<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange
--- Act of 1934
For the quarterly period ended April 30, 2000
Transition report under Section 13 or 15(d) of the Exchange Act for the
transition period from __________ to ___________.
Commission file number 0-14026
ii GROUP, INC.
--------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 13-3174562
------------------------------- ----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) (Identification No.)
7000 West Palmetto Park Road, Suite 510, Boca Raton, Florida 33433
------------------------------------------------------------------
(Address of Principal Executive Offices)
(561) 620-9202
(Issuer's Telephone Number, Including Area Code)
-------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12,13, or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
YES_____ NO_____
Number of shares of common stock outstanding as of May 15, 2000: 7,625,660
Transitional Small Business Disclosure Format (check one): Yes No X
---- ----
<PAGE>
INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
Page
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Balance Sheet as of April 30, 2000 3
Statements of Operations for the three
month and nine month periods ended
April 30, 2000 and 1999 4
Statement of Stockholders' Equity for the
nine months ended April 30, 2000 5
Statements of Cash Flows for the nine months
ended April 30, 2000 and 1999 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II OTHER INFORMATION 13
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Subsequent Events 13
Item 7. Exhibits and Reports on Form 8-K 14
SIGNATURE 15
</TABLE>
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<PAGE>
ii GROUP, INC.
CONSOLIDATED BALANCE SHEET
April 30, 2000
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
<S> <C>
CURRENT ASSETS
Cash $ 423,156
Accounts receivable, less allowance for doubtful accounts of $15,927 27,104
Prepaid expenses 2,269
------------
Total current assets 452,529
------------
PROPERTY AND EQUIPMENT, At Cost
Furniture and Fixtures 2,102
Computer Software and Hardware 4,427
------------
6,529
Less accumulated depreciation 79
------------
Net property and equipment 6,450
------------
OTHER ASSETS
Investments Stocks 500,000
Note Receivable - Bridge Notes 253,333
Deposits 1,158
Goodwill Travlang, less accumulated amortization of $43,333 346,667
------------
Total other assets 1,101,158
------------
Total assets $ 1,560,137
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 40,000
Accounts payable 28,004
Accrued expenses 2,028
Notes payable 20,000
------------
Total current liabilities 90,032
------------
LONG-TERM DEBT 0
------------
STOCKHOLDERS' EQUITY
Preferred stock, [Series A] $1 par value; authorized 150,000 shares:
issued 0, Preferred stock, $1.00 par value, authorized 850,000 shares:
issued 0
Common stock, $.01 par value; authorized 50,000,000 shares:
issued and outstanding 7,623,654 shares 76,237
Additional paid-in capital 10,095,768
Accumulated deficit (8,551,900)
Less subscriptions receivable (150,000)
------------
Total stockholders' equity 1,470,105
------------
Total liabilities and stockholders' equity $ 1,560,137
============
</TABLE>
See Notes to Consolidated Financial Statements
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<PAGE>
ii GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Month Period Nine Month Period
Ended April 30 Ended April 30,
-------------- ---------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 77,218 $ 0.00 $ 77,218 $ 0.0
Cost of Revenues 22,612 0 22,612 0
----------- ----------- ----------- -----------
Gross Profit [Loss] 54,606 0 54,606 0
Operating Expenses
Stock Compensation for Services 75,000 -- 472,500 --
Marketing and Internet Expenses 6,000 6,000
General and administrative 83,860 1,450 137,260 23,319
----------- ----------- ----------- -----------
164,860 1,450 615,760 23,319
----------- ----------- ----------- -----------
Loss from Operations (110,254) (1,450) (561,154) (23,319)
----------- -----------
Other Income (Expenses)
Interest Income 8,014 8,014
Miscellaneous Expenses (28,379) (43,646)
Interest expense (678) -- (1,277) --
----------- ----------- ----------- -----------
Total Other Income (Expenses) (21,043) 0 (36,909)
----------- ----------- -----------
Loss before extraordinary items: (131,297) (1,450) (598,063) (23,319)
----------- ----------- ----------- -----------
Extraordinary Items; 0 0 36,400 0
----------- -----------
Loss before taxes (131,297) (1,450) (561,663) (23,319)
----------- ----------- ----------- -----------
Income Tax benefit 0 0 8,600 0
----------- ----------- ----------- -----------
0
Net income (loss) $ (131,297) $ (1,450) $ (553,063) $ (23,319)
=========== =========== =========== ===========
Basic:
Loss from operations before extraordinary item $ (0.017) $ (0.007) $ (0.163) $ (0.122)
----------- ----------- ----------- -----------
Extraordinary item $ 0.000 $ 0.000 $ 0.009 $ 0.000
----------- =========== ----------- -----------
Net income/(loss) per share $ (0.017) $ (0.007) $ (0.151) $ (0.122)
----------- ----------- ----------- -----------
Weighted average number of common shares 7,563,287 192,654** 3,661,476 190,683**
=========== =========== =========== ===========
Diluted:
Loss from operations before extraordinary item $ (0.017) $ (0.007) $ (0.163) $ (0.122)
----------- ----------- ----------- -----------
Extraordinary item $ 0.000 $ 0.000 $ 0.009 $ 0.000
----------- ----------- ----------- -----------
Net income/(loss) per share $ (0.017) $ (0.007) $ (0.151) $ (0.017)
----------- ----------- ----------- -----------
Weighted average number of common shares 7,563,287 192,654** 3,661,476 190,683**
=========== =========== =========== ===========
</TABLE>
** Effective November 29, 1999, ii Group, effected a 1 for 50 reverse split of
its common stock. As a result there was 372,643 shares of Common Stock at
such date.
See Notes to Consolidated Financial Statements
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<PAGE>
ii GROUP, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY
NINE MONTHS ENDED APRIL 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Series A
Preferred Stock Par Common $.01 par value
Shares Value Stock,
Additional Retained
Common Paid-in Subscription earnings
Shares Stock capital Receivable (deficit) Total
------ ----- ------- ---------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance (deficit), July 31, 1999 80,000 80,000 18,632,699 186,327 7,625,369 (7,998,837) (107,141)
50 for 1 reverse stock split** (18,260,045) (182,600) 182,600 -
Issuance of preferred stock 15,000 15,000 15,000
Conversion of preferred stock (95,000) (95,000) 1,900,000 19,000 76,000 -
Private Placement 2,300,000 23,000 1,127,000 (150,000) 1,000,000
Private placement expenses (835) (835)
Stock issued for compensation 2,101,000 21,010 380,134 401,144
Acquisition of Travlang 250,000 2,500 137,500 140,000
Stock swap for GMC Stock 500,000 5,000 495,000 500,000
Stock issued for compensation 200,000 2,000 73,000 75,000
Net loss - April 30,2000 (553,063) (553,063)
-------- ------ ---------- -------- ----------- --------- ----------- ----------
Balance (deficit) April 30, 2000 0 0 7,623,654 $76,237 $10,095,768 ($150,000) ($8,551,900) $1,470,105
======== ====== ========== ======== =========== ========= =========== ==========
</TABLE>
** Effective November 29, 1999, ii Group, effected a 1 for 50 reverse split of
its common stock. As a result there was 372,643 shares of Common Stock
outstanding on such date.
See Notes to Consolidated Financial Statements
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<PAGE>
ii GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED April 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
April 30, 2000 April 30, 1999
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (553,063) $ (23,319)
Item not requiring cash:
Depreciation 43,412
Non cash compensation 472,500
Gain on extraordinary items: (45,000)
Changes in:
Accounts receivable (27,103)
Prepaid expenses (1,158)
Other assets (2,269)
Accounts payable and accrued expenses (3,154) (5,472)
----------- -----------
Net cash provided (used) in operating activities (115,835) (28,791
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (6,529)
Asset Purchase (250,000)
Investments - Bridge Notes (253,333)
Notes Payables 0
----------- -----------
Net cash provided (used) in investing activities (509,862) 0
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Note Payables 40,000
Paid in Capital (835)
Proceeds from issuance of common stock 1,009,175 9,400
----------- -----------
Net cash provided (used) in financing activities 1,048,312 9,400
----------- -----------
INCREASE (DECREASE) IN CASH 422,615 (19,391)
CASH, BEGINNING OF PERIOD 541 22,495
----------- -----------
CASH, END OF PERIOD $ 423,156 $ 3,104
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
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<PAGE>
ii GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Company
ii GROUP, INC., (the" Company") is an Internet strategic management
company that invests in operating internet companies and relevant technologies,
and provides management services to those companies. Our goal through our
investments and services is to provide companies with the missing ingredients
that are needed in order for them to grow and prosper.
ii Group looks for undervalued properties that can utilize and benefit
from the collaborative network of our portfolio companies. The network is
comprised of companies in which iiGroup has invested both time and money, and
has been designed so that the portfolio companies can share information,
advertising, and personnel, and take maximum advantage of the synergies inherent
in the network. The ability to share resources will reduce the costs of
attracting users and personnel. It will also give the executives of the
portfolio companies the opportunity to benefit from their collective skills and
expertise.
Significant Accounting Policies
The accounting policies followed by the Company are set forth in Note 1 to the
Company's financial statements included in its Annual Report on Form 10-KSB for
the fiscal year ended July 31, 1999.
NOTE 2: INTERIM FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
in accordance with the instructions to Form 10-QSB of the Securities and
Exchange Commission and in accordance with generally accepted accounting
principles applicable to interim financial statements and do not include all of
the information and footnotes required by generally accepted accounting
principles for audited financial statements. The financial statements should be
read in conjunction with the audited consolidated financial statements and
accompanying notes of the Company for the year ended July 31, 1999, which are
included in its Annual Report on Form 10-KSB for the fiscal year ended July 31,
1999.
In the opinion of the management of the Company, the accompanying
consolidated financial statements reflect all adjustments necessary (consisting
solely of normal recurring adjustments) necessary to present fairly the
financial position of the Company as of April 30, 2000 and the results of its
operations, stockholders' equity and cash flows for the three month period and
nine month periods then ended.
The results of operations for the period ended April 30, 2000, are not
necessarily indicative of the results to be expected for the entire year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
NOTE 3: INCOME PER SHARE INFORMATION
In 1998, the Company adopted SFAS No. 128, (Earnings Per Share), which
requires the reporting of both basic and diluted earnings per share. Basic net
loss per share is determined by dividing income/[loss] available to common
shareholders by the weighted average number of common shares outstanding for the
period. Diluted gain/[loss] per share reflects the potential dilution that could
occur if options or other contacts to issue common stock were exercised or
converted into common stock, as long as the effect of their inclusion is not
anti-dilutive.
On November 29, 1999, iiGroup, Inc, effected a 1-50 reverse split of
its common stock. As a result, there were 372,642 shares of common stock
outstanding after the split.
NOTE 4: CONVERTIBLE DEBENTURES
In September and October 1999, the company issued five 6% convertible
notes, for a total of $40,000. The conversion rate is $.50. These notes mature
in 2000, with interest accrued and paid semi-annually. These notes and the
shares of common stock issuable upon its conversion have not been registered
under the Securities Act of 1933, as amended, or qualified under any other
applicable securities laws. As a result, no sale or transfer of these notes or
such shares of common stock may be made except in compliance with or pursuant to
an exemption from such laws.
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
General
Forward Looking-Statements. When used in this report, press releases
and elsewhere by the management of the Company from time to time, the words
"believes", "anticipates", and "expects" and similar expressions are intended to
identify forward-looking statements that involve certain risks and
uncertainties. Additionally, certain statements contained in this discussion may
be deemed forward-looking statements that involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially are the following: the ability of the Company to meet its working
capital and liquidity needs, the status of relations between the Company, its
primary customers and distributors, the availability of long-term credit,
unanticipated changes in the U.S. and international economies, business
conditions and growth in the e-commerce and the timely development and
acceptance of new products, the impact of competitive products and pricing, and
other risks detailed from time to time in the Company's SEC reports. Readers are
cautioned not to place undue reliance on these forward-looking statements which
speak only as of the date hereof. The Company undertakes no obligation to
publicly release the results of any events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Going Concern. The Company has limited expenditures in many areas,
including discretionary expenditures, in order to focus iiGroup's resources in
what it believes are the most promising areas of the Company's business.
However, there can be no assurance that the Company will have sufficient funds
to carry out these plans or to remain in business. Although iiGroup, has
sufficient resources to carry out its business plan for the remainder of 2000,
there can be no assurance that iiGroup, will be successful in meeting it
long-term liquidity requirements. The Company experienced a loss from operations
in 1999 and had a working capital deficit at July 31, 1999 and its accountants
issued a going concern opinion. The Company experienced a loss from operations
of $125,563 (prior to stock compensation expense and extraordinary items), for
the nine months ended April 30, 2000, and had a positive working capital of
$362,497 at April 30, 2000. Also, our liquidity needs could exceed the amount of
the Company's future ability for equity financing. See "--Liquidity and Capital
Resources."
Overview
On January 14, 2000 the Company purchased the assets of Travlang.com,
an Internet foreign travel language web site from GourmetMarket.com, Inc., a
publicly traded related party. Terms of the purchase were 250,000 common shares
of iiGroup, valued at $140,000 [0.56 per share] and $250,000 paid as follows:
$191,028 cash, and the assumption of $58,973 of Travlang.com liabilities. This
asset purchase is the first step in the Company's plan to become a content
provider on the Internet.
Travlang.com is a foreign language and travel site that has existed for
nearly five years and is recognized as the leader in providing free access to
over 70 foreign language translation dictionaries to over one and a half million
unique visitors a month. Travlang.com recently entered into an agreement with
Alta Vista to provide content to the Alta Vista World Channel. Travlang.com's
main source of revenue is from the sale of advertising on its site. The Company
currently has a contract with 24/7 Media and several travel companies.
The Company will make investments in e-commerce and technology
companies in order to exploit the information and content it has, and to create
revenue streams from the millions of visitors iiGroup has captured on its
content-based Internet sites. To date the Company has either purchased or
invested in the following:
o Travlang.com - content
o GourmetMarket.com, Inc. - e-commerce
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<PAGE>
The Company will be aggressively focusing on companies that have both
e-commerce and content that will be useful to a particular audience. Once a user
is at the web site, iiGroup, will offer services and products to those visitors
through partnerships with other companies. iiGroup will establish relationships
with other portals and web sites to increase the continuous traffic on their
sites with revenue splitting arrangements that will attract more visitors to our
sites and add value to iiGroup.
Results of Operations
The discussion and analysis set forth below is for the three and nine
months ended April 30, 2000 and April 30, 1999. It should be read in conjunction
with our Financial Statements and the related Notes thereto appearing elsewhere
in this quarterly report. The information presented for the nine months ended
April 30, 2000, and April 30, 1999, was derived from unaudited financial
statements which, in our opinion, reflect all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation.
Three Months Ended April 30, 2000 Compared to the Three Months Ended
April 30, 1999
Net sales for the three months ended April 30, 2000 increased by
$77,218, to $77,218 from $0 for the three months ended April 30, 1999. Net sales
for the three months ended April 30, 2000 of Travlang, and other commissions
were $77,178, and $40 respectively, as compared with $0 and $0, respectively,
for the three months ended April 30, 1999 The increase in sales resulted
primarily from the Company's purchase of Travlang. While the cost and
effectiveness of each advertising program varies, our current rate of repeat
visitors to the site is between 1.25% and 2%.
Cost of goods sold for the three months ended April 30, 2000 increased
by $22,612, to $22,612 from $0 for the three months ended April 30, 1999. The
increase in cost of sales comes from the purchase of Travlang. Advertising
expense is the highest operating cost that the company occurs. The Web hosting,
site and management are usually at fixed rates with small variable components.
Gross profit for the three months ended April 30, 2000 was $54,606, or
70.72% of net sales, compared to $0 or 0% of net sales, for the three months
ended April 30, 1999 The increase in gross profit was primarily due to the
acquisition of Travlang. For the three months ended April 30, 2000, Travlang,
and other commissions accounted for 99.95% and .05% of net sales, respectively,
as compared with 0%, and 0% of net sales, respectively, for the three months
ended April 30, 1999.
Marketing and Internet expenses increased by $6,000 to $6,000, for the
three months ended April 30, 2000, from $0.00, for the three months ended April
30, 1999. This increase in marketing and Internet expenses resulted from as
consulting agreement for site content and upgrades. General and administrative
expenses were $83,860 for the three months ended April 30, 2000, compared with
$1,450, for the three months ended April 30, 1999, The increase in the general
and administrative expenses was due to the fact that business has been
developing, and iiGroup organized an infra structure of qualified staff. In the
three months ended April 30, 2000, the Company had a non cash charge of $75,000
for issuance of stock for compensation.
The Company's interest expense for the three months ended April 30,
2000 was $678 as compared with $0, for the three months ended April 30, 1999.
The increase in interest expense was primarily due to increase of loans by
related parties and loans by third parties.
As a result of the foregoing, the Company's net loss for the three
months ended April 30, 2000 was $131,297 compared to a net loss of $1,450 for
the three months ended April 30, 1999.
Nine Months Ended April 30, 2000 Compared to the Nine Months Ended
April 30, 1999
Net sales for the nine months ended April 30, 2000 increased by
$77,218, to $77,218 from $0 for the three months ended April 30, 1999. Net sales
for the nine months ended April 30, 2000 of Travlang, and other commissions were
$77,178, and $40 respectively, as compared with $0 and $0, respectively, for the
nine months ended April 30, 1999. The increase in sales resulted primarily from
the Company's purchase of Travlang.
Cost of goods sold for the nine months ended April 30, 2000 increased
by $22,612, to $22,612 from $0 for the nine months ended April 30, 1999. The
increase in cost of sales came from the purchase of Travlang.
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<PAGE>
Gross profit for the nine months ended April 30, 2000 was $54,6061, or
70.721% of net sales, compared to $0 or 0% of net sales, for the nine months
ended April 30, 1999. The increase in gross profit was primarily due to the
acquisition of Travlang. For the nine months ended April 30, 2000, Travlang, and
other commissions accounted for 99.95% and .05% of net sales, respectively, as
compared with 0%, and 0% of net sales, respectively, for the nine months ended
April 30, 1999.
Marketing and Internet expenses increased by $6,000 to $6,000, for the
nine months ended April 30, 2000, from $0, for the nine months ended April 30,
1999. This increase in marketing and Internet expenses resulted from as
consulting agreement for site content and upgrades. General and administrative
expenses were $137,260 for the nine months ended April 30, 2000, compared with
$23,319, for the nine months ended April 30, 1999. The increase in the general
and administrative expenses was due to the fact that business has been
developing, and has organized an infra structure of qualified staff. In the nine
months ended April 30, 2000, the Company had a non cash charge of $472,500 for
issuance of stock for compensation and $36,400 extraordinary gain for the nine
months ended April 30, 2000 for the extinguishment of prior indebtedness. This
extraordinary gain resulted in a tax benefit of $8,600.
The Company's interest expense for the nine months ended April 30, 2000
was $1,278 as compared with $0, for the nine months ended April 30, 1999. The
increase in interest expense was primarily due to increase of loans by related
parties and loans by third parties.
As a result of the foregoing, the Company's net loss for the nine
months ended April 30, 2000 was $598,063 compared to a net loss of $23,319 for
the nine months ended April 30, 1999.
For the nine months ended April 30, 2000, the Company realized an
extraordinary gain $45,000, which reduced the Company's net loss the for nine
months ending April 30, 2000 to $553,063.
Liquidity and Capital Resources
The Company has limited expenditures in many areas, including
discretionary expenditures, in order to focus iiGroup's resources in what it
believes are the most promising areas of the Company's business. However, there
can be no assurance that the Company will have sufficient funds to carry out
these plans or to remain in business. Although iiGroup, has sufficient resources
to carry out its business plan for the remainder of 2000, there can be no
assurance that iiGroup, will be successful in meeting its long-term liquidity
requirements. The Company experienced a loss from operations in 1999 and had a
working capital deficit at July 31, 1999. The Company experienced a loss from
operations of $125,562 (this does not reflect the Stock compensation and
extraordinary items), for the nine months ended April 30, 2000, and had a
positive working capital of $362,497 at April 30, 2000. Also, our liquidity
needs could exceed the amount of the Company's future ability for equity
financing.
In January and February, 2000, the Company raised $1.15 million from a
private placement offering, of a minimum of 1,000,000 shares and a maximum of
4,000,000 shares at $.50 per share. This offering was not registered under the
Securities Act, and the Shares are were offered in reliance upon the exemption
under Section 4(2) of the Securities Act, including but not limited to Rule 506
of Regulation D.
The Company may utilize cash derived from the sales of equity
securities, debt securities or bank or other borrowings or a combination thereof
as consideration in effecting future acquisitions, joint ventures or
investments. Also, iiGroup, will, in all likelihood, issue additional shares in
connection with the consummation of transactions. To the extent that such
additional shares are issued, dilution of the interests of the Company's
shareholders will occur.
In February 2000, the iiGroup, loaned a total of $250,000 to
GourmetMarket.com, Inc., ("GMC") pursuant to 8% Convertible Bridge Notes. The
Bridge Notes provide that they may be prepaid at any time, but are mandatorily
prepayable upon the sale of all of the outstanding shares of the GMC., the sale
substantially all of the GMC's, assets, or the closing of financing of at least
$5,000,000. The Convertible Notes are convertible into common sock of the GMC at
the lower of $1.00 per share or 75% of the average closing bid price of the
GMC's common stock in the five days proceeding the date of conversion. These
Bridge Notes mature on December 31, 2000.
Capital expenditures totaled $6,529 for the three months ended April
30, 2000, primarily for computer hardware and computer programs, and office
fixtures. The Company anticipates further capital expenditures relating
computers and furniture as the Company increases its personnel.
-11-
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
In January and February, 2000 the Company raised $1.15 million from a
private placement offering of a minimum of 1,000,000 shares and a maximum of
4,000,000 shares at $.50 per share. This offering has not been registered under
the Securities Act, and the Shares are were offered in reliance upon the
exemption under Section 4(2) of the Securities Act, including but not limited to
Rule 506 of Regulation D.
On January 14, 2000 the Company purchased the assets of Travlang.com,
an Internet foreign travel language web site from GourmetMarket.com, Inc., a
publicly traded related party. Terms of the purchase were 250,000 common shares
of iiGroup, valued at $140,000 [0.56 per share] and $250,000 paid as follows:
$191,028 cash, and the assumption of $58,973 of Travlang.com liabilities. This
asset purchase is the first step in the Company's plan to become a content
provider on the Internet. In connection with the Travlang.com acquisition, the
Company issued Dr. Michael Martin, 100,000 options to purchase common stock at
$3.00 per share.
In February 2000, the iiGroup, loaned a total of $250,000 to the
GourmetMarket.com, Inc., ("GMC") pursuant to two (2) 8% Convertible Bridge
Notes. The Bridge Notes provide that they may be prepaid at any time, but are
mandatorily prepayable upon the sale of all of the outstanding shares of the
GMC., the sale substantially all of the GMC's, assets, or the closing of
financing of at least $5,000,000. The Convertible Notes are convertible into
common sock of the GMC at the lower of $1.00 per share or 75% of the average
closing bid price of the GMC's common stock in the five days proceeding the date
of conversion. These Bridge Notes mature on December 31, 2000.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security-Holders.
None
Item 5. Other Information.
None.
Item 6. Subsequent Events
In June 2000, ii Group acquired Silicon Ventures, Inc. an Internet
venture capital company, for 3,714,286 shares of ii Group common stock.
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<PAGE>
Item 7. Exhibits and Reports on Form 8-K.
(a) Exhibits:
Exhibit
No. Description
--- -----------
27 Financial Data Schedule
----------------
(b) Reports on Form 8-K
None.
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<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ii GROUP, INC.
Date: June 7, 2000
By: /s/ Neil Swartz
--------------------------------
Neil Swartz, President
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