UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 7, 2000
---------------
GoPublicNow.com, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
033-05384 33-0886032
---------------- ------------------------
(Commission File Number) (IRS Employer Identification No.)
5000 Birch Street, West Tower, Suite 4900, Newport Beach, CA 92660
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(949) 752-2797
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Registrant's telephone number, including area code:
DermaRx Corporation
c/o Connolly & Halloran PC
1121 Broadway, Suite 202
Boulder, CO 80302
(303) 440-7676
---------------------------------
(Former name, address and telephone number)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Acquisition Agreement (the "Acquisition Agreement")
dated as of February 24, 2000 among DermaRx Corporation ("DMRX"), shareholders
of DMRX holding a majority of the DMRX shares (the "Shareholders") and
GoPublicNow.com, Inc., a Nevada corporation ("GPN-Nevada"), effective on April
6, 2000, GPN-Nevada was merged with and into DMRX and the separate corporate
existence of GPN-Nevada ceased in a transaction referred to as a "reverse
acquisition." Simultaneously with the merger, the name of DMRX was changed to
GoPublicNow.com ("GPN" or the "Company"), and all the outstanding shares of
common stock of GPN-Nevada were exchanged on a one-for-one basis for shares of
common stock of the Company. Immediately prior to the merger, the common stock
of DMRX was reduced by a one for five reverse stock split.
Notice of the merger and the reverse stock split was sent to all of the
shareholders of DMRX on a Schedule 14C information which was first mailed to
shareholders on or about March 15, 2000.
The Acquisition Agreement was adopted by the unanimous consent of the Board
of Directors of GPN-Nevada and DMRX on February 24, 2000. A written consent of
the shareholders of GPN-Nevada and DMRX was also adopted by the shareholders of
those corporations on February 24, 2000. In accordance with SEC rules, after
mailing the Schedule 14C information statement, the shareholder approval for
DMRX was effective on April 5, 2000.
Prior to the Acquisition Agreement, DMRX had 2,019,900 shares of common
stock outstanding. At the time of the merger and subsequent to the reverse
stock split, DMRX had 750,080 shares outstanding. By virtue of the merger, the
shareholders of GPN-Nevada acquired 10,326,123 shares of the Company and
consequently obtained majority control of the issued and outstanding common
stock of the combined entities. The total issued and outstanding shares of the
combined entities subsequent to the merger was 11,076,203 shares.
The officers of GPN-Nevada continued as officers of GPN subsequent to the
merger. See "Management" below. The officers, directors, and by-laws of GPN
will continue without change.
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(b) The following table sets forth certain information regarding beneficial
ownership of the common stock of GPN as of the date hereof by:
each person or entity known to own beneficially more than 5% of the common
stock;
each of GPN's directors;
each of GPN's named executive officers; and
all executive officers and directors of GPN as a group.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name and Address of Amount and Nature of Beneficial Percent of
Title of Class . . . . . . . . . . . . . . Beneficial Owner (1) Ownership Class (2)
- ------------------------------------------ ---------------------- -------------------------------- -----------
Common Stock . . . . . . . . . . . . . . . Bruce A. Berman (3) 8,000,000 72.2%
- ------------------------------------------ ---------------------- -------------------------------- -----------
Common Stock . . . . . . . . . . . . . . . Marcus Hurlburt (4) 500,000 4.5%
- ------------------------------------------ ---------------------- -------------------------------- -----------
Common Stock . . . . . . . . . . . . . . . Eric Hopkins (5) 0 0.0%
- ------------------------------------------ ---------------------- -------------------------------- -----------
Common Stock . . . . . . . . . . . . . . . Jeffrey M. Diamond (6) 5,000 *
- ------------------------------------------ ---------------------- -------------------------------- -----------
Common Stock All Officers and Directors as a Group 8,505,000 76.8%
(4 persons)
</TABLE>
1. Unless otherwise referenced, the address for each of these shareholders
is c/o GoPublicNow.com, Inc., 5000 Birch Street, West Tower, Suite 4900, Newport
Beach, CA 92660.
2. Based on a total of 11,076,203 shares issued and outstanding.
3. Mr. Berman's shares are held by The Berman Family Trust but owned
beneficially by Mr. Berman.
4. Mr. Hurlburt has agreed that in the event he leaves the Company prior to
2002, he will return for cancellation all 500,000 of these shares. If he leaves
prior to 2003, he will return 300,000 of these shares and if he leaves prior to
2004, he will return 200,000 of these shares.
5. Does not include options to purchase 200,000 shares at $3.75 per share
which are not presently exercisable.
6. Reflects options to purchase 5,000 shares at $3.75 per share. Does not
include options to purchase 50,000 shares at $3.75 per share which are not
presently exercisable.
* Less than 1%
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Acquisition Agreement was
negotiated between the shareholders of DMRX, DMRX and GPN-Nevada.
In evaluating GPN-Nevada as a candidate for the proposed acquisition, DMRX
and its shareholders used criteria such as GPN-Nevada's proposed internet
financial services business (as set forth more fully below under "Business")
and other anticipated operations, and GPN-Nevada's and its principal's business
name and reputation. DMRX and GPN-Nevada determined that the consideration for
the merger was reasonable.
(b) GPN as the combined entity intends to continue its historical
businesses and proposed businesses as set forth more fully immediately below.
The historical business and operations of DMRX shall no longer be continued by
GPN.
BUSINESS
GoPublicNow.com ("GPN"), is a Nevada Corporation headquartered in Newport
Beach, California. The Company was initially formed in December 1999 and began
generating business in April 2000.
INDUSTRY
The number of companies going public and requiring access to capital has
significantly increased in recent years (see Industry Description and Trends
below). There is also significant growth in the use of the Internet for
offering efficient business-to-business commerce. GPN intends to offer a
variety of financial consulting services targeted toward this market.
OPERATIONS OVERVIEW
When fully operational, GPN's operations will consist of three major
components. First is a network of financial service providers that can satisfy
many of the demands of companies desiring to go public or needing access to
capital or GPN's advanced business services. Second is a unique, interactive
web portal site that can serve as the conduit between the clients, the financial
service providers and GPN, allowing benefits for all parties. Third, the
Company effectively becomes an emerging growth company incubator.
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REVENUE
GPN intends to derive revenue from a number of sources. First, client
companies that wish to become members of the site and access premium online
content will pay a membership fee. Second, to the extent permissible under
applicable regulations, the Company will be paid a small percentage (or
finder's fee') for any business services that are placed through our site.
Third, the Company will receive an equity position in companies that become
public in three years that are a member of GPN's site.
The Company's primary website will be www.gopublicnow.com. GPN presently
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owns the following Internet URL's designed to protect the value of its website:
WWW.GOPUBLICNOW.COM
WWW.GOPUBLICNOW.NET
WWW.GOPUBLICNOW.ORG
WWW.2GOPUBLICNOW.COM
WWW.2GOPUBLICNOW.NET
WWW.2GOPUBLICNOW.ORG
WWW.4BUSINESSNOW.COM
WWW.4BUSINESSNOW.NET
WWW.4BUSINESSNOW.ORG
WWW.GOPUBLICNETWORK.COM
WWW.GOPUBLICNETWORK.NET
GPN recognized the importance of protecting its intellectual property. Our
legal counsel is in the process of seeking to register with the US Patent and
Trademark Office for service marks for the following:
Go Public
Go Public Now
Go Public Network
SERVICES OFFERED
GPN intends to offer a single source financing solution to any qualified
business that wants to become public or obtain capital, as well as provide other
related services to existing public companies.
GoPublicNow.com will target companies that are seeking capital and intend
to go public, as well as licensed investment bankers and brokers, etc that are
interested in these types of companies.
Specific web addresses will be targeted toward different audiences,
however, with the exception of the front-end of the site, services will be
equally available to all addresses.
GPN intends to offer the following services:
Free Services
--------------
As a financial Internet portal site, provide free access to timely
financial information in a customizable, easy-to-use format. This information
may include some or all of the following:
- - Stock quotes
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Stock ticker
Market news
Information about Going Public B i.e. IPO's, mergers, shell mergers, etc.,
including strategy, timing and costs.
Information about different types of financial programs - i.e. private
placements, secondary offerings, DPO's, Internet offerings, etc.
The web site will also provide a unique interactive business questionnaire
that will assess whether a candidate company has the potential to Go Public Now.
If the candidate company is qualified through the questionnaire to go public in
accordance with criteria determined by GPN, the site will notify GPN. If a
candidate company does not meet minimum criteria necessary to become a public
company, the site will explain its reasoning to the candidate company and will
offer the candidate company the ability to contact GPN to discuss further
options.
Professional service providers, including accountants, attorneys, PR and IR
firms, web site designers, etc., will be able to utilize the web site's referral
service feature.
ALTHOUGH THESE FEATURES ARE FREE TO THE CLIENT, GPN (IN MOST CASES) WILL RECEIVE
FEES FROM THE SERVICE PROVIDERS. (SEE PRICING STRATEGY).
Premium Services
-----------------
Listing companies and their financing needs for potential investment under
appropriate regulatory guidelines on the website.
Submitting listed companies to investment sources that are registered on
the Company's website whose financial products match the company's
unique profile.
Evaluating businesses and providing them with a strategy to prepare them
for going public.
Potential investment by a proprietary proposed incubator bridge/venture in
select companies.
THE COMPANY INTENDS TO CHARGE FOR THESE PREMIUM SERVICES IN EXCHANGE FOR CASH
AND STOCK. (SEE PRICING STRATEGY).
PRICING STRATEGY
GPN intends to develop a pricing strategy which derives revenues from
member companies as well as from service providers.
MEMBER COMPANIES WILL BE CHARGED THE FOLLOWING:
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$500 client membership fee for access to all premium services.
3% equity interest in client company if client company is a start-up, 2% if
client company is pre-IPO with less than $1 million in annual sales, and 1% if
client company is pre-IPO with over $1 million in annual sales.
Most Investment Bankers charge $25,000 to $50,000 initial fees for due
diligence and expenses without guaranteeing a successful financing. GPN's $500
fee allows companies to access a wide variety of financial services at a
fraction of the cost.
SERVICE PROVIDERS WILL BE CHARGED THE FOLLOWING:
------------------------------------------------------
Up to 10% of fees collected by PR and IR firms.
Up to 10% finder's fee for web design services.
Up to 10% fee from media referrals.
Banner / web advertising fees to be determined under market conditons.
These referral fees are relatively standard in the various industries. By
combining financial services in a "one-stop-shop" format, the Company will
potentially be in the position of being able to receive fees from a broad range
of providers at the same time as well as obtaining favorable pricing for client
companies.
QUALITY CONTROL
GPN's Management, based on years of combined investment experience, has
developed a series of multiple choice questions and answers for GPN's
interactive web site questionnaire. The questions are designed to analyze
companies for listing on the GPN web site that meet the criteria generally
necessary to become a public company, and to explain to companies that do not
presently meet the criteria why they are not a candidate to GoPublicNow.com.
GPN's screening process for reliable service providers has been developed from
years of Management's experience providing like services.
MARKETING
GPN intends to create a Web-enabled marketplace that targets companies
seeking capital as well as investors, fund managers and other business services
resources. By combining Management's experience in the corporate finance and
IPO marketplace with the exponential growth of the Internet, GPN may provide a
global network of clients with a comprehensive "one-stop-shop" for finding and
utilizing financial business services. The Company is positioned to provide
market leadership in this rapidly growing industry sector due to the Management
team's background and track record of performance in the financial marketplace.
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GPN's operations will consist of two major components: first, a network of
financial service providers with wide ranging experience in servicing the IPO
marketplace; second, a unique, interactive website that serves as a value-added
conduit between GPN and its clients, thus allowing both parties to communicate,
collaborate and partner.
A key component to the Company's launch strategy is to quickly build brand
awareness for the GoPublicNow.com website through advertising, publicity and
cross-promotional campaigns. GPN hopes to have a competitive advantage due to
the following:
Being early to market and establishing a commanding client base
Maintaining high quality financial service providers
Maintaining a broader range of financial service offerings than other sites
Maintaining marketing to maximize web site awareness and traffic
Utilizing economies of scale to reduce costs, increase margins, and
negotiate preferential agreements
In order to drive users to the Go Public web site, the Company plans to do
the following:
Utilize internet marketing via banner ads, link swapping, co-promotions,
etc.
Utilize traditional marketing programs such as business print ads and
business radio ads.
Attend Investment Banking and Business Development trade shows and
conferences.
Telemarket to investment banking firms and strategic partners.
Telemarket to and/or email follow-up on site visitors through database
management.
Market Assessment & Analysis
As much as $24 billion in fresh funding flowed from Venture Capital firms
to startup companies in 1998, according to The National Association of Venture
Capitalists. According to the Los Angeles Times, investors poured $65 billion
into first time stock offerings in 1999. Twenty First Century Internet Venture
Partners claims they receive approximately 1,600 business plans each year and
are only able to fund no more than four or five of them. Due to GPN's potential
resources, as well as the proposed online screening process, the Company could
theoretically be able to relatively efficiently take those 1,600 or 7,550
business plans and shop them to multiple venture funds.
International Potential
GPN recognizes that one of the greatest advantages of the Internet is to
lower global boundaries and allow direct personal contact between individuals
and businesses around the world. A key advantage of business-to-business
financing over the Internet is that it removes layers of middlemen that
traditionally exist in current international financing operations. GPN will be
well positioned to assist international companies in accessing US capital. In
the future, the Company expects to offer targeted services for international
clients, and expects to have multiple versions of its web site online featuring
foreign languages and personalized content for different countries and cultures.
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REGULATORY ISSUES
The Company will be subject to state and federal regulation with respect to
securities, as well as rules and regulations with respect to certain of the
services it provides. In order to better resolve some of those regulatory
issues, and to support the wide variety of services GPN plans to offer the
companies, GPN intends to acquire or establish a NASD licensed broker/dealer.
The Company's Management presently has the experience and licenses necessary to
perform some broker/dealer services.
COMPETITION
The market for capital and financing resources for emerging growth
companies is intensely competitive. Additionally, the Company competes in an
industry segment in which numerous competitors exist that have substantially
greater resources than the Company. There are several companies that have a
meaningful presence on the Internet to provide capital to emerging growth
companies, such as Idealabs, Garage.com, and Twenty First Century Internet
Venture Partners. There can be no assurance that existing or potential
competitors of the Company will not develop products equal to or better than
those marketed by the Company. Numerous smaller competitors also exist in this
industry. They tend to be: (i) Specialized (and only offer one type of
financing service); (ii) Traditional (non-Internet, face-to-face operators) or
(iii) Small scale B only able to accommodate a few clients each year. The
Company does not anticipate directly competing with conventional financing
sources. The Company intends to welcome any and all legitimate financing
sources to participate in clients financing needs. The Company will receive a
fee for any financing that comes through the GPN Network.
PROPERTIES
GPN currently subleases 3,460 square feet at 5000 Birch St., West Tower,
Suites 4600 and 4900, Newport Beach, CA 92660 at a cost of $8,650 per month.
EMPLOYEES
GPN presently has 20 employees, of which 8 are in management. GPN believes
its relations with its employees are good.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, the Company has funded its capital requirements through
funding from its founder and from private equity financing. As of April 17,
2000, the Company's sources of liquidity included cash of approximately $2.3
million.
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In December 1999 and January 2000, the Company funded its initial capital
requirements through the sale of securities to private investors in a private
bridge offering generating a total of $1.35 million. The bridge offering sold
541,800 units at $2.50 per unit, with each unit consisting of one share of
common stock, one warrant to purchase one share of common stock at $7.50 per
share and one warrant to purchase one share of common stock at $10.00 per share.
In March 2000, the Company raised an additional $2.13 million via a private
placement of approximately 569,000 Units at $3.75 per Unit, with each Unit
consisting of one share of Common Stock, one Warrant to purchase one share of
Common Stock at $7.50 per share, and one Warrant to purchase one share of Common
Stock at $10.00 per share.
The Company believes that proceeds from its bridge financing and private
placement funds will be sufficient to cover working capital requirements for at
least 12 months. Should revenue levels expected by the Company not be achieved,
the Company would require additional financing during such period to support its
operations, continued expansion of its business and acquisition of technologies.
Such sources of financing could include capital infusions from strategic
partners of the Company, additional equity financings or debt offerings. The
Company has made no arrangements or commitments for such financing and there can
be no assurance that the Company will be able to obtain such financing on
satisfactory terms, if at all.
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MARKET FOR GPN SECURITIES
GPN's common stock is presently traded on the OTC Bulletin Board operated by
Nasdaq under the symbol "GNOW". Prior to April 6, 2000, the Company's common
stock traded under the symbol "DMRX". The following table sets forth the high
and low closing prices for shares of GPN common stock for the periods noted, as
reported by the National Daily Quotation Service and the Over-The-Counter
Bulletin Board. Quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLOSING PRICES
YEAR . .PERIOD HIGH LOW
- ---- ------ ------- ------
2000 First quarter $ 3.75 $ 0.08
Second quarter (through April 18) $ 6.63 $ 0.75
1999 First quarter $ 67.38 $ 1.48
Second quarter $ 24.90 $ 6.25
Third quarter $ 2.25 $ 0.75
Fourth quarter $ 3.12 $ 0.05
1998 Second quarter $ 29.78 $21.48
Third quarter $ 32.72 $20.02
Fourth quarter $ 21.48 $ 0.50
</TABLE>
On September 1, 1999, the Company effected a one for five reverse split of
its Common Stock. Effective April 5, 2000, the Company effected an additional
one for five reverse split of its Common Stock. The table above has been
adjusted to reflect the cumulative effect of these splits.
The number of beneficial holders of record of GPN common stock as of the
date of the merger was approximately 300. Many of the shares of GPN's common
stock are held in "street name" and consequently reflect numerous additional
beneficial owners.
In addition to freely tradeable shares, GPN has a minimum of 10,325,123
shares of common stock outstanding which could be sold pursuant to Rule 144
after completion of the appropriate holding period. In general, under Rule
144, subject to the satisfaction of certain other conditions, a person,
including our affiliates, who has beneficially owned restricted shares of common
stock for at least one year would become entitled to sell, in certain brokerage
transactions, within any three-month period, a number of shares that does not
exceed the greater of 1% of the total number of outstanding shares of the same
class, or the average weekly trading volume during the four calendar weeks
immediately preceding the sale. A person who presently is not and who has not
been an affiliate for at least three months immediately preceding the sale and
who has beneficially owned the shares of common stock for at least two years is
entitled to sell such shares under Rule 144 without regard to any of the volume
limitations described above.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of the current directors
and executive officers of GPN who will remain so with the combined entity, their
principal offices and positions and the date each such person became a director
or executive officer. Our executive officers are elected annually by the Board
of Directors. Our directors serve one year terms until their successors are
elected. The executive officers serve terms of one year or until their death,
resignation or removal by the Board of Directors. There are no family
relationships between any of the directors and executive officers. In addition,
there was no arrangement or understanding between any executive officer and any
other person pursuant to which any person was selected as an executive officer.
Our directors and executive officers are as follows:
The Officers, Directors and Executive Management of the Company are as
follows:
Name Age Positions
---- --- ---------
BRUCE BERMAN 42 Founder, President,
Chief Executive Officer and Chairman
ERIC HOPKINS 45 Chief Financial Officer and
Treasurer
MARCUS HURLBURT 40 Vice President, Broker Relations
JEFFREY M. DIAMOND 34 Chief Technical Officer and
Secretary
BRUCE BERMAN, first worked in the emerging growth finance industry, forming
his first finance company at age 23. After generating substantial success and
arranging a successful buyout of his finance company, Mr. Berman co-founded
a renewable energy company in the mid 1980s. Mr. Berman then went on in 1994
to establish the Michelson Group, Inc., a corporate development firm that has
successfully assisted companies in their quest to become public entities. Mr.
Berman has decided to share and utilize his knowledge, skills and experience
through his current innovation, GoPublicNow.com., which he founded in late 1999.
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ERIC HOPKINS, worked most recently as the Director of Finance for
Unisys-PulsePoint Communications, a NASDAQ manufacturer of telecommunications
products. At Unisys-PulsePoint, Hopkins focused his efforts in stockholder and
lender relations, private equity placements, debt negotiation, and became a
major participant in the company's acquisition by Unisys Corporation. Prior
to his job at Unisys-PulsePoint, Mr. Hopkins served as the Chief Financial
Officer at Tanknology Environmental International, a publicly traded
environmental services company. Hopkins, a CPA, spent several years in public
accounting in both large and small firms. He began his career with Motel 6
L.P., where he worked for more than twelve years in both finance and field
operations. He graduated from Kent State University with a B.A. in accounting
and obtained his MBA from Pepperdine University.
MARCUS HURLBURT, is a Registered Securities Principal with a series 24, 7,
22 and 63 licenses. He has over 10 years of experience as an Investment Banker
assisting emerging growth companies with corporate development and capital
finance. Mr. Hurlburt has been the Executive Vice President and Branch Manager
of the corporate headquarters and Director of Investment Banking for an Irvine
based Broker Dealership in California.
JEFFREY M. DIAMOND, has worked as an Information Technology (IT)
professional since 1982. He founded a Southern California programming company
that expanded into Local Area Networking (LAN) and Wide Area Networking (WAN)
consulting services. After experiencing success in these endeavors, he left his
firm to become the Director of Client Services for a major Novell Networking
firm in Los Angeles. Continuing his IT career, Mr. Diamond maintained the
positions of IT director for a premier Hilton Hotels Resort property as well as
the position of the IT director for a Los Angeles area business law firm. In
1994, Mr. Diamond formed QuickNet, Inc., an Internet-centric Digital Engineering
firms. In 1999, Jeff successfully negotiated the sale of QuickNet Corporation
and its Intellectual Property holdings. Mr. Diamond, a UCI graduate, holds
undergraduate degrees in both Computer Science and Political Science. He
continued his formal education earning a Juris Doctor in law and is a licensed
California attorney with an emphasis in business law and negotiation.
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EXECUTIVE COMPENSATION
Bruce Berman, the Company's Founder, President and Chief Executive Officer,
receives an annual salary of $120,000. When the Company's market capitalization
reaches $140 million, his salary will be increased to $180,000 annually through
2000. Mr. Hurlburt receives a salary of $95,000 annually. The Company
currently reimburses Management for expenses and costs associated with its
operations and provides auto lease allowances to its officers.
The Company has an employment agreement with Eric Hopkins, its Chief
Financial Officer. Pursuant to that Agreement, Mr. Hopkins receives $100,000
in salary for his first year and $120,000 in salary for his second year. Mr.
Hopkins also received options to purchase 200,000 shares of common stock at
$3.75 per share. These options vest monthly over a two-year period.
Jeffrey M. Diamond, Chief Technical Officer, receives a salary of $100,000
annually. He also received options to acquire 5,000 shares of Common Stock at
$3.75 per share as a signing bonus and options to purchase an additional 50,000
shares of Common Stock at $3.75 per share which will vest on a pro rata monthly
basis over a one-year period.
The Company has not had a bonus, profit sharing or deferred compensation
plan for the benefit of its employees, officers or directors.
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DESCRIPTION OF SECURITIES
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of
100,000,000 shares of common stock, $0.001 par value per share. The holders of
each share of common stock (i) have equal rights to dividends from funds legally
available therefore, when, as and if declared by the Company's Board of
Directors, (ii) are entitled to share in all assets of the Company available for
distribution, (iii) do not have pre-emptive, subscription or conversion rights
and (iv) are entitled to one non-cumulative vote at all shareholder meetings.
All shares of common stock now outstanding are fully paid for and
non-assessable and all shares of common stock which are the subject of this
Offering, when issued, will be fully paid for and non-assessable.
Stockholders have no cumulative voting rights, which means that
Stockholders owning more than 50% of the outstanding stock can vote to elect all
directors. Accordingly, the remaining Stockholders would not be able to elect
any of the Company's directors.
PREFERRED STOCK
The Company is authorized to issue up to 10,000,000 shares of Preferred
Stock, par value $.001 per share. The preferred stock of the Company can be
issued in one or more series as may be determined from time to time by the Board
of Directors without further stockholder approval. In establishing a series the
Board of Directors shall give to it a distinctive designation so as to
distinguish it from the shares of all other series and classes, shall fix the
number of shares in such series, and the preferences, rights and restrictions
thereof. All shares of any one series shall be alike in every particular. All
series shall be alike except that there may be variation as to the following:
(1) the rate of distribution, (2) the price at and the terms and conditions on
which shares shall be redeemed, (3) the amount payable upon shares for
distributions of any kind, (4) sinking fund provisions for the redemption of
shares, and (5) the terms and conditions on which shares may be converted if the
shares of any series are issued with the privilege of conversion, and (6) voting
rights except as limited by law. There is presently no preferred stock issued
or outstanding.
COMMON STOCK DIVIDENDS
The Company does not presently anticipate that it will pay dividends on its
Common Stock at any time in the foreseeable future. The payment of dividends
will depend, among other things, upon the earnings, assets, general financial
condition, and other factors. In the event that the Company successfully
completes a merger or acquisition as contemplated hereunder, the Management of
the acquired company will, in all likelihood, have sole and exclusive authority
to determine whether Common Stock dividends will be paid thereafter.
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RISK FACTORS
DEVELOPMENT STAGE COMPANY. The Company is a development stage enterprise,
as defined by generally accepted accounting principles. The Company was
incorporated in December 1999 and has generated nominal revenue to date. Its
primary activities to date have been capital formation, the development of its
web page and marketing research. The Company's success is dependent upon the
successful development and marketing of its financial network through the
internet, as to which there is no assurance. Unanticipated problems, expenses
and delays are frequently encountered in establishing a new business and
developing new products. These include, but are not limited to, lack of
consumer acceptance, competition, product development, and inadequate sales and
marketing. The failure of the Company to meet any of these conditions would
have a materially adverse effect upon the Company and may force the Company to
reduce or curtail operations. No assurance can be given that the Company can or
will ever operate profitably.
FUTURE CAPITAL NEEDS. To date the Company has relied on funding from its
founder, from bridge financing and from the proceeds of a private placement to
fund operations. The Company raised gross proceeds of approximately $3.5
million in its private placements. To date, the Company has generated nominal
revenue and the Company has limited cash liquidity and capital resources. The
Company's future capital requirements will depend on many factors, including the
Company's ability to market its web site successfully, cash flow from
operations, and competing market developments. The Company's business plan
requires additional funding beyond its present resources. Consequently,
although the Company currently has no specific plans or arrangements for
financing, the Company intends to raise additional funds subsequent to this
Offering through private placements, public offerings or other financings. Any
equity financings would result in dilution to the Company's then-existing
stockholders. Sources of debt financing may result in higher interest expense.
Any financing, if available, may be on terms unfavorable to the Company. If
adequate funds are not obtained, the Company may be required to reduce
operations. The Company anticipates that its existing capital resources,
together with the net proceeds of this Offering, will be adequate to satisfy its
operating expenses and capital requirements for twelve months.
REGULATION IN THE SECURITIES AND MERGERS AND ACQUISITIONS INDUSTRY. The
industry in which the Company intends to operate is subject to extensive
regulation on the federal, state and local levels. Among other regulations,
Company securities offerings are subject to rules and regulations of the
Securities and Exchange Commission and State "blue sky" authorities. The
Company believes that it will be required to structure its operations and fee
structures in accordance with applicable state and federal securities laws.
There can be no assurance as to what, if any, future actions such legislative
and regulatory authorities may take or the effect thereof on the industry or the
Company.
16
<PAGE>
COMPETITION. The market for capital and financing resources for emerging
growth companies is marked by numerous small, as well as large, competitors.
Additionally, the Company competes in an industry segment in which numerous
competitors exist that have substantially greater resources than the Company.
There are several companies that have a meaningful presence on the Internet to
provide capital to emerging growth companies such as Idealabs, Garage.com, and
Twenty First Century Internet Venture Partners. There can be no assurance that
existing or potential competitors of the Company will not develop products equal
to or better than those marketed by the Company. The Company does not
anticipate directly competing with conventional financing sources. The Company
intends to welcome any and all legitimate financing sources to participate in
its clients financing needs.
INTERNET RELATED RISKS. The Company is subject to federal, state, and
local laws concerning the conduct of business on the Internet. Today, there are
relatively few laws specifically directed towards online services. However, due
to the increasing popularity and use of the Internet and online services, it is
possible that laws and regulations will be adopted with respect to the Internet
or online services. These laws and regulations could cover issues such as
online contracts, user privacy, freedom of expression, pricing, fraud, content
and quality of products and services, taxation, advertising, intellectual
property rights and information security. Applicability to the Internet of
existing laws governing issues such as property ownership, copyrights and other
intellectual property issues, taxation, libel, obscenity and personal privacy is
uncertain. The vast majority of these laws were adopted prior to the advent of
the Internet and related technologies and, as a result, do not contemplate or
address the unique issues of the Internet and related technologies.
DEPENDENCE ON MANAGEMENT. The Company's success depends, to a significant
extent, upon certain key employees and directors, including primarily Bruce A.
Berman. The loss of services of one or more of these employees could have a
material adverse effect on the business of the Company. In addition, the
Company has a substantial need for additional qualified management and marketing
personnel. The Company believes that its future success will also depend in
part upon its ability to attract, retain and motivate qualified personnel.
There can be no assurance that the Company will be successful in attracting and
retaining such personnel. Competition for such personnel is intense. The
Company does not maintain a policy of key man life insurance on any employees.
PROTECTION OF PROPRIETARY INFORMATION. Currently, the Company does not
hold patents or trademarks on any of its names, products or processes under
development. The Company is presently seeking trademark protection of certain
of its names and logos. The Company treats its technical data as confidential
and relies on internal nondisclosure safeguards, as well as on laws protecting
trade secrets, to protect its proprietary information. There can be no
assurance that these measures will adequately protect the confidentiality of the
Company's proprietary information or that others will not independently develop
products or technology that are equivalent or superior to those of the Company.
The Company may receive in the future communications from third parties
asserting that the Company's products infringe the proprietary rights of third
parties. There can be no assurance that any such claims would not result in
protracted and costly litigation, having a materially adverse and negative
effect on the Company and its financial results.
17
<PAGE>
DIFFICULTY OF PLANNED EXPANSION; MANAGEMENT OF GROWTH. The Company plans
to expand its level of operations. The Company's operating results will be
adversely affected if net sales do not increase sufficiently to compensate for
the increase in operating expenses caused by this expansion. In addition, the
Company's planned expansion of operations may cause significant strain on the
Company's management, technical, financial and other resources. To manage its
growth effectively, the Company must continue to improve and expand its existing
resources and management information systems and must attract, train and
motivate qualified managers and employees. There can be no assurance, however,
that the Company will successfully be able to achieve these goals. If the
Company is unable to manage growth effectively, its operating results will be
adversely affected.
CONTROL BY OFFICERS AND DIRECTORS. The officers and directors of the
Company beneficially own or control 8,500,000 shares of the Company's
outstanding Common Stock, or 76.8% of the issued and outstanding Common Stock.
As a result, such persons may be able to elect a majority of the Company's Board
of Directors, to dissolve, merge, or sell the assets of the Company, and to
direct and control the Company's operations, policies and business decisions.
See "Principal Stockholders."
LACK OF DIVIDENDS. The Company does not intend to declare or pay any
dividends on its outstanding shares of Common Stock in the foreseeable future.
THE SECURITIES ENFORCEMENT AND PENNY STOCK REFORM ACT OF 1990; RISKS OF
LOW-PRICED STOCKS. The Securities Enforcement and Penny Stock Reform Act of
1990 requires additional disclosure relating to the market for penny stocks in
connection with trades in any stock defined as a penny stock. The Commission
has adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. Such exceptions include any equity security listed on
Nasdaq and any equity security issued by an issuer that has (i) net tangible
assets of at least $2,000,000, if such issuer has been in continuous operation
for three years, (ii) net tangible assets of at least $5,000,000, if such issuer
has been in continuous operation for less than three years, or (iii) average
annual revenue of at least $6,000,000, if such issuer has been in continuous
operation for less than three years. Unless an exception is available, the
regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure schedule explaining the penny stock market and the risks
associated therewith.
SHARES ELIGIBLE FOR FUTURE SALE. Approximately 10,326,123 of the Company's
Common Stock are "restricted securities," and under certain circumstances may,
in the future, be sold in compliance with Rule 144 adopted under the Securities
Act. In general, under Rule 144, subject to the satisfaction of certain other
conditions, a person, including an affiliate of the Company, who has
beneficially owned restricted shares of Common Stock for at least one year is
entitled to sell, in certain brokerage transactions, within any three-month
period, a number of shares that does not exceed the greater of 1% of the total
number of outstanding shares of the same class, or if the Common Stock is quoted
on Nasdaq or a stock exchange, the average weekly trading volume during the four
calendar weeks immediately preceding the sale. A person who presently is not
and who has not been an affiliate of the Company for at least three months
immediately preceding the sale and who has beneficially owned the shares of
Common Stock for at least two years is entitled to sell such shares under Rule
144 without regard to any of the volume limitations described above.
18
<PAGE>
AUTHORIZATION OF ADDITIONAL SHARES OF COMMON STOCK. The Company's Articles
of Incorporation authorize the issuance of up to 100,000,000 shares of Common
Stock. The Company's Board of Directors has the authority to issue additional
shares of Common Stock and to issue options and warrants to purchase shares of
the Company's Common Stock without shareholder approval. Future issuance of
Common Stock could be at values substantially below the Offering Price in the
Offering and therefore could represent further substantial dilution to investors
in the Offering. In addition, the Board could issue large blocks of voting
stock to fend off unwanted tender offers or hostile takeovers without further
shareholder approval.
AUTHORIZATION OF PREFERRED STOCK. The Company's Articles of Incorporation
authorize the issuance of up to 10,000,000 shares of Preferred Stock in one or
more series. The Company's Board of Directors has the authority to fix the
number of shares and to determine or alter for each such series, such voting
powers, full or limited, or no voting powers, and such designations,
preferences, and relative, participating, optional, or other rights and such
qualifications, limitations, or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issue of such shares. The Board of Directors is also
authorized to increase or decrease (but not below the number of shares of such
series then outstanding) the number of shares of any series subsequent to the
issue of shares of that series.
FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS. This Form 8-K contains
certain forward-looking statements, including among others: (i) the projected
sales growth of the Company's products; (ii) anticipated trends in the Company's
financial condition and results of operations; (iii) the Company's business
strategy and (iv) the Company's ability to distinguish itself from its current
and future competitors. These forward-looking statements are based largely on
the Company's current expectations and are subject to a number of risks and
uncertainties. Actual results could differ materially from these
forward-looking statements. In addition to the other risks described elsewhere
in this "Risk Factors" discussion, important factors to consider in evaluating
such forward-looking statements include: (i) changes to external competitive
market factors or in the Company's internal budgeting process which might impact
trends in the Company's results of operations; (ii) anticipated working capital
or other cash requirements; (ii) changes in the Company's business strategy or
an inability to execute its strategy due to unanticipated changes in the
industry; and (iv) various competitive factors that may prevent the Company from
competing successfully in the marketplace. In light of these risks and
uncertainties, many of which are described in greater detail elsewhere in this
"Risk Factors" discussion, there can be no assurance that the events predicted
in forward-looking statements contained in this Form 8-K will in fact,
transpire.
IN ADDITION TO THE FOREGOING RISKS, BUSINESSES ARE OFTEN SUBJECT TO RISKS THAT
ARE NOT FORESEEN OR FULLY APPRECIATED BY MANAGEMENT. POTENTIAL INVESTORS SHOULD
KEEP IN MIND THAT OTHER IMPORTANT RISKS COULD ARISE.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
19
<PAGE>
As of the date of the Merger, Paul C. Roberts, Certified Public
Accountant, the independent accountant previously engaged as the principal
accountant to audit the financial statements of the Company was
terminated. As of the same date, the firm of Corbin & Wertz was engaged as
the independent accountant for the Company.
The audit reports of Paul C. Roberts on the financial statements of
the Company did not contain any adverse opinion or disclaimer of opinion,
nor were they qualified or modified as to audit scope or accounting
principles. The decision to change accountants was approved by the board of
directors of the Company. During the Company's two most recent fiscal years and
any subsequent interim period preceding the change, there were no
disagreements with the former accountant 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 the
former accountant, would have caused it to make reference to the subject
matter of the disagreements in connection with its report.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of GPN for the period from inception until
March 31, 2000 and the financial statements of DMRX as of February 28, 1999 and
for each of the two years then ended, as well as applicable pro forma financial
information, will be filed by amendment to this Form 8-K within the time period
required pursuant to SEC regulations.
ITEM 8. CHANGE IN FISCAL YEAR
GPN as the successor issuer has a fiscal year end of December 31.
DMRX's fiscal year was February 28. GPN will retain its December 31 fiscal year
end.
EXHIBITS
*3.1 Articles of Incorporation of the Company, as amended
*3.2 Bylaws of the Company
3.3 Articles and Agreement of Merger of GoPublicNow.com, Inc. into
DermaRx Corporation
3.4 Certificate of Merger of GoPublicNow.com, Inc. into
DermaRx Corporation
- -----
*Previously filed
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 8-K to be signed on its behalf by
the undersigned hereunto duly authorized.
GOPUBLICNOW.COM, INC.
/s/ Bruce A. Berman
----------------------------------
President and Chief Executive
Officer
Date: April 20, 2000
21
ARTICLES AND AGREEMENT OF MERGER
OF
GOPUBLICNOW.COM, INC.
(A NEVADA CORPORATION)
INTO
DERMARX CORPORATION
(A DELAWARE CORPORATION)
The undersigned officers of GoPublicNow.com, Inc., a Nevada corporation as
the disappearing corporation, and of DermaRx Corporation, a Delaware corporation
as the surviving corporation, pursuant to a Plan and Agreement of Merger submit
these Articles and Agreement of Merger pursuant to the provisions of the Nevada
Revised Statutes 92A.
Article I - Constituent Corporations
- ----------------------------------------
The name and place of organization and governing law of each constituent
corporation is:
A. GoPublicNow.com, Inc., a Nevada corporation
B. DermaRx Corporation, a Delaware corporation
The Address for Service of Process is 5000 Birch Street, West Tower, Suite
4900, Newport Beach, California 92660, Attention Bruce A. Berman.
Article II - Adoption of the Plan and Agreement of Merger
- -------------------------------------------------------------------
The respective Boards of Directors of the Surviving Corporation and the
Disappearing corporation have adopted a Plan and Agreement of Merger.
Article III - Approval of the Plan and Agreement of Merger by the Owners
- --------------------------------------------------------------------------------
The Plan and Agreement of Merger was approved by the written consent of the
owners of each class of interests of the Surviving Corporation and the
Disappearing Corporation.
Article IV - Amendments to the Articles of Incorporation of the Surviving
- --------------------------------------------------------------------------------
Corporation
- -----------
The Articles of Incorporation of the Surviving Corporation shall be amended
by these Articles of Merger as follows:
Article FIRST shall be amended to read as follows:
"The name of the Corporation shall be GoPublicNow.com, Inc."
Article FOURTH shall be amended to read as follows:
<PAGE>
"This Corporation is authorized to issue two classes of shares of stock to
be designated as "Common Stock" and "Preferred Stock". The total number of
shares of Common Stock which this Corporation is authorized to issue is One
Hundred Million (100,000,000) shares, par value $0.001. The total number of
shares of Preferred Stock which this Corporation is authorized to issue is Ten
Million (10,000,000) shares, par value $0.001. The shares of Common Stock
issued and outstanding as at the date of these Articles of Merger shall be
subject to a one for five reverse stock split.
The shares of Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the Corporation (the "Board of
Directors") is expressly authorized to provide for the issue of all or any of
the shares of the Preferred Stock in one or more series, and to fix the number
of shares and to determine or alter for each such series, such voting powers,
full or limited, or no voting powers, and such designations, preferences, and
relative, participating, optional, or other rights and such qualifications,
limitations, or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of such shares (a "Preferred Stock Designation") and as may be permitted
by the General Corporation Law of the State of Delaware. The Board of Directors
is also expressly authorized to increase or decrease (but not below the number
of shares of such series then outstanding) the number of shares of any series
subsequent to the issue of shares of that series. In case the number of shares
of any such series shall be so decreased, the shares constituting such decrease
shall resume the status that they had prior to the adoption of the resolution
originally fixing the number of shares of such series."
Article V - Plan and Agreement of Merger
- -----------------------------------------------
A. The complete executed Plan and Agreement of Merger is on file at the
Surviving Corporation's registered office or other place of business.
B. A copy of the Plan and Agreement of Merger shall be furnished, on
request and without cost, to any owner of a corporation which is party to the
merger.
Article VI - Effective Date of Merger
- -------------------------------------------
The merger of the Disappearing Corporation with and into the Surviving
Corporation shall take effect on April 5, 2000, which date is not more than 90
days after the filing of these Articles and Agreement of Merger.
Dated this 4th day of April, 2000.
"DISAPPEARING CORPORATION" "SURVIVING CORPORATION"
GoPublicNow.com, Inc. DermaRx Corporation
5000 Birch Street 284 Jackson Street
West Tower, Suite 4900 Denver, Colorado 80222
Bakersfield, CA 93313
/s/ Bruce A. Berman /s/ Maryanne Carroll
By: Bruce A. Berman By: Maryanne Carroll
Its: President Its: President
<PAGE>
Attested to this 4th day of April, 2000.
/s/ Bruce A. Berman
Bruce A. Berman, Secretary
GoPublicNow.com, Inc., a Nevada corporation
Attested to this 4th day of April, 2000.
/s/ Maryanne Carroll
Maryanne Carroll, Secretary
DermaRx Corporation, a Delaware corporation
CERTIFICATE OF MERGER
(DELAWARE)
CERTIFICATE OF MERGER
OF
GOPUBLICNOW.COM, INC.
(a Nevada corporation)
INTO
DERMARX CORPORATION
(a Delaware corporation)
Pursuant to Section 252(c) of the General Corporation Law of the State of
Delaware,
It is hereby certified, on behalf of each of the constituent corporations
named below, as follows:
1. The names of the constituent corporations are GoPublicNow.com,
Inc., a Nevada corporation ("GPN") and DermaRx Corporation, a Delaware
corporation ("DMRX" or the "Surviving Corporation"). The Articles of
Incorporation of GPN was filed with the Secretary of State of the State of
Nevada on December 2, 1999. The Certificate of Incorporation of DMRX was filed
with the Secretary of State of the State of Delaware on June 4, 1985.
2. An Agreement and Plan of Reorganization between GPN and DMRX has
been approved, adopted, certified, executed and acknowledged by GPN and DMRX in
accordance with Section 252(c) of the General Corporation Law of the State of
Delaware.
3. DMRX is the surviving corporation.
4. The executed Agreement and Plan of Reorganization is on file at the
principal place of business of DMRX, the surviving corporation, at 5000 Birch
Street, West Tower, Suite 4900, Newport Beach, CA 92660. A copy of the
Agreement and Plan of Reorganization will be furnished by DMRX, the surviving
corporation, without cost, to any stockholder of GPN or DMRX who sends a written
request therefor to DMRX at its principal place of business indicated above.
DMRX hereby appoints PARACORP INCORPORATED to accept service of process for
DMRX. All services of proccess may be mailed to: 15 E. North Street, City of
Dover, County of Kent, Delaware 19901.
5. The authorized capital stock of GPN preceding the merger is
50,000,000 shares of common stock, par value $.001 per share, and 10,000,000
shares of preferred stock, par value $.001 per share. The authorized capital
stock of DMRX preceding the merger was 12,000,000 shares of common stock, par
value $.05 per share, and 800 shares of preferred stock, par value $.10 per
share.
<PAGE>
6. The Articles of Incorporation of DMRX as the Surviving Corporation
shall be amended by this Certificate of Merger as follows:
Article FIRST shall be amended to read as follows:
"The name of the Corporation shall be GoPublicNow.com, Inc."
Article FOURTH shall be amended to read as follows:
"This Corporation is authorized to issue two classes of shares of stock to
be designated as "Common Stock" and "Preferred Stock". The total number of
shares of Common Stock which this Corporation is authorized to issue is One
Hundred Million (100,000,000) shares, par value $0.001. The total number of
shares of Preferred Stock which this Corporation is authorized to issue is Ten
Million (10,000,000) shares, par value $0.001. The shares of Common Stock
issued and outstanding as at the date of these Articles of Merger shall be
subject to a one for five reverse stock split.
The shares of Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the Corporation (the "Board of
Directors") is expressly authorized to provide for the issue of all or any of
the shares of the Preferred Stock in one or more series, and to fix the number
of shares and to determine or alter for each such series, such voting powers,
full or limited, or no voting powers, and such designations, preferences, and
relative, participating, optional, or other rights and such qualifications,
limitations, or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of such shares (a "Preferred Stock Designation") and as may be permitted
by the General Corporation Law of the State of Delaware. The Board of Directors
is also expressly authorized to increase or decrease (but not below the number
of shares of such series then outstanding) the number of shares of any series
subsequent to the issue of shares of that series. In case the number of shares
of any such series shall be so decreased, the shares constituting such decrease
shall resume the status that they had prior to the adoption of the resolution
originally fixing the number of shares of such series."
GOPUBLICNOW.COM, INC. DERMARX CORPORATION
(a Nevada corporation) (A Delaware corporation)
By: /s/ Bruce A. Berman By: /s/ Maryanne Carroll
Bruce A. Berman Maryanne Carroll
President President
ATTEST: ATTEST:
/s/ Bruce A. Berman /s/ Maryanne Carroll
Bruce A. Berman Maryanne Carroll
Secretary Secretary
