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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20509
FORM 8-K/A-2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
February 19, 1999
Date of Report
(Date of Earliest Event Reported)
WORLD INTERNETWORKS, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada 033-05844-NY 87-0575839
(State or other juris- (Commission File No.) (IRS Employer
diction of incorporation) I.D. No.)
418 South Commerce Road Suite #422
Orem, Utah 84058
(Address of Principal Executive Offices)
(801) 434-7517
Registrant's Telephone Number
Item 5. Other Events.
General
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The Registrant temporarily ceased business operations on October 22,
1998, as outlined in its 8-K Current Report of such date, which has been
previously filed with the Securities and Exchange Commission and is
incorporated herein by reference.
Since then, the Registrant has undergone a restructuring, which
resulted in the resignation of former directors and executive officers; the
election of a new management team; and the recommencement of operations. See
the 10-KSB Quarterly Report for the quarter ended November 30, 1998, which has
been previously filed with the Securities and Exchange Commission and is
incorporated herein.
During the next twelve months, the Registrant expects to become one
of the premier sites on the Internet providing access to electronic shopping,
local and national news, travel, business opportunities, wall street and
financial markets and much more. Management of the Registrant believes its
web site will become one of the most popular portals to the Internet.
The Registrant will specialize in bringing state-of-the-art web site
technology and the Internet to small businesses in the personal market. Its
vision is to provide web site innovation on fast, easy and safe, on line
shopping, with the integration of traditional retailing through the Internet
with the Registrant's web site owners.
Through core operations, joint venture arrangements and the
Registrant's distributor network, the Registrant expects its revenue
opportunities to be classified in four general areas:
* Sales of web sites to small businesses and home based
business markets.
* Hosting fees for web sites and distressed/over-stocked
product resale opportunities from numerous wholesale
vendors.
* Sales of varied products from business enhancement
software to vacation banners that facilitate recurring
visits to our member web site locations.
* Referral payments on the sales of Merchant Accounts
for online processing of credit card transactions.
The Registrant's restructured operations are currently underway,
though the Registrant will require substantial debt or equity financing during
the next twelve months to enhance its business opportunities. For further
information, see the Registrant's web site at www.wiworks.com.
Principal Executive Offices
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The new principal executive offices of the Registrant are located at
418 South Commerce Road, Suite 422, Orem, Utah 84058, Telephone: 801-434-7517;
and Facsimile: 801-229-0092. These facilities are being provided by Internet
Development, Inc., at no cost for one year, as outlined below under the
heading "Corporate Affiliations."
Corporate Affiliations
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The Registrant is in the process of completing an agreement to
formalize its current on-going operations through:
Internet Development, Inc. ("IDI")
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IDI will design and build the Registrant's web site, with a go-live
date of not later than March 8, 1999, and:
* The Registrant will charge distributors monthly fees.
* The monthly hosting fees shall be divided between the
distributor, the Registrant and IDI, as agreed.
* Net sales price of the web sites shall be divided by
the Registrant and IDI.
* IDI will make available to the Registrant sufficient
inventory of sites at no cost, to satisfy prior claims
of distributors, and these distributors shall be
entitled to 100% of the proceeds from the sale of
these sites until this inventory is exhausted.
* IDI will establish a reseller agreement for the
Strategic Advantage Software, which will be retailed
by the Registrant, with a commission to be payable to
distributors.
* IDI will provide a merchant account to transact all of
the on-line purchases, until the Registrant is
repositioned sufficiently to obtain a merchant account
of its own.
* All technical services required by the Registrant will
be provided by IDI, including design, build,
maintenance, customer service, technical updates and
the like.
* The Registrant will occupy an office in the facilities
of IDI located at 418 South Commerce Road, in Orem,
Utah, at no cost, for a period of one year; however,
the Registrant will be responsible for all hard costs,
including telephone, printing, personnel employed by
the Registrant and similar expenses.
* The IDI vacation banner will be made available to
distributors of the Registrant at no cost for six
months, and at a monthly fee to be shared by the
Registrant and IDI thereafter.
* IDI will have a first right of refusal to purchase up
to $50,000 of the Registrant's contemplated private
placement of "restricted securities" (common stock) at
an offering price of $1 per share, and in the event of
such purchase, shall receive a warrant at a term to be
negotiated to purchase an additional share for each
share of "restricted securities" purchased at a price
of $4 per share.
* The Registrant shall have access to all of the
facilities of IDI, including conference rooms,
receptionist services, copy machines, facsimile equipment
and telephone messaging services at no
additional cost for a period of one year.
* IDI will install the Registrant's systems and network
to all main databases, together with necessary
telephone equipment.
* Principals of IDI will corporate restructuring and
related matters.
Internet Marketing Concepts ("IMC")
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IMC is an operating unit of IDI, and the Registrant
intends to retain two of its top managers to facilitate day-to-day needs. IMC
is an Orem, Utah based leader in the direct sales industry, providing advanced
software solutions for the small business and home based business markets.
Commerce Market Place ("CM")
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CM is owned by IDI and is to be included in the shared
revenue arrangement being negotiated between the Registrant and IDI. CM is a
virtual mall which was developed originally to provide a shopping environment
which was safe to conduct business transactions, while being fun and easy to
use.
E-Commerce Exchange ("ECE")
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ECE has been contracted to provide merchant account
services to the Registrant's entire national network, providing a fee to the
Registrant for all approved merchant accounts; a schedule for payments; charge
backs, if the Registrant has been paid and a dispute or charge back is
received by ECE; confidentiality; return of each party's information, on
termination; a six month term, with an automatic renewal of six months, if not
terminated on 60 notice; and a first right of refusal for ECE to match the
fees of any other merchant account provider to the Registrant, which the
Registrant subsequently engages. ECE is a nationwide credit card processing
company, with over eight years experience specializing in merchant account
and credit card transaction solutions for non-traditional merchants within
the Internet.
Management Employment Contracts
---------------------------------------------
The Registrant has or shortly will execute Employment Contracts
with certain members of its management as follows:
Steven K. Hansen. Mr. Hansen was designated on February
19, 1999, to act as the President of the Registrant for a period of three
years; at a monthly salary of $8,000 (to commence on March 1, 1999); with a
complete medical benefit package for him and his family; and with 800,000
shares of "restricted securities" (common stock) to be issued no later than
10 days from the execution of the Employment Contract.
Phillip M. Ray. Mr. Ray was designated
Secretary/Treasurer, on March 4, 1999, and will act as the business
development manager, responsibilities to include all facets the Registrants's
direct selling efforts, the transfer of existing web sites to the new server,
day to day operations and introductions to strategic business alliances. He
will receive a monthly salary of $3,000, with a six month review; 20,000
shares of "restricted securities" (common stock) shall be issued in the name
"Automotive Direct" in consideration of a $40,000 debt of the Registrant; and
Mr. Ray shall be accorded the following options to purchase additional shares
of these "restricted securities," for a period of two years after vesting,
with all non-vested options to expire on termination of employment for any
reason: 50,000 shares at an option price of $1 shall vest immediately; 5,000
at $1 once 1,000 web sites are hosted; 5,000 at $1 once 2,000 web sites are
hosted; 5,000 at $1.50 once 3,000 web sites are hosted; 10,000 at $2 once
5,000 web sites are hosted; 10,000 at $2.50 once 10,000 web sites are hosted;
and 30,000 at $3 once 20,000 web sites are hosted. Additional benefits may be
made available, based upon performance.
Randal L. Roberts. Mr. Roberts was designated as a
director on March 4, 1999. For his service on the Board of Directors, he
shall be granted the option to acquire 10,000 shares of "restricted
securities" (common stock) at a price of $2 per share for fiscal 1999, and an
additional 10,000 shares to be priced at the market price for the Registrant's
securities on any national medium on March 1, 2000; these options shall vest
immediately, and shall expire in five years. Mr. Roberts must attend at least
75% of all meetings of the Board of Directors for these options to remain in
force. He shall also be responsible for his own expenses of travel to
quarterly meetings.
Gary S. Winterton. Mr. Winterton was designated as a
director on March 4, 1999. For his service on the Board of Directors, he
shall be granted the option to acquire 10,000 shares of "restricted
securities" (common stock) at a price of $2 per share for fiscal 1999, and an
additional 10,000 shares to be priced at the market price for the Registrant's
securities on any national medium on March 1, 2000; these options shall vest
immediately, and shall expire in five years. Mr. Winterton must attend at
least 75% of all meetings of the Board of Directors for these options to
remain in force. He shall also be responsible for his own expenses of travel
to quarterly meetings. Mr. Winterton will serve as the Vice President of
Strategic Planning. He will be responsible for strategic planning and direct
distributor communications. He will be granted the following options to
acquire additional shares of "restricted securities" (common stock): 25,000 at
a price of $1 per share, which shall vest immediately; 25,000 shares at $2 on
the successful completion of certain contracts with a number of major
corporation; 10,000 at $2 once 10,000 web sites are hosted; and 10,000 at
$2.50 once 20,000 web sites are hosted. These options shall be for a period
of two years after vesting, with all non-vested options to expire on
termination of employment for any reason.
Risk Factors
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The Registrant's current and intended operations will be
subject to numerous risks, many of which cannot presently be ascertained or
anticipated. The Internet is relatively new, intensely competitive, rapidly
evolving and subject to many unique and proprietary technological
developments. Consider that:
* Results of operations will be dependent upon the
continued growth and acceptance of the Internet.
* Governmental regulation of the Internet could reduce
its appeal.
* Privacy issues may further reduce the appeal of the
Internet as a viable market for retail purchases.
* The Registrant may not adequately evaluate the
Internet trends sufficiently well to adapt to the
needs of the market, limiting its effectiveness to
compete with others.
* Plans by long distance carriers to charge rates
similar to telephone long distance charges could
seriously affect the use of the Internet.
* Increasing competition for the Internet market has
attracted some of the largest companies listed on the
New York Stock Exchange and NASDAQ, and the Registrant
will be at a distinct disadvantage in competing with
these entities in every phase of its present and
contemplated operations.
* The Registrant's ability to maintain its customer
base, following the recent recommencement of
operations, will greatly affect the Registrant's
success.
* The Registrant is in the developmental stage of its
operations; it requires substantial funding for its
planned operations and/or to pay and settle with
creditors from prior operations. The inability to
raise sufficient funding through equity of debt
financing will have a substantial adverse impact on
the Registrant's operations.
These itemized risks are only a few of the potential risks
facing the Registrant in the conduct of its current and intended operations,
in this ever changing industry. There can be no assurance that the
Registrant will be successful in meeting these and other challenges or in
addressing these and other risks. The failure to do so could have a material
adverse effect on the Registrant's business, financial condition, results of
operations and prospects.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
WORLD INTERNETWORKS, INC.
Date: 4/24/00 By:/s/Steven K. Hansen
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Steven K. Hansen
CEO, President and Chairman
