U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH
31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
______________ TO ______________
COMMISSION FILE NUMBER: 33-43621
INTERNET BUSINESS S INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0307734
(State or jurisdiction of incorporation I.R.S. Employer
or organization) Identification No.)
3900 Birch Street, Suite 111, Newport Beach, California 92660
(Address of principal executive offices) (Zip Code)
Registrant s telephone number: (949) 833-0261
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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) been subject to such filing requirements for the
past 90 days. Yes X No .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant s knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K [ ].
Not Applicable.
The aggregate market value of the voting stock held by non-
affiliates of the registrant as of May 10, 1999: Common Stock, par
value $0.001 per share -- $27,085,595. As of May 10, 1999, the
registrant had 177,302,997 shares of common stock issued and
outstanding.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS AS OF MARCH 31, 1999
AND JUNE 30, 1998 3
STATEMENTS OF OPERATIONS FOR THE THREE
AND NINE MONTHS ENDED MARCH 31, 1999
AND MARCH 31, 1998 4
STATEMENTS OF CASH FLOWS FOR THE NINE
MONTHS ENDED MARCH 31, 1999 AND
MARCH 31, 1998 5
NOTES TO FINANCIAL STATEMENTS 6
ITEM 2. MANAGEMENT S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
PART II
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 11
ITEM 5. OTHER INFORMATION 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 24
SIGNATURE 25
PART I.
ITEM 1. FINANCAL STATEMENTS.
INTERNET BUSINESS S INTNERATIONAL, INC.
BALANCE SHEETS (Unaudited)
June 30, 1998 March 31, 1999
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,102 $ 0
Accounts Receivable 0 0
Inventories 0 0
Prepaid expenses 0 0
Total current assets 1,102 0
FIXED ASSETS 0 0
OTHER ASSETS:
Web Sites 1,120,000
Prepaid advertising 164,160
Note Receivable: Iron Horse Holdings 2,500,000
Total Assets $ 1,102 $3,784,160
LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES:
Notes payable and current
maturities of long-term debt $ 0 $ 0
Accounts payable 1,819,644 0
Accrued wages and benefits 0 0
Accrued commissions
and marketing 0 0
Other accrued expenses 0 0
Total current liabilities 1,819,644 0
LONG TERM DEBT: 455,000 0
SHAREHOLDERS EQUITY (DEFICIT):
Preferred Stock Issued 0 2,090,000
Preferred Stock Subscribed 0 300,000
Common Stock 428,000 1,572,187
Additional paid-in capital 1,000 303,428
Retained earnings (deficit) (2,702,542) (2,221,087)
Current earnings (deficit) 2,214,813
Total Shareholders Equity (2,273,542) 3,784,160
Total Liabilities
& Shareholders Equity $ 1,102 $3,784,160
INTERNET BUSINESS S INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
1998 1999 1998 1999
REVENUES
$ 72,000 $ 0 $2,376,000 $ 0
COST OF SALES
371,839 0 2,346,839 0
GROSS PROFIT
(299,839) 0 29,161 0
EXTRAORDINARY INCOME
Debt forgiveness
2,274,644
OPERATING EXPENSES:
Selling and distribution
7,000 0 424,998 0
General and administration
39,000 18,231 296,002 55,943
Interest expense, net
19,000 0 69,000 0
Total Operating Expenses
65,000 18,231 790,000 55,943
GAIN (LOSS) ON
DISPOSITION
(299,703) (299,703)
OTHER INCOME
2,386
NET INCOME (LOSS)
$(664,542) $(18,231) $(1,060,542) $2,221,087
NET INCOME (LOSS) PER
COMMON SHARE
$(nil) $(nil) $(nil) $0.01
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING
154,763,438 177,302,997 154,763,438 177,302,997
See Accompanying Notes to Financial Statements
INTERNET BUSINESS S INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended
March 31, 1998 March 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) (1,060,542) $2,221,087
Adjustments for non-cash items:
Debt forgiveness (2,274,644)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization 0 0
Changes in assets
and liabilities:
Accounts receivable 154,000 0
Inventories 422,000 0
Prepaid expenses (2,417) 0
Accounts payable 183,913 52,455
Accrued wages and benefits (28,273) 0
Accrued commissions and marketing (44,792) 0
Other accrued expenses (37,839) 0
Net cash provided by (used in)
operating activities (413,950) (1,102)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to, and
reduction of, fixed assets 800,000 0
Net cash provided by (used in)
investing activities 800,000 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on
notes payable (413,009) 0
Net cash provided by (used in)
financing activities (413,009) 0
NET INCREASE (DECREASE) IN CASH (26,959) (1,102)
CASH AND CASH EQUIVALENTS,
beginning of period 28,000 1,102
CASH AND CASH EQUIVALENTS,
end of period $ 1,041 $ 0
See Accompanying Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
Note 1. Description of the business
Internet Business s International, Inc. (the Company), was in the
manufacturing business, these operations ceased as of December 31,
1997. In December 1998 after new management was in place, a decision
was made to change the company into an Internet Company offering E-
commerce, internet access as an Internet Service Provider, hosting
through our own server and other enhancements and service through and
for the Internet. It was also determined to change the companies name
to better reflect the companies operation: Internet Business s
International, Inc. The management began after the first of the year
looking for ways to implement the Company s operations.
Note 2. Change in Control
In November 1998 new stock holders bought majority control from
Michael W. Hogarty, and other stock holders in a private transaction.
Immediately after the stock ownership changed Michael W. Hogarty
resigned as the Chief Executive Officer and President of the Company,
and Michael W. Hogarty who was also the sole director resigned after
nominating and electing two new directors from the group that bought
the controlling shares of stock.
Note 3. Summary of Significant Accounting Policies
Fiscal Year
The Company s fiscal year was the 52-53 week period ending on the
Saturday closest to June 30. For clarity of presentation, fiscal
year end and period end dates in the accompanying financial
statements and notes are referred to as June 30 and March 31 for the
applicable period presented.
Accounts Receivable and Revenues
With the new venture for the company into E-commerce, revenues will
be generated though credit card sales over the Internet, minimizing
the risk of bad debt.
Inventories
With this new line of business inventories will be kept to a minimum.
.
Fixed Assets
All of the Company s fixed assets will be Internet related. The exact
extent of what this will consist of will be determined with time.
Other Assets
Other assets will consists primarily of software for Internet
programs and other related assets.
Goodwill
Due to the change in the new nature of the business the company will
not include goodwill in it s financial reports at this time.
Income Taxes
The Company follows Statement of Financial Accounting Standards
(SPAS) No. 109, Accounting for Income Taxes. Under this method,
deferred income taxed was recognized for the tax consequences in
future years of difference between the tax bases of assets and
liabilities, and their financial reporting amounts at each year-end
based on enacted tax laws and statutory tax rates applicable to the
periods in which the differences were expected to affect taxable
income. Valuation allowances were established, when necessary, to
reduce deferred tax assets to the amount expected to be realized.
Under this standard the provision for income taxes represents the tax
payable for the period and the change during the period in deferred
tax assets and liabilities.
Stockholders Equity Common Share
Stockholders equity common share is based on the reported net equity
divided by the weighted average number of common shares outstanding.
Cash Equivalents
The Company considered highly liquid debt instruments purchased with
a maturity of three months or less to be cash equivalents.
Fair Value of Financial Instruments
The carrying value of the Company s cash and cash equivalents,
accounts receivable, accounts payable, accrues expenses and notes
payable approximates fair value.
Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Note 4. Commitments
Leases
The company doesn t lease current corporate office facility. A more
permanent base of operation will be determined after the fist of the
year.
Note 5. Stock Issuance
Current stock authorized
The company is currently authorized to issue up to 199,000,000 share
of common stock and 1,000,000 of preferred stock.
Issued and outstanding stock
Common Stock. The Company by the end of this quarter had issued
177,302,997 common shares of which 134,499,037 are restricted. Of
the restricted 8,004,025 will become free trading on July 21, 1999.
Preferred Stock . There was 23,900 shares of Preferred Stock issued
by the end of this Quarter.
Preferred Stock Issuance
On December 15, 1998 the Company entered into an agreement with Iron
Horse Holdings, Inc. (IHHI) wherein IHHI agreed to buy up to
25,000 the Company s preferred shares at the price of at the price of
$100.00 per share. Shares purchased under this agreement are to be
issued to IHHI or its designee. Payment for shares sold under this
agreement is to be in the form of a promissory note bearing interest
at the rate of 9% per annum, and the obligation created thereby is to
be secured by a blanket, or all inclusive security agreement
executed by IHHI and perfected by filings as specified by law. Until
such note is paid in full, IHHI shall pay the 3% coupon on such
shares as are issued under this agreement directly to the
shareholder(s) of record at the time such payment becomes due.
By the end of the quarter ending March 31, 1999 23,900 shares were
issued according to the agreement with IHHI. The balance of the
shares to be issued 0f 1,100 at a par value of $100.00 per share or
$110,000.00 are being treated as additional paid in capital, and are
included as such on the balance sheet.
Common Stock Issuance
On December 15, 1998 the company agreed to issue common shares to
Iron Horse Holdings, Inc. IHHI for IHHI to pay it s bills in exchange
for the issuance of restricted common stock. Under the terms to this
agreement, the Company issued an additional 9,154,999 shares by March
31, 1999.
On December 21, 1998 the company agreed to acquire several internet
sites with issuance of common stock. Under to the terms of this
agreement 8,000,000 shares were issued.
By the end of this quarter the company issued an additional
2,087,791 shares for advertising and site maintenance.
At the end of June 30, 1998 there were 158,060,207 shares issued the
total to shares since that date as identified above added an
additional 19,242,790 shares bring the total to 177,302,997.
Note 6. Extraordinary Income
After review by legal consul about the collectability of the
company s unsecured prior debts, it was determined by management to
show those debts as uncollectable. Therefore management has decided
to write those debts off and according to the Internal Revenue Code
that uncollectable debt has to be shown as extraordinary income.
Note 7. Net Loss Carry Forward
The Net Loss Carry Forward that incurred due to the prior operation
if the Company will be used to offset the impact of the Extraordinary
Income as indicated above.
Note 8. Wages Payable
The corporate officers are due wages for the months of November 1998
to March 1999. In lieu of cash payments, the officers will take
additional shares of stock at the higher of $.02 per share or market
price of the stock at the end of each month. These shares will not be
issued until the Company is current with it s filings as required by
State, and Federal Governments. The wages are for $15,000.00 per
month for two of the officers. Another officer that started in
February of 1999 will receive $5,000.00 per month under the same
terms and condition as stated above.
ITEM 2. MANAGEMENT S DISCUSSION AND ANALYSIS OF FIINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the
financial statements of the Company and notes thereto contained
elsewhere in this report.
Results of Operations.
Revenues for the nine month period ended March 31, 1999 of $0
decreased 100% when compared with revenues of $2,376,000 in the prior
year comparable period due to the shut down of operations of the
Company on December 31, 1997.
Liquidity and Capital Resources.
Net cash used by the Company was $1,102 for the three month
period ended March 31, 1999 versus cash used in operating activities
of $413,950 in the comparable prior year period.
Capital Expenditures.
No material capital expenditures were made during the quarter ended
on March 31, 1999.
Year 2000 Issue.
The Year 2000 issue arises because many computerized systems use
two digits rather than four to identify a year. Date sensitive
systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when information using the year 2000 date is
processed. In addition, similar problems may arise in some systems
which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 issue may be experienced before,
on, or after January 1, 2000, and if not addressed, the impact on
operations and financial reporting may range from minor errors to
significant system failure which could affect the Company s ability to
conduct normal business operations. This creates potential risk for
all companies, even if their own computer systems are Year 2000
compliant. It is not possible to be certain that all aspects of the
Year 2000 issue affecting the Company, including those related to the
efforts of customers, suppliers, or other third parties, will be fully
resolved.
The Company currently believes that its systems are Year 2000
compliant in all material respects, its current systems and products
may contain undetected errors or defects with Year 2000 date
functions that may result in material costs. Although management is
not aware of any material operational issues or costs associated with
preparing its internal systems for the Year 2000, the Company may
experience serious unanticipated negative consequences (such as
significant downtime for one or more of its web site properties) or
material costs caused by undetected errors or defects in the
technology used in its internal systems. Furthermore, the purchasing
patterns of advertisers may be affected by Year 2000 issues as
companies expend significant resources to correct their current
systems for Year 2000 compliance. The Company does not currently
have any information about the Year 2000 status of its advertising
customers. However, these expenditures may result in reduced funds
available for web advertising or sponsorship of web services, which
could have a material adverse effect on its business, results of
operations, and financial condition. The Company s Year 2000 plans
are based on management s best estimates.
Forward Looking Statements.
The foregoing Management s Discussion and Analysis, and the
discussion set forth under Item 5 Other Information, contain
forward looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Act of 1934, as amended, and as comptemplated under the Private
Securities Litigation Reform Act of 1995, including statements
regarding, among other items, the Company s business strategies,
continued growth in the Company s markets, projections, and
anticipated trends in the Company s business and the industry in
which it operates. The words believe, expect, anticipate,
intends, forecast, project, and similar expressions identify
forward-looking statements. These forward-looking statements are
based largely on the Company s expectations and are subject to a
number of risks and uncertainties, certain of which are beyond the
Company s control. The Company cautions that these statements are
further qualified by important factors that could cause actual
results to differ materially from those in the forward looking
statements, including, among others, the following: reduced or lack
of increase in demand for the Company s products, competitive pricing
pressures, changes in the market price of ingredients used in the
Company s products and the level of expenses incurred in the
Company s operations. In light of these risks and uncertainties,
there can be no assurance that the forward-looking information
contained herein will in fact transpire or prove to be accurate. The
Company disclaims any intent or obligation to update forward looking
statements.
PART II.
ITEM 1. LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by or
against the company has been threatened.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the Company s
stockholders during the first quarter of the fiscal year covered by
this report.
ITEM 5. OTHER INFORMATION.
Introduction
The Company, after January 1, 1999, has been engaged in the
development, operation and marketing of a number of commercial
internet web sites (as contrasted to the pizza production business
that the Company was previously engaged in under former management).
The Company is an internet company that offers a branded network of
comprehensive information, communication and shopping (auction)
web sites, using technology which it has either developed itself, or
for which it has acquired licenses.
The Company first announced its web sites in March of 1999. As
of the date of this filing, the Company has three such internet
web sites. Two of these web sites act as subject-focused discussion
forums on which the web site visitor can exchange messages with other
visitors, thereby creating a community of interest focused on a
central, underlying theme. The discussion themes for these two
forums are sports and film. The license that the Company holds allows
it to quickly expand to as many different subject themes necessary.
The current discussion sites, known as SportzFanz.com and
FilmFanz.com, derive income from the sale of the advertising which is
displayed to the web site s visitors. The Company makes these
properties available without charge to users. The remaining current
web site, www.AuctionWinner.com, provides a real-time auction facility
to its users, wherein, for a fee, the user can list various items for
public bidding and sale to the bidder with the highest offer at the
time of the auction s closing. The Company believes that User-
Contributed Content, as embodied in the Company s internet
offerings, will allow a maximum of interesting, diverse, and
continuously-updated, web site content at minimum cost and
administrative overhead.
The Company s SportzFanz.com web site offers a comprehensive,
intuitive and user-friendly system to access aggregated information
content, communication services, and user community services. The
web site includes a hierarchical, subject-based index of user-
contributed messages focused on its underlying theme of sports
discussion. Users can either browse the listings by subject matter,
or use a rapid keyword search facility that scans the contents of the
entire directory or any subcategory within the web site. Through
sponsorship and advertising arrangements with merchants, the Company
offers its user-members the opportunity to purchase goods and
services.
The following explanation will address the new business line
for the Company, as well as many of the risks associated with this
business.
Market
The market for internet products and services is highly
competitive. There are no substantial barriers to entry in these
markets, and management expects that competition will continue to
intensify. Negative competitive developments could have a material
adverse effect on the Company s business and on the trading price of
its stock. The Company competes with many other providers of online
navigation, information and community services. As the Company
expands the scope of its internet services, it will compete directly
with a greater number of internet sites and other media companies
across a wide range of different online services.
The Company also competes in vertical markets where competitors
may have advantages in expertise, brand recognition, and other
factors. Many companies offer directly competitive products or
services information and community services, including, among others:
America Online, Inc.; Yahoo!; CNET, Inc. (Snap); Excite, Inc.;
Infoseek Corporation (including Go network); Lycos, Inc. (including
HotBot and Tripod); Microsoft Corporation (msn.com); and Netscape
Communications Corporation (Netcenter). In the past several months,
there have been a number of significant acquisitions and strategic
plans announced among and between these companies. These include: The
Walt Disney Company acquiring a significant interest in Infoseek; AOL
acquiring Netscape; @Home Networks, Inc., a provider of high speed
internet access serving the cable television infrastructure and the
largest shareholder of which is AT&T, acquiring Excite, Inc.; NBC
acquiring an interest in Snap, a subsidiary of CNET; USA Networks and
Ticketmaster Online-Citysearch, Inc. announcing that they intend to
combine their services with Lycos, Inc.
The effect of these completed and pending acquisitions on the
Company cannot be predicted with certainty, but all of these
competitors are aligned with companies that are significantly larger
or more well established than the Company. As a result, each of them
will have access to significantly greater financial, marketing and,
in certain cases, technical resources than the Company. For example,
assuming that its acquisition by @Home Networks is approved, Excite
will significantly enhance its access to knowledge about broadband
transmission technology.
These acquisitions, if consummated, will also result in many of
these companies gaining access to significantly greater marketing
resources. For example, the combination of Lycos with USA Networks
and Ticketmaster Online-Citysearch, Inc. will permit Lycos to access
significant television resources for marketing and other purposes.
In addition, Infoseek and The Walt Disney Company recently entered
into an agreement whereby Disney gains a significant interest in
Infoseek. The parties have introduced a portal and navigation
service entitled Go.com, which is supported by Disney s substantial
promotional and media resources. Similarly, Snap, by virtue of its
relationship with NBC, has and will continue to be supported by NBC s
substantial promotional and media resources. Several large media
companies, including both Time Warner, Inc. and CBS, have announced
that they are contemplating internet navigation services and are
attempting to become gateway sites for web users. These and other
competitors are expected to continue to make substantial marketing
expenditures to promote their online properties. The Company may be
required to increase its sales and marketing expenditures
significantly in response to these efforts, which may materially
impair its operating results and may not be successful.
The recent announcements of the proposed acquisitions listed
above will result in greater competition as they consolidate more
users of the internet on a single service and incorporate
communication and community into their offerings. For example,
Netscape announced an agreement with Excite under which Excite will
be the most prominent navigational service within the Netcenter web
site and will therefore bring Excite s communication and community
features to the Netcenter s users. In the future, Netscape,
Microsoft and other browser suppliers may also more tightly integrate
products and services similar to those offered by the Company into
their browsers or their browsers pre-set home pages. In addition,
entities that sponsor or maintain high-traffic web sites or that
provide an initial point of entry for internet users, such as the
Regional Bell Operating Companies, long-distance providers and cable
companies such as AT&T/TCI through @Home Networks and Excite, Inc.,
or Internet Service Providers (ISPs) such as Microsoft and AOL,
currently offer and could further develop, acquire or license
internet community, communications and commerce services that compete
with those offered by the Company. Any of these companies could take
actions that would make it more difficult for consumers to find and
use the Company s services.
A large number of web sites and online services, such as the
Microsoft Network, AOL, and Netscape (Netcenter), other web
navigation companies such as Excite, Lycos, and Infoseek, and high-
traffic e-commerce merchants such as Amazon.com, Inc. also offer or
are expected to offer informational and community features (such as
auctions, chat services, message boards, email and personal
calendaring) that may be competitive with the services the Company
offers. A number of companies, including Hotmail (acquired by
Microsoft) and WhoWhere? Inc. (acquired by Lycos), offer web-based
email service similar to those the Company offers on its discussion
web sites. These companies are expected to continue to provide such
services in tandem with larger navigational sites and online
services. In order to effectively compete, the Company may need to
expend significant internal engineering resources or acquire other
technologies and companies to provide such capabilities.
Competition for Advertising Expenditures.
The Company competes with online services, other web site
operators and advertising networks, as well as traditional offline
media such as television, radio and print for a share of advertisers
total advertising budgets. Management believes that the number of
companies selling web-based advertising and the available inventory
of advertising space has recently increased substantially.
Accordingly, the Company may face increased pricing pressure for the
sale of advertisements, which could reduce its advertising revenues.
In addition, its sales may be adversely affected to the extent that
its competitors offer superior advertising services that better
target users or provide better reporting of advertising results.
Principal Competitive Factors.
Management believes that the principal competitive factors in
its markets are: brand recognition; ease of use; comprehensiveness;
personalization; independence; quality and responsiveness of search
results and other services; the availability of high-quality,
targeted content and focused value-added products and services;
access to end users; and with respect to advertisers and sponsors,
the number of users, duration and frequency of visits, and user
demographics. Competition among current and future suppliers of
internet informational, communication, community and commerce
services, high-traffic web sites and ISPs, as well as competition
with other media for advertising placements, could result in
significantly lower prices for advertising and reductions in
advertising revenues.
The Company also faces competition with respect to the
acquisition of strategic businesses and technologies. Many of its
existing competitors, as well as a number of potential new
competitors, have significantly greater financial, technical,
marketing and distribution resources than the Company does. In
addition, providers of internet tools and services may be acquired
by, receive investments from, or enter into other commercial
relationships with larger, well-established and well-financed
companies, such as Microsoft and AOL. It is difficult to predict
with certainty what the effects will be of the proposed acquisition
of Netscape by AOL or Excite by @Home Networks, but it will likely
increase the Company s competitive in several respects, including
their additional access to end users and the ability to provide a
more comprehensive offering to advertisers and sponsors. In
addition, well-established traditional media companies may acquire,
invest or otherwise establish commercial relationships with its
competitors. These larger companies may use their substantial media
resources to promote and enhance their own services. Greater
competition resulting from such relationships could have a material
adverse effect on the Company s business.
The Company regards its copyrights, trademarks, trade dress,
trade secrets, and similar intellectual property as critical to its
success. The Company relies upon trademark and copyright law, trade
secret protection and confidentiality or license agreements with its
employees, customers, partners and others to protect its proprietary
rights. Effective trademark, copyright, and trade secret protection
may not be available in every country in which its products and media
properties are distributed or made available through the internet.
The distinctive elements of the Company s web sites may not be
protectible under copyright law. Management cannot guarantee that
the steps the Company has taken to protect its proprietary rights
will be adequate. Many parties are actively developing
communication, community, e-commerce, and other web-related
technologies. Management believes that such parties will continue to
take steps to protect these technologies, including seeking patent
protection. As a result, management believes that disputes regarding
the ownership of such technologies are likely to arise in the future.
For example, management is aware that a number of patents have been
issued in the areas of electronic commerce, online auctions, web-
based information, online direct marketing, fantasy sports, common
web graphics formats and mapping technologies. Management
anticipates that additional third-party patents will be issued in the
future. From time to time these parties may assert patent
infringement claims against the Company. Management cannot guarantee
that it would be able to license such patents on reasonable terms.
The Company may incur substantial expenses in defending against
third-party patent claims regardless of the merit of such claims. In
the event that there is a determination that the Company has
infringed such third-party patent rights, the Company could incur
substantial monetary liability and be prevented from using the rights
in the future.
Employees
As of the date of this filing, the Company had 3 full-time
employees. The Company s future success is substantially dependent
on the performance of its senior management and key technical
personnel, and its continuing ability to attract and retain highly
qualified technical and managerial personnel.
Risk Factors
In addition to the other information in this Report (including
under the captions Competition and Proprietary Rights), the
following factors may be encountered in the operation of the Company
under its current plan of business:
a. Limited Operating History
The Company has only begun operations as an internet company
since January 1, 1999. Therefore, the Company has a limited operating
history, and its prospects are subject to the risks, expenses and
uncertainties frequently encountered by young companies that operate
exclusively in the new and rapidly evolving markets for Internet
products and services. Successfully achieving its growth plan
depends on, among other things, the Company s: ability to continue to
develop and extend its brand; ability to develop new web site
properties; ability to maintain and increase the levels of traffic on
its internet properties; development or acquisition of services or
products equal or superior to those of the Company s competitors;
ability to effectively generate revenues through sponsored services
and placements on the Company s internet web site properties; ability
to effectively integrate the technology and operations of businesses
or technologies which the company may acquire; ability to
successfully develop and offer new personalized web-based services,
such as e-mail services, to consumers without errors or interruptions
in service; and ability to identify, attract, retain and motivate
qualified personnel. Furthermore, the success of the Company s
growth plan depends on factors outside its control including, among
other things: the adoption by the market of the web as an advertising
medium; the successful sale of web-based advertising by the Company s
sales agents; and the relative price stability for web-based
advertising, despite competition and other factors that could reduce
market prices for advertising. The Company may not be successful in
implementing its growth plan or continuing to operate its business as
anticipated.
b. Anticipation of Increased Operating Expenses
Because of the Company s limited operating history and the
uncertain nature of the rapidly-changing markets it serves, the
accurate prediction of future results of operations is difficult or
impossible. The Company currently expects that its operating
expenses will increase significantly as the sales and marketing
operations are expanded and as the Company continues to develop and
extend its brand. As a result, the Company may experience
significant losses on a quarterly and annual basis.
c. Operating Results May Fluctuate
The Company expects to derive the majority of its revenues from
the sale of advertisements under short-term contracts, which are
difficult to forecast accurately. As noted above, the Company
expects its operating expenses to increase significantly over the
near term. To the extent its expenses increase but its revenues do
not, its business, operating results, and financial condition will be
materially and adversely affected. Operating results may fluctuate
significantly in the future as a result of a variety of factors, many
of which are outside its control. These factors include: the level of
usage of the internet; demand for internet advertising; the addition
or loss of advertisers; the level of user traffic on the Company s
online media properties; the advertising budgeting cycles of
individual advertisers; the mix of types of advertising the Company
sells (targeted advertising generally has higher rates); the amount
and timing of capital expenditures and other costs relating to the
expansion of its operations; the introduction of new products or
services by the Company or its competitors; pricing changes for
internet-based advertising; the timing of initial set-up, engineering
or development fees that may be paid in connection with larger
advertising and distribution arrangements; technical difficulties
with respect to the online web site properties that the Company may
develop; costs incurred with respect to acquisitions; negative
general economic conditions and resulting effects on media spending;
and economic conditions specific to the internet and online media.
A key element of the Company s strategy is to generate
advertising revenues through sponsored services and placements by
third parties in its online media properties in addition to banner
advertising. In connection with these arrangements, the Company may
receive sponsorship fees as well as a portion of transaction revenues
received by the sponsor from business originated through the Company
placement, in return for minimum levels of user impressions to be
provided by the Company. These arrangements expose the Company to
potentially significant financial risks, including: the risk that the
Company fails to deliver required minimum levels of user impressions
or click throughs (in which case, these agreements typically
provide for adjustments to the fees payable thereunder or make good
periods); the risk that sponsors do not renew the agreements at the
end of their term or that they renew at lower rates; and the risk
that the arrangements do not generate anticipated levels of shared
transaction revenue, or that sponsors default on the payment
commitments in such agreements (as has occurred in the past).
As a result of these financial risks, the Company cannot
guarantee that it will achieve significant revenue from these
sponsorship arrangements. In addition, because the Company has
limited experience with these arrangements, management is unable to
determine what effect they will have on gross margins and results of
operations.
d. Dependence on Continued Growth in Use of the Internet;
Technological Change
The Company s future success is dependent upon continued
growth in the use of the internet and the web in order to support the
sale of advertising on its online web site properties. web-based
advertising is relatively new, and it is difficult to predict the
extent of further growth, if any, in web advertising expenditures.
The internet may not prove to be a viable commercial marketplace for
a number of reasons, including lack of acceptable security
technologies, potentially inadequate development of the necessary
infrastructure, or timely development and commercialization of
performance improvements. To the extent that the internet continues
to experience significant growth in the number of users and level of
use, the internet infrastructure may not be able to support the
demands placed upon it by such growth and the performance or
reliability of the web may be adversely affected.
The market for internet products and services is characterized
by rapid technological developments, evolving industry standards and
customer demands, and frequent new product introductions and
enhancements. To the extent that higher bandwidth internet access
becomes more widely available through cable modems or other
technologies, the Company may be required to make significant changes
to the design and content of its online properties in order to
compete effectively. Failure to effectively adapt to these or any
other technological developments may adversely affect its business,
operating results, and financial condition.
The markets for the Company s products and media properties
have only recently begun to develop, are rapidly evolving, and are
increasingly competitive. Demand and market acceptance for recently
introduced products and services are subject to a high level of
uncertainty and risk. It is difficult for management to predict
whether, or how fast, these markets will grow. the Company cannot
guarantee either that the market for its products and media
properties will continue to develop or that demand for its products
or media properties will be sustainable. If the market develops more
slowly than expected or becomes saturated with competitors, or if its
products and media properties do not sustain market acceptance, its
business, operating results, and financial condition may be
materially and adversely affected.
e. Risks Associated with Brand Development
The Company believes that establishing and maintaining its
brand is a critical aspect of its efforts to attract and expand its
user and advertiser base. Management also believes that the
importance of brand recognition will increase due to the growing
number of Internet sites and the relatively low barriers to entry.
Promotion and enhancement of the Company s brand will depend
largely on its success in providing high-quality products and
services. In order to attract and retain internet users and to
promote and maintain its brand, the Company may find it necessary to
increase expenditures devoted to creating and maintaining brand
loyalty. In the event of any breach or alleged breach of security or
privacy involving its services, or if any third party undertakes
illegal or harmful actions utilizing its community, communications or
commerce services, the Company could suffer substantial adverse
publicity and impairment of its brand and reputation. If the Company
is unable to provide high-quality products and services or otherwise
fails to promote and maintain its brand, or if it incurs excessive
expenses in an attempt to improve its products and services or
promote and maintain its brand, its business, operating results, and
financial condition may be materially and adversely affected.
f. Reliance on Advertising Revenues
The Company expects to derive a substantial portion of its
revenues from the sale of advertisements on its web pages under
short-term contracts. Most of its advertising customers have limited
experience with the web as an advertising medium. The Company s
continuing ability to generate significant advertising revenues will
depend upon, among other things: advertisers acceptance of the web
as an effective and sustainable advertising medium; the development
of a large base of users of its services possessing demographic
characteristics attractive to advertisers; and its ability to
continue to develop and update effective advertising delivery and
measurement systems.
No standards have yet been widely accepted for the measurement
of the effectiveness of web-based advertising. Management cannot be
certain that such standards will develop sufficiently to support web-
based advertising as a significant advertising medium. In addition,
adverse economic conditions can significantly impact advertisers
ability and willingness to spend additional amounts on advertising
generally, and on web-based advertising specifically. Management
cannot be certain that the advertisers will determine that banner
advertising is an effective advertising medium. Certain advertising
filter software programs are available that limit or remove
advertising from an internet user s desktop. Such software, if
generally adopted by users, may have a materially adverse effect upon
the viability of advertising on the internet. The Company s
advertising customers may not accept the internal and third- party
measurements of impressions received by advertisements on the
Company s online web site properties and such measurements may contain
errors. The Company currently relies on its external advertising
sales agents for advertising sales, which involves additional risks
and uncertainties. As a result of these factors, the Company may not
be able to sustain or increase current advertising sales levels.
Failure to do so may have a material adverse effect on its business,
operating results, and financial position.
g. The Company Depends Substantially on Third Parties
The Company depends substantially upon third parties for
several critical elements of its business including, among others,
technology and infrastructure, distribution activities.
h. Technology and Infrastructure
In January, 1999, the Company entered into an agreement with
Verio Webhosting, through Verio s authorized services reseller, under
which Verio will provide the Company s principal internet
connections. Any disruption in the internet access provided by this
provider or any to handle current or higher volumes of use may have
a material adverse effect on its business, operating results, and
financial condition.
i. Possible Inability to Successfully Enhance or Develop Properties
To remain competitive, the Company must continue to enhance and
improve the functionality, features, and content of its web site
properties. The Company may not be able to successfully maintain
competitive user response times or implement new features and
functions, which will involve the development of increasingly complex
technologies. Personalized information services, such as its web-
based email messaging services, message boards, and other community
features, require significant expense. The Company cannot guarantee
that this additional expenses will be offset by additional revenues
from these services.
A key element of its business strategy is the development and
introduction of new particular demographic characteristics, and
geographic areas. The Company may not be successful in developing,
introducing, and marketing such web site properties and such
properties may not achieve market acceptance, enhance its brand name
recognition, or increase user traffic. Furthermore, enhancements of
or improvements to the Company s new properties may contain
undetected errors that require significant design modifications,
resulting in a loss of customer confidence and user support and a
decrease in the value of its brand name. Its ability to successfully
develop additional targeted media properties depends on use of the
Company to promote such properties. If use of the Company s web site
properties does not continue to grow, its ability to establish other
targeted properties would be adversely affected. If the Company
fails to effectively develop and introduce such new properties, or
such properties fail to achieve market acceptance, its business,
results of operations, and financial condition may be adversely
affected.
j. Risks of Equity Investments in Other Companies
The Company may, from time to time, make equity investments in
affiliated companies that are involved in complementary. Any
investments in such companies may not result in any return, nor can
there be any assurance as to the timing of any such return, or that
the Company may lose its entire investment. Losses resulting from
such investments may have a material adverse effect on its operating
results.
k. Management of Potential Growth and Integration of Acquisitions
The Company s growth may place substantial strains on its
financial systems and its systems to, train, and manage its employee
base. The process of managing advertising within large, high traffic
web is an increasingly important and complex task. The relies on
both internal and licensed third-party advertising inventory
management and analysis systems. To the extent that the Company does
not have the appropriate advertising inventory or any extended
failure of its advertising management system results in incorrect
advertising insertions, the Company may be exposed to make good
obligations with its advertising customers, which, by displacing
advertising inventory, could defer advertising revenues. Failure of
its advertising management systems to effectively scale to higher
levels of use or to effectively track and provide accurate and timely
reports on advertising results also could negatively affect its
relationships with advertisers. The Company s systems, procedures,
or controls may not be adequate to support its operations,
particularly with regard to support and service. Its management may
not be able to achieve the rapid execution necessary to fully exploit
its market opportunity. Any inability to effectively manage growth
may have a material adverse effect on its business, operating
results, and financial condition.
As part of its business strategy, the Company may, from time to
time, make acquisitions or enter into other forms of business
combinations. These transactions are accompanied by a number of
risks, including: the difficulty of assimilating the operations and
personnel of the acquired companies; the potential disruption of its
ongoing business and distraction of management; the difficulty of
incorporating acquired technology or content and rights into its
products and media properties; he correct assessment of the relative
percentages of in-process research and development expense which can
be immediately written off as compared to the amount which must be
amortized over the appropriate life of the asset; the failure to
successfully develop an acquired in-process technology could result
in the impairment of amounts currently capitalized as intangible
assets; unanticipated expenses related to technology integration; the
maintenance of uniform standards, controls, procedures and policies;
the impairment of relationships with employees and customers as a
result of any integration of new management personnel; and the
potential unknown liabilities associated with acquired businesses.
The Company may not be successful in addressing these risks or any
other problems encountered in connection with such acquisitions.
l. Risk of Capacity Constraints and Systems Failures
The Company is dependent on its ability to effectively
withstand a high volume of use of its online web site properties.
Accordingly, the performance of its online web site properties is
critical to its reputation, its ability to attract advertisers to its
web sites, and to achieve market acceptance of its products and
web site properties. Any system failure that causes an interruption
or an increase in response time of its products and media properties
could result in less traffic to its web sites and, if sustained or
repeated, could reduce the attractiveness of its products and media
properties to advertisers and licensees. An increase in the volume
of queries conducted through its products and media properties could
strain the capacity of the software or hardware the Company has
deployed, which could lead to slower response time or system
failures. In addition, as the number of web pages and users increase,
its products and media properties and infrastructure may not be able
to scale accordingly. Personalized information services, such as
web-based email-type messaging services and other community and
communication facilities, and the posting of photographs on its
auction properties, involve increasingly complex technical and
operational challenges that may strain its development and
operational resources. The Company may not be able to successfully
implement and scale such services to the extent required by any
growth in the number of users of such services. Failure to do so may
affect the goodwill of users of these services, or negatively affect
its brand and reputation.
The Company is dependent on third parties for much of its
technology and infrastructure (See The Company Depends Substantially
on Third Parties above). The Company s operations are susceptible
to outages due to fire, floods, power loss, telecommunications
failures, break-ins, and similar events. In addition, substantially
all of its network infrastructure is located in the State of Utah.
The Company does not have multiple site capacity in the event of any
such occurrence. Despite its implementation of network security
measures, its servers are vulnerable to computer viruses, break-ins,
and similar disruptions from unauthorized tampering with its computer
systems. The Company does not carry business interruption insurance
to compensate for losses that may occur as a result of any of these
events. Such events may have a material adverse effect on its
business, operating results, and financial condition.
m. Dependence on Key Personnel
The Company is substantially dependent on the continued
services of its key personnel. The Company expects that it will need
to hire additional personnel in all areas. The competition for such
personnel in its industry is intense. The Company may experience
difficulties in hiring personnel with the right training or
experience, particularly in technical areas. The Company does not
maintain key person life insurance for any of its personnel. If the
Company does not succeed in attracting new personnel, or retaining
and motivating existing personnel, its business will be adversely
affected.
n. Government Regulation and Legal Uncertainties
There are currently few laws or regulations directly applicable
to access to or commerce on the internet. Due to the increasing
popularity and use of the internet, it is possible that laws and
regulations may be adopted, covering issues such as user privacy,
defamation, pricing, taxation, content regulation, quality of
products and services, and intellectual property ownership and
infringement. Such legislation could expose the Company to
substantial liability. Such legislation could also dampen the growth
in use of the web, decrease the acceptance of the web as a
communications and commercial medium, or require the Company to incur
significant expense in complying with any new regulations. In
addition, several telecommunications carriers, including America s
Carriers Telecommunications Association, are seeking to have
telecommunications over the web regulated by the FCC in the same
manner as other telecommunications services.
Because the growing popularity and use of the web has burdened
the existing telecommunications infrastructure and many areas with
high web use have begun to experience interruptions in phone service,
local telephone carriers, such as Pacific Bell, have petitioned the
FCC to regulate ISPs and OSPs and to impose access fees. Increased
regulation or the imposition of access fees could substantially
increase the costs of communicating on the web, potentially
decreasing the demand for its products and media properties. A number
of proposals have been made at the federal, state and local level
that would impose additional taxes on the sale of goods and services
through the internet. Such proposals, if adopted, could
substantially impair the growth of electronic commerce, and could
adversely affect the Company s opportunity to derive financial
benefit from such activities.
Also, Congress recently passed (and the President has signed
into law) the Digital Millenium Copyright Act, which is intended to
reduce the liability of online service providers for listing or
linking to third-party web sites that include materials that infringe
copyrights. Congress also recently passed (and the President has
signed into law) the Children s Online Protection Act and the
Children s Online Privacy Act, which will restrict the distribution
of certain materials deemed harmful to children and impose additional
restrictions on the ability of online services to collect user
information from minors. Further, Congress recently passed (and the
President has signed into law) the Protection of Children from Sexual
Predators Act, which mandates that electronic communication service
providers report facts or circumstances from which a violation of
child pornography laws is apparent. The Company is currently
reviewing these pieces of legislation, and cannot currently predict
the effect, if any, that such legislation will have on its business.
There can be no assurance that such legislation will not impose
significant additional costs on its business or subject the Company
to additional liabilities.
In addition, a number of other countries have announced or are
considering additional regulation. For example, a recent European
Commission privacy directive restricts the use of personal
information without the consent of both the individual and that
individual s government. Such restrictions could jeopardize the
future of e-commerce in and with the European Union. In addition,
the European Commission is expected in the near future to propose a
directive concerning the liability of online service providers for
activities that take place using their services. Such laws and
regulations could fundamentally impair the Company s ability to
provide internet services, or substantially increase the cost of
doing so. Moreover, the applicability to the internet of existing
laws governing issues such as property ownership, copyright,
defamation, obscenity, and personal privacy is uncertain. The
Company may be subject to claims that its services violate such laws.
Any such new legislation or regulation in the United States or abroad
or the application of existing laws and regulations to the internet
could have a material adverse effect on its business, operating
results, and financial condition. Due to the global nature of the
web, it is possible that the governments of other states and foreign
countries might attempt to regulate its transmissions or prosecute
the Company for violations of their laws. The Company might
unintentionally violate such laws. Such laws may be modified, or new
laws enacted, in the future. Any such developments may have a
material adverse effect on its business, results of operations, and
financial condition.
o. Liability for the Company s Services
The Company hosts a wide variety of information, community,
communications and commerce services that enable individuals to
exchange information, generate content, conduct business and engage
in various online activities. The laws relating to the liability of
providers of these online services for activities of their users is
currently unsettled. Claims could be made against the Company for
defamation, negligence, copyright or trademark infringement, personal
injury or other theories based on the nature and content of
information that may be posted online by its users. Such claims have
been brought, and sometimes successfully pressed, against online
service providers in the past. In addition, the Company could be
exposed to liability through content and materials that may be posted
by users in auctions, message boards, clubs, chat rooms, or other
interactive community-building services. Such claims might include,
among others, that by providing hypertext links to web sites operated
by third parties, the Company is liable for copyright or trademark
infringement or other wrongful actions by such third parties through
such web sites, or that the Company is responsible for legal injury
caused by statements made to, actions taken by or content generated
by, participants in its message board services, clubs, or other
community building services. It is also possible that if any
information which may, in the future, be provided through its
services, such as stock quotes, analyst estimates or other trading
information, contains errors, third parties could make claims against
the Company for losses incurred in detrimental reliance on such
information. The Company offers web-based e-mail type messaging
services, which expose it to potential risks, such as liabilities or
claims resulting from lost or misdirected messages, illegal or
fraudulent use of messages, or interruptions or delays in messaging
services. Investigating and defending such claims is expensive, even
to the extent such claims do not result in liability.
The Company may also, from time to time, enter into
arrangements to offer third-party products and services under the
Company s brand or via distribution on its properties. While its
agreements with these parties would provide that the Company will be
indemnified against liabilities, such indemnification may not be
adequate. The Company may be subject to claims concerning such
services or content by virtue of its involvement in marketing,
branding or providing access to such services. Any such claims may
have a material adverse effect on its business, results of
operations, and financial condition.
p. Potential Commerce-Related Liabilities and Expenses
As part of its business, the Company enters into agreements
with advertisers, sponsors, content providers, service providers, and
merchants under which the Company is entitled to receive a share of
revenue from the purchase of goods and services by users of its
web site properties. Such arrangements may expose the Company to
additional legal risks and uncertainties, including potential
liabilities to consumers of such products and services. These
activities expose the Company to a number of additional risks and
uncertainties, including: potential liabilities for illegal
activities that may be conducted by participating merchants; products
liability or other tort claims relating to goods or services sold
through hosted commerce sites; consumer fraud and false or deceptive
advertising or sales practices; breach of contract claims relating to
merchant transactions; claims that materials included in merchant
sites or sold by merchants through these sites infringe third-party
patents, copyrights, trademarks or other intellectual property
rights, or are libelous, defamatory or in breach of third-party
confidentiality or privacy rights; claims relating to any failure of
merchants to appropriately collect and remit sales or other taxes
arising from e-commerce transactions; and claims that may be brought
by merchants as a result of their exclusion from its commerce
services or losses resulting from any downtime or other performance
failures in its hosting services.
In March, 1999, the Company launched AuctionWinner.com, a
service that hosts online auctions for a wide variety of goods and
services. Auction services expose the Company to a number of
significant additional risks. For example, the Company does not pre-
screen the types of goods offered on its auctions, it is aware that
certain goods, such as alcohol, tobacco, firearms, adult material and
other goods that may be subject to regulation by local, state or
federal authorities may be traded on the auction web site. The
Company might not be able to prevent the unlawful exchange of goods
on its service, and may be subject to civil or criminal liability for
unlawful activities carried out by users through its service. In
addition, while the Company takes no responsibility for delivery of
payment or goods to any user of its auctions, the Company anticipates
that users who did not receive the purchase price or the goods that
were to have been exchanged may register complaints with the Company
or seek to hold the Company liable. The Company also anticipates
that it will receive complaints from buyers as to the quality of the
goods purchased through its auctions, as well as complaints alleging
that comments posted by participants of the service concerning other
participants are unfair or defamatory. Any claims or litigation
arising from the Company s auction activities could be costly. Any
negative publicity generated as a result of fraudulent or deceptive
conduct by users of these auctions could damage its reputation and
diminish the value of its brand name. In addition, the Company
anticipates that it will receive in the future, communications
alleging that certain items sold through its auctions, or text and
images posted by users in auction listings, infringe third-party
copyrights, trademarks or other intellectual property rights. While
its user policies prohibit the sale of goods and posting of materials
which may infringe third-party intellectual property rights, an
allegation of infringement may result in costly litigation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Reports on Form 8-K. A report on Form 8-K has been filed
during the third quarter of the fiscal year covered by this Form 10-Q
report. This report, dated February 17, 1999, covered the following
items:
On February 17, 1999, pursuant to a resolution of the
Board of Directors of the registrant, dated January 4,
1999, the company changed its name from International
Food & Beverage, Inc. to Internet Business s
International, Inc. On March 1, 1999, the address of the
registrant was changed to: 3900 Birch Street, Suite 111,
Newport Beach, California 92660; (949) 833-0261.
(b) Exhibits included or incorporated by reference herein:
See Exhibit Index.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
INTERNET BUSINESS S
INTERNATIONAL, INC.
Dated: May 10, 1999 By: /s/ Albert R. Reda
Albert R. Reda
Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
3.01 Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.01 of the Registrant s Annual Report on Form
10-K for the fiscal year ended June 26, 1993).
3.02 Certificate of Amendment of International Food &
Beverage, Inc. changing its name to Internet Business s
International, Inc.
3.03 Bylaws (incorporated by reference to Exhibit 3.02 to the
Company s registration statement on Form S-1 filed with the
Securities and Exchange Commission on October 29, 1991, the
Registration Statement).
4.01 Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4.01 to the Registration Statement).
22.1 Subsidiaries (incorporated by reference to Exhibit 22.1
to the Registration Statement).
27 Financial Data Schedule.
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of INTERNATIONAL
FOOD & BEVERAGE, INC. a resolution was duly adopted setting forth a
proposed amendment of the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and calling a
meeting of the stockholders of said corporation for consideration
thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of this corporation
to be amended by changing the Article thereof numbered one so that,
as amended said article shall be read as follows: changing the name
of International Food & Beverage, Inc. to Internet Business s
International, Inc.
SECOND: That thereafter, pursuant to resolution of its board of
Directors , a special meeting of the stockholders of said corporation
was duly called and held upon notice in accordance with Section 222
of the General Corporation Law of the State of Delaware at which
meeting the necessary number of shares as required by statue were
voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
Provision of Section 242 of the General Corporation Law of the State
of Delaware.
FOURTH: That the capital of said cooperation shall not be reduced
under or by reason caused this certificate to be signed by
Albert Reda , an Authorized Officer this 11th day of February,
1999.
By: /s/ Albert Reda
Albert Reda
Chief Executive Officer
STATE OF DELAWARE
SFCRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM O2/17/1999
991061280 - Z159360
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