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: April 14, 2000
INTERNET VENTURE GROUP, INC.
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(Exact name of registrant as specified in its charter)
STRATEGIC VENTURES, INC.
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(former name)
FLORIDA 33-19196-A 59-2919648
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
9601 WEST SAM HOUSTON PARKWAY SOUTH, BLDG. 100, HOUSTON, TEXAS 77049
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(New Address)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (713) 596-9308
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
In December 1999, the Company changed its name to Internet
Venture Group, Inc.
Effective January 31, 1999 certain shareholders of
GeeWhiz.com, Inc. acquired majority control of the Company
through a share exchange undertaken pursuant to an Agreement
and Plan of Reorganization. A total of 23,905,374 shares of
common stock were issued to shareholders of GeeWhiz.com.
THE MERGER
The Company is in the process of completing a three part
process that will result in the merger of GeeWhiz.com, Inc.
with and into the Company, with the Company as the surviving
entity. In the first step or this three part process, certain
shareholders of GeeWhiz.com, Inc. acquired majority control of
the Company through a share exchange undertaken pursuant to an
Agreement and Plan of Reorganization dated to be effective
January 31, 1999. In this share exchange, the Company
exchanged approximately 23,905,374 shares of the Company's
Common Stock for approximately 5,312,053 shares of
GeeWhiz.com, Inc. Common Stock that were tendered by the
participating shareholders. Through this step, the
shareholders of GeeWhiz.com, Inc. obtained control of
approximately 87 % of the issued and outstanding Common Stock
of the Company.
In the second step of the process, anticipated to occur during
March, 2000, the Company and the remaining shareholders of
GeeWhiz.com, Inc. will approve a Plan of Merger pursuant to
which the companies will be merged, and the remaining
GeeWhiz.com, Inc. shareholders will acquire the remaining 13%
of the outstanding Common Stock of the Company not currently
owned by former shareholders of GeeWhiz.com, Inc.
Following the completion of the merger, in the third step of
the process, the Company will incorporate a new, wholly owned
subsidiary corporation, to hold the operating assets and
intellectual property of GeeWhiz.com, Inc. Thereafter,
GeeWhiz.com, Inc. will operate as an autonomous subsidiary,
with the ultimate goal of becoming a public company through an
initial public offering.
THE COMPANY'S BUSINESS AND GROWTH STRATEGY
The Company's internet business strategy is to find and
develop unique B2B, B2C e-commerce companies, or e-commerce
suitable BAM companies that want to transition to the
internet, that are leaders in their commercial niche by virtue
of a compelling business model, technology and/or proprietary
service. The Company plans to provide a value added corporate
exostructure that will enable the target company to quickly
leverage its expertise and deploy its e-commerce strategy by
utilizing the management, financial and corporate resources of
the Company. By acquiring a family of e-commerce companies,
the Company hopes to create an "e-commerce network" (or
"Eco/Net") of affiliated companies that can synergistically
benefit from each others internet assets, customers and
business models.
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1. BUSINESS MODEL
As an internet holding company focused on developing internet
properties, the Company offers target companies an efficient
and direct route to achieve liquidity and to develop concrete
exit and return-on-investment strategies. The Company plans to
provide its portfolio companies with access to growth capital,
strategic corporate alliances, corporate development and
financial planning, information technologies, e-commerce
enabling technologies, recruiting, marketing and access to
public securities markets. The Company intends to hold long
term positions in each of its portfolio companies whose growth
in market capitalization should be reflected in the trading
price of the Company's shares. The Company's internet holding
company model is similar to that of CMGI, ICGE & Softbank
except that the Company plans to focus on a narrower B2B and
B2C e-commerce niches and BAM companies that can achieve
significant efficiencies through electronic data interchange.
Typical internet target niches include businesses that are
widely dispersed or would otherwise benefit from the
coalescence of a centralized internet business portal to
facilitate both front end B2B and B2C transactions as well as
back end and infrastructure support.
2. BENEFITS AND RESOURCES FOR TARGET COMPANIES
Target companies that meet the Company's acquisition profile
(See "Target and Portfolio Companies-Target Company Profile")
can take advantage of potentially tax free stock exchanges for
shares of the Company's Common Stock As a member of the
Company group, the portfolio company can benefit from private
placements of its own or of the Company securities, funding of
its immediate growth needs, establishment of strategic
relationships within the Company portfolio companies, and
ultimate access to the Company underwriters, broker- dealers
and market-makers for its own stock once the company matures.
3. THE COMPANY AND THE SQCS E-COMMERCE BUSINESS PARADIGM
The Company believes that business and consumer purchasing
behavior is evolving into an interrelated e-commerce and
physical world process that places a premium on specificity,
quality, convenience and savings (or "SQCS" transactions). The
power and breadth of the internet is now allowing niche
markets to achieve critical mass so that businesses and
consumers can effectively and efficiently access a wide
variety of specialty items, in real time, to find, compare and
purchase products by combining on-line resources with physical
world facilities.
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4. STRATEGIC ALLIANCE WITH EC OUTLOOK
A fundamentally important piece of the Company's business
model is its strategy to establish strategic alliance with
e-commerce enabling companies. These would include, for
example, front-end web design firms, back-end transaction
support firms, and enablers for horizontal electronic business
communities. By establishing a network of strategic business
alliances, the Company can provide their internet enabling
expertise to the Company's Eco/Net companies. This will allow
the portfolio companies to quickly deploy their internet
strategies and contribute to the Company's community of
related companies.
EC Outlook.com, Inc., a Houston based e-commerce solutions
provider, is one of the Company's first stretegic business
partners. EC Outlook is a first class e- commerce consultancy
and solutions implementer with a special focus on B2B
applications. EC Outlook has technical expertise in electronic
data interchange, internet commerce, web application
development, community enablement, sales and marketing,
application integration and network communications. EC Outlook
is capable of delivering a full range of B2B e-commerce
capabilities from automating existing paper based processes
and communications through establishing sophisticated
e-commerce communities including web sites and customer
profiling.
The Company and EC Outlook have agreed that EC Outlook shall
be the primary e-commerce solutions provider for the Company
and its portfolio companies.
5. CORPORATE DEVELOPMENT STRATEGY
International Data Corporation ("IDC") has forecast that
e-commerce transactions will grow from over $50 Billion in
1998 to over $1.5 Trillion by the year 2003. In addition, IDC
expects the number of people who go online to increase from
142 million in 1998 to over 508 million users in the year
2003. The Company has designed a five-stage corporate
development strategy intended to allow the company to
aggressively participate in these emerging internet e-commerce
economies. The Company plans to take early equity positions in
a variety of B2B and B2C internet properties through stock
exchanges and to ultimately spin these properties out into
stand alone companies via initial public offerings of their
securities.
STAGE ONE. ACQUISITION OF FIRST TARGET INTERNET PROPERTIES.
The Company plans to acquire four to six internet properties
via stock exchange transactions. While the Company has
identified several potential candidates, the Company will
continue to evaluate new internet properties suitable for
acquisition by the Company. In addition, the Company will
continue to add to its management team and corporate
infrastructure to put in place the skill sets and human
resources necessary to achieve the business strategies and
objectives of the Company.
STAGE TWO. SPIN OUT OF THE COMPANY INTERNET PROPERTIES. The
Company plans to begin spinning out Portfolio Companies into
stand alone companies through an initial public offering of
their stock. The Company intends to hold
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long term positions in any spin out IPO's of its Portfolio
Companies. In addition to these activities, the Company
plans to continuously seek out unique internet properties in
niche markets to provide a constant flow of candidates for
spin out IPOs.
STAGE THREE. RETURN ON INVESTMENT. The Company plans to
execute an integrated corporate development strategy aimed
at establishing the Company as a "one stock" way to play the
emergence of industry leading internet companies. The
Company intends to maintain a long- term position in each of
its Portfolio Companies and to reflect the potential
increase in the value of those portfolio company shares in
the price of the Company's stock. The leverage of having
long term capital appreciation in a portfolio of leading
e-business companies is intended to provide investors in the
Company with a compelling return on investment as the
Company executes its long term strategic plan.
E-COMMERCE OPPORTUNITIES GENERALLY
1. GROWTH OF B2B AND B2C E-COMMERCE. The internet has seen
explosive growth over the last two years as more and more
people go online to conduct business and companies provide
services to connect the internet buyers and sellers.
Generally, the B2B segment involves the sale of goods and
services between businesses while B2C involves the
dissemination of information or sale of goods and service from
businesses to consumers. In the first case, B2B has
traditionally involved electronic data exchange over
proprietary networks which are expensive and of limited
availability. B2C e-commerce has historically been limited by
limited consumer access to a centralized electronic system.
As the internet has matured into a wide spread, stable
electronic network, reliability, speed, and security have
improved to the point where e-commerce is being facilitated on
a wide scale basis. As more and more businesses and
individuals are being connected to the internet, traditional
B2B and B2C businesses are using the internet to conduct
e-commerce and exchange information with customers, suppliers
and distributors. In 1998, the B2C e- commerce topped $15
Billion with B2B e-commerce exceeding $43 Billion. Together,
this e-commerce is expected to exceed $1.5 Trillion in 2003.
2. INTERNET BUSINESS MODEL OPPORTUNITIES. We believe that this
rapid expansion and deployment of the internet e-commerce will
provide unique and dramatic business opportunities for new
internet businesses based on innovative business models that
take advantage of several fundamental trends.
CENTRALIZED COMMUNITIES FOR WIDELY DISPERSED INDUSTRIES.
Online website business portals now allow widely dispersed
industries to come together to communicate, share ideas and
match buyers, sellers and distributors in real time when the
participants are in geographically disparate locations. Many
industries that do not yet have the critical mass to
physically congregate to conduct business, can now utilize the
time, space and network offered by online business portals.
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EXPANDED REAL TIME ACCESS TO INFORMATION, GOODS AND SERVICES.
Consumers now enjoy unlimited real time access to the world
wide web. This allows consumers to access and download
information, goods and services in a way that is fundamentally
changing the way consumers collect information, purvey goods
and conduct transactions.
INCREASED EFFICIENCY AND REDUCED COSTS. Traditional business
can now utilize the internet to automate their internal
operations, including manufacturing, finance, sales and
purchasing functions. The internet also increases information
flow and access throughout an organization thus increasing
business efficiency by reducing the time, costs and resources
required to transact business, lowering inventory levels, and
improving responsiveness to customers and suppliers.
3. CHALLENGES FACING E-COMMERCE COMPANIES. While we believe
there are numerous internet opportunities for emerging
e-commerce, and a virtual flood of new e-commerce start- ups,
there are a number of fundamental challenges that any new
internet business must master in order to be a success.
DEVELOPING A SUCCESSFUL BUSINESS MODEL. Simply put, any new
e-commerce internet company must develop business models that
eventually make money and provide a return- on- investment.
Some companies have focused on gaining market share (page
views) or revenues without regard to profitability. Other
companies have been able to sustain this approach due, in
large part, to the tremendous run up in their underlying stock
prices as investors flock to scoop up the newest internet
public offering. This high valuation has provided these
companies with an internet currency that allows them to grow
through the acquisition of other internet companies or to
raise working capital by issuing new securities to the
internet starved financial community. It also can provide
early investors with a paper return-on-investment.
However, the Company's management does not believe that this
makes a sustainable successful business model. The Company
believes that as the internet matures and begins to transact
real business on a wide scale, each internet segment will
consolidate, resulting in a few market leaders that have a
sound business model to achieve sustained earnings. The
mission of the Company is to find businesses in a leadership
position within their market segment and to help them
capitalize on their position by implementing a successful
earnings business model.
BUILDING A CORPORATE INFRASTRUCTURE. By definition, all
internet companies are relatively new. Even industry leaders
are often only a few years old. Accordingly, almost all new
internet companies are in need of assistance in sales and
marketing, executive recruiting, human resources, information
technologies, and finance and business development assistance.
These companies also require capital as significant resources
may be required to build technological capabilities and
internal operations.
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FINDING THE BEST PEOPLE. The single most important resource
for any new company, whether internet or BAM, is the people
that manage, operate and execute the business and strategy of
the company. Therefore, the Company will look for companies
that are led by entrepreneurs with the vision to guide a new
business to its market space to satisfy its market demand. To
facilitate the Company's success, the Company will augment
management with professionals who have expertise in the
applicable market, an understanding of the internet's
capabilities, the ability to manage rapid growth and the
flexibility to adapt to the changing internet market place.
Such people are few and are highly sought after. To be
successful, the venture must be able to attract and retain
such people.
PORTFOLIO AND TARGET COMPANIES
A. TARGET COMPANY PROFILE. When evaluating a potential target
company, the Company will consider a variety of factors,
including the following.
MARKET SEGMENT. Is the target company positioned in a
market segment that can experience extraordinary growth or
leverage?
MARKET POSITION. Is the target company well positioned
within the segment compared to competitors? Is the target
company first in its space? Does the target company have
some other market advantage?
INDUSTRY LEADERSHIP. Does the target company have the
products, services and skills necessary to become an
industry leader in the market segment?
PROPRIETARY TECHNOLOGY. Does the target company possess
some proprietary technology or other technical competitive
edge?
MANAGEMENT TEAM. Does the management team exhibit the
traits or potential necessary to recognize and quickly
exploit a market opportunity and focus the company to seize
market share?
BUSINESS MODEL. Does the company have, or is it open
to, adopting a business model and strategy that will allow
the target company to mature and eventually generate
earnings per share that results in a return-on- investment?
SIGNIFICANT OWNERSHIP. Is the management team open to
having the Company participate with a significant equity
position in their company and will they accept the Company's
guidance in the company's strategic corporate development
and operational support?
NETWORK SYNERGY. Does the target company contribute to,
or will it benefit from our portfolio of target companies
under the Company's umbrella?
NEED FOR CAPITAL. Does the target company have a need
for working capital? Does the target company have an
effective exit strategy or other plan for liquidity or
return on investment for its shareholders?
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B. THE COMPANY'S CONTRIBUTION. Once the Company identifies a
company that meets the target company profile, the Company
will attempt to obtain a significant equity interest in the
company. As a condition to an acquisition, the Company will
require representation on the company's board of directors to
ensure our ability to provide guidance to the target company.
The Company will structure the acquisition so that the target
company's key management has a significant equity stake that
will vest over time to ensure the highest possible chance for
success.
During our negotiations with the target companies, we
emphasize our business model, the value of our portfolio of
target companies, the value add of our Advisory board and
executive management and our strategic goal of spinning out
the target company in its own IPO. Once we make an
acquisition, we will take an active role in the target company
in a variety of ways, including:
STRATEGIC GUIDANCE. We provide strategic guidance to our
target companies regarding market positioning, business model
development and market trends. In addition, we advise target
company management on day-to-day management and operational
issues.
OPERATIONAL SUPPORT. New internet companies often have
difficulty obtaining senior executive level guidance in the
many areas of expertise successful companies need. We assist
our target companies by providing access to seasoned
executives and managers who help guide our target companies in
sales and marketing, executive recruiting and human resources,
information technology, finance and business development, and
access to the skillsets of our strategic partner companies.
C. INITIAL PORTFOLIO & TARGET COMPANIES
The Company and its portfolio companies intend to provide the
infrastructure to support these SQCS transactions, the
websites to promote user specific goods and services and the
industrial and strategic relationships to create new on-line
niche market opportunities. The Company's initial portfolio
and target companies are:
GEEWHIZ.COM, INC. - Fiber Optic Illuminated Promotions
Products and Drinking Glasses. GeeWhiz.com, Inc. brings
together widely distributed vendors, suppliers and purchasers
of corporate promotional products to offer custom designed,
logo illuminated glasses for corporate and industry
promotions. The company plans to expand to a wide line of
fiber optic illuminated gifts and souvenirs. GeeWhiz.com, Inc.
has created a promotional products super website that is
unique because it brings together the widely dispersed
manufacturers, sellers and buyers of specialty promotional
products. The merger between the Company and GeeWhiz.com, Inc.
is explained in detail above.
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RISK FACTORS
A. RISKS RELATING TO THE COMPANY
NEW BUSINESS VENTURE; LACK OF OPERATING HISTORY. The Company
has a very limited prior operating history upon which
investors may evaluate the Company's performance. The
likelihood of the success of the Company must be considered in
light of the expenses, complications and delays frequently
encountered in connection with the establishment and expansion
of new businesses, and the competitive environment in which
the Company will operate. The Company only completed the
Merger (as defined below) in January, 2000. Future revenues
and profits, if any, will depend on various factors,
including, but not limited to the ability of the Company to
identify and close investments in promising e- commerce
companies. See "BUSINESS OF THE COMPANY."
SUBSTANTIAL COMPETITION; BETTER FINANCED COMPETITORS. The
business of developing, acquiring and capitalizing early stage
internet B2B and B2C e- businesses and assisting BAM companies
to transition to e-commerce is highly competitive. The
Company's competitors include existing internet holding
companies that have a longer operational history, existing
portfolios of e- commerce companies, substantially greater
financial resources, and an established market for their
publicly traded securities. While the Company plans to
acquire, develop and capitalize target companies and to spin
such companies out through initial public offerings, the
market for IPO's is extremely competitive. The Company faces
competition from venture capital companies, investment banks,
internet holding companies, and large capitalization industry
companies with captive investment and venture divisions. There
is no assurance that the Company will be successful in finding
suitable target companies, that such companies will want to be
acquired by the Company, or that if acquisitions are
completed, that the Company will be able to spin out target
companies through IPO's.
MANAGEMENT. The Company currently has two officers. See
""MANAGEMENT." The Company recognizes that, in order to
successfully implement its business plan, it will need to
recruit, supervise and compensate a variety of senior
professionals, including, among others, a Chief Financial
Officer and a Vice President-Corporate Development. The
Company's efforts to recruit talented individuals to serve in
such capacities are taking place in an extremely competitive
job market. No assurances can be given that the Company will
be successful in recruiting a full array of senior managers
within the time frames established by the Board of Directors.
The Company's failure to recruit a full slate of officers
within such time frame will result in a delay by the Company
in achieving the goals in its business plan.
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CUMULATIVE LOSS. The Company's financial statements are
reported on a consolidated basis, reflecting the assets,
liabilities, revenue, profits and losses of the companies that
were merged into the Company. The Company itself did not
actively conduct business prior to January, 2000, and so has
no independent profits or assets to report. The companies that
were merged into the Company largely have been engaged in
product research and design, market research and the
development of manufacturing and marketing systems.
Historically, those companies operated at a loss. As a result,
the Company reports a cumulative loss through operations from
its inception to date.
DIRECTORS AND OFFICERS LIABILITY LIMITED. The Company's
Articles of Incorporation provide that directors and officers
of the Company may not be held liable to the Company or its
stockholders for monetary damages except upon breach of a
director's or officer's fiduciary duty.
DEPENDENCE UPON KEY PERSONNEL. The Company's success is
heavily dependent upon the continued active participation of
its current executive officers. Loss of the services of one of
these executives could have a material adverse effect upon the
development of the Company's business. The Company does not
currently have "key-man" life insurance on any of its
executive personnel. There can be no assurance that the
Company will be able to recruit or retain other qualified
personnel should it be necessary to do so. See "MANAGEMENT."
LIQUIDITY/NEED FOR ADDITIONAL FINANCING. As an early stage
operating company, the Company frequently experiences
liquidity problems that are typical of similarly sized
companies. The Company intends to solicit additional
investments in order to continue its operations as planned.
Although the Company will aggressively and actively seek
additional "follow-on" investment, there is no assurance that
the Company will receive follow-on investment or that the
Company will have sufficient funds to conduct its operations
as planned. The inability of the Company to attract follow-on
investment may significantly curtail the Company's operations
and have a significant impact on the Company's ability to
achieve its strategic goals.
SHARES AVAILABLE FOR RESALE. A large portion of the Company's
currently outstanding Common Stock is held by officers and
directors of the Company, or by certain related persons. These
shares have not been registered under the Securities Act, and
are "restricted securities" under Rule 144 of the Securities
Act. In general, under Rule 144, a person (or persons who
agree to act in concert) who owns "restricted securities" or
who is an "affiliate" of the Company, after holding such
securities for a period of two years, will be able to sell
within any three-month period an amount of shares equal to the
greater of (i) 1 % of the number of outstanding shares of
Common Stock of the Company, or (ii) the average weekly
reported trading volume of the shares of Common Stock for the
four weeks preceding such sale. A person who is not an
affiliate for three months prior to the sale may, after
holding "restricted securities" for three years, sell such
securities without being subject to the foregoing volume
limitation. Sales of a substantial number of such shares of
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the Company's Common Stock pursuant to Rule 144 could have an
adverse effect on the market for or market price of the
Company's Common Stock should such public market develop.
NO DIVIDENDS ANTICIPATED. The Company has not paid any
dividends upon its Common Stock since its inception and, by
reason of its present financial status and its contemplated
financial requirements, does not contemplate or anticipate
paying any dividends upon its Common Stock in the foreseeable
future. In this regard, the Company intends to retain earnings
for the foreseeable future for use in the operation and
expansion of its business.
DIFFICULTY IN TARGETING ACQUISITIONS. The Company's success
depends upon the ability of its managers to identify and close
the acquisition of equity interests in e- commerce related
companies that compliment the Company's overall strategy and
business plan. No assurances can be given that the Company
will be able to identify e-commerce related companies that are
complimentary and interested in completing transactions with
the Company. Even if such prospects are successfully
identified, any number of factors could preclude successful
completion of transactions, including the failure to agree on
terms, incompatibility of management teams, competitive bids
from other e-commerce investment companies, lack of capital to
complete the transactions, or unwillingness on the part of the
prospects. If the Company cannot acquire substantial equity
interests in attractive e-commerce companies, the Company's
strategy to build a network of internet companies and to spin
out IPO's may not be successful.
DEPENDENCE UPON PERFORMANCE OF TARGET COMPANIES. Economic,
competitive, governmental, industry and internal factors
outside the control of the Company will affect the performance
of each of the target companies in which the Company acquires
an interest. If the target companies do not succeed, the value
of the Company's assets and price of the Company's stock on
the public markets could decline. Moreover, once target
companies are successfully spun out into IPO's, fluctuations
in their respective market prices will affect the price of the
Company's stock.
BETTER FINANCED, MORE ESTABLISHED COMPETITION. The Company's
general model of acquiring equity interests in e-commerce
companies, establishing collaborative partner company
networks, spinning out portfolio companies in IPO's and
increasing the asset value of the parent and the parent's
stock price is a common model within the internet related
industries. A number of companies that have previously
employed the model are extremely well financed and have a
track record of success. The current climate for identifying
and closing on the acquisition of attractive e-commerce
related companies is extremely competitive as a result of the
activities of these competitors. No assurances can be given
that the Company will be able to succeed in targeting and
acquiring attractive e- commerce companies in such a
competitive market.
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COMPANY STOCK VALUATION. The Company's business model is based
on the acquisition of target companies, their growth, and
return on investment via IPO's of target companies.
Accordingly, the Company's revenues and operating results will
vary from quarter to quarter depending on the performance of
the target companies and the results, if any, of IPO's of
target companies. Thus, the Company believes that period to
period comparisons of operating results will be largely
meaningless. Further, the Company's operating results
themselves will not fit traditional metrics used by
institutional financial analysts in determining valuations and
stock prices. Thus, the value of the Company's stock and the
price that the stock trades at will be subject to wide
fluctuations based on, among other things, the perceived
condition of the internet sector in general, the expectations
of analysts and others, and the market for IPO's of B2B and
B2C companies. Adverse changes in any of these factors will
almost certainly have a negative effect on the price of the
Company's stock.
INDUSTRY STOCK VALUATION. The current stock valuations for
many of the Company's competitors in the internet investment
industry are extremely high, and far beyond the values that
would be dictated by traditional stock valuation
methodologies. While the Company's management believes that
this stock pricing environment will have beneficial short term
effects for the Company, prospective investors should note
that any widespread deflation of the stock values in this
industry segment could have an extremely adverse affect on the
value of the Company's stock. The Company's management can not
presume to predict when, how or if widespread changes in the
accepted pricing models for internet investment companies
might occur and, if they occur, how the Company's ability to
do business might be impacted as a result.
STOCK NOT TRADING. Although the Company is a public company by
virtue of having registered its initial offering of securities
under the Securities Act, the Company did not conduct active
operations prior to December 31, 1999.
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NO MARKET MAKERS. Because the Company has not obtained
authorization to commence trading of its Common Stock, the
Company has not been able to reach agreements with NASD
broker/dealers who will act as market makers in the Company's
Common Stock. The Company reasonably expects, based on
expressions of interest from a number of NASD broker/dealers,
that it will have prompt success in reaching agreements with
market makers once authorization to commence trading has been
obtained. However, the Company can not give assurances that it
will not encounter delays in reaching agreements with market
makers for the Common Stock and, if such delays are
encountered, the stock will be untradable until an approval is
achieved.
B. RISKS RELATING TO PARTNER COMPANIES
DEPENDENCE ON PATENTS AND PROPRIETARY RIGHTS; NO ASSURANCE OF
ENFORCEABILITY. The success of certain of the target companies
may depend in part on their ability to obtain and maintain
patent, trademark and copyright protection for their
intellectual property, to preserve their trade secrets and to
operate without infringing the proprietary rights of third
parties. The Company cannot give assurances that, in each
instance, the target companies will be successful in
completely protecting their intellectual property. Further, in
the event that another party infringes upon the patents,
copyrights or trademarks of the partner companies or their
trade secret rights, the enforcement of such rights can be a
lengthy and costly process, with no guarantee of success.
Also, other parties may be issued patents, copyrights or
trademarks that restrict the partner companies from pursuing
initiatives or selling products that are fundamental to their
business plans, or that require licenses and the payment of
royalties by the partner companies. Finally, although to date
no claims have been brought against the Company or any of its
partner companies alleging that their technology or products
infringe upon the intellectual property rights of others,
there can be no assurance that such claims will not be brought
in the future, or that any such claims will not be successful.
If such a claim were successful, the Company's business, asset
value or stock value could be materially adversely affected.
COMPETITION. Competition for internet products and services is
intense. As the market for B2B and B2C e-commerce grows, that
competition will intensify. Barriers to entering e-commerce
are minimal. The partner companies must compete with other
internet companies for a share of business internet purchasing
resources, consumer internet purchases, dollars spent on
internet consulting and dollars spent on attracting and
sticking consumer page views to vertical business portals. If
the partner companies are not successful in this competition,
their stock prices and asset values obviously will be impacted
in a negative way. Many of the partner companies will compete
with older, more established companies that have greater brand
recognition and greater financial, marketing and management
resources. As a result, the target companies may be at a
disadvantage in responding to their competitors' pricing
strategies, technological innovations, advertising campaigns
and other initiatives.
<PAGE>
DEVELOPMENT OF THE E-COMMERCE MARKET. All of the partner
companies will rely on the internet of the success of their
businesses. The development of e- commerce on the internet is
in the earliest, developmental stages. Widespread commercial
use of the internet could be delayed or even completely
discouraged by a number of factors, including, but not limited
to, insufficient infrastructure to support high transaction
volume, security issues, and governmental regulation AND/OR
TAXATION. If the internet does not become generally accepted
as a main line media for the conduct of routine business
transactions, the partner companies will not be successful in
their businesses.
PARTNER COMPANY COMPUTER AND COMMUNICATION RESOURCES.
Obviously, the ability of the partner companies to conduct
business on the internet will depend on their ability to
develop reliable, uninterrupted computer and
telecommunications technology. Any system disruptions that
cause a partner company's web site to go off line, even for a
limited period of time, will result in the loss of users and a
reduction in the attractiveness of the site for third party
content providers.
CUSTOMER LOYALTY. Success for the partner companies will
depend upon their ability to deliver compelling content to the
targeted users of their web sites to attract business. If the
partner companies are not able to develop internet content
that attracts a loyal user base, their revenue and
profitability will be impaired. Users of the internet can
navigate freely and quickly among a variety of web sites, most
of which offer original content. As a result, the partner
companies may have difficulty developing distinctive content
for their web sites that attracts and holds the attention of
their customers.
WEBSITE AND URL ISSUES. The availability of URL domain names,
the registration of same and the protection of them once they
are registered is, at the present time, an imprecise area. The
ability of the partner companies to obtain the domain names
that best promote their businesses is subject to conflicts
with the operators of existing web sites, conflicts with
speculators who have registered large numbers of names betting
on their future relevance, and conflicts with the trademarks
of other competing companies. The relationship between the
regulations governing the use of domain names on the internet
and the laws protecting trademarks is not clear, and not
likely to become clear in the near future. No assurances can
be given that the partner companies will be universally
successful in obtaining and protecting the domain names that
they need to conduct their business activities.
UNRELIABLE REVENUE. Partner companies often will embrace a
strategy that places a premium on being the first in category
or first in the internet space. Such a strategy will mean that
the primary thrust of the business in the early stages will be
to log the highest number of unique hits rather than
generating revenue. Therefore, partner companies pursuing this
"first- in- time" strategy may not generate revenue or may be
in a negative cash flow position for an extended period of
time. As a consequence, the Company may be forced to support
the partner companies operations financially, which will
negatively impact the Company's cash flow and profitability.
<PAGE>
C. RISKS RELATING TO THE INTERNET INDUSTRY
SECURITY ISSUES. Many prospective users of the internet have
valid concerns regarding the security of their online
transactions and the vulnerability of confidential information
transmitted over the internet. To the extent that any of the
partner companies, are engaged in online transactions, the
success of their businesses will depend on their ability to
meet their customers' expectations for security. No assurances
can be given that each partner company will be able to
successfully accomplish this fundamentally important issue.
TECHNOLOGICAL INNOVATION. The markets in which the partner
companies will operate are characterized by rapid
technological change, frequent new product and service
introductions, and constantly evolving industry standards.
Significant, unanticipated and expenses technological change
could render the partner companies' web site technology,
products or services obsolete or render them less competitive
in the market place. If the partner companies are unable or
unwilling to respond to rapid technological change in a
cost-effective way, the partner companies' financial condition
and operating results may be adversely affected.
GOVERNMENT REGULATION/TAXATION. As of the date of this
memorandum, there are relatively few laws and regulations
governing how business is done on the internet. However, as
the internet grows in usage, it seems inevitable that new laws
and regulations will be enacted. Likely subjects for
legislation are collection, ownership and use of data
collected on the internet, privacy, security, pricing,
content, taxation of internet transactions, copyrights,
gambling, and distribution of goods and services. There can be
no assurances that the course of regulation of the internet
will not have a significant negative impact on the partner
companies.
COMPANY OFFICES
The Company's principal executive offices are located in
Houston, Texas at 9601 West Sam Houston Highway South,
Bldg. 100, Houston, Texas, 77049. The Company's telephone
number is 713-596-9308, the fax number is 713-771-7536 and
the website address is the IVGcorp.com. The Company also
maintains offices in Silicon Valley, California at 2982
Scott Blvd., Santa Clara, CA. 95054 and in Tampa, Florida,
at 3816 W Lindberg Ave, Ste. 408, Tampa, Florida, 33624.
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
In the share exchange, the Company exchanged approximately
23,905,374 shares of the Company's common stock for
approximately 5,312,053 shares of GeeWhiz.com, Inc. common
stock that were tendered by the participating shareholders.
The shareholders of GeeWhiz.com, Inc. obtained control of
approximately 87% of the issued and outstanding common stock
of the Company.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
None.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
None.
ITEM 5. OTHER EVENTS
None.
ITEM 6. RESIGNATION AND APPOINTMENT OF DIRECTORS
Thomas L. McCrimmon resigned as President of Internet Venture
Group, Inc. on February 10, 2000. However, he still holds the
position of Director.
Bertram Cutler resigned as Secretary, Treasurer and Director
on February 10, 2000.
On February 10, 2000, the following were appointed as
Officers and Directors:
ELORIAN LANDERS (AGE 51), Serving as President and CEO,
Mr. Landers was the founding principal of GeeWhiz.com, Inc.
Mr. Landers has primary responsibility for the day-to-day
management of the Company's affairs. Mr. Landers will focus
on the acquisition of portfolio companies and the formation
of strategic business alliances.
Mr. Landers has orchestrated the early stage
capitalization and corporate development of several public
companies. Mr. Landers has also previously served as Vice
President of Marketing for Watermark Corporation, a startup
company involved in several segments of the water industry,
including a chain of retail water centers. He has extensive
advertising agency experience and expertise. Mr. Landers was
a founder and partner of South Coast Venture Group, Inc.,
which funded several technology based companies.
Mr. Landers holds a B.A. in Advertising from Art Center
College in Pasadena, California. He also attended Texas A & M
University studying Architecture.
<PAGE>
EDEN KIM (age 44), Serving as Chairman of the Board and
Managing Director. Mr. Kim will be responsible for the long
term strategic positioning of the Company and the
development of business models for portfolio companies. Mr.
Kim has specific experience in strategic corporate
development, technology development, strategic alliances and
corporate partnering.
Mr. Kim has been the President and Chairman of Swan
Magnetics, Inc., a disk drive high technology company in the
Silicon Valley, since 1992. He was also one of the founders
of the Company and served previously as President from 1984
to 1986. Mr. Kim's management duties at the Company included
directing the Company's business development as well as
establishing and maintaining Swan's key strategic alliances.
Under Mr. Kim's guidance, Swan raised over $30 Million in
equity financing and e stablished strategic working
relationships with world class high technology companies
including Hewlett Packard Co., SEGA Enterprises Co., Ltd.,
Mitsubishi Chemical Co., Ltd., Emtec Magnetics GmbH, JTS
Corporation, CSK Venture Capital and others.
Mr. Kim has experience in acquiring companies through
stock, debt and cash transactions. In addition, Mr. Kim has
established distribution channels in the Asian Pacific Rim
and has orchestrated corporate mergers and acquisitions. Mr.
Kim is an attorney and a member of the California State Bar
Association.
EDUARDO ORLLIAC, age 42, serves as a member of the Board of
Directors. Mr. Orlliac is the founder and Chief
Executive Officer of T-Shirts Interamerica, a Panamanian
company involved in screen printing and manufacturing
of garments, promotional products and gift/souvenirs
internationally. Mr. Orlliac also is a founder and director
of Zetta CentroAmerica y Caribe (1985 to date), a color
separation and large image reproduction company and
Multimedia Live, Inc. (1998 to date) which is an internet
service provider in the United States and Latin America.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIALS, & EXHIBITS
Financial Statements:
F-1-F-10 GeeWhiz.com, Inc. for period ended December 31, 1998
Pro Forma Financial Statements:
F-11-F-14 Consolidated Pro Forma financial statements for
period ended December 31, 1999 (Unaudited)
Exhibits:
10.1 Agreement and Plan of Reorganization
<PAGE>
SIGNATURES
Pursuant to 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 thereunto duly authorized.
Date: April 14, 2000 Internet Venture Group, Inc.
By:/s/Elorian Landers
Elorian Landers, President
<PAGE>
GEEWHIZ.COM, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<PAGE>
Michael Johnson & Co., LLC
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237
Michael B. Johnson, C.P.A. Telephone: (303) 796-0099
Member: A.I.C.P.A. Fax: (303) 796-0137
Colorado Society of C.P.A.s
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of
GEEWHIZ.COM, INC.
Houston, Texas
We have audited the accompanying balance sheet of GEEWHIZ.COM, INC. as of
December 31, 1998 and 1997 and the related statements of operations,
stockholders' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GEEWHIZ.COM, INC. as of
December 31, 1998 and 1997, and the results of it's operations and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/Michael Johnson & Co., LLC
Denver, Colorado
August 28, 1999
F-1
<PAGE>
<TABLE>
<CAPTION>
GEEWHIZ.COM, INC.
BALANCE SHEET
<S> <C> <C>
December 31,
1998 1997
ASSETS
Current Assets:
Cash $25 $1,508
Accounts Receivable 26,377 24,971
Inventories 88,504 72,568
------- --------
Total current assets 114,906 99,047
------- --------
Equipment, net 53,661 71,134
------- --------
Other Assets, net 328,514 353,314
------- --------
TOTAL ASSETS $497,081 $523,495
======= ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable - trade $293,388 $164,663
Accrued liabilities 40,675 18,474
Notes Payable 586,601 515,309
----------- ----------
Total current liabilities 920,664 698,446
=========== ==========
Stockholders' Deficit:
Common Stock, $.001 par value, 10,000,000 shares
4,655,828 and 4,400,828 issued and outstanding 4,656 4,401
in 1998 and 1997, respectively
Additional paid-in-capital 1,374,495 1,234,199
Retained deficit (1,802,734) (1,413,551)
Total stockholders' deficit (423,583) (174,951)
------------ -----------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $497,081 $523,495
============ ===========
F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GEEWHIZ.COM, INC.
STATEMENT OF OPERATIONS
<S> <C> <C>
December 31,
---------------------------------------------------
1998 1997
----------------- -------------------
Sales $328,480 $251,359
Costs of Goods Sold 133,099 353,840
----------------- -------------------
Gross Profit 195,381 (102,481)
----------------- -------------------
Selling, General, and Administrative Expenses 550,289 557,195
----------------- -------------------
Operating Loss (354,908) (659,676)
Other, Interest Expense (34,275) (15,110)
----------------- -------------------
Net Loss ($389,183) ($674,786)
================= ===================
Loss Per Share ($0.09) ($0.16)
================= ===================
Weighted Average Number of Common and
Common Equivalent Shares Outstanding 4,528,327 4,234,278
================= ===================
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GEEWHIZ.COM, INC.
CASH FLOWS
<S> <C> <C>
December 31,
1998 1997
------------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ($389,183) ($674,786)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 46,273 44,939
Services performed in exchange for common stock 83,751 190,025
Increase in:
Accounts receivable (1,406) (456)
Inventories (15,936) (50,227)
Increase (decrease) in:
Accounts payable 128,725 160,467
Accrued liabilities 22,201 (39,947)
-------------------- ----------------
Net Cash Used in Operating Activities (125,575) (369,985)
-------------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Equipment purchases (4,000) (4,000)
Increase in other assets 0 (190,025)
-------------------- ----------------
Net Cash Used in Investing Activities (4,000) (194,025)
-------------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable 101,070 435,900
Payments on short-term debt (29,778) (17,884)
Proceeds from issuance of common stock 56,800 143,500
-------------------- ----------------
Net Cash Provided by Financing Activities 128,092 561,516
-------------------- ----------------
Net Increase (Decrease) in Cash (1,483) (2,494)
Cash Balance - Beginning of Period 1,508 4,002
-------------------- ----------------
CASH BALANCE - END OF PERIOD $25 $1,508
==================== ================
Supplemental Information
Interest paid $6,861 $5,009
==================== ================
Taxes paid $0 $0
==================== ================
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GEEWHIZ.COM, INC.
STOCKHOLDER'S EQUITY
<S> <C> <C> <C> <C> <C>
COMMON STOCK ADDITIONAL RETAINED
------------------------------------ PAID-IN EARNINGS
SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
--------------------- -------------- --------------- --------------- -------------
Balance at December 31, 1996 4,067,727 4,068 901,007 (738,765) 166,310
Issuance of common stock for various
services rendered 245,601 246 189,779 0 190,025
Issuance of common stock 87,500 87 143,413 143,500
Net loss for year ended December 31, 1997 0 0 0 (674,786) (674,786)
--------------------------------------------------------------------------------------
Balance at December 31, 1997 4,400,828 $4,401 $1,234,199 ($1,413,551) ($174,951)
--------------------------------------------------------------------------------------
Issuance of common stock for various
services rendered 167,500 168 84,383 0 84,551
Issuance of common stock 87,500 87 55,913 0 56,000
Net loss for year ended December 31, 1998 0 0 0 (389,183) (389,183)
---------------- -------------- -------------- ---------------- ---------------
Balance at December 31, 1998 4,655,828 $4,656 $1,374,495 ($1,802,734) ($423,583)
================ ============== ============== ================ ===============
F-5
</TABLE>
<PAGE>
GEEWHIZ.COM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1 - ORGANIZATION AND PRESENTATION:
GEEWHIZ.COM, Inc. (the "Company") was incorporated on February 10, 1995
in the state of Texas under the name of Fyrglas, Inc. The Board of
directors on June 21, 1999 changed the name to GEEWHIZ.COM, Inc. Its
primary business operations are the development, acquisition, marketing
and distribution of proprietary products as specialty products and items
for the worldwide gift, novelty and souvenir industries. The Company's
present product line consists of a series of patented illuminated
drinking containers with logos, characters and designs etched into their
exterior walls.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
These financial statements are presented on the accrual method of
accounting in accordance with generally accepted accounting principles.
Significant principles followed by the Company and the methods of
applying those principles, which materially affect the determination of
financial position and cash flows, are summarized below:
Cash and Cash Equivalents:
The Company considers all highly liquid debt instruments, purchased with
an original maturity of three months or less, to be cash equivalents.
Accounting for Impairments in Long-Lived Assets:
Long-lived assets and identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amounts of assets may not be recoverable. Management
periodically evaluates the carrying value and the economic useful life of
its long-lived assets based on the Company's operating performance and
the expected future undiscounted cash flows and will adjust the carrying
amount of assets which may not be recoverable.
Property and Equipment:
Property and equipment is stated at cost. The cost of ordinary
maintenance and repairs is charged to operations while renewals and
replacements are capitalized. Depreciation is computed on the
straight-line method over the following estimated useful lives:
Equipment - manufacturing 5 years
Office equipment 3-5 years
Federal Income Tax:
The Company accounts for income taxes under SFAS No. 109, which requires
the asset and liability approach to accounting for income taxes. Under
this approach, deferred income taxes are determined based upon
differences between the financial statement and tax bases of the
Company's assets and liabilities and operating loss carryforwards using
enacted tax rates in effect for the years in which the differences are
expected to reverse. Deferred tax assets are recognized if it is more
likely than not that the future tax benefit will be realized.
Inventories:
Inventories are stated at cost, which is not in excess of market
determined using the first-in, first-out (FIFO) method.
F-6
<PAGE>
GEEWHIZ.COM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
Other Assets:
Other assets consist primarily of trademarks, patents and licenses. Such
amounts are carried at cost less accumulated amortization that is
calculated on a straight-line basis over the estimated useful lives of
the assets, not to exceed fifteen years. The recoverability of carrying
values of intangible assets is evaluated on a recurring basis. The
primary indicators of recoverability are based on various analyses,
including cash flow and profitability projections that incorporate, as
applicable, the impact on existing Company business.
Use of Estimates:
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
Fair Value of Financial Instruments:
The Company's financial instruments include cash, cash equivalents and
notes payable. Estimates of fair value of these instruments are as
follows:
Cash and cash equivalents - The carrying amount of cash and cash
equivalents approximates fair value due to the relatively short maturity
of these instruments.
Notes payable - The carrying amount of the Company's notes payable
approximate fair value based on borrowing rates currently available to
the Company for borrowings with comparable terms and conditions.
Receivables:
At December 31, receivables consisted of the following:
1998 1997
Trade $26,337 $24,971
======== ========
Inventories:
At December 31, inventories consisted of the following:
1998 1997
Finished Parts & Sub-Assemblies $47,751 $38,000
Raw Materials and Supplies $40,753 $34,568
-------- --------
$88,504 $72,568
======== ========
F-7
<PAGE>
GEEWHIZ.COM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
Other Assets:
At December 31, other assets consisted of the following:
1998 1997
License Agreement $31,250 $31,250
Patents and Trademarks 333,246 333,246
Deposit 15,360 15,360
Organization Costs 2,500 2,500
------- -------
382,356 382,356
(Less Accumulated Depreciation) (53,842) (29,043)
------- -------
$328,514 $353,313
======== ========
NOTE 3 - PROPERTY AND EQUIPMENT:
Property and equipment consist of the following:
1998 1997
Equipment - Manufacturing $86,613 $82,613
Office Equipment 20,750 20,750
------- -------
107,363 103,363
(Less Accumulated Depreciation) (53,702) (32,229)
------- -------
$53,661 $71,134
======= =======
NOTE 4 - CAPITAL STOCK:
The Company's capital stock consists of 10,000,000 authorized shares of
$0.001 par value common stock. At December 31,1998 and 1997, there were
4,655,828 and 4,400,828 shares issued and outstanding respectively.
NOTE 5 - RELATED PARTY TRANSACTIONS:
In March 1995, the Company entered into a consulting agreement with Mr.
Tommy B. Tipton (the "Consulting Agreement"). Pursuant to the terms of
the Consulting Agreement, Mr. Tipton will assist the Company in the
development of products to be marketed by the Company, and will perform
such services as the Company may require from time to time and will
receive compensation of $3,000 per month during the twelve-month period
commencing November 5, 1996.
A director of the Company leases office space for his various business
ventures. The director has allowed the Company to maintain its corporate
headquarters at this leased space rent-free.
NOTE 6 - PATENT LICENSE AGREEMENT:
In February 1995, the Company entered into a license agreement (the
"Patent Agreement") with Mr. Tommy B. Tipton who is the owner of a patent
for a method of manufacturing drinking containers incorporating fiber
optics. Pursuant to the Patent Agreement, the Company obtained exclusive
right and license to sell products produced under the patent or that
incorporate technology of the patent.
F-8
<PAGE>
GEEWHIZ.COM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 6 - PATENT LICENSE AGREEMENT (Continued):
In consideration of the exclusive license granted to the Company pursuant
to the terms of the License Agreement, the Company agreed to (1) convey
to Mr. Tipton 50,000 shares upon the first date on which the Company
collects any Gross Cash Receipts as defined in the Patent Agreement, and
an additional 50,000 shares on the first anniversary of the initial
collection of Gross Cash Receipts, and (2) to pay Mr. Tipton, within 30
days following the end of each calendar quarter, a royalty in an amount
equal to the greater of $0.10 per product unit sold by the Company
pursuant to the terms of the Patent Agreement or a certain percentage
(ranging from 2% to 4%) of the Company's Gross Cash Receipts as defined
in the Patent Agreement. The license granted pursuant to the Patent
Agreement shall continue uninterrupted during the period from the date of
the License Agreement through and until the date on which the Patent
expires and becomes legally unenforceable.
NOTE 7 - INCOME TAXES:
Significant components of the Company's deferred tax liabilities and
assets are as follows:
1998 1997
Deferred Tax Asset 612,900 495,000
Valuation Allowed (612,900) (495,000)
--------- ---------
Net Deferred Tax Liability/Asset - -
========= ==========
As of December 31, 1998, the Company had a net operating loss
carryforward for federal income tax purposes approximately equal to the
accumulated deficit recognized for book purposes, which will be
available to reduce future taxable income. The full realization of the
tax benefit associated with the carryforward depends predominantly upon
the Company's ability to generate taxable income during the
carryforward period. Because of the current uncertainty of realizing
such tax assets in the future, a valuation allowance has been recorded
equal to the amount of the net deferred tax asset. The net operating
loss carryforward, if not utilized, will begin to expire in the year
2010.
NOTE 8 - NET LOSS PER SHARE:
During the fiscal year ended December 31, 1998, the Company adopted
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share." Basic earnings per share is based on the weighted effect of all
common shares issued and outstanding, and is calculated by dividing net
income available to common shareholders by the weighted average shares
outstanding during the period. Diluted earnings per share is calculated
by dividing net income available to common shareholders by the weighted
average of common shares used in the basic earnings per share
calculation plus the number of common shares that would be issued
assuming conversion of all potentially dilutive securities outstanding.
F-9
<PAGE>
<TABLE>
<CAPTION>
GEEWHIZ.COM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
<S> <C> <C>
NOTE 9 - NOTES PAYABLE:
At December 31, 1998and 1997, Notes payable consisted of the following: 1998 1997
---- ----
Borrowings against a $25,000 line of credit agreement with a financial
institution collateralized by a general security agreement covering
substantially all assets of the Company. The note bears interest at two
points above the bank's prime rate (8.25% at December 31, 1998). The
note is payable on demand; however, if no demand is made it matures on 30,002 24,982
February 27, 1999.
Note payable to a financial institution, payable on demand; however, if
no demand is made, payable in monthly installments of $425, including
interest at 9.75%, through February 15, 2001. Certain equipment and a
personaly guaranty by the COmpany's officers collaterize the note. 8,020 15,936
Note payable to an individual shareholder, interest at 8%, payable in full
in March 1999 236,382 217,000
Note payable to an individual shareholder, interest at 8%, payable in
full in December 1999 56,000 51,000
Note payable to an individual shareholder, interest at 10.5%, payable in
full April 1999 96,000 100,000
Note payable to an individual shareholder, interest at 8%, payable in
full in June 7, 1999 148,900 94,000
Note payable to an individual shareholder, interest at 10.5%, payable in
full in December 1999 11,297 12,391
--------- --------
Totals $586,601 $515,309
======== ========
The notes payable to individual shareholders provide that upon maturity of said
notes, the shareholders have the right upon written notice, to receive the
Company's common stock at the conversion rate of two shares of common stock for
each dollar of principal and interest then owing.
</TABLE>
F-10
<PAGE>
Consolidated Pro Forma financial statements for
period ended December 31, 1999
(Unaudited)
F-11
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC VENTURES/GEEWHIZ.COM, INC.
COMBINED PRO FORMA BALANCE SHEET
DECEMBER 31, 1998
<S> <C>
ASSETS
Current Assets:
Cash $25
Accounts Receivable 26,377
Inventories 88,504
------------------
Total Current Assets 114,906
------------------
Equipment - Net 53,661
Other Assets - Net 328,514
------------------
TOTAL ASSETS $497,081
==================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable - Trade $293,388
Accrued Liabilities 40,675
Notes Payable 586,601
------------------
Total Current Liabilities 920,664
==================
Stockholders' Deficit:
Common Stock, $0.0001 par value, 100,000,000 shares
authorized; 27,905,374 issued and outstanding. 2,791
Additional Paid In Capital 1,693,385
Retained Deficit (2,119,759)
------------------
Total Stockholders' Deficit (423,583)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $497,081
==================
F-12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC VENTURES/GEEWHIZ.COM, INC.
COMBINED STATEMENT OF OPERATIONS - PRO FORMA
FOR THE YEAR ENDED DECEMBER 31, 1998
<S> <C>
SALES $328,480
Cost of Goods Sold 133,099
--------------------
GROSS PROFIT 195,381
--------------------
Selling, General and Administrative Expenses 553,774
OPERATING LOSS (358,393)
Other, Interest Expense (34,275)
--------------------
NET LOSS ($392,668)
====================
LOSS PER SHARE ($0.01)
Weighted Average Number of Common Shares
Outstanding. 27,905,374
F-13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC VENTURES/GEEWHIZ.COM, INC.
COMBINED STATEMENT OF CASH FLOWS - PRO FORMA
FOR THE YEAR ENDED DECEMBER 31, 1998
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ($392,668)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and Amortization 46,273
Services performed in exchange for common stock 83,751
(Increase) Decrease in:
Accounts Receivable (1,406)
Inventories (15,936)
Increase (Decrease) in:
Accounts Payable 126,505
Accrued Liabilities 22,201
------------------
NET CASH USED IN OPERATING ACTIVITIES (131,280)
------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Equipment Purchases (4,000)
Increase in Other Assets
------------------
NET CASH USED IN INVESTING ACTIVITIES (4,000)
------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Notes Payable 101,070
Payments on Short Term Debt (29,778)
Proceeds from Issuance of Common Stock 62,505
------------------
Net Cash Provided by Financing Activities 133,797
------------------
NET INCREASE (DECREASE) IN CASH (1,483)
CASH BALANCE - BEGINNING OF PERIOD 1,508
------------------
CASH BALANCE - END OF PERIOD $25
==================
</TABLE>
F-14
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
INTERNET VENTURE GROUP, INC.
A FLORIDA CORPORATION
AND
GEEWHIZ.COM, INC.
A TEXAS CORPORATION
DATED: JANUARY ____, 2000
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
INTERNET VENTURE GROUP, INC.
AND
GEEWHIZ.COM, INC.
This Agreement and Plan of Reorganization ("Agreement"), dated as of
January ____, 2000, among INTERNET VENTURE GROUP, INC. ("IVG"), a Florida
corporation, GEEWHIZ.COM, INC. ("GWI") , a Texas corporation, and the
participating shareholders of GEEWHIZ.COM, INC. ("Shareholders") who will join
this agreement by execution of the Consent/Exchange Agreement (Exhibit "A")
concurrent with or immediately after closing.
W I T N E S S E T H:
A. WHEREAS, IVG and GWI are corporations duly organized under the laws
of the State of Florida and Texas, respectively.
B. PLAN OF REORGANIZATION. The GWI Shareholders are the owners of at
least 80% of the issued and outstanding common stock of GWI. It is the intention
that at least 80% of the issued and outstanding stock of GWI shall be acquired
by IVG in exchange solely for its voting stock. For federal income tax purposes
it is intended that this exchange shall qualify as a reorganization within the
meaning of SEC 368 (a)(1)(B) of the Internal Revenue Code of 1986, as amended
(the "Code").
C. EXCHANGE OF SHARES. IVG and GWI and participating Shareholders agree
that at least 80% of the common shares issued and outstanding of GWI shall be
exchanged with IVG for shares of the restricted stock of IVG. The pro rata
numbers of the IVG shares, after the Effective Date, shall be delivered to the
Exchange Agent as hereinafter defined, for the participating shareholders in
exchange for their GWI shares as hereinafter set forth, and the shares allocated
to the trustee for GWI shareholders shall be delivered to said trustee by the
Exchange Agent.
D. WHEREAS, the parties hereto wish to enter into this Agreement,
pursuant to the provisions of the Florida Statutes.
NOW, THEREFORE, it is agreed among the parties as follows:
<PAGE>
ARTICLE I
THE CONSIDERATION
1.1 Subject to the conditions set forth herein on the "Effective Date"
(as herein defined), Shareholders of at least 80% of the outstanding shares of
GWI shall exchange their shares of GWI for common shares of IVG common stock on
a one share of GWI for 4.5 shares of IVG basis. The transactions contemplated by
this Agreement shall be completed on an Effective Date ("Effective Date") which
shall be as soon as possible after all shareholder approvals, if any are
required, are obtained in accordance with law as set forth in this Agreement,
but no later than 30 days after date hereof.
Prior to the Effective Date, all of the documents to be furnished to
IVG and GWI, including the documents to be furnished pursuant to Article VII of
this Agreement, shall be delivered to M.A. Littman, to be held in escrow until
all preconditions have been performed or the date of termination of this
Agreement, whichever first occurs, and thereafter shall be promptly distributed
to the parties as their interests may appear.
1.2 At the Effective Date, GWI shall become at least an 80% owned
subsidiary of IVG. GWI's shareholder shall receive pro rata shares of $.0001 par
value voting common stock as follows:
IVG shall issue 4.5 shares of common stock for each of the
outstanding common shares of GWI owned by participating
shareholders of GWI, pro rata to the shareholders of GWI.
1.3 If this Agreement is duly adopted by the holders of the requisite
number of shares of GWI, in accordance with the applicable laws and subject to
the other provisions hereof, it shall become effective. For accounting purposes,
the Agreement shall be effective as of 12:01 a.m., on the last day of the month
preceding the Effective Date.
<PAGE>
ARTICLE II
ISSUANCE AND EXCHANGE OF SHARES
2.1 The shares of $.0001 par value common stock of IVG shall be issued
by it to GWI shareholders within 15 days after Effective Date.
2.2 IVG represents that no outstanding options or warrants for its
unissued shares exist. All preferred stock of IVG due for redemption as of the
date hereof shall have been redeemed as of Effective Date, if any.
2.3 The stock transfer books of GWI shall be closed on the Effective
Date, and thereafter no transfers of the stock of GWI shall be made. GWI shall
appoint GWI as exchange agent ("Exchange Agent"), to accept surrender of the
certificates representing the common shares of GWI, and to deliver in exchange
for such surrendered certificates, shares of common stock of IVG. The
authorization of the Exchange Agent may be terminated by IVG after six months
following the Effective Date. Upon termination of such authorization, any shares
of GWI and any funds held by the Exchange Agent for payment to GWI shareholders
pursuant to this Agreement shall be transferred to IVG or its designated agent
who shall thereafter perform the obligations of the Exchange Agent. If
outstanding certificates for shares of GWI are not surrendered or the payment
for them not claimed prior to such date on which such payments would otherwise
escheat to or become the property of any governmental unit or agency, the
unclaimed items shall, to the extent permitted by abandoned property and other
applicable law, become the property of IVG (and to the extent not in its
possession shall be paid over to it), free and clear of all claims or interest
of any persons previously entitled to such items. Notwithstanding the foregoing,
neither the Exchange Agent nor any party to this Agreement shall be liable to
any holder of GWI shares for any amount paid to any governmental unit or agency
having jurisdiction of such unclaimed item pursuant to the abandoned property or
other applicable law of such jurisdiction.
2.4 No fractional shares of IVG stock shall be issued as a result
of the Agreement. Shares shall be rounded to nearest whole share.
2.5 At the Effective Date, each holder of a certificate or certificates
representing common shares of GWI, upon presentation and surrender of such
certificate or certificates to the Exchange Agent, shall be entitled to receive
the consideration set forth herein. Upon such presentation, surrender, and
exchange as provided in Section 2.5, certificates representing shares of GWI
previously held shall be canceled. Until so presented and surrendered, each
certificate or certificates which represented issued and outstanding shares of
GWI at the Effective Date shall be deemed for all purposes to evidence the right
to receive the consideration set forth in Section 1.2 of this Agreement. If the
certificates representing shares of GWI have been lost, stolen, mutilated or
destroyed, the Exchange Agent shall require the submission of an indemnity
agreement and may require the submission of a bond in lieu of such certificate.
<PAGE>
ARTICLE III
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF GEEWHIZ.COM, INC.
No representations or warranties are made by any director, officer,
employee or shareholder of GWI as individuals, except as and to the extent
stated in this Agreement or in a separate written statement (the "GWI Disclosure
Statement"), if any. GWI hereby represents, warrants and covenants to IVG, as
follows:
3.1 GWI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas, and has the corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Bylaws of GWI are
complete and accurate, and the minute books of GWI contain a record, which is
complete and accurate in all material respects, of all meetings, and all
corporate actions of the shareholders and board of directors of GWI.
3.2 The aggregate number of shares which GWI is authorized to issue is
10,000,000 shares of common stock of which 5,844,111 shares are issued and
outstanding, and options are outstanding for approximately 1,100,000 shares.
3.3 GWI has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
3.4 Neither the making of nor the compliance with the terms and
provisions of this Agreement and consummation of the transactions contemplated
herein by GWI will conflict with or result in a breach or violation of the
Articles of Incorporation or Bylaws of GWI.
3.5 The execution, delivery and performance of this Agreement has been
duly authorized and approved by GWI's Board of Directors.
3.6 GWI has delivered to IVG consolidated audited financial statements
of GWI, as of December 31, 1998 which includes audited statements for the year
ended December 31, 1997. All such statements, herein sometimes called "GWI
Financial Statements", are complete and correct in all material respects and,
together with the notes to these financial statements, present fairly the
financial position and results of operations of GWI for the periods included.
The December 31, 1998 statements will have been prepared in accordance with
generally accepted accounting principles.
<PAGE>
3.7 Since the dates of the GWI Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise of GWI.
3.8 There are no legal proceedings or regulatory proceedings involving
material claims pending, or to the knowledge of the officers of GWI, threatened
against GWI or affecting any of its assets or properties, and GWI is not in any
material breach or violation of or default under any contract or instrument to
which GWI is a party, and no event has occurred which with the lapse of time or
action by a third party could result in a material breach or violation of or
default by GWI under any contract or other instrument to which GWI is a party or
by which it or any of its properties may be bound or affected, or under its
respective Articles of Incorporation or Bylaws, nor is there any court or
regulatory order pending, applicable to GWI, except as disclosed on Schedule 3.8
regarding a former employee.
3.9 All liability of GWI has been properly provided for and is adequate
to comply with all regulatory requirements regarding same.
3.10 The representations and warranties of GWI shall be true and
correct as of the date hereof and as of the Effective Date.
3.11 GWI has no employee benefit plan.
3.12 No representation or warranty by GWI in this Agreement, the GWI
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
3.13 INTELLECTUAL PROPERTY. Except for U.S. Patents #5,211,699 and
#5,575,553 in which GWI holds a non-exclusive license, all trade names,
inventions, discoveries, ideas, research, engineering, methods, practices,
processes, systems, formulae, designs, drawings, products, projects,
improvements, developments, know-how, and trade secrets which are used in the
conduct of GWI's business, whether registered or unregistered (collectively the
"Proprietary Rights") are owned by GWI, except as to the specific patents
excluded above. To the knowledge of each Seller and GWI, GWI created or
developed such Proprietary Rights and such Proprietary Rights are not subject to
any restriction, lien, encumbrance, right, title or interest in others. All of
the foregoing Proprietary Rights that are not in the public domain stand solely
in the name of GWI and not in the name of any shareholder, director, officer,
agent, partner or employee or anyone else known to any Seller or GWI and none of
the same have any right, title, interest, restriction, lien or encumbrance
therein or thereon or thereto. To the knowledge of each Seller and GWI, GWI's
ownership and use of the Proprietary Rights do not and will not infringe upon,
conflict with or violate in any material respect any patent, copyright, trade
secret or other lawful proprietary right of any other party, and no claim is
pending or, to the knowledge of any Seller or GWI, threatened to the effect that
the operations of GWI infringe upon or conflict with the asserted rights of any
other person under any of the Proprietary Rights, and to the knowledge of each
Seller and GWI there is no reasonable basis for any such claim (whether or not
pending or threatened). No claim is pending, or to the knowledge of each Seller
and GWI, threatened to the effect that any such Proprietary Rights owned or
licensed by GWI, or which GWI otherwise has the right to use, is invalid or
unenforceable by GWI and there is no reasonable basis for any such claim
(whether or not pending or threatened). GWI has not granted or assigned to any
other person or entity any right to manufacture, have manufactured, assemble or
sell the products or proposed products or to provide the services or proposed
services of Seller.
<PAGE>
3.14 A. LIENS. Except as disclosed on Schedule 3.14(a), no one
other than GWI has any right, title, interest, lien, claim, security interest,
restriction or encumbrance in, on or to GWI's assets.
B. MATERIAL CONTRACTS. Other than as disclosed on Schedule
3.14(b), GWI does not have any material obligation, contract, agreement, lease,
sublease, commitment or understanding of any kind, nature or description, oral
or written, fixed or contingent due or to become due, existing or inchoate.
C. NO UNDISCLOSED LIABILITIES. GWI does not have any
material liabilities or obligations, including, without limitation, contingent
liabilities for the performance of any obligation, except for (i) liabilities or
obligations which are disclosed or fully provided for in GWI's Financial
Statements, (ii) liabilities or obligations disclosed in this Agreement or in
any Exhibit or Schedule to this Agreement, and (iii) liabilities not in excess
of $2,000 in the aggregate.
D. ENVIRONMENTAL MATTERS.(i) GWI has not received notice of
any violation of or investigation relating to any environmental or pollution
law, regulation, or ordinance with respect to assets now or previously owned or
operated by GWI that has not been fully and finally resolved; (ii) All permits,
licenses and other authorizations which are required under United States,
federal, state, provincial and local laws with respect to pollution or
protection of the environment ("Environmental Laws") relating to assets now
owned or operated by GWI or any of its subsidiaries, including Environmental
Laws relating to actual or threatened emissions, discharges or releases of
pollutants, contaminants or hazardous or toxic materials or wastes
("Pollutants"), have been obtained and are effective, and, with respect to
assets previously owned or operated by GWI, were obtained and were effective
during the time of GWI's operation; (iii) to the knowledge of GWI, no conditions
exist on, in or about the properties now or previously owned or operated by GWI
or any third-party properties to which any Pollutants generated by GWI were sent
or released that could give rise on the part of GWI to liability under any
Environmental Laws, claims by third parties under Environmental Laws or under
common law or the occurrence of costs to avoid any such liability or claim; and
(iv) to the knowledge of GWI, all operators of GWI's assets are in compliance
with all terms and conditions of such Environmental Laws, permits, licenses and
authorizations, and are also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in such laws or contained in any regulation,
code, plan, order, decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder, relating to GWI's assets.
<PAGE>
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
INTERNET VENTURE GROUP, INC.
No representations or warranties are made by any director, officer,
employee or shareholder of IVG as individuals, except as and to the extent
stated in this Agreement or in a separate written statement.
IVG hereby represents, warrants and covenants to GWI, except as stated
in the IVG Disclosure Statement, as follows:
4.1 IVG is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, and has the corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Bylaws of IVG, copies of
which have been delivered to GWI, are complete and accurate, and the minute
books of IVG contain a record, which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the shareholders and
Board of Directors of IVG.
4.2 The aggregate number of shares which IVG is authorized to issue is
100,000,000 shares of common stock with a par value of $.001 per share, of which
4,000,000 shares of such common stock will be issued and outstanding, fully paid
and non-assessable, prior to Effective Date under this agreement (after a one
for 24 reverse split). IVG has no outstanding options, warrants or other rights
to purchase, or subscribe to, or securities convertible into or exchangeable for
any shares of capital stock. No preferred stock of IVG is outstanding.
4.3 IVG has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement. The execution of this Agreement has been duly
authorized and approved by the IVG's Board of Directors.
4.4 Neither the making of nor the compliance with the terms and
provisions of this Agreement and consummation of the transactions contemplated
herein by IVG will conflict with or result in a breach or violation of the
Articles of Incorporation or Bylaws of IVG.
4.5 IVG will bring all of its SEC filings current within 10 days after
the date of closing, and has provided audited financials for the prior three
fiscal years.
<PAGE>
4.6 IVG has delivered to GWI financial statements of IVG dated December
31, 1998. All such statements, herein sometimes called "IVG Financial
Statements" are (and will be) complete and correct in all material respects and,
together with the notes to these financial statements, present fairly the
financial position and results of operations of GWI of the periods indicated.
All statements of IVG will have been prepared in accordance with generally
accepted accounting principles.
4.7 Since the dates of the IVG Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise, of IVG. IVG does not have any material liabilities or obligations,
secured or unsecured except as shown on updated financials (whether accrued,
absolute, contingent or otherwise).
4.8 IVG has delivered to GWI a list of all pending legal proceedings
involving IVG (none), none of which will affect them, and except for these
proceedings, there are no pending legal proceedings or regulatory proceedings
involving material claims pending, or, to the knowledge of the officers of IVG,
threatened against IVG or affecting any of its assets or properties, and IVG is
not in any material breach or violation of or default under any contract or
instrument to which IVG is a party, and no event has occurred which with the
lapse of time or action by a third party could result in a material breach or
violation of or default by IVG under any contract or other instrument to which
IVG is a party or by which they or any of their respective properties may be
bound or affected, or under their respective Articles of Incorporation or
Bylaws, nor is there any court or regulatory order pending, applicable to IVG.
4.9 IVG shall not enter into or consummate any transactions prior to
the Effective Date other than in the ordinary course of business and will pay no
dividend, or increase the compensation of officers and will not enter into any
agreement or transaction which would adversely affect its financial condition,
or issue any new shares.
4.10 IVG is not a party to any contract performable in the future.
4.11 The representations and warranties of IVG shall be true and
correct as of the date hereof and as of the Effective Date.
4.12 IVG has delivered, or will deliver within two weeks of the date of
this Agreement, to GWI, all of its corporate books and records for review, true
and correct copies of IVG tax returns, if any. IVG will also deliver to GWI on
or before the Effective Date any reports relating to the financial and business
condition of IVG which occur after the date of this Agreement and any other
reports sent generally to its shareholders after the date of this Agreement.
4.13 IVG has no employee benefit plan in effect at this time.
<PAGE>
4.14 No representation or warranty by IVG in this Agreement, the IVG
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
4.15 IVG agrees that all rights to indemnification now existing in
favor of the employees, agents, directors or officers of GWI and its
subsidiaries, as provided in the Articles of Incorporation or Bylaws or
otherwise in effect on the date hereof shall survive the transactions
contemplated hereby in accordance with their terms, and IVG expressly assumes
such indemnification obligations of GWI.
4.16 A. LIENS. Except as disclosed on Schedule 4.7, no one other
than IVG any right, title, interest, lien, claim, security interest, restriction
or encumbrance in, on or to IVG;s assets.
B. MATERIAL CONTRACTS. Other than as disclosed on Schedule
4.7, IVG does not have any material obligation, contract, agreement, lease,
sublease, commitment or understanding of any kind, nature or description, oral
or written, fixed or contingent due or to become due, existing or inchoate.
C. NO UNDISCLOSED LIABILITIES. IVG does not have any material
liabilities or obligations, including, without limitation, contingent
liabilities for the performance of any obligatioin, except for (i) liabilities
or obligations which are disclosed or fully provided for in IVG's Financial
Statements, (ii) liabilities or obligations disclosed in this Agreement or in
any Exhibit or Schedule to this Agreement, and (iii) liabilities not in excess
of $2,000 in the aggregate.
ARTICLE V
OBLIGATIONS OF THE PARTIES PENDING THE EFFECTIVE DATE
5.1 a. This Agreement shall be duly submitted to the shareholders of
GWI for the purpose of considering and acting upon this Agreement in the manner
required by law at a meeting of shareholders on a date selected by GWI, such
date to be the earliest practicable date. The Board of Directors of GWI, subject
to the Board's fiduciary obligations to shareholders, shall use its best efforts
to obtain the requisite approval of GWI shareholders of this Agreement and the
transactions contemplated herein. GWI shall take all reasonable and necessary
steps and actions to comply with and to secure GWI shareholder approval of this
Agreement and regulations of such states.
5.1 b. A majority of IVG shareholders shall have approved this
Agreement, in writing and notice pursuant to Florida Statutes shall have been
provided to non-consenting shareholders.
<PAGE>
5.2 At all times prior to the Effective Date during regular business
hours, each party will permit the other to examine its books and records and the
books and records of its subsidiaries and will furnish copies thereof on
request. It is recognized that, during the performance of this Agreement, each
party may provide the other parties with information which is confidential or
proprietary information. During the term of this Agreement, and for four years
following the termination of this Agreement, the recipient of such information
shall protect such information from disclosure to persons, other than members of
its own or affiliated organizations and its professional advisers, in the same
manner as it protects its own confidential or proprietary information from
unauthorized disclosure, and not use such information to the competitive
detriment of the disclosing party. In addition, if this Agreement is terminated
for any reason, each party shall promptly return or cause to be returned all
documents or other written records of such confidential or proprietary
information, together with all copies of such writings and, in addition, shall
either furnish or cause to be furnished, or shall destroy, or shall maintain
with such standard of care as is exercised with respect to its own confidential
or proprietary information, all copies of all documents or other written records
developed or prepared by such party on the basis of such confidential or
proprietary information. No information shall be considered confidential or
proprietary if it is (a) information already in the possession of the party to
whom disclosure is made, (b) information acquired by the party to whom the
disclosure is made from other sources, or (c) information in the public domain
or generally available to interested persons or which at a later date passes
into the public domain or becomes available to the party to whom disclosure is
made without any wrongdoing by the party to whom the disclosure is made.
5.3 IVG and GWI shall promptly provide each other with information as
to any significant developments in the performance of this Agreement, and shall
promptly notify the other if it discovers that any of its representations,
warranties and covenants contained in this Agreement or in any document
delivered in connection with this Agreement was not true and correct in all
material respects or became untrue or incorrect in any material respect.
5.4 All parties to this Agreement shall take all such action as may be
reasonably necessary and appropriate and shall use their best efforts in order
to consummate the transactions contemplated hereby as promptly as practicable.
ARTICLE VI
PROCEDURE EXCHANGE
6.1 At the Effective Date, the exchange shall be effected as set forth
in Florida Revised Statutes with common stock certificates of IVG being
exchanged for GWI common stock certificates as and when submitted to the
transfer agent under Article 2.3 hereof, and GWI shall become subsidiary of IVG.
ARTICLE VII
CONDITIONS PRECEDENT TO THE
CONSUMMATION OF THE EXCHANGE
The following are conditions precedent to the consummation of the
Agreement on or before the Effective Date:
7.1 GWI and IVG shall have performed and complied with all of its
respective obligations hereunder which are to be complied with or performed on
or before the Effective Date and IVG and GWI shall provide the other at the
Closing with a certificate to the effect that such party has performed each of
the acts and undertakings required to be performed by it on or before the
Effective Date pursuant to the terms of this Agreement.
7.2 This Agreement, the transactions contemplated herein shall have
been duly and validly authorized, approved and adopted, at a meeting of the
shareholders of GWI duly and properly called for such purpose in accordance with
the applicable laws.
<PAGE>
7.3 No action, suit or proceeding shall have been instituted or shall
have been threatened before any court or other governmental body or by any
public authority to restrain, enjoin or prohibit the transactions contemplated
herein, or which might subject any of the parties hereto or their directors or
officers to any material liability, fine, forfeiture or penalty on the grounds
that the transactions contemplated hereby, the parties hereto or their directors
or officers, have violated any applicable law or regulation or have otherwise
acted improperly in connection with the transactions contemplated hereby, and
the parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
7.4 All actions, proceedings, instruments and documents required to
carry out this Agreement and the transactions contemplated hereby and the form
and substance of all legal proceedings and related matters shall have been
approved by counsel for GWI and IVG.
7.5 The representations and warranties made by GWI and IVG in this
Agreement shall be true as though such representations and warranties had been
made or given on and as of the Effective Date, except to the extent that such
representations and warranties may be untrue on and as of the Effective Date
because of (1) changes caused by transactions suggested or approved in writing
by GWI or (2) events or changes (which shall not, in the aggregate, have
materially and adversely affected the business, assets, or financial condition
of IVG or GWI during or arising after the date of this Agreement.)
7.6 GWI shall have furnished IVG with:
(1) a certified copy of a resolution or resolutions duly adopted
by the Board of Directors of GWI approving this Agreement and
the transactions contemplated by it and directing the
submission thereof to a vote of the shareholders of GWI;
(2) a certified copy of a resolution or resolutions duly adopted
by a majority of all of the classes of outstanding shares
of GWI capital stock approving this Agreement and the
transactions contemplated by it;
(3) an agreement from each "affiliate" of GWI as defined in the
rules adopted under the Securities Act of 1933, as amended, to
the effect that (a) the affiliate is familiar with SEC Rules
144 and 145; (b) none of the shares of IVG common stock will
be transferred by or through the affiliate in violation of the
Federal Securities Laws; (c) the affiliate will not sell or in
any way reduce his risk relative to any IVG common stock
received pursuant to this Agreement until such time as
financial results covering at least 30 days of post-closing
date combined operations shall have been published by IVG on
SEC Form 10-Q or otherwise; and (d) the affiliate acknowledges
that IVG is under no obligation to register the sale,
transfer, or the disposition of IVG common stock by the
affiliate or to take any action necessary in order to make an
exemption from registration available to the affiliate, but
understands that IVG will satisfy the public information
requirements of Rules 144 and 145 during the three-year period
following the Effective Date.
(4) Each participating shareholder of GWI shall sign a Consent/
Subscription Agreement as contained on Exhibit "A".
<PAGE>
7.7 IVG shall furnish GWI with a certified copy of a resolution or
resolutions duly adopted by the Board of Directors of IVG and a majority of the
shareholders of IVG, approving this Agreement and the transactions contemplated
by it.
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1 Anything contained in this Agreement to the contrary
notwithstanding, the Agreement may be terminated and abandoned at any time
(whether before or after the approval and adoption thereof by the shareholders
of GWI) prior to the Effective Date:
(a) By mutual consent of GWI and IVG;
(b) By GWI or IVG, if any condition set forth in Article VII
relating to the other party has not been met or has not been
waived;
(c) By GWI or IVG, if any suit, action or other proceeding shall
be pending or threatened by the federal or a state government
before any court or governmental agency, in which it is sought
to restrain, prohibit or otherwise affect the consummation of
the transactions contemplated hereby;
(d) By any party, if there is discovered any material error,
misstatement or omission in the representations and warranties
of another party;
(e) By any party if the Agreement Effective Date is not within 30
days from the date hereof.
8.2 Any of the terms or conditions of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof, by action taken
by its Board of Directors provided; however, that such action shall be taken
only if, in the judgment of the Board of Directors taking the action, such
waiver will not have a materially adverse effect on the benefits intended under
this Agreement to the party waiving such term or condition.
<PAGE>
ARTICLE IX
TERMINATION OF REPRESENTATION AND
WARRANTIES AND CERTAIN AGREEMENTS
9.1 The respective representations and warranties of the parties hereto
shall expire with, and be terminated and extinguished by consummation of the
Agreement; provided, however, that the covenants and agreements of the parties
hereto shall survive in accordance with their terms.
ARTICLE X
MISCELLANEOUS
10.1 This Agreement embodies the entire agreement between the parties,
and there have been and are no agreements, representations or warranties among
the parties other than those set forth herein or those provided for herein.
10.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument. Counterparts shall include the execution of the
Exchange Agreement and Representations by all shareholders.
10.3 Within 20 days after Closing hereunder, IVG shall complete a
merger of the then subsidiary, GWI, with IVG pursuant to Florida Statutes
607,1101-1107, such merger providing that the share ratio for the exchange shall
be 4.5 IVG shares for each share of GWI held by private shareholders.
10.4 All parties to this Agreement agree that if it becomes necessary
or desirable to execute further instruments or to make such other assurances as
are deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
10.5 This Agreement may be amended upon approval of the Board of
Directors of each party provided that the shares issuable hereunder shall not be
amended without approval of the requisite shareholders of GWI.
10.6 Any notices, requests, or other communications required or
permitted hereunder shall be delivered personally or sent by overnight courier
service, fees prepaid, addressed as follows:
To Internet Venture Group, Inc.:
c/o Michael A. Littman, Esq.
10200 W. 44th Ave., #400
Wheat Ridge, Co 80033
(303) 422-8127
To GeeWhiz.com, Inc.:
9307 W. Sam Houston Parkway, Suite #100
Houston, TX 77099
(713) 596-9308
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
<PAGE>
10.7 No press release or public statement will be issued relating to
the transactions contemplated by this Agreement without prior approval of the
Parties. However, either IVG or GWI may issue at any time any press release or
other public statement it believes on the advice of its counsel it is obligated
to issue to avoid liability under the law relating to disclosures, but the party
issuing such press release or public statement shall make a reasonable effort to
give the other party prior notice of and opportunity to participate in such
release or statement.
10.8 IVG agrees that upon Effective Date its directors will appoint the
directors designated by GWI as specified by GWI.
IN WITNESS WHEREOF, the parties have set their hands and seals this
_____ day of January, 2000.
Consented and Agreed Internet Venture Group, Inc.
/s/Thomas McCrimmon /s/Elorian Landers
______________________ By:__________________
Thomas McCrimmon President
/s/Eden Kim
Attest:________________
Secretary
Consented and Agreed GeeWhiz.com, Inc.
/s/Bert Cutler /s/Elorian Landers
_____________________ By:___________________
Bert Cutler President
/s/Eden Kim
Attest:_________________
Secretary
