As Filed with the Securities and Exchange Commission on May 22, 2000
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to __________
Commission File Number 0-23462
MYWEB INC.COM
(Exact name of Small Business Issuer as Specified in its Charter)
NEVADA
(State or Other Jurisdiction of Incorporation or Organization)
88-0207089
(IRS Employer Identification No.)
Block G, Unit 606
Phileo Damansara 1
No. 9 Jalan 16/11
Off Jalan Damansara
46350 Petaling Jaya
Selangor Malaysia
(Address of Principal Executive Offices)
(603) 460-9282
Issuer's Telephone Number, Including Area Code
Check whether the issuer: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 a court.
Yes [X] No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of May 15, 2000, the registrant
had 11,121,357 shares of Common Stock outstanding.
Transitional Small Business Disclosure Format (check one):
Yes [X] No
<PAGE>
MYWEB INC.COM
FORM 10-QSB
For the Quarter Ended March 31, 2000
Page
Index Number
PART I FINANCIAL INFORMATION
Item 1 Condensed Consolidated Balance Sheets at March 31, 2000 and
December 31, 1999 (unaudited for March 31, 2000 period) 3
Condensed Consolidated Statements of Operations for the
three month periods ended March 31, 2000 and March 31, 1999
(unaudited) 4
Condensed Consolidated Statements of Cash Flows for the three
month periods ended March 31, 2000 and March 31, 1999 (unaudited) 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations 10
PART II OTHER INFORMATION
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 14
Item 5 Other Information 14
Item 6 Exhibits and Reports on Form 8-K 14
Certain statements under the caption "Management's Discussion and Analysis"
and elsewhere in this Form 10-QSB constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are typically identified by their inclusion of phrases such
as "the Company anticipates," "the Company believes" and other phrases of
similar meaning. Such forward looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
performance or achievements of the company to be materially different from any
future results, performance or achievements express or implied by such
forward-looking statements. Such factors include, among others: general
economic and business conditions; competition; political changes in
international markets; operating costs; costs of capital equipment; changes in
foreign currency exchange rates; changes in business strategy or expansion
plans; quality of management; availability, terms and development of capital;
fluctuating interest rates; and other factors referenced in this Form 10-QSB.
2
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MYWEB INC.COM
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS, EXCEPT FOR SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
(Unaudited)
March December
31, 2000 31, 1999
----------- ---------
<S> <C> <C>
Assets
- ------
Current Assets:
Cash and cash equivalents $ 792 $ 2,362
Accounts receivable, net 2,441 1,818
Inventories 791 43
Prepaid expenses and other current assets 375 466
--------- ---------
Total Current Assets 4,399 4,689
--------- ---------
Property and equipment, net 546 352
Goodwill, net 1,075 -
--------- ---------
$ 6,020 $ 5,041
========= =========
Liabilities and Shareholders' Equity
- ------------------------------------
Current Liabilities:
Accounts payable, trade $ 1,792 $ 1,861
Other accounts payable 3,386 1,369
Due to directors 76 198
Deferred revenue 25 26
Short term borrowings 362 -
Income taxes payable 8 -
Deferred Tax Liability 5 -
--------- ---------
Total Current Liabilities 5,654 3,454
--------- ---------
Commitments and contingencies (Note 9)
Minority Interest 98 7
Shareholders' Equity:
Common stock, par value $.01;
authorized 100,000,000 shares;
issued and outstanding 11,121,357 shares in 2000
and 11,070,135 shares in 1999 111 111
Additional paid-in capital 15,512 14,749
Accumulated deficit (15,363) (13,272)
Other comprehensive income (loss) 8 (8)
--------- ---------
Total Shareholders' Equity 268 (1,580)
--------- ---------
$ 6,020 $ 5,041
========= =========
</TABLE>
3
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MYWEB INC.COM
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
(Unaudited)
For The Three Months Ended
March 31, March 31,
2000 1999
---------- ---------
<S> <C> <C>
Revenues :
Net Sales $ 1,388 $ 436
Interest and Other Income 37 8
---------- ---------
Total Revenues 1,425 444
---------- ---------
Costs and Expenses:
Cost of sales 1,297 395
Sales and marketing 1,009 41
Product development 261 12
General administration 929 252
---------- ---------
Total Costs and Expenses 3,496 700
---------- ---------
Minority Interest 21 -
Loss before income taxes (2,092) (256)
Income Taxes - -
---------- ---------
Net Loss $ (2,092) $ (256)
========== =========
Loss per share - Basic and Diluted $ (0.19) $ (0.03)
========== =========
Average number of common shares outstanding 11,112,285 9,375,743
========== =========
</TABLE>
4
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MYWEB INC.COM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
(Unaudited)
For The Three Months Ended
March 31, March 31,
2000 1999
---------- ------------
<S> <C> <C>
Operating Activities:
Net loss $ (2,092) $ (256)
Reconciliation to net cash used in operating activities:
Depreciation 33 1
Non-cash Expense 624 -
Common stock issuance for consulting services - 4
Amortization of goodwill 98 -
Fixed assets written off 2 -
Gain on disposal of fixed assets (5) -
Minority interest in net income 21 -
Changes in Operating Working Capital:
(Increase) Decrease in inventories (101) -
(Increase) Decrease in accounts receivable, trade 162 644
(Increase) Decrease in prepaids and other current assets 170 (273)
(Decrease) Increase in accounts payable (675) 235
Decrease in deferred revenue (1) -
-------- ---------
Net cash (used in) provided by Operating Activities (1,764) 356
-------- ---------
Investing Activities:
Acquisition of property and equipment (72) -
Cash acquired in acquisitions 6 -
Acquired cash in Asia Media - 11
Proceeds from disposal of equipment 14 -
-------- ---------
Net cash (used in) provided by Investing Activities (52) 11
-------- ---------
Financing Activities:
Proceeds on issuance of common stock - 5
Repayments to directors (123) (15)
Proceeds of loan payable - 361
Net change in short term borrowings 362 -
Proceeds from minority shareholders 11 -
-------- ---------
Net cash provided by Financing Activities 250 351
Effect on exchange rate changes on cash (4) -
-------- ---------
(Decrease) Increase in cash and cash equivalents (1,570) 717
Cash, beginning of period 2,362 -
-------- ---------
Cash, end of period $ 792 $ 717
======== =========
</TABLE>
5
<PAGE>
MYWEB INC.COM
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: Basis of Presentation
The accompanying financial statements report the consolidated accounts of MyWeb
Inc.com. and its wholly owned subsidiaries, TecnoChannel Technologies Sdn. Bhd.
(a Malaysian corporation) and its subsidiary companies, MyWeb Asia Pte. Ltd. (a
Singaporean corporation), MyWeb Network System (Beijing) Co. Ltd. (a China
corporation) and MyWeb America Inc. (a Delaware corporation), and Easy2Bid Pte.
Ltd. (a Singaporean corporation). Pursuant to the acquisition described in Note
4 hereto, the Company has treated the acquisition of TecnoChannel Technologies
as a reverse acquisition and, accordingly, has reported TecnoChannel
Technologies' 1998 statements as continuous. The Company was incorporated on
February 20, 1985 pursuant to the laws of the State of Nevada, and presently has
an administrative office in San Francisco, California, and operations offices in
Kuala Lumpur and Beijing.
Note 2: Unaudited Financial Statements
The consolidated financial statements as of March 31, 2000 and for the periods
ended March 31, 2000 and 1999, included herein are unaudited; however, such
information reflects all adjustments consisting of normal recurring adjustments,
which are, in the opinion of management, necessary for a fair presentation of
the information for such periods. In addition, the results of operations for the
interim periods are not necessarily indicative of results for the entire year.
The accompanying financial statements are in condensed form and should be read
in conjunction with the Company's consolidated financial statements and notes
thereto included in the Company's Annual Report filed on Form 10-KSB.
Note 3: Inventories
Inventories of the Company primarily consist of fast moving consumer products
and office stationery products. All inventories are stated at the lower of cost
or realizable values. Cost of these inventories is primarily determined on a
weighted average basis.
Note 4: Acquisitions
On February 24, 1999, the Company acquired 100% of the issued and outstanding
capital stock of TecnoChannel Technologies Sdn. Bhd., a Malaysian corporation,
("TSB"), in exchange for an aggregate of 8,500,000 shares of common stock. In
connection with such acquisition, the Company issued an aggregate of 440,000
shares of its common stock to GEM Ltd. for its services as financial advisor to
the Company.
TSB, which was formed in April, 1997 and operates under the trade name, "MyWeb",
has developed with Philips Consumer Electronics set-top boxes that enable
Internet access via the television set. The boxes are marketed and sold by
Philips and other third parties and include software developed by TSB. In
addition, TSB has developed and provides enabling technologies to manufacturers
and Internet service providers serving non-personal computer devices, (such as
the set-top boxes), to enhance the functionalities of such devices. TSB also
operates multiple Internet portals providing localized interactive applications,
such as e-commerce, to both personal computer users and set-top box users.
6
<PAGE>
MYWEB INC.COM
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 4: Acquisitions - Continued
The Company accounted for the acquisition as a recapitalization under a reverse
acquisition procedure whereby TSB's operations and retained earnings are
reported as continuous. The value of the shares issued to GEM Ltd. has been
charged to additional paid-in capital.
On January 3, 2000, the Company acquired 95% of the issued and outstanding
capital stock of Easy2Bid Pte Ltd ("E2B") and issued 6,200 shares of common
stock of the Company to the shareholders of E2B at a total purchase
consideration of approximately $164,000. The Company accounted for the
acquisition of E2B using the purchase method of accounting. Accordingly, the
purchase price has been assigned to the fair values of the acquired assets and
liabilities, resulting in the recognition of goodwill in the amount of $139,000,
which is being amortized over a three year period.
On January 2, 2000, the Company's subsidiary, TSB, acquired 66.67% of the issued
and outstanding capital stock of Pacific Office Supplies Sdn. Bhd. ("POS") for a
total purchase consideration of approximately $1.23 million, payable in cash.
The Company accounted for the acquisition of POS using the purchase method of
accounting. Accordingly, the purchase price has been assigned to the fair values
of the acquired assets and liabilities, resulting in the recognition of goodwill
in the amount of $1.03 million, which is being amortized over a three year
period.
Note 5: Goodwill
As part of the acquisition of E2B and POS as described in Note 4 above, the
Company recorded an intangible asset related to goodwill in the amount of $1.17
million. This asset is being amortized over a three year period beginning
January 2000.
Note 6: Other Accounts Payable
Of other accounts payable balances at March 31, 2000, approximately $1.23
million represents amount owing to vendors in connection with the purchase of
POS.
Note 7: Short Term Borrowings
The short term borrowings represent a short term loan obtained by MyWeb Network
System (Beijing) Co. Ltd. from the China Construction Bank. The short term
borrowing bears interest of 6.44% per annum of which the principal amount will
be payable in full on January 13, 2001. The interest element will be repaid
every three months commencing March 21, 2000.
7
<PAGE>
MYWEB INC.COM
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 8: Certain Transactions
Private placements:
The Company completed a private placement of 250,000 shares of our common stock
on March 23, 2000 for aggregate proceeds of $2.5 million. Under the terms of the
agreement, we have received $1.0 million on April 4, 2000 and will receive a
further $1.5 million in aggregate proceeds by June 15, 2000.
The Company has also secured another private placement of 100,000 shares of the
Company's common stock where we will receive $800,000 upon the signing of the
agreement. We intend to use the proceeds to finance our operations.
The Company entered into a Licensing and Shareholder Agreement, dated March 29,
2000 (the "Adgator Agreement"), with Adgator.com Co., Ltd and Adgator Inc.
(collectively, "AC/AI"). Under the terms of the Adgator Agreement, AC/AI has
agreed to purchase, and the Company has agreed to sell to AC/AI, within three
(3) months following March 29, 2000, $1.0 million worth of the Company's common
stock at a price per share equal to a 30% discount from the one week average
price from the date of the agreement. The Company received a non-refundable
deposit of $100,000 from AC/AI in April 2000.
Note 9: Commitments and Contingencies
Option agreement:
Pursuant to a proposed acquisition in 1996 which was never completed, the
Company had granted its then subsidiary, AMC Holdings, an option to convert
certain preference shares in the acquisition agreement to 125,000 shares of the
Company's common stock. The proposed acquired company executed an agreement of
forbearance whereby it was agreed to never exercise such option. As management
is presently uncertain as to the legal binding effect of such an agreement upon
an innocent purchaser for value, and although management believes that no shares
will be required to be issued, an aggregate of 125,000 shares are reserved if
the Company may be forced to issue such shares in the future.
Marketing Agreement:
The Company executed an agreement with a public relations consulting firm,
providing for the firm to provide certain services over a twelve month term. The
Company is charging the value of the shares issued for such arrangement of
approximately $283,000 over the agreement term. As of March 31, 2000,
approximately $94,000 of the advance fee has been charged to operations. Such
services included the preparation of product and corporate literature, as well
as services related to media distribution.
8
<PAGE>
MYWEB INC.COM
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 9: Commitments and Contingencies - Continued
1999 Stock Incentive Plan
In February 1999, the Company's stockholders approved the adoption of the
Company's 1999 Incentive Program (the "Program") pursuant to which various types
of awards may be made. In June 1999, the directors of the Company adopted the
1999 Non-Qualified Stock Option Plan (the "Plan") pursuant to which only
non-qualified stock options may be granted.
Under our Stock Incentive plans, we may grant stock options and incentive awards
to executives, directors and employees to provide motivation to enhance the
Company's success and increase shareholder value. Incentive or non-qualified
stock options granted under our plans may be exercised up to 10 years from the
date the options were granted and vest over a period of up to two (2) years and
certain options granted in 1999 became exercisable immediately. Option holders
are required to tender cash or shares of our common stock that they already
owned equal to the aggregate exercise price of the options at the time of
exercise. Options outstanding under our plans may not exceed 15% of the total
number of shares at any time outstanding and the total number of options that
may be granted under the plans may not exceed 1,000,000 under each plan. At
March 31, 2000, shares available for future awards under our plans were 547,862.
For the three month period ended March 31, 2000, the Company recognized
compensation expense of $504,000, related to the intrinsic value at the date of
grant of certain options.
Note 10: Subsequent Events
Secondary Listing in Singapore
The Company is in the process of applying to the Singapore Exchange Securities
Trading Limited ("SGX") for a secondary listing of the Company's common stock on
the Stock Exchange of Singapore.
Licensing and Shareholder Agreement
The Company entered into a Licensing and Shareholder Agreement, dated March 29,
2000, with Adgator.com Co., Ltd and Adgator Inc. (collectively "AC/AI"). Under
the terms of the agreement, AC/AI has agreed to purchase, and the Company has
agreed to sell to AC/AI, within three (3) months of March 29, 2000, $1.0 million
worth of the Company's common stock at a price per share equal to a 30% discount
from the one week average price from the date of the agreement. The Company
received a non-refundable deposit of $100,000 from AC/AI in April 2000.
Investment in Jingqi.com
On March 22, 2000, the Company entered into an agreement to acquire a strategic
equity stake of 25% - 36% in Jingqi.com, one of the largest retail bookstore
chains in China. During due diligence, certain matters were brought to the
attention of the Company's management. As a result of the outcome of the due
diligence, the Company's management has decided not to proceed with an
investment in Jingqi.com unless and until these matters are resolved.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THE FOLLOWING ANALYSIS OF THE OPERATIONS AND FINANCIAL CONDITION OF THE
COMPANY SHOULD BE READ IN CONJUNCTION WITH THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO, OF THE COMPANY CONTAINED ELSEWHERE IN
THIS FORM 10-QSB.
Overview
The Company was inactive during 1997 and 1998. In February 1999, the Company
acquired all of the capital stock of TecnoChannel Technologies Sdn. Bhd., a
Malaysian corporation ("TSB").
TSB, which was formed in April, 1997 and operates under the trade name, "MyWeb,"
has developed with Philips Consumer Electronics set-top boxes that enable
Internet access via the television set. The boxes are marketed and sold by third
parties, primarily Philips Consumer Electronics, and include software developed
by TSB. In addition, TSB has developed and provides enabling technologies to
manufacturers and Internet service providers serving non-personal computer
devices (such as the set-top boxes) to enhance the functionalities of such
devices. TSB also operates multiple Internet portals providing localized
interactive applications, such as e-commerce, to users of both personal
computers and set-top boxes.
The Company's current business plan is to devote all of its resources to the
development and expansion of TSB's business in China and other emerging markets
that have the following characteristics: a high percentage of television usage;
a high level of consumer demand for the Internet; a low percentage of personal
computer use; a low level of personal computer literacy; a high cost of personal
computers; and a pre-existing cable and telecommunications infrastructure.
On February 22, 2000, we entered into an agreement with Asia Infonet Co., Ltd.,
an Internet service provider in Thailand, to jointly distribute and market a
co-branded portal in Thailand, localized in Thai language. Under the terms of
the agreement, Asia Infonet has agreed to provide consumers with local access to
MyWeb's portal and allow MyWeb access to its distribution channels at no cost to
distribute and market the product. MyWeb has agreed to provide logos and icon
links to Asia Infonet's websites on its portal.
On February 15, 2000, we entered into a license and service agreement with MyWeb
Americas, Inc. ("MyWeb Americas"). The agreement allows MyWeb Americas to
develop, offer and promote television Internet access and Spanish and Portuguese
versions of our MyWeb Online Services to markets in Latin America. Under the
agreement, MyWeb Americas may use our Thunder and Thunderserve software, and our
intellectual property rights relating to our MyWeb Online Service, and may also
sub-license and promote our technology within the Latin American markets. MyWeb
Online Services for the Latin American market are still being developed, and we
anticipate that they will be ready by the end of 2000.
As discussed below, the three month period ended March 31, 2000 was
characterized by increased revenues offset by increased expenses incurred in
connection with the Company's operations in China and for professional fees
incurred in relation to the Company's application for a secondary listing on the
Stock Exchange of Singapore. The Company believes it is well placed to capture a
portion of the Internet users in China and other emerging markets through the
deployment of the set-top boxes, as they offer easy and affordable Internet
access compared to PCs whose prices remain high relative to average income
levels. The Company has entered into strategic alliances with local Chinese
partners, i.e., manufacturers, content providers and Internet service providers,
for the deployment of the set-top boxes, and for MyWeb's localized portal site
in China. The Company has continued on its brand building strategy in China and
maintained its level of expenditure relating to the cost of acquiring Internet
10
<PAGE>
users in China and advertising and promoting the MyWeb brand. The Company
expects to continue to incur operating losses during the continued expansion of
our products and services in China and other emerging markets.
We have a limited operating history upon which to base an evaluation of our
business and prospects. We have yet to achieve significant revenues, and our
ability to generate significant revenues in the future is uncertain. Further, in
view of the rapidly evolving nature of our business and our limited operating
history, it is not possible to forecast future revenues. We believe, therefore,
that period-to-period comparisons of our financial results are not necessarily
meaningful, and you should not rely on them as an indication of future
performance.
Our business and prospects must be considered in light of the risks, expenses
and difficulties frequently encountered by companies in their early stages of
development, particularly companies in new and rapidly evolving markets such as
the Internet and e-commerce. In addition, our revenues depend substantially upon
the level of activity on our Internet properties and our ability to successfully
create brand name awareness and market recognition for our products and
services. Although we have experienced growth in our revenues since our merger
with TSB in February 1999, there can be no assurance that our revenues will
continue at their current rate or that we will be able to operate profitably.
CONSOLIDATED RESULTS OF OPERATIONS
Revenues
Revenues were $1.43 million, including $37,000 of interest and other income, in
the three month period ended March 31, 2000 (the "2000 First Quarter"), compared
to $444,000, including $8,000 of interest income, in the three month period
ended March 31, 1999 (the "1999 First Quarter"). The increase in revenues of
221% in the 2000 First Quarter as compared to the 1999 First Quarter was
primarily due to the increase in e-commerce transactions, which only commenced
in 1999. Revenues for the 2000 First Quarter consisted primarily of e-commerce
transactions of $1.27 million and advertising and design work of approximately
$112,000. No customer accounted for more than 10% of total revenues during the
2000 First Quarter. No customer accounted for more than 10% of total revenues
during the 1999 First Quarter except for Pemasaran Jaya Mas, Saw Beng Swee,
Visan Holdings, The Action Station and Elemkay Resources Sdn Bhd.
Cost of Sales
Cost of sales was $1.3 million in the 2000 First Quarter compared to $395,000 in
the 1999 First Quarter. The increase in cost of sales of 228% in the 2000 First
Quarter compared to the 1999 First Quarter was primarily due to increases in the
cost of goods for e-commerce transactions which is consistent with the increase
in revenue over the same period.
Total Operating Expenses
Total operating expenses were $2.2 million in the 2000 First Quarter compared to
$305,000 in the 1999 First Quarter. The increase in total operating expenses of
621% in the 2000 First Quarter compared to the 1999 First Quarter is primarily
attributable to an increase in sales and marketing expenses from $41,000 in the
1999 First Quarter to $1.01 million in the 2000 First Quarter and general
administration expenses from $252,000 in the 1999 First Quarter to $929,000 in
the 2000 First Quarter.
Sales and marketing expenses in the 2000 First Quarter consisted primarily of
employee compensation, advertising and other promotion/marketing related
expenses and employee related expenses. The increase in absolute dollars from
the 1999 First Quarter is primarily attributable to an increase in personnel,
costs associated with the Company's advertising and promotion/marketing related
expenses in China and employee related expenses.
11
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Product development expenses increased 2,075% from $12,000 in the 1999 First
Quarter to $261,000 in the 2000 First Quarter. Product development expenses in
the 2000 First Quarter consist primarily of employee compensation relating to
developing and enhancing features of the MyWeb online service properties. The
increase in absolute dollars from the 1999 First Quarter is primarily a result
of the increase in the number of engineers responsible for the product
development and employee related expenses.
General administration expenses increased 269% from $252,000 in the 1999 First
Quarter to $929,000 in the 2000 First Quarter. General administration expenses
in the 2000 First Quarter consist primarily of employee compensation, employee
related expenses and fees for professional services. The increase in absolute
dollars from the 1999 First Quarter is primarily a result of an increase in
employee compensation and an increase in fees for professional services
primarily related to the Company's application for a secondary listing on the
Singapore Stock Exchange amounting to approximately $230,000.
Net Profit (Loss)
The Company recorded a net loss of $2.09 million or $0.19 per share for the 2000
First Quarter compared to a net loss of $256,000 or $0.03 per share for the 1999
First Quarter. Compared to the net loss of $256,000 in the 1999 First Quarter,
the increase in net loss was primarily attributable to the increase in cost of
revenues, advertising and promotion/marketing related expenses especially in the
Company's operations in China, employee compensation and fees for professional
services. This was offset by the increase in revenues in the 2000 First Quarter
compared to the 1999 First Quarter.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, the Company had cash and cash equivalents totaling $792,000
compared to $8,000 at March 31, 1999. Cash used in operating activities of $1.76
million during the 2000 First Quarter was primarily due to the net loss of $2.09
million for the 2000 First Quarter. Cash used in investing activities was
$52,000 for the 2000 First Quarter compared to cash provided by investing
activities of $11,000 for the 1999 First Quarter. The capital expenditures of
$72,000 for the 2000 First Quarter consisted primarily of the purchase of
computer hardware and software. Cash provided by financing activities of
$250,000 during the 2000 First Quarter was primarily from short-term borrowings
while $123,000 was used to repay the amount due to directors.
The Company completed a private placement of 250,000 shares of our common stock
on March 23, 2000 for aggregate proceeds of $2.5 million. Under the terms of the
agreement, we have received $1.0 million on April 4, 2000 and will receive a
further $1.5 million in aggregate proceeds by June 15, 2000.
The Company has also: -
i) secured another private placement of 100,000 shares of our common stock
where we will receive $800,000 upon the signing of the agreement, and
ii) entered into a Licensing and Shareholder Agreement pursuant to which the
other parties to the agreement have agreed to purchase within three (3)
months of March 29, 2000, $1.0 million worth of the Company's common stock
at a price per share equal to a 30% discount from the one week average
price from the date of the agreement. The Company received a non-refundable
deposit of $100,000 in April 2000.
However, the Company is continuing to pursue leads for additional possible
investors. The Company believes that with the additional funds of $3.3 million,
it will be able to meet its current expenditure requirements and achieve its
business goals for the next 12 months. Any additional funds raised will
determine the speed with which promotion and enhancements are pursued.
12
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1999, MyWeb Beijing set up a music channel on its website,
which contained links to websites on the internet with MP3 music, enabling users
to listen to or download MP3 songs through its search engine. Four member
companies of the International Federation of the Phonographic Industry ("IFPI"),
namely Sony Music Entertainment (Hong Kong) Records Ltd., Warner Records Ltd.,
Universal Records Ltd. and China Records Guangzhou, each sued MyWeb's Hyperlink
service in the Beijing Second Intermediate People's Court for copyright
infringement from the end of November to early December 1999. MyWeb and IFPI, as
well as its four member companies, reached a settlement agreement on March 17,
2000. Under the settlement, the litigation was terminated in exchange for which
My Web agreed to reimburse IFPI and its four member companies for their legal
costs, notarization cost and attorney's fees in the amount of approximately
$42,000.
ITEM 2. CHANGES IN SECURITIES
No securities that were not registered under the Securities Act of
1933, as amended (the "Act") were issued or sold by the Company during the three
months ended March 31, 2000, except as described below.
1. On February 25, 2000, the Company issued to Merger
Communications Inc. ("Merger"), a sophisticated investor, 30,000 shares of its
common stock, valued at approximately $330,000, as partial payment for certain
public relations services rendered to the Company by Merger. On the same date,
the Company issued an additional 15,000 shares of its common stock, valued at
approximately $283,000, to Merger for certain public relations services to be
rendered pursuant to Media Relations Cooperation contract dated September 28,
1999. The shares were issued in reliance upon the exemption provided by Section
4(2) of the Act.
2. On March 20, 2000, the Company issued 6,200 shares of its
common stock valued at approximately $164,000 to Deepa Nilkanth Mahajan, a
sophisticated investor, in exchange for 95% of the issued and outstanding
capital stock of Easy2Bid Pte Ltd., a Singaporean corporation. The shares were
issued in reliance upon the exemption provided by Regulation S promulgated under
the Act.
3. On March 23, 2000, the Company sold 250,000 shares of its
common stock to Asia Internet Assets, Inc. ("Asia Internet"), a sophisticated
investor, at $10 per share. Asia Internet paid $1.0 million of the total
purchase price on April 4, 2000 and the remaining $1.5 million is payable on or
before June 15, 2000. The shares were sold in reliance upon the exemption
provided by Regulation S under the Act.
4. On March 29, 2000, the Company entered into a Licensing and
Shareholder Agreement with Adgator.com Co., Ltd. and Adgator Inc. (collectively,
"AC/AI"). Under the terms of such agreement, AC/AI has agreed to purchase, and
the Company has agreed to sell to AC/AI, within three months following March 29,
2000, $1.0 million worth of the Company's common stock at a price per share
equal to a 30% discount from the one week average price from the date of the
agreement. The Company received a non-refundable deposit of $100,000 from AC/AI
in April 2000. The agreement to sell the shares was made in reliance upon the
exemption provided by Section 4(2) of the Act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
13
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
The Company is in the process of applying to the Singapore
Exchange Securities Trading Limited for a secondary listing of the Company's
common stock on the Stock Exchange of Singapore.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.44 Sale and Purchase Agreement, dated January 3, 2000,
between MyWeb Inc.com and Deepa Nilkanth Mahajan for
purchase of 95% of outstanding and issued shares in
Easy2Bid Pte. Ltd. * +
10.45 Sale and Purchase Agreement, dated January 2, 2000,
between MyWeb Inc.com and Tan Tian Sin and Chew Siau
Fong for purchase of 13,334 shares representing
66.67% of the issued and paid-up capital of Pacific
Office Supplies Sdn Bhd. * +
10.46 Co-Marketing Agreement, dated February 22, 2000,
between MyWeb Inc.com and Asia Infonet Co., Ltd. +
10.47 License Agreement, dated February 15, 2000, between
MyWeb Inc.com and MyWeb Americas, Inc. * +
10.50 Agreement for Bank Loan between MyWeb (Beijing) and
China Construction Bank. *
10.51 Mortgage Agreement between MyWeb (Beijing) and China
Construction Bank. *
10.62 QNX OEM Licensing Agreement, dated April 5, 2000,
between QNX Software Systems Ltd and TecnoChannel
Technologies Sdn Bhd. * +
10.63 Subscription Agreement, dated March 23, 2000, for
Asia Internet Assets Inc. to subscribe for MyWeb
Inc.com's common stock.
10.64 Letter, dated March 23, 2000, confirming Samsung Asia
Pte. Ltd.'s acceptance of MyWeb Inc.com's offer to
subscribe for MyWeb Inc.com common stock. *
10.65 Licensing and Shareholder Agreement, dated March 29,
2000, between MyWeb Inc.com and Adgator, Inc. +
10.66 Software Licensing Agreement, dated January 28, 2000,
between Tecnochannel and MyWeb (Beijing). **
10.67 Shareholders Agreement, dated February 15, 2000,
between MyWeb Inc.com and other shareholders of MyWeb
Americas. **
27.1 Financial Data Schedule for the Three Months Ended
March 31, 2000.
14
<PAGE>
(b) Reports on Form 8-K
On March 24, 2000, the Company filed a Current Report on
Form 8-K reporting the change in the Company's certifying
accountant from Wlosek & Braverman, LLC to Arthur Andersen and
that on March 13, 2000, shares of the Company's common stock
commenced trading on the American Stock Exchange and ceased to
trade on the Over-the-Counter Bulletin Board.
- ------
* Previously filed with the Commission on Form 10-KSB of MyWeb Inc.com,
April 14, 2000, and incorporated by reference.
** To be filed by amendment.
+ Portions of these exhibits have been omitted pursuant to a request for
confidential treatment.
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned, hereunto duly authorized.
MYWEB INC.COM
(Registrant)
By: /s/ Victor Fook Ai Ng
---------------------------------
Victor Fook Ai Ng
Director, Chief Financial Officer
Treasurer and Secretary
Date: May 19, 2000
Exhibit 10.46
A CO-MARKETING AGREEMENT
Made this 22nd day of February, 2000
Between
MyWeb Inc.com, a company incorporated in Nevada whose business address
is at 595 Market Street, Suite 2500, San Francisco, CA 94105, United States.
(hereinafter referred to as "MyWeb") on the one part
and
Asia Infonet Co., Ltd. whose business address is at 1 Fortune Town 17th
Floor, Ratchadapisek Road, Din Daeng, Bangkok 10320, Thailand (hereinafter
referred to as "Asia Infonet") on the other
WHEREAS -
MyWeb is a company with significant expertise and experience in
developing TV portals and providing alternative Internet access.
Asia Infonet is a leading ISP in Thailand.
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
<PAGE>
1. MYWEB'S COMMITMENTS
1.1 MyWeb will at [***] provide a co-branded TV portal localized in the
Thai language.
1.2 MyWeb will provide the necessary technical and marketing
consultancy to help launch the service.
1.3 MyWeb is committed to allocating sufficient experienced personnel
to execute item 1.2 above.
1.4 MyWeb will be responsible for all advertising and promotion
expenses.
1.5 MyWeb shall provide logos and icons link to Asia Infonet's websites
on its portal.
2. ASIA INFO'S COMMITMENTS
2.1 Asia Infonet will provide co-location for MyWeb's servers [***].
2.2 Asia Infonet will provide consumers with [***] of local access to
MyWeb's TV portal, hosted at Asia Infonet's backbone at a cost of [***]
per month.
2.3 Asia Infonet will allow MyWeb access to its distribution channels
[***] to distribute and market the product.
2.4 Asia Infonet will commit to allocating sufficient experienced
marketing personnel to help launch the service.
3. EXCLUSIVITY
3.1 MyWeb will not cooperate with any other internet service providers
in the territory of Thailand for the term of this contract.
3.2 Asia Infonet will not cooperate with any other analogue Internet
set-top box providers for the term of this contract.
4. TRADEMARKS AND LOGOS
4.1 Asia Infonet acknowledges that MyWeb owns the ThunderServe
trademark and MyWeb trademark and all MyWeb related trademarks, logos
and icons and agrees not to do anything harmful to or inconsistent with
MyWeb's rights in the aforementioned marks.
4.2 MyWeb acknowledges that Asia Infonet owns the ASIANET trademark and
logos and agrees not to do anything harmful to or inconsistent with
MyWeb's rights in the aforementioned marks.
2
<PAGE>
5. TERM OF AGREEMENT
5.1 The Agreement shall be for a period of 2 years (hereinafter
referred to as "the Term").
6. TERMINATION
Either party may terminate this agreement in the event the other party
is in material breach and has not cured breach within 30 days after written
notice by the other party.
7. SECRECY
Not at any time during or 1 year after the Term will either party
divulge or allow to be divulged to any persons any confidential information
relating to the business or affairs of the other and the details of this
agreement. In the event that this Clause is breached, both parties agree that
the aggrieved party shall be entitled to claim against the other for damages and
further equitable relief as it deems necessary.
8. NON-ASSIGNMENT
Both parties shall not assign or sub-contract any of its rights under
this agreement without the consent in writing of the other party.
9. COMPLIANCE WITH LAWS
To the extent applicable hereto, both parties shall comply with all
laws, regulations, policies and guidelines of Thailand.
10. GOVERNING LAW
This agreement shall be governed and construed in all respects in
accordance with the laws of Thailand.
11. ARBITRATION
Any differences or disputes arising from this agreement shall be
settled by an amicable effort of both parties.
3
<PAGE>
11.1 An attempt to arrive at a settlement shall be deemed to have
failed as soon as one of the parties notifies the other in
writing.
11.2 If an attempt at settlement has failed, the parties shall try
to settle their dispute via arbitration in accordance with the
applicable arbitration legislation of Thailand.
11.3 In the event that any attempt at an amicable settlement
pursuant to a dispute has failed, either party may seek to
resolve their differences or disputes in a valid court of law.
12. NO WAIVER
The failure of any of the other party to assert or enforce any right
hereunder (whether upon a breach of this agreement by the other party hereto or
otherwise) shall not be deemed to be a waiver of such right with respect to any
such breach or any subsequent breach; nor will any waiver be implied from the
acceptance of any payment or service, except where the waiver has been expressly
agreed to in writing and signed by both parties.
13. NOTICE
Any notice or communication under this agreement shall be in writing
and may be given by registered post, facsimile or personal delivery to the
following addresses:
To: MyWeb Inc.com
595 Market Street
Suite 2500
San Francisco, California 94105
United States
ATTN: Wong Thean Soon
To: Asia Infonet Co., Ltd.
1 Fortune Town, 17th Floor,
Ratchadapisek Road
Din Daeng, Bangkok 10320
Thailand
ATTN: Chatchaval Jiaravanon
14. SEVERABILITY
If any one or more of the provision contained in this agreement or any
document executed in connection herewith is found by any court of law with
jurisdiction over the matter to be invalid, illegal or unenforceable in any
respect, the validity. Legality and enforceability of the remaining provisions
contained herein shall not be affected or impaired in any way.
4
<PAGE>
15. FORCE MAJEURE
Neither party shall be liable for delay in performance or failure to
perform in whole or in part, the terms of this agreement if such failure or
delay is due to labor dispute, strike, war, or act of war, insurrections, riot,
civil commotion, act of publish enemy, accident, fire, flood, acts of God or
other causes beyond the reasonable control of such party and any delay or
failure shall not be considered to be a breach of this agreement. In the event
that this agreement cannot be performed due to the aforementioned circumstances
for a continuous period of 30 days, either party may at its discretion terminate
this agreement by notice in writing.
16. VARIANCE
All changes modifications, variations and amendments to this agreement
must be in writing to be valid.
17. COSTS
Both parties shall be responsible for their solicitors' costs involved
in the preparation of this agreement. The stamp duty shall be borne by the
Licensee.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
MyWeb Inc.com: Asia Infonet Co., Ltd.
By: /s/ TS Wong By: /s/ Chatchaval Jiaravanon
------------------------- ----------------------------
Name: TS Wong Name: Chatchaval Jiaravanon
President & CEO President
Date: 2/22/00 Date: 2/22/00
------- -------
5
Exhibit 10.63
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT made as of this 23rd day of March, 2000
between MyWeb Inc.com, a Nevada, United States corporation with its registered
office at 595 Market Street, Suite 2500, San Francisco, CA94105 U.S. (the
"Company"), and Asia Internet Assets Inc. (the "Subscriber") with its office at
No. 5, Shenton Way, #12-08, UIC Building, Singapore 068808.
WHEREAS, the Company desires to issue 250,000 shares of its
common stock, (the "Common Stock") at a price of $10 per Share on the terms and
conditions hereinafter set forth and Subscriber desires to acquire that number
of shares of Common Stock set forth on the signature page hereof (the "Shares");
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants hereinafter set forth, the parties hereto do hereby agree
as follows:
I. SUBSCRIPTION FOR SHARES AND REPRESENTATIONS AND
WARRANTIES BY SUBSCRIBER
Subscriber hereby represents and warrants to the Company as
follows:
1.1 Subject to the terms and conditions hereinafter
set forth, Subscriber hereby subscribes for and agrees to purchase from the
Company the Shares at a price equal to $10 per Share and the Company agrees to
sell the Shares to Subscriber for said purchase price subject to the Company's
right to sell to Subscriber such lesser number of Shares as it may, in its sole
discretion, deem necessary or desirable. The purchase price is payable, in U.S.
Dollars, by certified or bank check made payable to the Company, or by wire
transfer to the Company's account at such bank as shall be designated by the
Company, contemporaneously with the execution and delivery of this Subscription
Agreement. In exchange therefore, the Company will deliver certificate(s)
registered in the name of Subscriber representing the shares purchased and which
shall bear the customary restrictive legend on transferability pursuant to Rules
502 and 506 of Regulation D promulgated under the United States Securities Act
of 1933, as amended (the "Act"). $1,250,000 of the total purchase price shall be
paid to the designated bank account by March 31, 2000 and the remaining sum of
$1,250,000 shall be paid within 30 days after the date of the first payment.
1.2 Subscriber recognizes and acknowledges that the
purchase of the Shares involves a high degree of risk in that (i) an investment
in the Company is highly speculative and only investors who can afford the loss
of their entire investment should consider investing in the Company and the
Shares; (ii) he may not be able to liquidate his investment; and (iii) in the
event of a disposition, an investor could sustain the loss of his entire
investment.
<PAGE>
1.3 Subscriber represents that he is an "accredited
investor" as such term is defined in Rule 501 of Regulation D promulgated under
the Act, as indicated by his responses below, and that he is able to bear the
economic risk of an investment in the Shares.
Accredited Investor Questionnaire: Please check all of the following that apply
to you:
____ (1) Any natural person whose individual net
worth, or joint net worth with that person's spouse, at the time of his
purchase exceeds $1,000,000;
____ (2) Any natural person who had an individual
income in excess of $200,000 in each of the two most recent years or joint
income with that person's spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income level in the
current year;
____ (3) Any director, executive officer, or general
partner of the issuer of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of that issuer;
____ (4) Any trust with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person as described in
Rule 5076(b)(2)(ii);
____ (5) Any private business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
____ (6) Any organization described in Section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of acquiring
the securities offered, with total assets in excess of $5,000,000;
____ (7) Any bank as defined in Section 3(a)(2) of the
Act or any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary
capacity;
____ (8) Any insurance company as defined in Section
2(13) of the Act;
____ (9) Any investment company registered under the
Investment Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act;
____ (10) Any Small Business Investment Company
licensed by the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958;
____ (11) Any plan established and maintained by a
state, its political subdivisions, or any agency or instrumentality of a state
or its political subdivisions, for the benefit of its employees, if such plan
has total assets in excess of $5,000,000;
2
<PAGE>
____ (12) Any employee benefit plan within the meaning
of the Employee Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association, insurance company, or
registered investment adviser, if the employee benefit plan has total assets in
excess of $5,000,000, or if a self-directed plan, with investment decisions made
solely by person that are accredited investor; and
____ (13) Any entity in which all of the equity owners
are accredited investors.
1.4 Subscriber acknowledges that he has prior
investment experience, including investment in non-listed securities, or he has
employed the services of an investment advisor, attorney or accountant to read
all of the documents furnished or made available by the Company to him and to
all other prospective investors of shares of Common Stock being offered by the
Company and to evaluate the merits and risks of such an investment on his
behalf, and that he recognizes the highly speculative nature of this investment.
1.5 Subscriber acknowledges that he has been furnished
by the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know; that all
documents which could be reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of the
offering, and any additional information which he had requested.
1.6 Subscriber acknowledges that this offering of
Shares has not been reviewed by the United States Securities and Exchange
Commission ("SEC") because of the Company's representations that this is
intended to be a nonpublic offering pursuant to Sections 4(2) or 3(b) of the
Act. The Subscriber represents that the Shares are being purchased for his own
account, for investment and not for distribution or resale to others. Subscriber
acknowledges that the Shares have not been registered under the Act, or any
state or foreign securities laws, and may not be offered, sold or transferred by
the Subscriber unless registered under the Act and applicable state and foreign
securities laws, or an exemption from registration is available in the opinion
of Company counsel.
1.7 Subscriber understands that the Company will
review this Subscription Agreement and that the Company reserves the
unrestricted right to reject or limit any subscription and to close the offer at
any time.
1.8 Subscriber hereby represents that the address of
Subscriber furnished by him at the end of this Subscription Agreement is the
undersigned's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.
1.9 Subscriber hereby represents that, except as set
forth in any written material furnished by the Company to subscriber in
connection with his proposed investment, no representations or warranties have
been made to Subscriber by the Company or any agent, employee or affiliate of
the Company and in entering into this transaction, Subscriber is not relying on
any information, other than that contained in any such written material and the
results of independent investigation by Subscriber.
3
<PAGE>
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to Subscriber as follows:
(a) The Company is a corporation duly organized, existing
and in good standing under the laws of the State of Nevada and has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this
Subscription Agreement by the Company has been duly approved by the Board of
Directors of the Company and all other actions required to authorize and effect
the offer and sale of the Shares has been duly taken and approved.
(c) The Shares have been duly and validly authorized and
when issued and paid for in accordance with the terms hereof, will be duly and
validly issued, fully paid and non-assessable.
(d) The Company has obtained all licenses, permits and
other governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations are in full force and
effect; and the Company is in all material respects complying therewith.
(e) The Company knows of no pending or threatened legal
or governmental proceedings to which the Company is a party which could
materially adversely affect the business, property, financial condition or
operations of the Company.
(f) The Company is not in violation of or default under,
nor will the execution and delivery of this Subscription Agreement or the
issuance of the Shares, result in a violation of, or constitute a default under,
the certificate of incorporation or by-laws, in the performance or observance of
any material obligations, agreement, covenant or condition contained in any
bond, debenture, note or other evidence of indebtedness or in any material
contract, indenture, mortgage, loan agreement, lease, joint venture or other
agreement or instrument to which the Company is a party or by which it or any of
its properties may be bound or in violation of any material order, rule,
regulation, writ, injunction, or decree of any government, governmental
instrumentality or court, domestic or foreign.
(g) No commission or finder's fee will be payable by the
Company in connection with the sale of the Shares.
4
<PAGE>
III. MISCELLANEOUS
3.1 Any notice or other communication given hereunder
shall be deemed sufficient if in writing and sent by registered or certified
mail, return receipt requested, addressed to the Company, at its address set
forth above, and to Subscriber at his address indicated on the last page of this
Subscription Agreement. Notices shall be deemed to have been given on the date
of mailing, except notices of change of address, which shall be deemed to have
been given when received.
3.2 This Subscription Agreement shall not be changed,
modified or amended except by a writing signed by the parties to be charged, and
this Subscription Agreement may not be discharged except by performance in
accordance with its terms or by a writing signed by the party to be charged.
3.3 This Subscription Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
3.4 Notwithstanding the place where this Subscription
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed in accordance
with and governed by the laws of the State of New York. The parties hereby agree
that any dispute which may arise between them arising out of or in connection
with this Subscription Agreement shall be adjudicated before a court located in
New York City and they hereby submit to the exclusive jurisdiction of the courts
of the State of New York located in New York, New York and of the federal courts
in the Southern District of New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any objection they now
or hereafter may have respecting the venue of any such action or proceeding
brought in such a court or respecting the fact that such court is an
inconvenient forum, relating to or arising out of this Subscription Agreement or
any acts or omissions relating to the sale of the securities hereunder, and
consent to the service of process in any such action or legal proceeding by
means of registered or certified mail, return receipt requested, in care of the
address set forth below or such other address as the undersigned shall furnish
in writing to the other.
3.5 This Subscription Agreement may be executed in
counterparts. Upon the execution and delivery of this Subscription Agreement by
Subscriber, this Subscription Agreement shall become a binding obligation of
Subscriber with respect to the purchase of the Shares as herein provided;
subject, however, to the right hereby reserved to the Company to enter into the
same agreements with other subscribers and to add and/or to delete other persons
as subscribers.
3.6 The holding of any provision of this Subscription
Agreement to be invalid or unenforceable by a court of competent jurisdiction
shall not affect any other provision of this Subscription Agreement, which shall
remain in full force and effect.
5
<PAGE>
3.7 It is agreed that a waiver by either party of a
breach of any provision of this Subscription Agreement shall not operate, or be
construed, as a waiver of any subsequent breach by that same party.
3.8 The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Subscription Agreement.
IN WITNESS WHEREOF, the parties have executed this
Subscription Agreement as of the day and year first written above.
ASIA INTERNET ASSETS INC /s/ Philip Ng
--------------------------
Name of Subscriber Signature of Subscriber(s)
Philip Ng (Director)
Business Address of Subscriber(s)
No. 5, Shenton Way,
#12-08, UIC Building,
Singapore 068808
Number of Shares Subscribed For: 250,000 shares
Subscription Accepted:
/s/ T.S. Wong
----------------------------
By: T.S.Wong (Chairman)
MyWeb Inc.com
Date: 3/23/00
-----------------------
6
Exhibit 10.65
LICENSING AND SHAREHOLDER AGREEMENT
This Licensing and Shareholder Agreement ("Agreement") is entered into
this 29th day of March, 2000 ("Effective Date") and made by and between MyWeb
Inc, a corporation organized and existing under the law of the US, having a
principal office at 595 Market Street, Suite 2500, San Francisco, CA 94105
("MyWeb Inc"), Adgator, Inc., a corporation organized and existing under the law
of Washington State of the United States, having a principal office at 10500 NE
8th Street, Suite 1250, Bellevue, WA 98004 ("Adgator, Inc.") and AdgatorCom.
Co., Ltd., a corporation organized and existing under the laws of Korea, having
a principal office at 1594-4 Dea-A B/D, 2nd Floor, Seocho-Dong, Seocho-Gu,
Seoul, Korea ("AdgatorCom.Co.").
1. Purpose. MyWeb Inc, Adgator, Inc. and AdgatorCom.Co. agree to join together
in the strategic alliance in order to implement co-marketing effort in the
global market, including China, for the mutual interest and benefit. MyWeb Inc
hereby agrees to use its best efforts to distribute and maximize the use of the
Adgator product in the domestic Chinese market (PRC) and to secure the related
patent, already applied by AdgatorCom, for the domestic Chinese market. MyWeb
Inc agrees that AdgatorCom is a principal partner in Korea.
2. Components of Strategic and Capital Alliances
(a) Managerial Alliance
(1) MyWeb Inc shall be granted a license of the Adgator's
internet desktop portal product for the domestic China market
only to perform desktop portal service through MyWeb China.
This grant of license will be limited to its own service of
MyWeb China for the domestic Chinese market only.
(2) MyWeb Inc, upon execution of this Agreement, will be a
member of the Global Advertising Network Program of Adgator
Group. MyWeb Inc run such advertisement preferentially in the
desktop portal service of MyWeb China.
(3) MyWeb Inc will be responsible for all aspects of the
business operations in the domestic Chinese market.
(4) MyWeb Inc will be fully responsible for and will indemnify
Adgator Inc and AdgatorCom for any result directly or
indirectly arising from its business operations in the
domestic China. Adgator Inc and AdgatorCom will be fully
responsible for any problem related to intellectual property
of the Adgator Product.
<PAGE>
(5) The advertisement revenue will be shared in the following
way. If MyWeb Inc gets orders by itself, it will get [***] and
give [***] to Adgator Inc and AdgatorCom. If Adgator Inc or
AdgatorCom gets orders by itself, [***] will be allotted to
MyWeb Inc. The other revenue arising from the operation of
Adgator Product will be shared: [***] to MyWeb Inc and [***]
to Adgator Inc and AdgatorCom. For this purpose, a separate
accounting and book keeping will be maintained by both parties
and reviewed and cleared every quarter.
(6) AdgatorCom, as the principal partner of MyWeb Inc in
Korea, will make its best efforts to cooperate for any
operation of MyWeb Inc in Korea.
(b) Technical Alliance
(1) In connection with the grant of the right to MyWeb Inc,
Adgator Inc and AdgatorCom.Co. will provide solutions,
proprietary information and technologies relating to operation
of desktop portal service.
(2) Adgator Inc. and Adgatorcom.Co will, upon request of MyWeb
Inc, furnish technically qualified personnel of Adgator Inc
and AdgatorCom as employees of MyWeb Inc to deliver technical
services in the methods of operation of the product. It is the
intent of all parties that MyWeb Inc will employ 3-5 Adgator
Inc and AdgatorCom designated personnel. All costs associated
with customizing the Adgator product for the Chinese market
will be borne by MyWeb Inc.
(3) MyWeb Inc, Adgatorcom and Adgator Inc will provide various
information about technology and business model related to
Internet business with each other.
(c) Capital Alliance
(1) Adgator. Inc and AdgatorCom will subscribe to one (1)
million USD worth of MyWeb Inc's stocks (USD0.01) at the price
per share to be computed based on thirty (30)% discount
from the one week average price from the date of this
Agreement. Adgator Inc and AdgatorCom will pay one hundred
thousand (100,000) USD as a deposit within two (2) weeks after
the signing. If Adgator Inc and AdgatorCom do not fulfill the
balance (900,000 USD) within three (3) months from the date of
this agreement, the deposit will be forfeited by MyWeb Inc.
MyWeb Inc will issue to Adgator Inc and AdgatorCom the 12
months restricted MyWeb Inc's stocks upon successful
completion of the transaction.
2
<PAGE>
(2) Adgator. Inc and AdgatorCom will provide the opportunity
for MyWeb Inc to invest to both of Adgator. Inc and AdgatorCom
or Adgator-Japan in preferential condition.
3. Term and Termination. The agreement shall take effect as of the Effective
Date hereof and remain in full effect unless the parties mutually agree, in
writing, to terminate or modify this agreement or there is a material breach by
either party to the terms set forth in this Agreement.
4. Use and Assignment of License. MyWeb Inc will not permit, sub-license,
re-license or otherwise assign to any person or party whatsoever the Adgator
product, or any of its related technology or intellectual property without
written agreement of all parties.
5. Miscellaneous.
(a) In the event additional terms or provisions excluded in this
agreement but required to deliver this agreement, such modification
will be made upon mutual agreement between parties.
(b) In case of any dispute between parties about interpretation or
omission of any terms and provisions of the agreement, parties will
mutually agree to resolve such dispute in accordance with the common
commercial custom.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in their corporate name by their duly authorized representatives.
MyWeb Inc Adgator.com Co., Ltd
Adgator Inc
/s/ Nin Contreras /s/ Kyong Ho Song
- --------------------------- ---------------------------
Nin Contreras, CEO Kyong Ho Song, CEO
595 Market Street, Suite 2500, 1594-4 Dae-A Venture B/D,
San Francisco, CA 94105 2nd Floor
Seocho-Dong,
Seoch-Gu, Seoul, Korea
3
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27.1
FINANCIAL DATA SCHEDULE
Exhibit (27.1): Financial Data Schedule for the Three Months Ended March 31,
2000
</LEGEND>
<CIK> 0000823190
<NAME> MyWeb Inc.com
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 792
<SECURITIES> 0
<RECEIVABLES> 2,441
<ALLOWANCES> 0
<INVENTORY> 791
<CURRENT-ASSETS> 4,399
<PP&E> 724
<DEPRECIATION> 178
<TOTAL-ASSETS> 6,020
<CURRENT-LIABILITIES> 5,654
<BONDS> 0
0
0
<COMMON> 111
<OTHER-SE> 157
<TOTAL-LIABILITY-AND-EQUITY> 6,020
<SALES> 1,271
<TOTAL-REVENUES> 1,425
<CGS> 1,297
<TOTAL-COSTS> 3,496
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,092)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,092)
<EPS-BASIC> (0.19)
<EPS-DILUTED>
</TABLE>
