SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
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[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to _________________
Commission file number 0-25276
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QUIKBIZ INTERNET GROUP, INC.
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Exact name of small business issuer as specified in its charter
Nevada 88-0320364
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(State or other jurisdiction I.R.S. Employer Identification No.
of incorporation)
5310 NW 33rd Drive, Suite 212, Ft. Lauderdale, FL 33309
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(Address of principal executive offices and Zip code)
(954) 739-7005
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(Issuer's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by Court. Yes__ No__
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: November 4, 1998:
14,375,240 shares of common stock
Transitional Small Business Disclosure Format (check one): Yes__ No x
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<PAGE>
INDEX
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Page
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Part I
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Condensed Balance Sheets 3
Statement of Operations 4
Statement of Cash Flows 5
Management's Discussion and Analysis or Plan of Operations 6
Part II
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Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 10
Signatures
2
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QuikBIZ Internet Group, Inc.
Consolidated Balance Sheet
<TABLE>
<CAPTION>
Current Year Prior Yr
Sept. 30, 1998 Dec. 31, 1997
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<S> <C> <C>
Current Assets
Cash 71,909 40,498
A/R 492,009 92,018
Other Receivables 169,433 151,167
Inventories 14,468
Prepaid Rent 988
Total Current Assets 748,807 283,683
Fixed Assets
Net Property & Equipment 201,563 12,291
Copyright 32,236 32,236
Accum Amort (6,447) (6,447)
Total Fixed Assets 227,352 38,080
Other Assets
Org Cost 63,689 52,668
Accum Amort (32,480) (31,602)
Security 17,119 5,761
Goodwill 218,326 218,326
Franchise Rights - 225,000
Other Investments 11,000 21,595
Total Other Assets 277,654 491,748
Total Assets 1,253,813 813,511
Liabilities
A/P 636,071 246,074
Notes Payable - 225,000
Accrued Expenses 128,502 34,261
Notes Payable 50,000
Notes Payable-off 24,143
Line Credit 104,426 95,082
Total Liabilities 943,142 600,417
Shareholders' Equity
Preferred Stock 17,248 17,248
Common Stock 22,733 21,533
Additional Paid In Capital 1,764,074 1,706,549
Retained Earnings (1,493,384) (1,532,236)
Total Equity 310,671 213,094
Total Liabilities & Equity 1,253,813 813,511
</TABLE>
See Accountants' Compilation Report
3
<PAGE>
<TABLE>
<CAPTION>
QuikBIZ Internet Group, Inc.
Consolidated Statement of Operations
3 Months Ended 9 Months Ended
30-Sep 30-Sep
(Unaudited) (Unaudited)
1998 1997 1998 1997
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<S> <C> <C>
Revenues 992,149 - 1,700,284 -
CofGS 586,062 - 1,016,933 -
Gross Profit 406,087 - 683,351 -
Operating Expenses
General & Administrative 370,016 16,541 635,783 73,493
Interest 3,304 - 8,715 -
Total Operating Expenses 373,320 16,541 644,498 73,493
Net Profit/(Loss) 32,767 (16,541) 38,853 (73,493)
</TABLE>
See Accountants' Compilation Report
4
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QuikBIZ Internet Group, Inc.
Statement of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
30-Sep 30-Sep
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cash Flows From Operations 32,767 (16,541) 38,853 (73,493)
(Increase)Decrease in Accounts Receivable (287,831) - (399,991) -
(Increase)Decrease inOther Assets 190,515 - 180,372 -
Increase(Decrease)in Accounts Payable 345,612 - 389,997 -
Increase(Decrease) in Accrued Liab. 95,803 - 94,241 -
Total Adjustments 344,099 - 264,619 -
Cash Flows From Investing Activities:
Purchase of Property and Equipment (187,272) - (189,272) -
Increase(Decrease) Other Liabilities (213,000) - (200,857) -
Net Cash Provided By Investing Activties (400,272) - (390,129) -
Cash Flows From Financing Activities:
Receipt of Proceeds from Stock Sales 42,124 (3,750) 58,724 42,750
Net Borrowing on Line of Credit 1,824 - 59,344
Net Cash Provided by Financing Activities 43,948 (3,750) 118,068 42,750
Net Increase(Decrease) in Cash 20,542 (20,291) 31,411 (30,743)
Cash at Beginning 51,367 21,627 40,498 32,079
Cash at the End 71,909 1,336 71,909 1,336
</TABLE>
See Accountants' Compilation Report
5
<PAGE>
Management Discussion and Analysis or Plan of Operations
Results of Operations
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During the three month and nine month period ended September 30, 1998 the
Company had revenues of $992,149 and $1,700,284, respectively as against no
revenues during the three month and nine month period ended September 30, 1997.
The Company's gross profit was 40.9% and 40.1% of revenue for the three and nine
month periods ended September 30, 1998. This was due to the operations of the
Company's subsidiaries, ADS Advertising Corp. ("The Smith Agency"), which during
the three and nine month period ended September 30, 1998 had revenues of
$626,922 and $1,335,058, respectively which was acquired in November 1997, and
QuikLab Multimedia Centers, Inc., which during the three month period ended
September 30, 1998 had revenues of $365,226, which was acquired in July 1998.
During the three month and nine month period ended September 30, 1998 the
Company had general and administrative expenses of $370,016 and $625,783
respectively as against $16,541 and $73,493 during the three month and nine
month period ended September 30, 1997. This was predominately due to the
operations of the Company's subsidiaries, ADS Advertising Corp. ("The Smith
Agency"), which during the three and nine month period ended September 30, 1998
had administrative expenses of $111,958 and $357,351, and QuikLab Multimedia
Centers, Inc., which during the three month period ended September 30, 1998 had
administrative expenses of $158,751. That as a result the Company had a net
profit of $32,767 for the three month period ended September 30, and a net
profit of $38,853 for the nine month period ended September 30, 1998, as against
a loss of $16,541 and a loss of $73,493, respectively for the three month and
nine month period ended September 30, 1997.
Liquidity and Capital Resources
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The Company had cash on hand of $71,909 at the end of the nine month period
ended September 30, 1998, of which $20,068 was attributable to The Smith Agency,
and $31,360 was attributable to QuikLab Multimedia Centers. The Company had
accounts receivable of $492,009 at the end of the nine month period ended
September 30, 1998 of which $380,595 was attributable to The Smith Agency, and
$111,414 was attributable to QuikLab Multimedia Centers, an increase of $287,831
or 140% of such increase occurred during the three month period ended September
30, 1998. The Company at the end of the nine month period ended September 30,
1998 had accounts payable of $636,071 an increase of $326,122 during the nine
month period ended September 30. The accounts payable was due to the operations
of the Company's subsidiaries, ADS Advertising Corp. ("The Smith Agency"), which
during the three month period ended September 30, 1998 had accounts payable of
$432,973, and QuikLab Multimedia Centers, Inc., which during the three month
period ended September 30, 1998 had accounts payable of $203,098. The Company
had notes payable of $24,143 for expenses paid by the officers of the Company's
subsidiary QBIZ Business Centers, Inc., f/k/a Capital Network of America, Corp.
for the subsidiary.
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The Company believes that it will be able to meet its obligations through the
cash flow of its subsidiaries including QuikLab Multimedia Centers, Inc. which
it acquired in July 1998. In the event it cannot meet its through this avenue it
will seek to raise capital, though there is no assurance that the Company will
be successful in obtaining capital. In regard to the Company's subsidiaries, it
is expected that The Smith Agency and QuikLab Multimedia Centers will be able to
meet their respective obligations from their revenue; and that the officers of
QBIZ Business Centers, Inc., pursuant to agreement, will provide for the
expenses of that subsidiary for the first year or until it has sufficient
revenue. The recent acquisition of QuikLab Multimedia Centers in July 1998 has
further enhanced the Company's sales and profitability for the third quarter of
1998, and is expected to further enhance same for the remainder of 1998. The
Company will continue to seek out additional opportunities through acquisitions
and mergers.
YEAR 2000 ISSUE
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Thirty to forty years ago, when business began to depend on computers,
electronic memory was limited and storage was expensive. To save space and
money, programmers designated years with only two digits, not four. Barring
corrective actin, a computer program that has date sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. The Year
2000 presents potential concerns for business and consumer computing. The
consequences of this issue may include systems failures and business process
interruption. The problem exists for many kinds of software and hardware,
including mainframes, mini computers, PCs, and embedded systems. Aside from the
well-known calculation problems with the use of 2-digit date formats as the year
changes from 1999 to 2000, the Year 2000 is a special case leap year and in many
organizations using older technology, dates were used for special programmatic
functions.
The Year 2000 issue also affects the Registrant's internal systems,
including information technology (IT) and non-IT systems. The Registrant through
all of its subsidiaries, Quiklab Multimedia Centers, Inc., A.D.S. Advertising
Agency, Inc. and QUBIZ Business Centers, Inc., is assessing the readiness of its
systems for handling the Year 2000. Although the assessment is still underway,
management currently believes that all material systems will be compliant by the
Year 2000 and that the cost to address the issues is not material. Nevertheless,
the Registrant is creating contingency plans for certain internal systems.
The Registrant is in the process of gathering, testing, and producing
information about its technologies impacted by the Year 2000 transition. First,
the Registrant classified its core products into categories of compliance
renovation (identify problems develop solution strategies and support plans
budget), testing (validate the integrity, functionality and performance of all
systems and how they interact with one another), implementation (successfully
operate in a production environment without impact to customers), and
certification (prepared for Year 2000). However, variability of definitions of
"certification" with the Year 2000 and of different combinations of software,
firmware, and hardware may lead to lawsuits against the Registrant. The outcome
of such lawsuits and the impact on the Registrant are not estimable at this
time.
All organizations dealing with the Year 2000 must address the effect
this issue will have on their third-party supply chain. The Registrant is
undertaking steps to identify its vendors and to formulate a system of working
with key third-parties to understand their ability to continue providing
services and products through the change to 2000. The Registrant has requested
Year 2000 compliance certification from each of its major vendors and suppliers
for their hardware or software products and for their internal business
applications and processes. Registrant will work directly with its key vendors,
distributors, and resellers, and partner with them if necessary, to avoid any
business interruptions in 2000. Notwithstanding the substantive work efforts
described above, the corporation could potentially experience disruptions to
some aspects of its various activities and operations, including those resulting
from non-compliant systems utilized by unrelated third-party governmental and
business entities. Work is underway to develop contingency plans in order to
attempt to mitigate the extent of potential disruption to business operations.
The Y2K problem is of paramount importance to the Registrant, the
internet related services industry, and the global economy. Through September
1998, we have dedicated three people and about $10,000 to work toward
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Y2K compliance so that our computer networks will be abe to accurately process
data before, during and after the calendar changes on December 31, 1999. The
Registrant does not estimate that there will be any additional costs required to
reach compliance. Each of the Registrant's subsidiaries utilized existing
internal operating budgets for remediation. The ultimate total cost to the
Registrant in achieving Year 2000 compliant systems is not expected to be a
material incremental cost impacting the Registrant's operations, financial
condition or liquidity.
Resolving Year 2000 issues is a worldwide phenomenon that will likely
absorb a substantial portion of IT budgets and attention in the near term.
Certain industry analysts believe the Year 2000 issue will accelerate the trend
toward distributed PC-based systems from mainframe systems while others believe
a majority of IT resources will be devoted to fixing older mainframe software in
lieu of large scale transitions to systems. The impact of the Year 2000 on
future Registrant revenue is difficult to discern but is a risk to be considered
in evaluating future growth of the Registrant.
The Registrant is in the process of identifying operating and
application software challenges related to the Year 2000. While the Registrant
expects to resolve Year 2000 compliance issues substantially through normal
replacement and upgrades of software, there can be no assurance that there will
not be interruption of operations or other limitations of system functionality
or that the Registrant will not incur substantial costs to avoid such
limitations. Any failure to effectively monitor, implement or improve the
Registrant's operational, financial, management and technical support systems
could have a material adverse effect on the Registrant's business and
consolidated results of operations.
Achieving Year 2000 compliance is dependent on many factors, some of
which are not completely within the Registrant's control. Should either the
Registrant's internal systems or the internal systems of one or more significant
vendors or suppliers fail to achieve Year 2000 compliance, the Registrant's
business and its results of operations could be adversely affected. While we are
working closely and diligently with public utilities, third parties, unrelated
third party governmental and business entities, their performance ultimately is
beyond our control. For these key third parties, contingency plans will be
developed. Work is underway to develop business contingency plans in order to
attempt to mitigate the extent of potential disruption to business operations.
That said, once we finish testing our most critical systems in 1998, we will
spend most of 1999 implementing plans to minimize risk that might result if
counterparties and other firms with which we do business experience problems at
the turn of the century.
8
<PAGE>
Part II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
(c) 1. In July 1998 the Registrant issued a total of 1,000,000 shares
of its common stock pursuant to Sec. 4(2) of the Securities Act of 1933, as
amended (the "Act") in accordance with employment agreements of its subsidiary
QBIZ Business Ceners, Inc., f/k/a Capital Network of America, Corp.
2. On August 25, 1998 the Registrant issued a total of 240,000 shares
of its common stock pursuant to Sec. 4(2) of the Act to two individuals for
services rendered.
3. On August 25, 1998, the Registrant issued 200,000 shares of common
stock for $50,000.00 ($.40 per share) pursuant to Sec. 4(2) of the Act.
4. On September 30, 1998, the Registrant issued 9,868 shares of common
stock pursuant to an agreement for services and representation pursuant to Sec.
4(2) of the Act.
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
On August 24, 1998, the change of name of the Registrant's subsidiary,
Capital Network of America Corp. to QBIZ Business Centers Inc., was approved by
consent of a majority of the shareholders entitled to vote thereon.
Item 5. Other Information
In September 1998 the Registrant agreed to extend the time by which
Kirk J. Girrbach and Gene Farmer had to return 375,849 and 228,820 shares
respectively, which had not been paid for, from September 30, 1998 up to and
including December 31, 1998.
In July 1998 the Registrant entered into a financial consulting
agreement with M.H. Meyerson & Co. Inc. ("Meyerson"). Under the terms of the
agreement Meyerson will provide investment banking services on a non-exclusive
basis for a period of five years. Among the services to be provided by Meyerson
will be to assist in mergers, acquisitions and internal capital structuring and
the placement of new debt and equity issues of the Registrant. Meyerson will
endeavor, subject to market conditions, to assist the Registrant in identifying
corporate candidates for mergers and acquisitions and sources of private and
institutional funds; to provide planning, structuring, strategic and other
advisory services. Meyerson will have the option, during the term of the
agreement, to perform all financings to be done by the Registrant. In
consideration for these services the Registrant paid Meyerson the sum of $20,000
and granted Meyerson five year Warrants to purchase a total of 600,000 shares of
the Registrant's common stock at an exercise price of $.25 per share. The
Warrants also contain, a one time, demand and piggyback registration rights of
the shares underlying the Warrants at the expense of the Registrant. The demand
and piggyback registration rights are exercisable commencing one year from the
date of the agreement
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upon demand by the holders of 51% of the Warrants not exercised and the shares
issued upon exercise of the Warrants. In regard to the piggyback registration
rights, if there is an underwriter and the underwriter objects to the inclusion
of the shares, the shares shall not be included in the registration statement.
In addition, commencing one year from the date of agreement, Meyerson also has
the right of a cashless exercise option of the Warrants. If this option is
elected, the holders of the Warrants will be entitled to receive the equivalent
of shares that may be sold under Rule 144. The amount of shares to be issued
will be based on the fair market value per share on the date of exercise and
shall be valued at the average of the daily closing price for the five
consecutive trading days immediately preceding the date of exercise.
In July 1998 the Registrant entered into a legal representation
agreement with Kirk J. Girrbach, Esq. Mr. Girrbach is the Treasurer and a
director of the Registrant and is the President of its subsidiary, QBIZ Business
Centers Inc. Under the terms of the agreement Mr. Girrbach will provide legal
services to the Registrant for matters concerning the Registrant from time to
time. The Registrant has the right to terminate the agreement at any time. In
consideration of these services the Registrant has agreed to pay Mr. Girrbach,
on a quarterly basis, at the rate of $200.00 per hour and reimburse him for
costs and expenses. Payment will be in the form of shares of common stock based
upon the bid price of the Registrant's stock at the end of the quarter. The
shares will be registered on Form S-8 under the Act.
During the quarter, the Registrant redefined the business plan for its
subsidiary, QBIZ Internet Centers Inc. Instead of providing financial advisory
services, it is being developed as retail franchises to provide Internet
consulting and marketing services to businesses, organizations and institutions,
that are seeking direction, administration and marketing utilizing the Internet.
At the present time no franchises have been opened.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit 2.1 - Agreement and Plan of Merger Between DigiMedia USA,
Inc. and Nitros Franchise Corporation, dated May 14, 1997, incorporated by
reference to the Registrant's 10-QSB for the period ended June 30, 1997.
Exhibit 2.2 - Acquisition Agreement Between Algorhythm
Technologies Corporation and ADS Advertising Corporation, dated October 30,
1997, incorporated by reference to the Registrant's 10-QSB for the period ended
September 20, 1997.
Exhibit 2.3 - Acquisition Agreement between the Registrant and
QuikLab Multimedia Centers, Inc., dated June 25, 1998, incorporated by reference
to the Registrant's 8-K dated July 23, 1998.
Exhibit 3.1 - Registrant's Articles of Incorporation as
amended, incorporated by reference to the Registrant's 10-QSB for the period
ended March 31, 1998 and 10-KSB for the period ended December 31, 1997.
Exhibit 3.2 - Registrant's Bylaws, incorporated by reference
to the Registrant's 10-QSB for the period ended March 31, 1998.
Exhibit 10.1 - Employment agreement between ADS Advertising
Corporation and Andrew Smith, dated October 30, 1997, incorporated by reference
to the Registrant's 10-QSB for the period ended September 30, 1997.
Exhibit 10.2 - Employment agreement between Capital Network of
America, Corp. and Kirk J. Girrbach, dated April 13, 1998, incorporated by
reference to the Registrants's 10-QSB for the period ended March 31, 1998.
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Exhibit 10.3 - Employment agreement between Capital Network of
America, Corp. and Douglas A. Stepelton, dated April 13, 1998, incorporated by
reference to the Registrants's 10-QSB for the period ended March 31, 1998.
Exhibit 10.4 - Employment agreement between Capital Network of
America, Corp. and Anthony J. Ard, dated April 13, 1998, incorporated by
reference to the Registrants's 10-QSB for the period ended March 31, 1998.
Exhibit 10.5 - Amended employment agreement between Capital
Network of America, Corp. and Kirk J. Girrbach, dated July 6, 1998.
Exhibit 10.6 - Addendum to Employment Contract for Kirk J.
Girrbach, Douglas A. Stepelton and Anthony J. Ard dated July 7, 1998.
Exhibit 10.7 - Agreement for services and representation
between the Registrant and Kirk J. Girrbach, Esq., dated July 15, 1998
Exhibit 10.8 - Investment Banking Agreement between the
Registrant and M.H. Meyerson & Co. , Inc. dated July 14, 1998 and amendment
dated November 17, 1998.
B. During the period ended September 30, 1998, the Registrant filed the
following 8Ks:
8K dated July 23, 1998: reporting the acquisition of QuikLab Multimedia
Centers, Inc.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
QUIKBIZ INTERNET GROUP, INC.
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Registrant
Date: December 8, 1998 s/ANDREW SMITH
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ANDREW SMITH, President
Date: December 8, 1998 s/KIRK J. GIRRBACH
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KIRK J. GIRRBACH, Treasurer
12
AGREEMENT FOR SERVICES AND REPRESENTATION
-----------------------------------------
I, David Bawarsky, as Chairman of the Board and CEO on behalf of
QuikBIZ Internet Group, Inc., a public Nevada corporation (hereinafter, client),
hereby retain and employ the Law Office of Kirk J. Girrbach, P.A. (hereinafter,
Attorney), to undertake legal representation on behalf of the client in
connection with the following matter: Corporate counsel as may be mutually
agreed between the parties from time to time.
1. COSTS AND ADVANCES: Aside from the fee for professional services as
described infra in periodic billing, the parties agree that the Attorney shall
be reimbursed for costs advanced on behalf of the client. The Attorney shall
have the authority to make costs advances on the client's behalf provided that
the client approve said costs in writing, which shall be for expenses,
including, but not limited to, long-distance telephone calls, postage,
photocopies (Xerox), notary public fees, out-of-town (out of Broward County)
travel expenses (including meals and lodging while out-of-town), deposition
expenses (including cost of transcript and court reporter's fee for attendance),
court costs (such as filing fees, service of process, subpoena costs, witness
fees, etc.), accounting and appraisal fees, and expenses of other experts which
are deemed necessary to assist in the preparation and trial, or the proper
handling of the case or the matter, for which the Attorney is being retained.
2. ATTORNEY'S FEES FROM ADVERSE PARTY: Under certain circumstances, the
client may be entitled to Attorney's fees from the adverse party. Because fees
and costs awards are totally unpredictable, it is expressly acknowledged that it
is the client's responsibility to pay the total Attorney's fees. Amounts
collected from the adversary will be credited to client's account. The court
award of fees, if any, does not set or limit the Attorney's fees in any way. The
collection of fees form the adverse party is an additional service o the
Client's behalf, and the Client is expected to pay the Attorney a further fee on
the same basis as is set forth in this Agreement for performing such service.
3. PERIODIC BILLING:
(a) The Attorney will compute, on a quarterly basis, billing
for fees based upon the actual amount of time that has been devoted to the
Client, as well as the costs advanced on behalf of the Client. The monthly
billing for fees is based upon an hourly charge of $200.00. The hourly rate
shall include but not be limited to: Time spent on the telephone, in
negotiation, for legal research, court appearance, mediation, depositions, and
for travel t o and from locations away from Attorney's office for related
matters to Client. The Attorney's compensation and reimbursement for costs shall
be taken in the form of equity of the Client, registered under Form S-8 pursuant
to the Securities Exchange Act of 1934, on a quarterly basis at the purchase
rate equivalent to the bid price of the Client's stock at the end of said
quarter.
(b) Attorney's bills are repayable upon receipt. Client agrees
and understands that failure to make payment is a material breach of this
agreement, and will entitle the Attorney to withdraw without further authority
from Client. Client understands and agrees that Attorney shall have the option
to cease continued work on the Client's behalf and/or withdraw from
representation of Client's interest.
(c) In the event it is necessary to institute suit for
collection of fees due to the Attorney by the Client, the Client will pay, in
addition to any judgment for such fees and advances, all costs and expenses
necessitated thereby, including reasonable Attorney's fees for suit.
(d) The provisions of this agreement at the Attorney's
discretion may be disclosed to the Court in connection with any application by
Attorney for fees for services that may be rendered on Client's behalf, and the
Attorney has the right to advise the Court of any amounts that have been
received on account of fees.
4. TERMINATION OF REPRESENTATION: The Client shall have the right
to
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terminate the Attorney for any reason, but will be obligated to reimburse costs
and forward compensation for work performed to-date in accordance with the terms
of this Agreement. The Attorney shall have the right to withdraw from
representation or any case if the Client does not make payments required in this
Agreement, if the Client has misrepresented or failed to discuss material facts
with the Attorney. If any of these events shall occur, the client shall execute
such necessary documents as will permit the Attorney to withdraw. The Attorney
shall have a lien on all documents, property, or money in the Attorney's
possession for the payment of all sums due to the Attorney from the client under
the terms of this Agreement.
5. REPRESENTATIONS: The Client acknowledges that the Attorney has made
no guarantees whatsoever in the disposition of any phase of the matter or
matters for which the Attorney has been retained and all expressions relative to
it are only opinions of the Attorney.
6. SEVERABILITY: If any paragraph, sentence, clause or phrase of this
agreement is for any reason declared to be illegal, invalid, unconstitutional,
void or unenforceable, all other paragraphs, sentences, clauses or phrases
thereof not so held shall be and remain in full force and effect.
7. VENUE: The parties agree that this Agreement shall be governed by
the laws of the State of Florida.
Dated this 15th day of July, 1998
QuikBIZ Internet Group, Inc. Kirk J. Girrbach, P.A.
5310 NW 33rd Avenue, Suite 212 6500 N. Federal Highway, Suite 250
Fort Lauderdale, FL 33309 Fort Lauderdale, FL 33308
By: s/David Bawarsky By: s/Kirk J. Girrbach
------------------------------ ------------------------------
David Bawarsky, Chairman & CEO Kirk J. Girrbach, Esquire
2
M.H. MEYERSON & CO., INC.
FOUNDED 1960
BROKERS & DEALERS IN SECURITIES
UNDERWRITERS
NEWPORT OFFICE TOWER
525 WASHINGTON BLVD., P.O. BOX 260, JERSEY CITY, NJ 07303-0260
201-459-9500, 800-888-8118, FAX 201-459-9521, www.mhmeyerson.com
Mr. David Bawarsky
Chairman
Quikbiz Internet Group, Inc.
5310 NW 33rd Avenue
Ft. Lauderdale, FL 33309
Dear Mr. Bawarsky:
THIS AGREEMENT (the "AGREEMENT") is made as of July 14, 1998 between
Quikbiz Internet Group, Inc. ("QUIKBIZ") and M.H. Meyerson & Co. Inc.
("MEYERSON").
In consideration of the mutual covenants contained herein and intending
to be legally bound thereby, QUIKBIZ and MEYERSON hereby agree as follows:
1. MEYERSON will perform investment banking services, on a
non-exclusive basis, for QUIKBIZ on the terms set forth below
for a period of five years from the date hereof. Such services
will be performed on a best efforts basis and will include,
without limitation, assistance to QUIKBIZ in mergers,
acquisitions, and internal capital structuring and the
placement of new debt and equity issues of QUIKBIZ, all with
the objective of accomplishing QUIKBIZ's business and
financial goals. In each instance, MEYERSON, shall endeavor,
subject to market conditions, to assist QUIKBIZ in identifying
corporate candidates for merges and acquisitions and sources
of private and institutional funds; to provide planning,
structuring, strategic and other advisory services to QUIKBIZ;
and to assist in negotiations on behalf of QUIKBIZ. MEYERSON
will have the option to perform all financings to be done by
QUIKBIZ for as long as this AGREEMENT is in effect. In each
instance, MEYERSON will render such services as to which
QUIKBIZ and MEYERSON mutually agree and MEYERSON will exert
its best efforts to accomplish the goals agreed to by MEYERSON
and QUIKBIZ.
2. In connection with the performance of this AGREEMENT, MEYERSON
and QUIKBIZ shall comply with all applicable laws and
regulations, including, without limitation, those of the
National Association of Securities Dealers, Inc.
and the Securities and Exchange Commission.
1
<PAGE>
3. In consideration of the services previously rendered and to be
rendered by MEYERSON hereunder, MEYERSON is hereby granted
five-year Warrants to purchase, at a price of $0.25 per share,
a total of 600,000 shares of Common Stock of QUIKBIZ with
demand and piggy back registration rights as set forth in
paragraph 4 below. Such Warrants ("MEYERSON Warrants") may be
exercised at any time from July 14, 1998 to and including July
14, 2003. The MEYERSON Warrants shall vest and become
irrevocable immediately upon the signing of this AGREEMENT. In
any event after one year from the date of this AGREEMENT,
MEYERSON shall have, at MEYERSON's discretion, both a cashless
exercise option to exercise the Warrants and rights of
registration as described in paragraph 4 below. If the
cashless exercise option is exercised, it would be
accomplished by surrendering the vested Warrants and replacing
them with the equivalent of shares that my be sold under Rule
144. The amount of shares of common stock of QUIKBIZ to be
issued will be based on the fair market value per share on the
date of exercise and shall be valued at the average of the
daily closing price for the five consecutive trading days
immediately preceding the date of exercise. The presentation
of a copy of this AGREEMENT by MEYERSON, together with a
request that part or all of the Warrant be exercised and a
direction that the appropriate number of shares be withheld to
pay the exercise price, shall be deemed to be the surrender of
such number of shares for purposes of exercising the cashless
exercise option.
4. At MEYERSON's Option, during the period from July 14, 1998 to
July 14, 2003, the holders of at least 51% of : (i) the
MEYERSON Warrants not then exercised; and (ii) the shares
previously issued upon exercise of any of the MEYERSON
Warrants (hereinafter, collectively, the "MEYERSON EQUITY")
may demand, on one occasion only, that QUIKBIZ at QUIKBIZ's
expense, promptly file a Registration Statement under the
Securities Act of 1933, as amended ("ACT"), to permit a public
offering of the shares of Common Stock issued and issuable
pursuant to exercise of the MEYERSON Warrants (the "MEYERSON
SHARES"). Additionally, if QUIKBIZ during the period from July
14, 1998 to July 14, 2003, files a Registration Statement
covering the sale of any of QUIKBIZ's common stock, then
QUIKBIZ on each such occasion, at the request of the holders
of at least 51% of the shares and warrants constituting the
MEYERSON SHARES, provided that, if the sale of securities by
QUIKBIZ is being made through an underwriter and the
underwriter objects to inclusion of the MEYERSON SHARES in the
Registration Statement, the MEYERSON SHARES shall not be so
included in the Registration Statement or in any registration
statement filed within 90 days after the effective date of the
underwritten Registration Statement.
5. In the event QUIKBIZ fails to honor the exercise by MEYERSON
of any vested warrants as set forth herein, by failing to
deliver the certificate(s) for the underlying shares of common
stock to MEYERSON within 10 days after such
2
<PAGE>
exercise then MEYERSON may take legal action, without further
notice to QUIKBIZ to obtain such underlying shares, and
QUIKBIZ agrees to pay all damages, costs and expenses incurred
by MEYERSON, including reasonable attorneys' fees. In addition
to any other damages sustained by MEYERSON as a result of
QUIKBIZ's failure to honor such exercise, including any
diminution in the value of the underlying shares over time,
QUIKBIZ agrees that it will pay MEYERSON interest, at the
average prime rate based on New York City banking levels for
the prior six months, on the market value of the underlying
shares as of the 10th day after the exercise, for the period
beginning on the 10th day after the exercise and ending on the
day the certificates for the underlying shares are received by
MEYERSON.
6. If QUIKBIZ should, at any time, or from time to time
hereafter, effect a stock split, a reverse stock split, a
business combination, a recapitalization or merger, the terms
of the MEYERSON Warrants shall be proportionately adjusted to
prevent the dilution or enlargement of the rights of the
MEYERSON interest.
7. The obligation of QUIKBIZ to register the MEYERSON SHARES,
including the shares issuable upon the exercise of the
MEYERSON Warrants, pursuant to the demand or piggy back
registration rights set forth in paragraph 4 above, shall be
without regard to whether the MEYERSON Warrants have been or
will be exercised.
8 QUIKBIZ agrees that, for a period of three (3) years from the
date of this AGREEMENT, QUIKBIZ will not utilize the
registration exemption set forth in Regulation S under the
ACT, nor issue any security with a downward ratchet dilution
program without the consent of MEYERSON, which consent will
not be unreasonably withheld.
9. This AGREEMENT constitutes the entire Warrant Agreement
between the parties and when a copy hereof is presented to
QUIKBIZ's transfer agent, together with a request that all or
part of the MEYERSON Warrant be exercised and a certified
check in the proper amount or a direction, pursuant to the
cashless exercise option, that shares be withheld to pay for
the exercise, the certificates for the appropriate number of
shares of Common Stock shall be promptly issued.
10. Upon the execution of this AGREEMENT, QUIKBIZ shall include in
its next annual report and filing the highlights and terms of
this investment banking AGREEMENT.
11. Upon the signing of this AGREEMENT, QUIKBIZ shall provide
MEYERSON with 100,000 shares of free trading stock issued
under the S-8 Regulation. QUIKBIZ will also furnish MEYERSON
with a copy of the current registration statement allowing the
issuance of these free trading shares and al letter of
3
<PAGE>
opinion from QUIKBIZ's securities counsel stating that the
shares are free trading. MEYERSON shall be entitled to
additional compensation, to be negotiated between MEYERSON and
QUIKBIZ, arising out of any transactions that are proposed or
executed by MEYERSON and consummated by QUIKBIZ, or are
executed by MEYERSON at QUIKBIZ's request, during the term of
this AGREEMENT to the extent that such compensation is normal
and ordinary for such transactions. In addition, MEYERSON
shall be reimbursed by QUIKBIZ for any reasonable
out-of-pocket expenses that MEYERSON may incur in connection
with rendering any service to or on behalf of QUIKBIZ that is
approved, in writing, in advance by QUIKBIZ's Chief Executive
Officer.
12. QUIKBIZ agrees to indemnify and hold MEYERSON and its
directors, officers, and employees harmless from and against
any and all losses, claims, damages, liabilities, costs or
expenses arising out of any action or cause of action brought
against MEYERSON in connection with its rendering services
under this AGREEMENT except for any losses, claims, damages
liabilities, cost or expenses resulting from any violation by
MEYERSON of applicable laws and regulations including, without
limitation, those of the National Association of Securities
Dealers, Inc. and the Securities and Exchange Commission or
any state securities commission or from any act of MEYERSON
involving willful misconduct and except that QUIKBIZ shall not
be liable for any amount paid in settlement of any claim that
is settled without its prior written consent.
13. MEYERSON agrees to indemnify and hold QUIKBIZ and its
directors, officers and employees harmless from and against
any and all losses claims, damages, labilities , costs or
expenses resulting from any violation by MEYERSON of
applicable laws and regulations including, without limitation,
those of the National Association of Securities Dealers, Inc.,
the Securities and Exchange Commission or any state securities
commission or from any act of MEYERSON involving willful
misconduct.
14. Within 90 days of the date of this AGREEMENT, a representative
of MEYERSON will visit the corporate headquarters of QUIKBIZ.
QUIKBIZ will submit to MEYERSON a current business plan
setting forth how QUIKBIZ plans to proceed over the next two
(2) years.
15. Nothing contained in this AGREEMENT shall be construed to
constitute MEYERSON as a partner, employee, or agent of
QUIKBIZ; nor shall either party have any authority to bind the
other in any respect, it being intended that MEYERSON is, and
shall remain an independent contractor.
16. This AGREEMENT may not be assigned by either party hereto,
except that MEYERSON may assign any or all of its Warrants to
its employees, and shall be interpreted in accordance with the
laws of the State of New Jersey applicable
4
<PAGE>
to agreements negotiated, entered into, and performed wholly
within the State of New Jersey, and shall be binding upon the
successors of the parties. Either party may terminate this
AGREEMENT at any time, however, legally vested Warrants will
remain with MEYERSON.
17. If any paragraph, sentence, clause or phrase of this AGREEMENT
is for any reason declared to be illegal, invalid,
unconstitutional, void or unenforceable, all other paragraphs,
sentences, clauses or phrases hereof not so held shall be and
remain in full force and effect.
18. None of the terms of this AGREEMENT shall be deemed to be
waived or modified except by an express agreement in writing
signed by the party against whom enforcement of such waiver or
modification is sought. The failure of either party at any
time to require performance by the other party of any
provision hereof shall, in no way, affect the full right to
require such performance at any time thereafter. Nor shall the
waiver by either party of a breach of any provision hereof be
taken or held to be a waiver or any succeeding breach of such
provision or as a waiver of the provision itself.
19 Any dispute, claim or controversy arising out of or relating
to this AGREEMENT, or the breach thereof, shall be settled by
arbitration in Jersey City, New Jersey, in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association. The parties hereto agree that they will abide by
and perform any award rendered by the arbitrator(s) and that
judgment upon any such award may be entered in any Court,
state or federal, having jurisdiction over the party against
whom the judgment is being entered. Any arbitration demand,
summons, complaint, other process, notice of motion, or other
application to an arbitration panel, Court or Judge, and any
arbitration award or judgment may be served upon any party
hereto by registered or certified mail, or by personal
service, provided a reasonable time for appearance or answer
is allowed.
20. For purposes of compliance with laws pertaining to potential
inside information being distributed unauthorized to anyone,
all communications regarding QUIKBIZ's confidential
information should only be directed to Martin H. Meyerson,
Chairman, Michael Silvestri, President, or Joseph Messina,
Vice President, Compliance. If information is being faxed, our
confidential compliance fax number is (201) 459-9534 for
communication use.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT as
of the day and year set forth above.
M.H. Meyerson & Co., Inc. Quikbiz Internet Group, Inc.
By: s/ Michael Silvestri By:s/ David Bawarsky
-------------------------- --------------------------
Michael Silvestri David Bawarsky
President Chairman
6
<PAGE>
M.H. MEYERSON & CO., INC.
FOUNDED 1960
BROKERS & DEALERS IN SECURITIES
UNDERWRITERS
NEWPORT OFFICE TOWER
525 WASHINGTON BLVD., P.O. BOX 260, JERSEY CITY, NJ 07303-0260
201-459-9500, 800-888-8118, FAX 201-459-9521, www.mhmeyerson.com
November 17, 1998
Mr. David Bawarsky
Chairman
Quikbiz Internet Group, Inc.
5310 N.W. 33rd Avenue
Fort Lauderdale, FL 33309
Dear Mr. Bawarsky:
This letter will confirm that pursuant to paragraph 11 of our Investment Banking
Agreement between our firms dated July 14, 1998, a $20,000 payment was received
as a retainer in lieu of stock.
If you have any questions or comments regarding this matter, please feel free to
contact my office.
Sincerely,
M.H. MEYERSON & CO., INC.
s/Michael Silvestri
President
7
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