UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-18824
CORPORATE VISION, INC.
(Exact name of registrant as specified in its charter)
Oklahoma
(State or other jurisdiction of incorporation)
73-1380820
(I.R.S. Employer Identification No.)
8908 South Yale Avenue, Suite 360
Tulsa, OK 74137
(Address of principal executive offices, including zip code)
(918) 488-0057
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
[ X ] Yes [ ] No
As of March 31, 1996, the Registrant had 10,288,721 shares of common
stock, $0.01 par value, (the "Common Stock") issued and outstanding.
PART I - FINANCIAL INFORMATION
When used in this document, the words "anticipate", "expect", "project"
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to certain risks, uncertainties and assumptions.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those anticipated, expected, estimated or projected.
<PAGE>
<TABLE>
Item 1. Financial Statements
CORPORATE VISION, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<CAPTION> Three months ended
March 31,
1996 1995
-------- --------
<S> <C> <C>
Revenue $244,068 $60,346
Production expenses
Personnel 69,850 73,318
Audio/Visual 6,870 3,025
-------- --------
76,720 76,343
-------- --------
General and administrative
Office 31,708 17,180
Selling 32,138 6,111
Professional Fees 21,957 3,388
Investor relations 26,643 10,641
Other 2,973 0
Depreciation/Amortization 40,841 20,000
-------- --------
156,260 57,320
-------- --------
Income (loss) from operations 11,088 (73,317)
Interest expense 6,449 2,862
-------- ---------
Income (loss) before income tax 4,639 (76,179)
Provision for income taxes
Current 0 0
Deferred 0 0
-------- --------
Net income (loss) $4,639 $(76,179)
-------- --------
Earnings (loss) per share $0.00 $(0.01)
Weighted average shares 10,181,522 8,134,000
CORPORATE VISION, INC.
BALANCE SHEETS
(Unaudited)
March 31, December 31,
1996 1995
--------- ------------
<S> <C> <C>
ASSETS
Current Assets
Cash $65,009 $40,335
Accounts Receivable 80,346 0
Prepaid expenses (related party) 58,334 66,667
Prepaid expenses 309,754 103,422
--------- -----------
513,443 210,424
--------- -----------
Property and Equipment
Equipment 561,869 535,811
Accumulated depreciation (268,342) (245,773)
--------- -----------
293,527 290,038
--------- -----------
Other Assets
Capitalized software 95,472 101,837
Goodwill 103,621 110,529
Other assets 127,535 109,339
Licensing agreement 52,832 55,052
Marketing and distribution
rights 41,667 44,445
--------- -----------
421,127 421,202
--------- -----------
TOTAL ASSETS $1,228,097 $921,664
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $24,900 $1,000
Accrued liabilities 14,554 40,238
Notes payable 120,000 160,000
Payable to stockholders
(rel. party) 123,205 122,512
Current portion long term
debt 24,735 32,968
--------- -----------
307,394 356,716
--------- -----------
Long Term Liabilities
Long term debt 38,712 38,712
Deferred income taxes 15,600 15,600
--------- -----------
54,312 54,312
--------- -----------
Stockholders' Equity
Preferred stock, $0.01 par
value, 1,000,000 shares
authorized, no shares issued
or outstanding at March 31,
1996 or December 31, 1995 0 0
Common Stock, $0.01 par value
20,000,000 shares authorized,
10,288,721 and 9,491,175
shares issued and outstanding
at March 31, 1996 and
December 31, 1995,
respectively 102,887 94,912
Additional paid in capital 2,272,481 1,929,340
Retained earnings (deficit) (1,508,977) (1,513,616)
----------- ------------
866,391 510,636
----------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,228,097 $921,664
CORPORATE VISION, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
Three months ended
March 31,
1996 1995
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $4,639 $(76,179)
Non-cash charges to earnings:
Depreciation and amortization 40,841 20,000
Consulting services 21,000 0
Salary payable to
related party 19,500 0
Other 2,500 0
Changes in operating assets and
liabilities:
Accounts receivable (80,346) 1,499
Accounts payable 23,900 30,440
Other current liabilities (23,040) 14,077
----------- -----------
8,994 (10,163)
----------- -----------
INVESTING ACTIVITIES
Investment in other assets (18,197) (64,158)
Purchase of equipment (26,058) (19,142)
----------- -----------
(44,255) (83,300)
----------- -----------
FINANCING ACTIVITIES
Payment of loans
(related party) (18,807) (12,031)
Payment of long-term debt (8,231) (4,747)
Issuance of common stock 86,973 51,718
----------- -----------
59,935 34,940
----------- -----------
Net change in cash 24,674 (58,523)
Cash at beginning of period 40,335 106,769
----------- -----------
Cash at end of period $65,009 $48,246
----------- -----------
SUPPLEMENTAL DISCLOSURES
Cash paid for interest and
income taxes:
Interest $6,449 $20,663
Income taxes 0 0
Non-cash investing and financing
activities:
Conversion of note to
common stock $42,644 $0
Stock issued for services
in advance (related party) 0 150,000
Stock issued in advance for
services rendered by
non-affiliates 219,000 139,593
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
Corporate Vision, Inc. ("CVI" or "the Company") is an interactive
multimedia production company that develops and produces custom
CD-ROM, CD-i, On-line, and Internet products for the corporate and
consumer markets. To date, the Company's business has centered on
developing custom CD-ROM and CD-i applications for Fortune 500
companies to use in their training and marketing activities.
As of December 31, 1995, the Company was principally involved in
the development and production of interactive training programs on
CD-ROM for one corporate customer, the Dowell Division of
Schlumberger Technology Corporation, an international well logging,
seismic and service company, under a production agreement dated
January 1, 1995. Payments to the Company for services rendered
under the agreement commenced during 1995 and continued at regular
intervals during the first quarter of 1996.
Growth Strategy
CVI's objective is to acquire companies in the video production and
multimedia development businesses that enhance the Company's
production capabilities and expand its client base. By acquiring
superior production capabilities, and providing the working capital
necessary to develop marketing and distribution strengths, the Company
anticipates it can expand its scope of products and services to the
corporate market as well as develop CD-ROM and Internet products
for the consumer market and broadcast programming for cable,
satellite and interactive television.
The Company has signed non-binding letters of intent with two
acquisition candidates, discussed below, and is actively searching for
others. The Company has engaged the firm of Stanford Keene &
Associates, a mergers and acquisitions consulting firm in Charlotte,
North Carolina, to assist in identifying and evaluating other such
candidates.
Pending Acquisitions
Texas Video & Post
On December 7, 1995, CVI entered into a letter of intent to acquire
100% of the common stock of Texas Video & Post, Inc. (TVP), a
privately-held video and post-production facility, in exchange for
$600,000 in cash and the issuance of a minimum of 2,400,000 shares
of restricted common stock of the Company.
Located in Houston, Texas, TVP is considered to be one of the premiere
video and post-production facilities in the Southwest, serving an
impressive array of clients throughout the United States.
TVP employs 20 people and generates over $3.0 million in annual
revenues by producing corporate communications, original
broadcast programming, television commercials and cable films.
The letter of intent with TVP is non-binding on either party and
is subject to the execution of a definitive agreement. As of
March 31, 1996, the Company had not entered into a definitive
agreement with TVP, pending successful completion of the
corporate financing for the cash component of the consideration
required under the terms of the TVP letter of intent. Successful
completion of the corporate financing and the acquisition of TVP
may necessarily result in material expense for CVI and substantial
dilution of the interests of the current CVI shareholders.
InterActive Media
On January 25, 1996, CVI entered into a letter of intent to acquire
100% of the common stock of InterActive Media, Inc. (IAM),
a privately-held producer of custom CD-ROM programs for the
corporate and consumer markets, in exchange for $100,000 cash
and the issuance of a minimum of 2,000,000 shares of restricted
Common Stock of the Company.
Located in San Francisco, California, IAM is a leader in the design
and production of custom interactive multimedia software programs
for major corporations to use in their marketing, advertising, sales
and training programs. Since being established in 1990, IAM has
developed a high quality reputation with major Fortune 500 clients,
expanded its portfolio of programs and applications, and has built
its staff to 21 employees. IAM generates approximately $2.0 million
in annual revenue.
In 1994, IAM developed its first consumer "infotainment" title,
SportWare Golf, which is currently published and distributed by
Harper Collins in the US and by PalmSoft in Japan. SportWare
Golf is the most comprehensive program on every aspect of golf.
IAM owns the "SportWare" brand name and its content, and will
derive royalty revenues from each product sold under trade name.
Additional SportWare titles, such as tennis, flyfishing, and skiing,
are planned for release in 1996 and 1997. IAM also plans to
develop a line of products, known as "SportWare Coach", that
are designed to teach children aged 10-15 the fundamentals of
baseball, football, basketball, soccer and other sports.
The letter of intent with IAM is non-binding on either party and is
subject to the execution of a definitive agreement. As of March 31,
1996, the Company had not entered into a definitive agreement with
IAM pending successful completion of the corporate financing for
the cash component of the consideration required under the terms of
the IAM agreement. Successful completion of the corporate financing
and the acquisition of IAM may necessarily result in material expense
for CVI and substantial dilution of the interest of the current
shareholders of CVI.
Future Acquisitions
The Company's current growth plan calls for the acquisition of two
companies per year beginning in 1997. The Company believes that it
may increase the profitability of acquired businesses by consolidating
administrative activities, such as purchasing, accounting and finance,
which would allow management of the acquired companies to focus
exclusively on production, sales and marketing activities and by
providing the working capital necessary for the expansion of revenues
and earnings. CVI expects to select acquisition candidates based on
the following criteria:
Custom Development
CVI intends to acquire companies with existing revenues and earnings,
and that (i) increase CVI's interactive CD production capabilities,
(ii) expand CVI's corporate client base, or (iii) have high quality
"off the shelf" corporate training or professional education products
that can be converted to interactive CD and distributed through the
acquired company's existing sales channels.
Consumer Market
CVI intends to acquire companies that are (i) content-based
(i.e. have rights to movies, books, music, or images) with existing
revenues and earnings, and (ii) that have content that can be
converted to interactive CD and distributed through the acquired
company's existing sales channels. The Company believes that it
may increase the profitability of acquired consumer oriented
businesses by using its production expertise, developed in the corporate
market, to offer interactive CD-based products to the consumer.
Liquidity and Capital Resources
During the first quarter of 1996, the Company generated positive cash
flow from its operating activities. It is anticipated that such monthly
fees generated by the agreement with Schlumberger will extend through
August of 1996. At present, the Company has no other business backlog
beyond August of 1996.
In addition to its positive operating cash flow, the Company generated
approximately $86,973 in cash from the exercise of Common Stock
warrants, the proceeds of which were used to finance growth and
capital needs during the first quarter of 1996.
During the first quarter of 1996, the Company incurred capital expenditures
of $26,058, which were primarily for computers and related CD production
equipment. Such expenditures were consistent with those incurred during
the first quarter of 1995.
At December 31, 1995, the Company was in default on three notes payable
in the aggregate principal amount of $160,000 together with accrued interest
of $7,111 due to three individuals, one of which was a beneficial owner of
more than 5% of the outstanding Common Stock of the Company, and two
of which were non-affiliates. The notes were unsecured and accrued
interest at a rate of 10% per year, which increased to 15% upon default.
On January 1, 1996, the Company issued warrants to the three individual
note holders to purchase 80,000, 40,000 and 40,000 shares of Common
Stock, respectively, at $1.00 per share at any time prior to January 1, 1998.
During the first quarter of 1996, one of the non-affiliated note holders and
the Company mutually agreed to convert the outstanding principal and
accrued interest of $42,644 due under a promissory note to 85,288 shares
of Common Stock of the Company and 85,288 warrants to purchase an
additional share of Common Stock at $0.50 per share on or before
February 21, 1998. At March 31, 1996, the Company was in default on
notes payable in the principal amount of $120,000 together with accrued
interest of $9,500 due to the remaining two individuals. Subsequent to
the end of the first quarter of 1996, the Company began to repay the
principal balance of the remaining unpaid promissory notes.
The Company expects to reduce in full all amounts due and payable
under said notes on or before June 30, 1996.
Looking ahead, management believes that current cash balances and
revenues generated from operating activities will not be sufficient to
meet the Company's long term capital needs. In order to complete its
operating plan for 1996, the Company intends to raise additional funds
through the private placement of additional equity or convertible debt
securities. The sale of additional equity or convertible debt securities
will result in additional dilution to the Company's stockholders. There
can be no assurance that the Company will be able to raise such capital
when needed or on terms favorable to the Company.
In order to carry out its plans for additional corporate financing, the
Company, on March 1, 1996, entered into an agreement with Institutional
Investors Consulting Company ("IICC") to provide exclusive investment
advisory, brokerage participation and other financial services for the
purpose of securing a maximum of $5,000,000 in additional equity
and/or debt funding from investors and/or financial institutions.
Under the terms of the agreement, the Company obligated itself to
pay commissions of varying percentages depending on the nature and
amount of funds secured under the contract. As of March 31, 1996,
the Company had not completed any financing under the terms of the
contract with IICC.
In the event the Company is unsuccessful in raising a minimum of
$3,500,000 in additional funds during 1996 upon acceptable terms,
the business acquisitions planned by the Company in 1996 may,
by necessity, be delayed or abandoned and operations of the
Company reduced significantly.
During 1996, the Company anticipates receiving additional capital
from the exercise of currently outstanding Common Stock warrants.
On May 15, 1996, warrants to purchase 600,000 shares of the Company's
Common Stock expire. However, there can be no assurance that any
warrants will be exercised prior to their expiration
The Company's liquidity will be reduced as amounts are expended for
continuing product development, expansion of sales and marketing
activities and development of its administrative function. While not
currently anticipated, the Company's liquidity could also be reduced
if significant amounts were expended for additional facilities and
equipment or to license or acquire proprietary technology owned by
others or to legally defend its proprietary technology. Additionally,
depending on market conditions or future business opportunities, the
Company may decide to issue additional equity or debt securities for
cash or to acquire assets or technology of others as discussed above.
The working capital of the Company may also be used to acquire such
assets or technology, reducing the funds available for alternative use.
Results of Operations
Revenue for the first quarter of 1996 increased by approximately
$184,000, or 206%, from the first quarter of 1995 primarily from the
Company's contract to produce interactive safety training on CD-ROM
for the Dowell Division of Schlumberger Technology Corporation.
The increase in revenue resulted primarily from the successful conclusion
of the initial interactive program and the beginning of production on the
remaining training programs .
Production expenses for the first quarter of 1996 were approximately
$77,000 and were consistent with such expenses during the same quarter
of 1995.
Office expense during the first quarter of 1996 increased by approximately
$14,500, or 85%, compared to the first quarter of 1995 primarily because
of increased postage, printing and telephone charges related to the Company
becoming publicly traded.
Selling expenses during the first quarter of 1996 increased by approximately
$26,000, or 433%, compared to the first quarter of 1995 as a result of
commissions paid on revenues generated by the Schlumberger contract.
Professional fees during the first quarter of 1996 increased by
approximately $18,000, or 514%, compared to the first quarter of 1995
because of accounting fees and increased legal fees as a result of the two
pending acquisitions, discussed above and the increase in expense
associated with the Company becoming an SEC reporting company
during the second quarter of 1995.
Investor relations fees during the first quarter of 1996 increased by
approximately $16,000, or 160%, compared to the first quarter of 1995
primarily because of advertising and promotion of the Company in the
public market. Expenses recognized during the first quarter of 1996 related
primarily to the agreements with Investor Relations Corporation and with
RDG Investments (See "Other", below). In June, 1995, the Company's
Common Stock began trading on the Nasdaq Bulletin Board under the
symbol "CVIA".
Depreciation and amortization expenses during the first quarter of 1996
increased by approximately $20,000, or 100%, compared to the first
quarter of 1995 as a result of equipment purchases and increases in
intangible assets.
The Company has incurred losses since inception and, therefore, has not
been subject to federal income taxes. As of December 31, 1995, the
Company had generated net operating loss carryforwards for financial
reporting purposes of approximately $1.5 million available to reduce
future federal income taxes. These carryforwards will begin to expire
in 2007. The Company's ability to utilize the carryforwards could be
limited by a "change in ownership," as such term is defined by federal
income tax laws and regulations.
As a result of the Company's limited operating history, the Company
does not have historical financial data for a significant number of periods
on which to base planned operating expenses. Accordingly, the Company's
expense levels are based in part on its expectations as to future revenues.
However, the Company is currently operating with no backlog of orders or
contracts to develop additional CD-ROM titles. As a result, quarterly
operating results generally depend on the payments received under pre-
existing or new contracts within the quarter, which are difficult to forecast.
The Company may be unable to adjust spending in a timely manner to
compensate for any unexpected revenues shortfall. Accordingly, any
significant shortfall of demand for the Company's services in relation to
the Company's expectations would have an immediate adverse impact
on the Company's business, operating results and financial condition.
In addition, the Company plans to increase its operating expenses to
fund greater levels of development, increase its sales and marketing
operations, develop new distribution channels and broaden its customer
support capabilities. To the extent that such expenses precede or are not
subsequently followed by increased revenues, the Company's business,
operating results and financial condition will be materially adversely
affected.
The Company expects to experience significant fluctuations in future
quarterly operating results that may be caused by many factors, including
demand for the Company's services, introduction or enhancement of
products by the Company and its competitors, market acceptance of new
products, mix of distribution channels through which products are sold,
mix of products and services sold, and general economic conditions.
As a result, the Company believes that period-to-period comparisons
of its results of operations are not necessarily meaningful and should not
be relied upon as any indication of future performance. Due to all of the
foregoing factors, it is likely that in some future quarter the Company's
operating results will be below the expectations of public market analysts
and investors. In such event, the price of the Company's Common Stock
would likely be materially adversely affected.
Other
The Company has retained the services of Investor Relations Corporation
("IRC") of Tulsa, Oklahoma under the terms of a services agreement dated
December 1, 1994 to provide certain investor relations functions for the
Company and to serve as liaison to the current and potential shareholders
of the Company. The principal owners of IRC are Rhonda R. Vincent, an
officer and director of the Company and Gifford M. Mabie, the spouse of
the founder, President and Chief Executive Officer of the Company.
As compensation to IRC for services rendered under the contract, the
Company issued 500,000 shares of its voting Common Stock to IRC at a
deemed value of $0.20 per share. IRC is expected to continue to assist the
Company through the initial term of the contract in all aspects of the
Company's communication with its securities holders and potential
investors in the Company, including the preparation of annual and
quarterly reports and the coordination of compliance with state and
federal securities disclosure and reporting requirements. During the
quarter ended March 31, 1996, the Company paid IRC $0 in fees and
$5,800 in expense reimbursements.
In February, 1996, the Company entered into an agreement with RDG
Investments ("RDG") of Vancouver, British Columbia, to provide certain
consulting services to the Company with an objective of expanding investor
and brokerage firm awareness and interest in the Company and the
Common Stock. Under the terms of the three year agreement, RDG
received 378,000 shares of restricted Common Stock of the Company,
which was valued at $219,000, or $0.58 per share (the closing price on
the date of the agreement), and was recorded as a prepaid expense.
In addition, RDG was granted 500,000 incentive stock options at $0.10
per share, which will become exercisable upon the completion of certain
performance objectives. A copy of the consulting agreement with RDG
is filed as an Exhibit hereto.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
During the first quarter of 1996, the Company issued 797,546 shares of
its Common Stock without registration under the Securities Act of 1933,
as amended (the "Securities Act") paramount to claim of exemption under
Section 4(2) of the Act and the regulations thereunder. Of such shares,
85,288 shares of Common Stock were issued at a price of $0.50 per share
to a non-affiliated note holder in exchange for the cancellation of indebted-
ness; 20,000 shares of Common Stock were issued to IICC at a deemed
value of $0.50 per share under the terms of the IICC Consulting Agreement;
378,000 shares of Common Stock were issued to RDG at a deemed value
of $0.58 per share pursuant to a consulting agreement; 40,000 shares of
Common Stock were issued for various printing and publication services
at a deemed value of $0.50 per share; 15,000 shares of Common Stock
were issued for miscellaneous expenses at a deemed value of $0.50 per
share; and 259,258 shares of Common Stock were issued at an average
price of $0.34 per share pursuant to the exercise of outstanding Common
Stock purchase warrants. See Part I-Item 2 "Management's Discussion and
Analysis of Financial Conditions and Results of Operations."
Item 3. Defaults Upon Senior Securities
As of March 31, 1996, the Company was in default under the terms of
two promissory notes in the aggregate principal amount of $120,000
together with interest of $9,500. See Part I-Item 2 "Management's
Discussion and Analysis of Financial Conditions and Results of
Operations." As of the date hereof, the total amounts due and payable
under said promissory notes was $60,000 in principal and $10,250 in
accrued interest.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's security holders
during the first quarter of the fiscal year ended March 31, 1996.
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
Exhibit No. Description of Exhibits
10.1 Consulting Agreement by and between the Company
and RDG Investments dated February 1, 1996.
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the first quarter of 1996.
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.
CORPORATE VISION, INC.
(Registrant)
June 28, 1996
(Date)
Rhonda R. Vincent
Rhonda R. Vincent
(Principal Financial Officer)
June 28, 1996
(Date)
Sheryl D. Mabie
Sheryl D. Mabie
(Principal Executive Officer)
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This Consulting Agreement ("Agreement") is made and effective this
February 1, 1996, by and between RDG Investments, a British Columbia
Corporation ("Consultant") and Corporate Vision, Inc., an Oklahoma
Corporation ("Company").
Now, therefore, Consultant and Company agree as follows:
1. Engagement.
Company hereby engages Consultant, and Consultant accepts engagement,
to provide to Company the following services:
RDG will develop, implement and maintain an ongoing stock market
support system for the Company with the general objective of expanding
investor and stockbroker awareness and interest in the Company's stock.
2. Term.
Consultant shall provide services to Company pursuant to this Agreement
for a term commencing on February 1, 1996 and ending on January 31, 1999.
3. Place of Work.
Consultant shall render services primarily at Consultant's offices, but will,
upon request, provide the services at Company offices or such other places
as reasonably requested by Company as appropriate for the performance
of particular services.
4. Time.
Consultant's daily schedule and hours worked under this Agreement on a
given day shall generally be subject to Consultant's discretion, provided
that Consultant and Company anticipate that Consultant shall work on
average thirty hours per week in the performance of services pursuant to
this Agreement. Company relies upon Consultant to devote sufficient
time as is reasonably necessary to fulfill the spirit and purpose of this
Agreement.
5. Payment.
Company shall pay Consultant $219,000 in the form of 378,000 shares
of restricted CVI common stock valued at $0.579 per share for services
performed pursuant to this Agreement. Payment shall be made in advance.
In addition, Consultant shall be granted 500,000 options at $0.10 per share
which shall become exercisable when the price of the common stock exceeds
$1.00 per share for a period of twenty (20) consecutive days. Consultant
shall bear all of Consultant's expenses incurred in the performance of this
Agreement.
6. Covenant Not to Compete.
During the term of this Agreement and for a period of two years thereafter,
Consultant shall not within the United States, directly or indirectly, either
for his own account, or as a partner, shareholder, officer, director,
employee, agent or otherwise; own, manage, operate, control, be employed by,
participate in, consult with, perform services for, or otherwise be connected
with any business the same as or similar to the business conducted by
Company. In the event any of the provisions of this Section 6 are determined
to be invalid by reason of their scope or duration, this Section 6 shall be
deemed modified to the extent required to cure the invalidity. In the event of
a breach, or a threatened breach, of this Section 6, Company shall be entitled
to obtain an injunction restraining the commitments or continuance of the
breach, as well as any other legal or equitable remedies permitted by law.
7. Confidentiality.
During the term of this Agreement, and thereafter for a period of two (2)
years, Consultant shall not, without the prior written consent of Company,
disclose to anyone any Confidential Information. "Confidential Information"
for the purposes of this Agreement shall include Company's proprietary and
confidential information such as, but not limited to, customer lists, business
plans, marketing plans, financial information, designs, drawing,
specifications, models, software, source codes and object codes. Confidential
Information shall not include any information that:
A. is disclosed by Company without restriction;
B. becomes publicly available through no act of Consultant;
C. is rightfully received by Consultant from a third party.
8. Termination.
A. This Agreement may be terminated by Company as follows:
i. If Consultant is unable to provide the consulting services by reason
of temporary or permanent illness, disability, incapacity or death.
ii. Breach or default of any obligation of Consultant pursuant to
Section 6, Covenant Not to Compete, or Section 7, Confidentiality, of
this Agreement.
iii. Breach or default by Consultant of any other material obligation
in this Agreement, which breach or default is not cured within five (5) days
of written notice from Company.
B. Consultant may terminate this Agreement as follows:
i. Breach or default of any material obligation of Company, which
breach or default is not cured within five (5) days of written notice from
Consultant.
ii. If Company files protection under the federal bankruptcy laws,
or any bankruptcy petition or petition for receiver is commenced by a
third party against Company, any of the foregoing of which remains
undismissed for a period of sixty (60) days.
9. Independent Contractor.
Consultant is and throughout this Agreement shall be an independent
contractor and not an employee, partner or agent of Company.
Consultant shall not be entitled to nor receive any benefit normally
provided to Company's employees such as, but not limited to, vacation
payment, retirement, health care or sick pay. Company shall not be
responsible for withholding taxes from the payments made to Consultant.
Consultant shall be solely responsible for filing all returns and paying
any income, social security or other tax levied upon or determined with
respect to the payments made to Consultant pursuant to this Agreement.
10. Tools and Supplies.
Unless otherwise agreed to by Company in advance, Consultant shall be
solely responsible for procuring, paying for and maintaining any computer
equipment, software, paper, tools or supplies necessary or appropriate for
the performance of Consultant's services hereunder.
11. Controlling Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Oklahoma.
12. Headings.
The headings in this Agreement are inserted for convenience only and
shall not be used to define, limit or describe the scope of this Agreement
or any of the obligations herein.
13. Final Agreement.
This Agreement constitutes the final understanding and agreement between
the parties with respect to the subject matter hereof and supersedes all prior
negotiations, understandings and agreements between the parties, whether
written or oral. This Agreement may be amended, supplemented or changed
only by an agreement in writing signed by both of the parties.
14. Notices.
Any notice required to be given or otherwise given pursuant to this
Agreement shall be in writing and shall be hand delivered, mailed by
certified mail, return receipt requested or sent by recognized overnight
courier service as follows:
If to Consultant:
RDG Investments
Suite 402 1924 Comot Street
Vancouver, BC V6G 1R4
If to Company:
Corporate Vision, Inc.
8908 South Yale Avenue - Suite 360
Tulsa, OK 74137
15. Severability.
If any term of this Agreement is held by a court of competent jurisdiction
to be invalid or unenforceable, then this Agreement, including all of the
remaining terms, will remain in full force and effect as if such invalid or
unenforceable term had never been included.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the date first above written.
RDG Investments Corporate Vision, Inc.
By: DEAN GUISE By: RHONDA VINCENT
Dean Guise Rhonda Vincent
President Vice President, Secretary and Treasurer
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