stock of the Surviving Corporation, at an exercise price
as stated in the agreement governing the grant divided by 1.375 and rounded to
the nearest whole cent, on the terms of the agreements governing the options,
until duly amended. As of the effective time and date of this Plan of Merger,
there will be options outstanding to acquire up to an aggregate of 1,581,250
shares of Common Stock of the Surviving Corporation, all of which are issued
under the 1999 Performance Plan.
6. This Plan of Merger has been approved by the Unanimous Written Consent
of the Board of Directors of the Surviving Corporation and by the Unanimous
Written Consent of the Board of Directors and the holders of the common stock,
Class A Preferred Stock and Class B Preferred Stock of the Merging Corporation,
being all the holders of capital stock of the Merging Corporation.
7. The directors and officers of the Surviving Corporation shall continue
until the next annual meeting of shareholders and until their successors shall
have been elected and qualified.
8. The Board of Directors of the Surviving Corporation and the Merging
Corporation may amend the Plan of Merger at any time prior to its being filed
with one or more of the appropriate state authorities.
9. Service of process on the Surviving Corporation in connection with any
proceeding to enforce any obligation or rights of dissenting shareholders or
based on a cause of action arising with respect to the Merging Corporation may
be sent by registered or certified mail, return receipt requested, to the
address of the Surviving Corporation's office set forth in the Articles of
Merger.
<PAGE>
IN WITNESS WHEREOF, the parties hereto, pursuant to the corporate approval
requirements of Florida and Colorado law, have caused this Plan of Merger to be
executed by the persons indicated below, as the respective act, deed and
agreement of each of said corporations, on the 31st day of January, 2000.
LEVEL JUMP FINANCIAL GROUP, INC.
a Florida corporation
/s/ Robert Landau
By: __________________________
Name: Robert Landau
Title: President
LEVEL JUMP FINANCIAL GROUP, INC.
a Colorado corporation
/s/ Brice Scheschuk
By: __________________________
Name: Brice Scheschuk
Title: Secretary
EXHIBIT 10.5
AMENDING AGREEMENT
THIS AGREEMENT made as of the 31st day of January, 2000,
BETWEEN:
LEVEL JUMP FINANCIAL GROUP, INC., a corporation amalgamated under the laws
of the State of Florida ("Level Jump- Florida"),
- and -
thestockpage.com inc., a corporation incorporated under the laws of the
Province of Ontario (the "Corporation"),
-and-
ZDG HOLDINGS INC., a corporation incorporated under the laws of the
Province of Ontario ("ZDG").
WHEREAS the Articles of Merger and the Plan of Merger between
Level-Jump-Florida and Level Jump Financial Group, Inc., a corporation
incorporated under the laws of the State of Colorado ("Level Jump- Colorado")
resulted in Level Jump-Florida being the surviving corporation;
AND WHEREAS Level Jump-Colorado, the Corporation and Robert Landau are
parties to a Voting and Exchange Agreement (the "Agreement") dated June 1, 1999;
AND WHEREAS section 6.1 of the Agreement requires any successor to Level
Jump-Colorado to assume the rights and obligations of Level Jump-Colorado
pursuant to the Agreement;
AND WHEREAS ZDG is now the registered holder of the Exchangeable Shares
formerly held by Robert Landau referenced in the Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the mutual
covenants hereinafter contained, the partes hereto covenant and agree as
follows:
1. The Agreement be and it is hereby amended to provide that all references
to Parent in the Agreement shall refer to Level Jump-Florida.
2. The rights and obligations of Level Jump-Colorado under the Agreement
are now the rights and obligations of Level Jump-Florida.
3. The Agreement be and it is hereby amended to provide that all references
to Holder in the Agreement shall refer to ZDG.
4. The rights and obligations of Robert Landau under the Agreement are now
the rights and obligations of ZDG.
5. The Agreement be and it is hereby amended to provide that the number of
Exchangeable Shares referenced in the Agreement is 3,547,500.
<PAGE>
6. Each party shall do such acts and shall execute such further documents
in order to give full effect to the provisions of this agreement.
7. This agreement shall be construed and enforced in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
8. The Agreement, as amended by this agreement, is hereby ratified and
confirmed.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the date first above written.
LEVEL JUMP FINANCIAL GROUP, INC.
By ________________________________
Name:
Title:
thestockpage.com inc.
By ________________________________
Name:
Title:
ZDG HOLDINGS INC.
By ________________________________
Name:
Title:
EXHIBIT 10.6
AMENDING AGREEMENT
THIS AGREEMENT made as of the 31st day of January, 2000,
BETWEEN:
LEVEL JUMP FINANCIAL GROUP, INC.,
a corporation amalgamated under the laws
of the State of Florida ("Level Jump-Florida"),
- and -
thestockpage.com inc.,
a corporation incorporated under the laws
of the Province of Ontario (the "Corporation"),
-and-
DAVID ROFF, of the City of Toronto, in the Province of Ontario ("Roff").
WHEREAS the Articles of Merger and the Plan of Merger between
Level-Jump-Florida and Level Jump Financial Group, Inc., a corporation
incorporated under the laws of the State of Colorado ("Level Jump- Colorado")
resulted in Level Jump-Florida being the surviving corporation;
AND WHEREAS Level Jump-Colorado, the Corporation and Roff are parties to a
Voting and Exchange Agreement (the "Agreement") dated June 1, 1999;
AND WHEREAS section 6.1 of the Agreement requires any successor to Level
Jump-Colorado to assume the rights and obligations of Level Jump-Colorado
pursuant to the Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the mutual
covenants hereinafter contained, the partes hereto covenant and agree as
follows:
1. The Agreement be and it is hereby amended to provide that all
references to Parent shall refer to Level Jump-Florida.
2. The rights and obligations of Level Jump-Colorado under the Agreement
are now the rights and obligations of Level Jump-Florida.
3. The Agreement be and it is hereby amended to provide that the number
of Exchangeable Shares referenced in the Agreement is 2,365,000.
4. Each party shall do such acts and shall execute such further documents
in order to give full effect to the provisions of this agreement.
5. This agreement shall be construed and enforced in accordance with the
laws of the Province of Ontario and the laws of Canada applicable
therein.
6. The Agreement, as amended by this agreement, is hereby ratified and
confirmed.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the date first above written.
LEVEL JUMP FINANCIAL GROUP, INC.
By ________________________________
Name:
Title:
thestockpage.com inc.
By ________________________________
Name:
Title:
SIGNED, SEALED AND DELIVERED )
in the presence of: )
)
)
)
- - -------------------------- ) -----------------------------
Witness ) David Roff
)
EXHIBIT 10.7
AMENDING AGREEMENT
THIS AGREEMENT made as of the 31st day of January, 2000,
BETWEEN:
LEVEL JUMP FINANCIAL GROUP, INC.,
a corporation amalgamated under the laws of the State of Florida
("Level Jump-Florida"),
- and -
thestockpage.com inc.,
a corporation incorporated under the laws
of the Province of Ontario (the "Corporation").
WHEREAS the Articles of Merger and the Plan of Merger between
Level-Jump-Florida and Level Jump Financial Group, Inc., a corporation
incorporated under the laws of the State of Colorado ("Level Jump- Colorado")
resulted in Level Jump-Florida being the surviving corporation;
AND WHEREAS Level Jump-Colorado and the Corporation are parties to a
Support Agreement (the "Agreement") dated June 1, 1999;
AND WHEREAS section 2.12 of the Agreement requires any successor to Level
Jump-Colorado to assume the rights and obligations of Level Jump-Florida
pursuant to the Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the mutual
covenants hereinafter contained, the partes hereto covenant and agree as
follows:
1. The Agreement be and it is hereby amended to provide that all
references to Parent shall refer to Level Jump-Florida;
2. The rights and obligations of Level Jump-Colorado under the Agreement
are now the rights and obligations of Level Jump-Colorado;
3. Each party shall do such acts and shall execute such further documents
in order to give full effect to the provisions of this agreement.
4. This agreement shall be construed and enforced in accordance with the
laws of the Province of Ontario and the laws of Canada applicable
therein;
5. The Agreement, as amended by this agreement, is hereby ratified and
confirmed.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the date first above written.
LEVEL JUMP FINANCIAL GROUP, INC.
By ________________________________
Name:
Title:
thestockpage.com inc.
By ________________________________
Name:
Title:
EXHIBIT 10.8
EMPLOYMENT AGREEMENT AMENDMENT
Employment Agreement Amendment ("Amendment") made May 1, 1999, by and
between Level Jump Financial Group, Inc., ("Level Jump") a Colorado corporation
and thestockpage.com inc. ("thestockpage") an Ontario corporation,
("collectively referred to as the Companies" and individually referred to as a
"Company") and Robert Landau ("Landau").
WHEREAS, the Companies and Landau have entered into an Employment Agreement
("Agreement") dated May 1, 1999, the same date as this Amendment.
WHEREAS, the Companies desire to employ Landau and Landau desires to be
employed by the Companies upon the terms and conditions set forth in the
employment agreement dated May 1,1999 and in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Compensation.
Landau agrees that from May 1, 1999 through April 30, 2000, as compensation for
the services under this agreement in respect of the Companies and their
respective divisions, affiliates and subsidiaries and, if elected, as a director
of the Companies and their respective affiliates or subsidiaries, his annual
compensation shall be $84,000 in Canadian funds, payable in equal installments
no less frequently than monthly, in accordance with the Companies' usual payroll
procedures. For greater certainty, despite the foregoing, the Companies are
jointly and severally liable to pay all compensation, remuneration and benefits
to which Landau is entitled pursuant to the Agreement irrespective of whether
Landau performs such services on behalf of affiliates, or subsidiaries. For
greater certainty, the annual compensation stipulated in this Amendment reduces
the amount stipulated in the Agreement.
Landau will also be entitled to receive such bonus compensation as the board of
directors of Level Jump determines from time to time acting reasonably having
regard to bonus compensation customarily paid to senior executives by
corporations similar to Level Jump.
2. Notices.
All notices required or permitted under this agreement will be in writing and
will be deemed delivered when (i) delivered in person or (ii) upon receipt if
mailed by United States mail, postage prepaid, return receipt requested, the
addresses as follows:
Company Level Jump Financial Group, Inc.
133 Richmond Street West, Suite 401
Toronto, Ontario M5H 2LH
Canada
<PAGE>
Landau Robert Landau
1514- 66 Broadway Ave.
Toronto, Ontario, Canada
M5H-2L3
The above addresses may be changed from time to time by either party by
providing written notice in the manner set forth above.
3. Amendment.
This agreement may be modified or amended, if in writing and signed by both
parties to this agreement.
4. Severability.
If any provision of this agreement is held to be invalid or unenforceable for
any reason, the remaining provisions will continue to be valid and enforceable.
If a court or other competent authority finds that any provision of this
agreement is invalid or unenforceable, but that by limiting the provision it
would become valid or enforceable, then the provision will be deemed to be
written, construed, and enforced as so limited.
5. Waiver.
The failure of either party to enforce any provision of this agreement will not
be construed as a waiver or limitation of that party's right to subsequently
enforce and compel strict compliance with every provision of this agreement.
6. Applicable Law.
This agreement will be governed by the laws of the Province of Ontario and the
applicable laws of Canada. The parties elect to be governed by the laws of the
Province of Ontario and attorn to the non-exclusive jurisdiction of the courts
of Ontario.
7. Construction.
It will be an irrefutable presumption that this agreement was co-drafted by the
parties hereof, and therefore this agreement will be construed without regard to
any presumption or other rule requiring construction against any party. The
parties hereto also acknowledge the ability and opportunity to have this
agreement reviewed by independent counsel of their own choosing prior to
signing.
8. Survival of Provisions
All provisions of this Agreement will survive the termination of the employment
of Landau hereunder except for those provisions which require provision of
services by Landau to the Companies or either of them or to their associates,
affiliates or subsidiaries.
9. Dollar Amounts
Unless otherwise stated herein, all dollar amounts refer to U.S. funds.
<PAGE>
In witness whereof the parties have hereunto set their hands and seals this 1st
day of May, 1999.
Signed, Sealed and Delivered in
the presence of )
)
) Level Jump Financial Group, Inc.
)
)
) Per:
)
) ------------------------------
) Name: David Roff
) Office: Vice-President
) I have authority to bind the
corporation.
)
)
) -------------------------------
) Robert Landau
)
)
) thestockpage.com inc.
)
) Per:
)
) ------------------------------
) Name: David Roff
) Office: Vice-President
) I have authority to bind the
corporation.
EXHIBIT 10.9
EMPLOYMENT AGREEMENT AMENDMENT
Employment Agreement Amendment ("Amendment") made May 1, 1999, by and
between Level Jump Financial Group, Inc., ("Level Jump") a Colorado corporation
and thestockpage.com inc. ("thestockpage") an Ontario corporation,
("collectively referred to as the Companies" and individually referred to as a
"Company") and David Roff ("Roff").
WHEREAS, the Companies and Roff have entered into an Employment Agreement
("Agreement") dated May 1, 1999, the same date as this Amendment.
WHEREAS, the Companies desire to employ Roff and Roff desires to be
employed by the Companies upon the terms and conditions set forth in the
employment agreement dated May 1,1999 and in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Compensation.
Roff agrees that from May 1, 1999 through April 30, 2000, as compensation for
the services under this agreement in respect of the Companies and their
respective divisions, affiliates and subsidiaries and, if elected, as a director
of the Companies and their respective affiliates or subsidiaries, his annual
compensation shall be $84,000 in Canadian funds, payable in equal installments
no less frequently than monthly, in accordance with the Companies' usual payroll
procedures. For greater certainty, despite the foregoing, the Companies are
jointly and severally liable to pay all compensation, remuneration and benefits
to which Roff is entitled pursuant to the Agreement irrespective of whether Roff
performs such services on behalf of affiliates, or subsidiaries. For greater
certainty, the annual compensation stipulated in this Amendment reduces the
amount stipulated in the Agreement.
Roff will also be entitled to receive such bonus compensation as the board of
directors of Level Jump determines from time to time acting reasonably having
regard to bonus compensation customarily paid to senior executives by
corporations similar to Level Jump.
2. Notices.
All notices required or permitted under this agreement will be in writing and
will be deemed delivered when (i) delivered in person or (ii) upon receipt if
mailed by United States mail, postage prepaid, return receipt requested, the
addresses as follows:
<PAGE>
Company Level Jump Financial Group, Inc.
133 Richmond Street West, Suite 401
Toronto, Ontario M5H 2LH
Canada
Roff David Roff
7 Walmer Rd. Apt #1504
Toronto, Ontario, Canada
M5R 2W8
The above addresses may be changed from time to time by either party by
providing written notice in the manner set forth above.
3 Amendment.
This agreement may be modified or amended, if in writing and signed by both
parties to this agreement.
4. Severability.
If any provision of this agreement is held to be invalid or unenforceable for
any reason, the remaining provisions will continue to be valid and enforceable.
If a court or other competent authority finds that any provision of this
agreement is invalid or unenforceable, but that by limiting the provision it
would become valid or enforceable, then the provision will be deemed to be
written, construed, and enforced as so limited.
5. Waiver.
The failure of either party to enforce any provision of this agreement will not
be construed as a waiver or limitation of that party's right to subsequently
enforce and compel strict compliance with every provision of this agreement.
6. Applicable Law.
This agreement will be governed by the laws of the Province of Ontario and the
applicable laws of Canada. The parties elect to be governed by the laws of the
Province of Ontario and attorn to the non-exclusive jurisdiction of the courts
of Ontario.
7. Construction.
It will be an irrefutable presumption that this agreement was co-drafted by the
parties hereof, and therefore this agreement will be construed without regard to
any presumption or other rule requiring construction against any party. The
parties hereto also acknowledge the ability and opportunity to have this
agreement reviewed by independent counsel of their own choosing prior to
signing.
<PAGE>
8. Survival of Provisions
All provisions of this Agreement will survive the termination of the employment
of Roff hereunder except for those provisions which require provision of
services by Roff to the Companies or either of them or to their associates,
affiliates or subsidiaries.
9. Dollar Amounts
Unless otherwise stated herein, all dollar amounts refer to U.S. funds.
In witness whereof the parties have hereunto set their hands and seals this 1st
day of May, 1999.
Signed, Sealed and Delivered in the
presence of )
)
) Level Jump Financial Group, Inc.
)
)
) Per:
)
) ------------------------------
) Name: Robert Landau
) Office: Vice-President
) I have authority to bind the
) corporation.
)
) -------------------------------
) David Roff
)
)
) thestockpage.com inc.
)
) Per:
)
) ------------------------------
) Name: Robert Landau
) Office: Vice-President
) I have authority to bind the
) corporation.
EXHIBIT 21.1
Subsidiaries of Level Jump Financial Group, Inc.
Level Jump Asset Management, Inc. Delaware
thestockpage.com inc. Ontario
Level Jump Financial Group, Inc., a Colorado corporation was merged with and
into Level Jump Financial Group, Inc. and ceased to exist on January 31, 2000.
EXHIBIT 99.1
RISK FACTORS
Level Jump is subject to the risks of embarking on a new business without a
substantial history of
experience.
The current operations of Level Jump commenced in 1997. Level Jump plans on
expanding its operations in substantially different areas of endeavor. The most
important factors to consider are those of the company being able to:
o implement the business plan by acquiring or starting the proposed
businesses and having the capital resources to do so,
o select the right business services and products to attract customers,
o implement a viable marketing strategy and obtai market acceptance
generally,
o respond to competitive developments, and
o attract, retain and motivate qualified personnel.
Level Jump's operating history started in 1997; therefore it is a limited basis
on which to evaluate the company.
The business operations of Level Jump substantively began in 1997. Since the
business has been evolving and there have been recent new additions of areas of
endeavor, the past performance is not necessarily indicative of the future. The
revenues of Level Jump in the past have been highly dependent on the market
value of securities received in payment of its services. These values are
subject to market fluctuations which may be extreme. Therefore our potential
revenues may change dramatically.
Level Jump anticipates losses and negative cash flow in the future.
Because Level Jump is taking measures to add to its business operations in
different areas, it expects that it will have losses in the future. Losses will
be the result of increased expenses of acquisitions and development of these
businesses, additional staff, and marketing, among other things, at a time that
its revenues from current operations will not fund the expansion. Level Jump
anticipates that the losses will continue well into the future, and they will
depend on the speed and extent of expansion. At this time, it cannot be
estimated the amount of losses or the period during which the losses will occur.
Level Jump will require substantial amounts of capital to implement its
expansion for which it currently has no assured sources.
To implement its business plan of acquiring businesses and developing new
services and products, Level Jump will need capital for acquisition and
developmental expenses and to fund anticipated losses. Level Jump currently has
no financing sources sufficient to provide required capital. There can be no
assurance that Level Jump will obtain the needed capital or that it offered it
will be on acceptable terms.
Level Jump must maintain and enhance its brand to be successful in the future.
Establishing, maintaining and enhancing the Level Jump and thestockpage.com
brands are critical to the future success of Level Jump. The growing number of
Internet sites that offer competing products and services increase the
importance of brand recognition. Brand establishment and differentiation will
depend on successful advertising and public relations and providing a high
quality online experience to users. If Level Jump is unable to provide high
quality online services or otherwise fails to promote and maintain its brand, or
it incurs excessive expenses in an attempt to promote and maintain its brand,
the business, financial condition and results of operations of Level Jump will
be materially, adversely affected.
<PAGE>
Proprietary rights are important to our future success: the failure to secure
and maintain them will adversely affect our business.
Because brand establishment and recognition is so important, our proprietary
rights are significant to our future success. Generally, proprietary rights have
become of greater importance and value in recent years in all industries, but
particularly in the service related industries such as financial and consulting
services. Level Jump will actively protect and police the use of its service
marks, trademarks, trade dress, trade secrets and similar intellectual
properties critical to its success. Level Jump relies on trademark and copyright
law, trade secret protection and confidentiality and/or license agreements with
its employees, customers, partners and others to protect its proprietary rights.
There can be no assurance that the steps taken have been or will be adequate or
that third parties will not infringe or misappropriate the Level Jump
proprietary rights. The expense of enforcing proprietary rights can be expensive
which may limit Level Jump's ability to protect its rights with adverse
consequences on its business.
Level Jump is dependent on certain key individuals.
Level Jump is dependent on the continuing services of its president and other
officers for the creation and implementation of its business plan. The loss of
the services of these persons at this time will adversely impact the direction
of the company and its execution of expansionary plans as well as its current
business operations.
Acquisitions of businesses have the risk of not being successfully integrated
and receiving full value for the purchase price.
Level Jump expects to expand, in part, by acquiring other businesses. The
largest risk of any acquisition is integrating the acquired business into the
existing business of Level Jump or transitioning to new management where the
acquired business is retained as substantively separate. The failure of either
of these may result in a loss of business, greater expense and diminished value
compared to the purchase price. Any inability to overcome these risks may result
in a material adverse effect on the business, financial condition and results of
operations of Level Jump as a whole.
The focus on the Internet as a business medium has particular risks.
E-commerce is still in its infancy. There are many issues to be addressed and to
which consumers must become familiar. Also, the growth of the Internet presents
problems of adequacy of the infrastructure. Some of the critical issues
concerning the commercial use of the Internet include, security, reliability,
cost, ease of access, quality of service and bandwidth availability. Currently,
demand and market acceptance of the Internet is still subject to a degree of
uncertainty and dependent on a number of factors. These factors include growth
in consumer access to and acceptance of the new interactive technologies and the
development of technologies that facilitate interactive communication. All of
these issues are outside the control of Level Jump.
Consumers worry about protecting the privacy of their personal information.
Level Jump will ask for, and in certain of its businesses, will have to have,
personal information. To the extent consumers are reluctant to give this
information because of the perceived beliefs that it may be accessible to others
or misused, or there is theft of the information, our businesses may be
adversely impacted by the inability to develop a customer base.
If the Internet service providers fail, our business will be interrupted which
may cause us to lose business and customers or cause a poor perception for our
reliability.
Our business largely depends on the efficient and uninterrupted operation of its
computer and communications systems. Substantially all of our development and
management systems are located at its Toronto, Ontario facility. Level Jump
currently contracts with a local internet service provider to host the company's
web site. The ISP has one location in Toronto. Therefore we are vulnerable to
damage or interruption from fire, flood, power loss, telecommunications failure,
<PAGE>
break-ins and similar events. Level Jump does not have a formal disaster
recovery plan and does not carry sufficient business interruption insurance to
compensate it for losses that may occur. In the future, Level Jump intends to
outsource its entire technology infrastructure to a Fortune 500 company that
specializes in financial transaction services.
Despite the implementation of security measures by Level Jump, its servers may
be vulnerable to computer viruses, physical or electronic break-ins and similar
disruptions. Any of these events may lead to interruptions, delays, loss of data
or the inability to accept and fulfill customer orders.
The financial services industry and the Internet as a means of commerce is very
competitive and Level Jump is subject to all of these sources of competition.
The financial services industry, including financial public relations,
brokerage, investment banking, banking and insurance, are all highly competitive
businesses. There are many companies with greater financial and personnel
resources in these business areas compared to Level Jump. Many of these
competitors have longer operating histories which give them advantage in
obtaining capital, personnel and customers compared to Level Jump. Because of
their positions in the market and size, they may be able to secure similar
information, products and services at better prices than Level Jump.
The Internet has been the focus of business expansion by these companies and by
new entrants because of the lower barriers to entry offered by e-commerce. In
the current operations of Level Jump, some competitors are Yahoo! Finance,
Altavista Finance, E-Trade, Net Bank, MSN Investor, and Quote.com. In our future
areas of business, we will be subject to competition from stock brokerage
businesses and investment banks, banking institutions, and insurance companies.
Because Level Jump will publish content on its website, it may be liable for the
statements it makes or affected by the nature of the content.
Level Jump plans to provide descriptive content about financial markets,
industries and companies. As a publisher of online content, it faces potential
liability for defamation, negligence, copyright, and other claims based on the
nature and content of materials that it publishes or distributes. If Level Jump
implements a greater level of interconnectivity on its site, it will not and
cannot practically screen all of the content generated or accessed by its users
and Level Jump could be exposed to liability with respect to such content.
Although Level Jump will carry general liability insurance, it may not be
sufficient to cover claims or may be excluded from coverage.
Another aspect of providing content is its usefulness to the consumer. If it is
perceived to be insufficient, untimely or wrong, the reputation of Level Jump
will be affected which will result in impairment of the business.
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