As filed with the Securities & Exchange Commission on August 13,1996
Registration No. 33-83418-LA
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST EFFECTIVE AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NW VENTURE CORP.
(Name of Small Business Issuer in Its Charter)
Delaware 6770 93-1138967
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classifi- Identification)
incorporation or cation Code Number) Number)
organization)
501 S.E. Columbia Shores Boulevard, #350
Vancouver, Washington 98661 (360) 737-6800
(Address and Telephone Number of Principal Executive Offices)
501 S.E. Columbia Shores Boulevard, #350
Vancouver, Washington 98661
(Address of Principal Place of Business or Intended Principal Place of Business)
Martin Rifkin, President
NW Venture Corp.
501 S.E. Columbia Shores Boulevard, #350
Vancouver, Washington 98661
(360) 737-6800
(Name, Address, and Telephone Number of Agent for Service)
Copies to:
David M. Kaye, Esq.
Danzig, Garubo & Kaye
75 Livingston Avenue
Roseland, New Jersey 07068
(201) 535-5701
Approximate date of proposed sale to the public: As soon as practicable
after the effectiveness of this Registration Statement.
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRA-
REGISTERED REGISTERED SHARE(1) PRICE (1) TION FEE
<S> <C> <C> <C> <C>
Common Stock,
par value
$.0001
per share 500,000 $0.10 $50,000 $100.00
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL REGISTRATION FEE $100.00
</TABLE>
_____________________
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
<PAGE>
NW VENTURE CORP.
Cross-Reference Sheet Showing Location in Prospectus
of Information Required by Form SB-2
<TABLE>
<CAPTION>
Item Number and Caption Heading in Prospectus
<S> <C>
1. Front of Registration Statement
and Outside Front Cover Page
of Prospectus Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus Cover Page
3. Summary Information and Risk Factors Prospectus
Summary, Risk Factors
4. Use of Proceeds Prospectus Summary,
Use of Proceeds
5. Determination of Offering Price Cover Page,
Risk Factors
6. Dilution Dilution
7. Selling Security-Holders Not Applicable
8. Plan of Distribution Cover Page,
Plan of
Distribution
9. Legal Proceedings Litigation
10. Directors, Officers, Promoters and
Control Persons Management
11. Security Ownership of Certain
Beneficial Owners and Management Principal
Stockholders
12. Description of Securities Description of
Securities
13. Interest of Named Experts and Counsel Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
14. Disclosure of Commission Position on Indemnification
Indemnification for Securities Act of Directors
Liabilities and Officers
15. Organization Within Last Five Years Management,
Certain Transactions
16. Description of Business Prospectus Summary,
Introduction,
Business
17. Management's Discussion and Analysis Management's
or Plan of Operation Discussion and
Analysis, Business
18. Description of Property Business
19. Certain Relationships and Related Certain Transactions Transactions
20. Market for Common Equity and Related Description of
Stockholder Matters Securities
21. Executive Compensation Management
22. Financial Statements Financial
Statements
23. Changes in and Disagreements with Not
Accountants on Accounting and Applicable
Financial Disclosure
</TABLE>
<PAGE>
NW VENTURE CORP.
500,000 Shares of Common Stock
This Prospectus relates to the reconfirmation offering (the
"Reconfirmation Offering") required pursuant to Rule 419 of Regulation
C under the Securities Act of 1933, as amended (the "Act") concerning
500,000 shares of Common Stock, $.0001 par value (the "Common Stock")
of NW Venture Corp. (the "Company"). The shares were initially sold
in connection with an initial public offering (the "Offering") of
500,000 shares of Common Stock, which was completed in October 1995.
In May 1996, the Company executed an agreement with Cyberia, Inc., a
California corporation, and its shareholders to acquire all of the
issued and outstanding shares of capital stock of Cyberia, Inc. in
exchange for 25,500,000 shares of Common Stock of the Company. This
Prospectus is being furnished to investors in the Offering for such
investors to consider reconfirming their investment in the Company as
a result of the Company's proposed acquisition.
Prior to the Offering and this Reconfirmation Offering, there has
been no market for the Company's Common Stock and there is no
assurance that such a market will exist after the proposed acquisition
is completed by the Company. There are no plans, proposals,
arrangements or understandings with any person with regard to the
development of a trading market in any of the Company's securities.
The market for the Company's securities upon the proposed acquisition
being concluded may be very restricted and liquidity may be extremely
limited. The Offering price of $.10 per share was arbitrarily
established and was not based on earnings or assets of the Company.
(See "Risk Factors" and "Dilution").
________________________
THE OFFERING AND THE RECONFIRMATION OFFERING ARE BEING
CONDUCTED IN ACCORDANCE WITH RULE 419 OF REGULATION C UNDER THE
ACT. RULE 419 WAS DESIGNED, ACCORDING TO THE COMMISSION, TO
STRENGTHEN REGULATION OF SECURITIES OFFERINGS BY BLANK CHECK
COMPANIES WHICH CONGRESS HAS FOUND TO HAVE BEEN A COMMON VEHICLE
FOR FRAUD AND MANIPULATION IN THE PENNY STOCK MARKET. (See "RISK
FACTORS - OFFERING CONDUCTED IN ACCORDANCE WITH RULE 419").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Proceeds
Price to to the
Public Commissions(1) Company(2)(3)
<S> <C> <C> <C>
Per Share $.10 $-0- $.10
Total $50,000 $-0- $50,000
</TABLE>
(See footnotes on following page)
The Date of This Prospectus is , 1996
<PAGE>
(1) The shares were offered directly to the public on
behalf of the Company by Martin Rifkin, the sole officer and
director of the Company. No commissions or any other form of
remuneration was or will be paid to Mr. Rifkin, although his out-
of-pocket expenses will be reimbursed by the Company. No NASD
members or affiliates participated in the Offering.
(2) The figures do not reflect the deduction of offering
expenses estimated to be an aggregate of $14,000 which include
but are not limited to filing fees, printing expenses, legal and
accounting fees and other miscellaneous expenses.
(3) The shares were offered by the Company on a "best
efforts, all or none" basis. All moneys paid by subscribers for
the shares (the "deposited funds") were deposited in a special
non-interest bearing escrow account at United Jersey Bank, 210
Main Street, Hackensack, New Jersey 07602. Jersey Transfer and
Trust Co. of New Jersey and United Jersey Bank are together
serving as the Escrow Agent for the Offering. Except for 10% of
the deposited funds (10% of $50,000, or $5,000) which was
released under Rule 419 upon completion of the Offering, the
deposited funds and the securities to be issued to subscribers
are remaining in escrow and may not be released until an
acquisition meeting certain specified criteria has been made and
a sufficient number of subscribers reconfirm their investment in
accordance with the procedures set forth in Rule 419. While held
in escrow, the securities may not be traded or transferred.
Pursuant to these procedures, the Company must return the pro-rata
portion of the deposited funds to any subscriber who does
not elect to remain a subscriber. Unless a sufficient number of
investors elect to remain subscribers, all subscribers will be
entitled to the return of a pro-rata portion of the deposited
funds and none of the securities will be issued to investors. In
the event an acquisition is not consummated within 18 months of
June 30, 1995 (the effective date of the registration statement
relating to the Offering), the deposited funds will be returned
on a pro-rata basis to all investors. (See "Prospectus Summary -
Investors Rights to Reconfirm Investments Under Rule 419").
Prior to the Offering and the Reconfirmation Offering, there
has been no public market for the Common Stock and no assurance
can be given that a trading market for the Common Stock will
develop subsequent to the completion of the Reconfirmation
Offering or be sustained if developed. The shares will not be
eligible for listing on the Automated Quotation System of the
National Association of Securities Dealers (the "Nasdaq Stock
Market") upon the completion of the Reconfirmation Offering, and
therefore, the Company has not and does not presently intend to
make application to have the shares included on the Nasdaq Stock
Market.
___________________
THE OFFERING AND THE RECONFIRMATION OFFERING INVOLVES A
SPECULATIVE INVESTMENT, A HIGH DEGREE OF RISK, AND SUITABLE ONLY
FOR PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
<PAGE>
THE SHARES HAVE BEEN REGISTERED ONLY IN THE STATE OF NEW
YORK. PURCHASERS OF SHARES IN THE OFFERING OR IN ANY SUBSEQUENT
TRADING MARKET WHICH MAY DEVELOP MUST BE RESIDENTS OF THE STATE
OF NEW YORK (OR THE DISTRICT OF COLUMBIA, WHERE NO SECURITIES
REGISTRATION PROVISIONS EXIST), UNLESS AND UNTIL THE SHARES HAVE
BEEN REGISTERED OR QUALIFIED FOR SALE IN ADDITIONAL JURISDICTIONS
OR UNLESS AN EXEMPTION IS AVAILABLE AND HAS BEEN OBTAINED. THE
COMPANY WILL AMEND THIS PROSPECTUS FOR THE PURPOSES OF DISCLOSING
ADDITIONAL STATES, IF ANY, IN WHICH THE SHARES WILL HAVE BEEN
REGISTERED OR QUALIFIED.
PURSUANT TO THE TERMS OF THE OFFERING, THE COMPANY'S SOLE
OFFICER AND DIRECTOR, AND HIS AFFILIATES AND ASSOCIATES, WAS
PERMITTED TO PURCHASE A PORTION OF THE SHARES OFFERED UNDER THE
OFFERING, NOT TO EXCEED TEN PERCENT (10%) OF THE NUMBER OF SHARES
BEING OFFERED IN THE OFFERING, UPON THE SAME TERMS AND
CONDITIONS AS OTHER INVESTORS IN THE OFFERING. SUCH PURCHASES
COULD ONLY BE MADE FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO RESALE OR DISTRIBUTION. SUCH PURCHASES COULD BE MADE TO
HELP REACH THE MAXIMUM NUMBER OF SHARES BEING OFFERED SO THAT THE
OFFERING COULD CLOSE. PURSUANT THERETO, THE COMPANY'S SOLE
OFFICER AND DIRECTOR PURCHASED 10% OF THE NUMBER OF SHARES
OFFERED IN THE OFFERING.
THE COMPANY IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE
ACT"), AND IN ACCORDANCE THEREWITH, FILES REPORTS AND OTHER
INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
COMPANY INTENDS TO FURNISH TO ITS SHAREHOLDERS, AFTER THE CLOSE
OF EACH FISCAL YEAR, WITH AN ANNUAL REPORT WHICH WILL CONTAIN
AUDITED FINANCIAL STATEMENTS CERTIFIED BY ITS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS. IN ADDITION, THE COMPANY MAY
FURNISH TO ITS SHAREHOLDERS QUARTERLY REPORTS CONTAINING
UNAUDITED FINANCIAL INFORMATION.
<PAGE>
No dealer, salesman or other person has been authorized to
give any information or to make any representations other than
those contained in this Prospectus. Any information or
representations not herein contained, if given or made, must not
be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offering or solicitation with
respect to these securities in any jurisdiction in which such
offer or solicitation would be unlawful.
TABLE OF CONTENTS
Page
Prospectus Summary.................................... 5
Introduction.......................................... 8
Risk Factors.......................................... 9
Dilution.............................................. 15
Dividend Policy....................................... 15
Use of Proceeds....................................... 17
Capitalization........................................ 18
Management's Discussion
and Analysis......................................... 18
Business.............................................. 20
Management............................................ 23
Principal Stockholders................................ 27
Certain Transactions.................................. 28
Description of Securities............................ 29
Indemnification of Directors
and Officers......................................... 30
Plan of Distribution.................................. 30
Reports to Shareholders............................... 32
Litigation............................................ 32
Legal Opinions........................................ 32
Experts............................................... 32
Additional Information................................ 33
Financial Statements.................................. F-1
Until 90 days after the date funds and securities are
released from the escrow account pursuant to Rule 419 under the
Act, all dealers effecting transactions in the securities offered
hereby, whether or not participating in this distribution, may be
required to deliver a current prospectus. This is in addition to
the obligation of dealers to deliver a current prospectus when
acting as underwriters and with respect to their unsold
allotments.
<PAGE>
PROSPECTUS SUMMARY
This Prospectus, which constitutes part of a Registration
Statement filed by the Company with the Securities and Exchange
Commission under the Act, omits certain of the information
contained in the Registration Statement. Reference is hereby
made to the Registration Statement and to its exhibits for
further information with respect to the Company, the Offering and
Reconfirmation Offering. Statements contained herein concerning
provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the
Commission.
The Company
NW Venture Corp. (the "Company") was organized as a Delaware
corporation on February 24, 1994 for the purpose of creating a
corporate vehicle to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented
to it by persons or firms who or which desire to employ the
Company's funding in their business or to seek the perceived
advantages of a publicly-held corporation. In October 1995, the
Company completed an initial public offering (the "Offering") of
500,000 shares of its Common Stock at a price of $.10 per share
pursuant to a Registration Statement declared effective by the
Securities and Exchange Commission on June 30, 1995. In May
1996, the Company executed an agreement with Cyberia, Inc., a
California corporation ("Cyberia"), and its shareholders to
acquire all of the issued and outstanding shares of capital stock
of Cyberia in exchange for 25,500,000 shares of Common Stock of
the Company (the "Acquisition"). Cyberia is primarily involved
in the business of creating original music for television
commercials. (See "Risk Factors" and "Business").
The Offering and Reconfirmation Offering
Five Hundred Thousand (500,000) shares of Common Stock were
offered at a purchase price of $.10 per share on a "best efforts,
all or none" basis. The Offering was conducted directly by the
Company without the use of a professional underwriter and was
completed in October 1995. This Prospectus is being furnished to
investors in the Offering for such investors to consider
reconfirming their investment in the Company as a result of the
Company's proposed Acquisition.
Securities Outstanding
There are presently 4,500,000 shares of Common Stock
outstanding of an authorized issuance of 50,000,000 shares of
Common Stock. If the Acquisition is completed, 30,000,000
shares of Common Stock will be outstanding.
Use of Proceeds
The Offering is a "blank check" in that neither the Company's business
<PAGE>
nor the use of the proceeds of the Offering were specified. The Company
intends to utilize the net proceeds to pay general office expenses; for
the repayment of loans; to pay the expenses in connection with
identification and evaluation of business opportunities and structuring
and completion of acquisitions or mergers; and for working capital. (See
"Use of Proceeds").
Risk Factors
Investment in the securities of the Company is highly
speculative and involves many risks. (See "Risk Factors").
Investors Rights to Reconfirm Investment Under Rule 419
Deposit of Offering Proceeds and Securities
Rule 419 requires that the gross offering proceeds, less
deduction for underwriting compensation and underwriting expenses
(for which there were none in the Offering) and all securities to
be issued be deposited into an escrow account (the "deposited
funds" and "deposited securities," respectively) governed by an
agreement which contains certain terms and provisions specified
by Rule 419. Under Rule 419, except for an amount up to 10% of
the deposited funds (10% of $50,000, or $5,000), the deposited
funds and deposited securities will be released to the Company
and to investors, respectively, only after the Company has met
the following three conditions. First, the Company must execute
an agreement for an acquisition(s) meeting certain prescribed
criteria. Second, the Company must successfully complete a
reconfirmation offering which includes certain prescribed terms
and conditions. Third, the acquisition(s) meeting the prescribed
criteria must be consummated (see "Prescribed Acquisition
Criteria" and "Reconfirmation Offering" below).
Accordingly, the Company has entered into an escrow
agreement with Jersey Transfer and Trust Co. of New Jersey and
United Jersey Bank (together, the "Escrow Agent") which provides
that:
(1) The deposited funds are to remain in the escrow account
maintained by the Escrow Agent after completion of the Offering.
The deposited funds are to held for the sole benefit of the
investors and can be only invested in bank deposits, in money
market mutual funds or federal government securities or
securities for which the principal or interest is guaranteed by
the federal government.
(2) All securities issued in connection with the Offering
and any other securities issued with respect to such securities,
including securities issued with respect to stock splits, stock
dividends or similar rights are to be deposited directly into the
escrow account promptly upon issuance. The securities held in
the escrow account are to remain as issued and deposited and are
to be held for the sole benefit of the investors who retain the
voting rights, if any, with respect to the securities held in
their names.
<PAGE>
(3) Warrants, convertible securities or other derivative
securities, if any, relating to securities held in the escrow
account may be exercised or converted in accordance with the
terms; provided, however, the securities received upon exercise
or conversion together with any cash or other consideration paid
in connection with the exercise or conversion, are to be promptly
deposited into the escrow account.
Prescribed Acquisition Criteria
Rule 419 requires that before the deposited funds and the
deposited securities can be released the Company must first
execute an agreement(s) to acquire an acquisition candidate(s)
meeting certain specified criteria. The agreement must provide
for the acquisition of a business(es) or assets for which the
fair value of the business(es) represents at least 80% of the
offering proceeds, including funds received or to be received
from the exercise of warrants, but excluding underwriting
commissions, underwriting expenses and dealer allowances payable
to non-affiliates. For purposes of the Offering, the fair value
of the business(es) or assets to be acquired must be at least
$40,000. Once the acquisition agreement(s) meeting the above
criteria have been executed, the Company must successfully
complete the mandated reconfirmation offering, as discussed
below, and consummate the acquisition(s).
Post-Effective Amendment
Once the agreement(s) governing the acquisition(s) of (a)
business(es) meeting the above criteria has been executed, Rule
419 requires the Company to update the registration statement
with a post-effective amendment. The post-effective amendment
must contain information about: the proposed acquisition
candidate(s) and its business(es), including audited financial
statements; the results of this offering; and the use of the
funds disbursed from the escrow account. The post-effective
amendment must also include the terms of the reconfirmation offer
mandated by Rule 419. The reconfirmation offer must include
certain prescribed conditions which must be satisfied before the
deposited funds and deposited securities can be released from
escrow.
Reconfirmation Offering
The reconfirmation offer must commence within five business
days after the effective date of the post-effective amendment.
Pursuant to Rule 419, the terms of the reconfirmation offer must
include the following conditions:
(1) The prospectus contained in the post-effective
amendment will be sent to each investor whose
securities are held in the escrow account within five
business days after the effective date of the post-effective
amendment;
(2) Each investor will have no fewer than 20, and no more
than 45, business days from the effective date of the
post-effective amendment to notify the Company in
writing that the investor elects to remain an investor;
<PAGE>
(3) If the company does not receive written notification
from any investor within 45 business days following the
effective date, the pro-rata portion of the deposited
funds held in the escrow account on such investor's
behalf will be returned to the investor within five
business days by first class mail or other equally
prompt means;
(4) The acquisition(s) will be consummated only if a
minimum number of investors representing 80% of the
offering proceeds elect to reconfirm their investments;
(5) If a consummated acquisition(s) has not occurred within
18 months from the date of this Prospectus, the
deposited funds held in the escrow account shall be
returned to all investors on a pro-rata basis within
five business days by first class mail or other equally
prompt means.
This Prospectus serves as the prospectus required pursuant
to Rule 419 for investors in the Offering to consider
reconfirming their investment in the Company as a result of the
Company's proposed Acquisition.
Release of Deposited Securities and Deposited Funds
The deposited funds and deposited securities may be released
to the Company and the investors, respectively, after the escrow
agent receives a signed representation from the Company, together
with other evidence acceptable to the escrow agent that the
requirements of paragraphs (e)(1) [that a post-effective
amendment has been filed disclosing information relative to the
acquisition, which acquisition must be for a business or net
assets, with a value of at least 80% of the maximum gross of the
proceeds of the Offering] and (e)(2) [setting forth terms how a
purchaser must confirm his investment or he will have been deemed
not to remain an investor] of Rule 419 have been met, and (ii)
the escrow agent receives a signed representation that the
acquisition has been consummated.
Selected Financial Information
The Company has no operating history and has had no revenues
through the date of this Prospectus. Other financial information
is contained in the financial statements of the Company and
Cyberia, as well as pro forma financial information, which are
included elsewhere in this Prospectus.
INTRODUCTION
NW Venture Corp. (the "Company") was incorporated under
the laws of the State of Delaware on February 24, 1994 for the
purpose of creating a corporate vehicle to seek, investigate and,
if such investigation warrants, acquire an interest in business
opportunities presented to it by persons or firms who or which
desire to employ the Company's funding in
<PAGE>
their business or to seek the perceived advantages of a publicly-
held corporation. In October 1995, the Company completed an initial
public offering (the "Offering") of 500,000 shares of its Common
Stock at a price of $.10 per share pursuant to a Registration Statement
declared effective by the Securities and Exchange Commission on June 30,
1995. In May 1996, the Company executed an agreement with
Cyberia, Inc. a California corporation ("Cyberia"), and its
shareholders to acquire all of the issued and outstanding shares
of capital stock of Cyberia in exchange for 25,500,000 shares of
Common Stock of the Company (the "Acquisition").
The Company's offices are located at 501 S.E. Columbia
Shores Boulevard, #350, Vancouver, Washington 98661. Its
telephone number is (360) 737-6800.
RISK FACTORS
The securities subject of this Reconfirmation Offering are
speculative and involve a high degree of risk. Accordingly, in
analyzing this Reconfirmation Offering, investors should
carefully consider the following factors relating to the Company
and Cyberia.
1. Limited History of Operations. Cyberia, formed in
February 1994, has had a limited history of operations. The
likelihood of success of Cyberia must be considered in light of
the risks, expenses, difficulties and delays frequently
encountered in connection with the operation and development of a
business in its early stages. There is, therefore, nothing at
this time upon which to base an assumption that the Cyberia
business will prove successful, and there is no assurance that it
will be able to operate profitably. (See "Business").
2. Dependence on Key Suppliers (Composers). Cyberia's
success depends in part on members of the creative team. The loss
of services of one or more of these key suppliers could have a
material adverse affect on its business or results of operations.
Cyberia believes that its future success will depend upon its
ability to attract, motivate and retain qualified personnel with
the requisite musical talent and technical expertise.
Competition for such personnel is intense. The inability to hire
and retain quality personnel could have a material adverse effect
on Cyberia's business or results of operations.
3. Competition. The markets for Cyberia's services are
intensely competitive and characterized by significant price
competition. Cyberia has a large number of competitors which
range from large national and international concerns to small
owner/operator shops. In addition, there are numerous companies
that compete in the low end and mid price range of the music
production market. Many of the competitors have the advantage of
a larger installed customer bases than Cyberia. Many potential
customers in Cyberia's target markets are often reluctant to
commit significant resources to replace their current supplier,
despite increased creative ability and technological advantages
which management of Cyberia believes it offers. Furthermore,
Cyberia competes with licensors of pre-recorded music who are
able to license their products for a lower price than creating
original music. As a result of the above factors, there can be
no assurance that Cyberia will compete successfully in the
future.
<PAGE>
Cyberia believes that its ability to compete depends on
elements both within and outside its control including the
quality of the creative team, success and timing of marketing
and advertising efforts, competitors performance and price and
availability. There can be no assurance that Cyberia will be
able to compete successfully with respect to these factors. In
addition, there can be no assurance that Cyberia will
successfully differentiate its services from the services of its
competitors or that the marketplace will consider Cyberia's
services to be superior to competing services. Moreover,
competitors may introduce additional services that are
competitive with those of Cyberia, and there can be no assurance
that Cyberia's services would compete effectively with such
services. Although Cyberia believes that its music production
services has certain creative and technological advantages over
its competitors, maintaining such advantages will require
continued investment by Cyberia in sales and marketing and
customer service and support. There can be no assurance that
Cyberia will have sufficient resources to be able to maintain
such competitive advantages.
4. Fluctuations in Quarterly Operating Results. Cyberia's
quarterly operating results fluctuate from quarter to quarter.
Quarterly projections are often sidelined due to circumstances
beyond Cyberia's control.
5. Dependence on Key Employees. Cyberia's success
depends, in part, on its ability to retain key management and
creative employees, including, Hans Zimmer, Jay Rifkin and Mark
S. Levy. The loss of services of one or more of these key
employees could have a material adverse effect on Cyberia.
Management further believes that Cyberia's success is dependent
upon its continued ability to attract and retain highly skilled
creative, management and sales and marketing personnel. The
Company believes that it will need to hire additional management
staff in order to maintain and enhance current business levels.
Competition for such personnel is intense, and there can be no
assurance that Cyberia will attract, assimilate, and retain
personnel with the combination of skills and attributes necessary
to execute Cyberia's strategy. Moreover, there can be no
assurance that employees will not leave the employ of Cyberia and
compete against it, or that the Cyberia's contractors or
consultants will not perform services for competitors of Cyberia.
6. Management of Growth. Cyberia's ability to manage its
growth, if any, will require it to continue to improve and expand
its management, operational and financial systems and controls.
If management is unable to manage growth effectively, its
business and results of operations will be adversely affected.
In the normal course of business, management evaluates potential
acquisitions of businesses, products and technologies that could
complement or expand Cyberia's business. To date, Cyberia has
not made any acquisitions. In the event management were to
identify an appropriate acquisition candidate, there is no
assurance that management would be able to successfully negotiate
the terms of any such acquisition or integrate such acquired
business, products or technologies into Cyberia's existing
business and operations. Furthermore, the integration of an
acquired business could case a diversion of management time and
resources. There can be no assurance that a given acquisition,
when consummated, would not materially adversely affect Cyberia's
business and results of operations.
<PAGE>
7. Business Interruptions and Dependence on a Single
Facility. Cyberia's primary operations, including creative,
recording, management information systems, customer service,
distribution and general administration are housed in a single
facility in Santa Monica, California. Any disruption of
Cyberia's day to day operations could have a material adverse
affect upon its business. There can be no assurance that a fire,
flood, earthquake or other disaster affecting Cyberia's facility
in Santa Monica would not disrupt these functions. Any
significant damage to this facility would have a material adverse
affect on Cyberia's business and results of operations.
8. Additional Conflicts of Interest. All of the Company's
proposed officers and directors are involved in various business
activities. With respect thereto, they are or may become
officers, directors, controlling shareholders and/or partners of
other entities engaged in a variety of businesses, similar and
dissimilar to the business of the Company. Because of these
affiliations, there are potential conflicts of interest in their
acting as officers and directors of the Company. To the extent
the Company's officers and directors engage in such other
activities, they will have possible conflicts of interest in
directing opportunities to other companies, entities or persons
with which they are or may be associated or have an interest,
rather than direct such opportunities to the Company. Such
potential conflicts of interest include, among other things,
time, effort and corporate opportunity involved in their
participation in other business transactions. Since only
limited policies have been established for the resolution of such
a conflict, the Company may be adversely affected should they
choose to place their other business interests before those of
the Company. No assurance can be given that such potential
conflicts of interest will not cause the Company to lose
potential opportunities. Additional conflicts of interest and
non arm's-length transactions may also arise in the future in the
event the Company's officers and directors are involved in the
management, or are stockholders, of any company which the Company
may transact business. (See "Management - Potential Conflicts of
Interest and Other Blank Check Offerings").
9. Limitation on Liability of Directors. The Company's
Certificate of Incorporation provides that a director of the
Company will not be personally liable to the Company or its
shareholders for monetary damages resulting from breaches of his
fiduciary duty of care as a director, including breaches which
constitute gross negligence. As a result, the rights of the
Company and its shareholders to obtain monetary damages for acts
or omissions of directors will be more limited than they would be
in the absence of such provision. The provision would not apply
to a violation of a director's responsibility under the Federal
securities laws.
10. No Full-Time Management. Each of the Company's
proposed officers and directors will be devoting only a portion
of his or her working time to the affairs of the Company. The
amount of time which the officers and directors of the Company
are able to devote to Company business may be inadequate to
properly attend to Company business.
11. Offering Conducted in Accordance With Rule 419. The
Company's Offering and this Reconfirmation Offering are being
conducted in accordance with the Commission's Rule
<PAGE>
419 which was adopted to strengthen the regulation of securities
offerings by "blank check" companies, which Congress has found
to have been common vehicles for fraud and manipulation in the
penny stock market. The Company is a "blank check" company and
therefore is subject to Rule 419. Accordingly, investors in the Offering
receive the substantive protection provided by Rule 419. Rule 419
requires that the securities to be issued and the funds received
in a "blank check" offering be deposited and held in escrow
account until an acquisition meeting specific criteria is
completed. Before the acquisition can be completed and before
the funds (except for an amount up to 10% of the deposited funds)
and securities can be released, the "blank check" company is
required to update its registration statement with a post-effective
amendment and, after the effective date therefor, the
"blank check" company is required to furnish investors with a
prospectus (which forms a part of the post-effective amendment to
its registration statement) containing specified information,
including a discussion of the business and the audited financial
statements of the proposed acquisition candidate. According to
the Rule, the investors must have no fewer than 20 and no more
than 45 business days from the effective date of the post-effective
amendment to decide whether to remain an investor or
require the return of their investment funds. Unless a sufficient
number of investors elect to remain investors, all of the
deposited funds in the escrow account must be returned to all
investors and none of the securities will be issued. Rule 419
further provides that if the "blank check" company does not
complete an acquisition meeting the specified criteria within 18
months of the date of this Prospectus, all of the deposited funds
must be returned to investors. Accordingly, there is a risk that
investors may have their funds tied up for up to 18 months,
without the ability to use them, and have them returned at the
end of that time without interest. This Prospectus serves as the
prospectus required pursuant to Rule 419 for investors in the
Offering to consider reconfirming their investment in the Company
as a result of the Company's proposed Acquisition. (See
"Prospectus Summary - Investors Rights to Reconfirm Investment
Under Rule 419").
12. Failure of Sufficient Number of Investors to Reconfirm
Investment. Unless investors representing 80% of the maximum
offering proceeds elect to remain investors, the consummation of
the proposed Acquisition would be prevented and all of the
deposited funds in the escrow account must be returned to all
investors and none of the securities will be issued. Rule 419
further provides that if the blank check company does not
complete an acquisition meeting specified criteria within 18
months of the effectiveness of the initial registration statement
(June 30, 1995), all of the deposited funds in the escrow account
must be returned to investors.
13. Lack of Public Market for Securities. At the present
time, there is no public market for the securities of the
Company. It is unlikely that a regular trading market will
develop at the conclusion of the Reconfirmation Offering, or if
developed, that such market will be sustained, or that the
securities purchased by the public in the Offering may be resold
at their original offering price or at any other price. Any
market for the securities that may develop will, in all
likelihood, be a limited one. While the Company intends to
timely file periodic reports under the Securities Exchange Act of
1934 for so long as it may be required to do so, no assurances
are given that the Company will continue to file such reports on
a voluntary basis. In such event, the Company may, although no
assurances are given, furnish to interested
<PAGE>
broker-dealers, if any, the information specified under Rule 15c2-11
which would allow them, in their sole discretion, to make a market in the
Company's securities. In any event, due to the low price of the
securities, many brokerage firms may choose not to engage in
market making activities or effect transactions in such
securities. Purchasers of the securities may have difficulties
in reselling such securities and many banks may not grant loans
utilizing such securities as collateral. Further, the Company's
securities will not be eligible for listing on the Nasdaq Stock
Market upon completion of this Reconfirmation Offering.
14. Cumulative Voting and Pre-Emptive Rights. There are no
pre-emptive rights in connection with the Company's Common Stock.
Therefore, the shareholders purchasing in the Offering will be
further significantly diluted in their percentage ownership of
the Company in the event the Company completes the proposed
Acquisition and issues 25,500,000 shares of its Common Stock to
the current shareholders of Cyberia. Cumulative voting in the
election of directors is not allowed. Accordingly, the holders
of a majority of the shares of Common Stock, present in person
or by proxy, will be able to elect all of the Company's Board of
Directors. In such event, Martin Rifkin (see "Management") and
the current shareholders of Cyberia will own approximately 98% of
the shares then outstanding and will be in a position to elect
all of the Company's Board of Directors and otherwise control the
Company.
15. Dilution. The present sole officer and director of the
Company acquired his Common Stock at a cost substantially less
than that paid by the public investors. Further, there will be
immediate substantial dilution of the public's investment in the
Company in that the net tangible book value of the Common Stock
after the Reconfirmation Offering and Acquisition will be
substantially less than the public price. (See "Dilution").
16. Determination of Offering Price. The public offering
price of the shares was arbitrarily determined by the Company
and has no relationship to book value, assets, earnings or any
other accepted criteria of value. Accordingly, the price should
not be considered as an indication of the actual value thereof or
any future value.
17. Shares Available for Resale. All of the Company's
presently outstanding Common Stock may be deemed "restricted
securities" and may be sold in compliance with Rule 144 adopted
under the Securities Act of 1933, as amended. Rule 144 provides,
in essence, that after a 2-year holding period, the person may
sell the greater of an amount equal to one percent of the
outstanding Common Stock every three months or the average
weekly trading volume for the previous four weeks. After three
years, shareholders who are not affiliates of the Company may
sell their shares without regard to volume limitations and other
requirements. Sales under Rule 144 may have a depressive effect
on the market price of the Company's Common Stock. The first
date on which the resale provisions of Rule 144 was available to
Martin Rifkin, who owns all of the Company's outstanding
"restricted securities" (4,000,000 shares) was April 21, 1996.
18. No Underwriter. The Offering was conducted by the
Company without the assistance of an underwriter. Consequently,
the terms of the Offering were not negotiated,
<PAGE>
but rather merely reflect the determination of the Company's
Management as to the terms required to sell up to $50,000 of the
Company's securities to the public. Because no underwriter was
utilized, there can be no assurance that any broker-dealer will be
willing to make a market in the Company's securities.
19. Dividends. At the present time the Company does not
anticipate paying dividends on its Common Stock in the
foreseeable future. Any future dividends will depend on
earnings, if any, of the Company, its financial requirements and
other factors.
20. Issuance of Shares in Acquisition. The Certificate of
Incorporation of the Company authorizes the issuance of a
maximum of 50,000,000 shares of Common Stock, $.0001 par value.
The proposed Acquisition, if completed by the Company, will
result in the issuance of an additional 25,500,000 shares of
Common Stock and will result in substantial dilution in the
percentage of the Company's Common Stock held by the Company's
then-shareholders. Moreover, the Common Stock to be issued in
the Acquisition has been valued on an arbitrary or non arm's-length basis
by management of the Company, resulting in an
additional reduction in the percentage of Common Stock held by
the Company's then-shareholders.
21. Offering is Subject to Penny Stock Rules. The
Company's shares are subject to Securities and Exchange
Commission regulations which impose additional sales practice
requirements upon broker/dealers. Such regulations may affect
the ability of purchasers in the Offering to sell their shares in
the secondary market. (See "Plan of Distribution").
22. Return of Investment to Purchasers. Pursuant to
applicable rules of the Securities and Exchange Commission, all
funds from the sale of securities will be placed in an escrow
account. Pursuant to Rule 419, the Company was permitted to
withdraw 10% of the gross offering proceeds (10% of $50,000, or
$5,000) to pay certain expenses. The balance is being held in
escrow until a potential merger/acquisition is found, at which
time all shareholders have the option to withdraw their
proportionate share of the balance, and return their shares as
provided for in this Prospectus. This may result in substantial
reduction of capital to the Company. (See "Plan of
Distribution").
23. Limitations on Sale and Resale of the Company's
Securities. Many states have enacted special laws pertaining to
initial and secondary trading of the securities of blank check
companies. In many cases the sale and resale of securities of a
blank check company is restricted or even prohibited, so that the
shares being offered would not be eligible for trading in such
states until after the consummation of a merger or acquisition.
The shares have been registered or qualified for sale only in the
State of New York. Trading in the shares after the
Reconfirmation Offering would be limited to residents of the
State of New York and the District of Columbia (where no
securities registration provisions exist) until such time as the
shares may lawfully be traded pursuant to registration,
qualification, or applicable exemption, or subsequent to
consummation of the Acquisition. Until such time as the shares
may lawfully be traded in additional jurisdictions, investors
must assume that the shares may be sold or resold only in New
<PAGE>
York and in the District of Columbia. Upon the Company's
completion of the Acquisition, its securities may become eligible
for sale in additional states, if sales are made in compliance
with applicable state securities laws.
24. Prohibition Pursuant to Rule 15g-8 Under Exchange Act
to Sell or Offer to Sell Shares in Rule 419 Account. According
to Rule 15g-8 under the Exchange Act, it shall be unlawful for
any person to sell or offer to sell the shares (or any interest
in or related to the shares) held in the Rule 419 account other
than pursuant to a qualified domestic relations order. As a
result, contracts for sale to be satisfied by delivery of the
deposited shares (e.g., contracts for sale on a when, as, and if
issued basis) are prohibited. Such rule prohibits sales of other
interests based on the shares, whether or not physical delivery
is required.
DILUTION
As of March 31, 1996, there were 4,500,000 shares of the
Company's Common Stock outstanding having a net tangible book
value of $42,490 or approximately $.01 per share. Net tangible
book value is the net tangible assets of the Company (total
assets less total liabilities and intangible assets). (See
"Financial Statements"). The net tangible book value of the
Company as of March 31, 1996 on an unaudited pro forma combined
basis taking into account the acquisition of Cyberia and issuance
of 25,500,000 shares of Common Stock to the present shareholders
of Cyberia was $149,001 or approximately $.005 per share (based
on 30,000,000 outstanding shares of Common Stock). The result
will be an immediate dilution to present shareholders of the
Company, including a substantial dilution to the public
investors. The following table illustrates this dilution:
<TABLE>
<CAPTION>
<S> <C>
Public offering price per share ...... $.10
Net tangible book value
per share.............................. $.01
Pro forma net tangible book value
per share(1)............................ $.005
</TABLE>
(1) Assumes the acquisition of Cyberia and issuance of
25,500,000 shares of Common Stock to the present
shareholders of Cyberia.
DIVIDEND POLICY
The Company has not paid any dividends on its Common Stock.
The payment of future dividends will rest with the discretion of
the Board of Directors, and will depend upon the Company's
earnings, if any, capital requirements, financial condition and
other factors. The
<PAGE>
Company presently believes that in the foreseeable future, all of
its earnings, if any, will continue to be retained for use in its
business and, therefore, there is no assurance when, or if ever,
dividends may be paid.
USE OF PROCEEDS
In connection with the Offering, the Company raised gross
proceeds of $50,000. Rule 419 requires that the gross offering
proceeds, less (i) deduction for underwriting compensation and
underwriting expenses (for which there were none in the Offering)
and (ii) an amount up to 10% of the deposited funds, remain in
escrow and may not be released until an acquisition meeting
certain specified criteria has been made and a sufficient number
of investors reconfirm their investment in accordance with the
procedures set forth in Rule 419. In accordance therewith, upon
completion of the Offering, $5,000 (10% of the proceeds) was
released to the Company. As a result, $45,000 of the offering
proceeds remain in escrow.
In connection with the application of the gross proceeds
disbursed to date to the Company ($5,000), such amount was used
to pay certain of the offering expenses (estimated to be an
aggregate of $14,000 including but not limited to filing fees,
printing expenses, legal and accounting fees and other
miscellaneous expenses). None of such proceeds was paid to the
Company's sole officer and director, his affiliates or
associates, either directly or indirectly. The net proceeds of
the Offering, therefore, after deducting estimated expenses
($5,000 of which has been paid) are expected to be $36,000.
It is intended that the net proceeds will be expanded
approximately as follows after successful completion of the
Reconfirmation Offering:
<TABLE>
<CAPTION>
Approximate
Approximate Percentage
Amount of Net Proceeds
<S> <C> <C>
General Office Expenses (1) $ 2,000 5.6%
Repayment of Loans (2) 4,607 12.8%
Expenses incurred in
connection with the
identification and
evaluation of business
opportunities; and
structuring and completion
of acquisitions
or mergers:
Professional Services
(legal and accounting)(3) 8,000 22.2%
Travel Expenses 3,000 8.3%
Working Capital(4)(5) 18,393 51.1%
Total $36,000 100.0%
</TABLE>
<PAGE>
(1) Includes telephone, postage, supplies, copying and
other miscellaneous office expenses.
(2) In April 1994, the Company borrowed $4,000 from Martin
Rifkin in order to pay certain operating expenses of the
Company and expenses of this offering. Such loans are due
on demand and bear interest at 7% per annum. As of June 30,
1996, a total of $4,607 is owing to Mr. Rifkin representing
principal of $4,000 and accrued interest of $607.
Additional interest to be accrued after June 30, 1996 shall
be repaid out of the proceeds allocated to working capital.
(3) Includes expenses associated with particular merger or
acquisition transactions such as preparing post-effective
amendments, Form 8-K's, merger agreements and other related
reports and documents.
(4) The Company expects that this money will be available to be
used in connection with the working capital needs of the
business the Company acquires.
(5) The Company may, prior to completion of the Reconfirmation
Offering, borrow additional funds, not to exceed an
aggregate of $5,000, from the Company's sole officer and
director, or his affiliates, in order to pay expenses of the
Company. Any such borrowings will be repaid out of the
proceeds allocated to working capital.
The Company does not intend paying a cash finder's fee from
the offering proceeds to any person or entity in connection with
any acquisition.
None of the proceeds of the Offering will be used to make
any loans to the Company's promoters, management or their
affiliates or associates or any of the Company's shareholders.
Pending the utilization of the proceeds, Management intends
to make temporary investment in bank certificates of deposit,
interest-bearing savings accounts, prime commercial paper or
government obligations. Such investment in interest-bearing
assets, if continued for an excessive period of time within the
definition of the Investment Company Act of 1940, could subject
the Company to classification as an "investment company" under
the Act and to registration and reporting requirements
thereunder.
CAPITALIZATION
The capitalization of the Company, as of the date of
this Prospectus, and as adjusted to give effect to the issuance
of shares to the shareholders of Cyberia upon completion of the
proposed Acquisition, is as follows:
<PAGE>
<TABLE>
<CAPTION>
Amount to be
Amount Outstanding
Title of Class Authorized Outstanding After Acquisition
<S> <C> <C> <C>
Common stock, 50,000,000 4,500,000 30,000,000
par value
$.0001
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with
the Financial Statements and Notes thereto and is qualified in
its entirety by the foregoing and by other more detailed
financial information appearing elsewhere in this Prospectus.
NW Venture Corp.
The Company is in the development stage as of March 31, 1996
and completed an initial public offering (the "Offering") in
October 1995 pursuant to a Registration Statement declared
effective by the Securities and Exchange Commission on June 30,
1995 and sold 500,000 shares of its Common Stock, $.0001 par
value, at a price of $.10 per share. The Offering was conducted
directly by the Company without the use of a professional
underwriter. The Company is a "blank check" company subject to
Rule 419 of Regulation C which was organized to obtain funding
from persons purchasing in the Offering in order to provide a
vehicle to take advantage of business opportunities which
management believes arise from time to time.
Except for 10% of the deposited funds (10% of $50,000 or
$5,000) which was released under Rule 419 upon completion of the
Offering, the deposited funds and the securities to be issued to
subscribers are remaining in escrow and may not be released until
an acquisition meeting certain specified criteria has been made
and a sufficient number of subscribers reconfirmed their
investments in accordance with the procedure set forth in Rule
419.
The Company had no revenues for each of the years ended
December 31, 1995 and December 31, 1994. The Company had a net
loss of $(385) for the year ended December 31, 1995 as compared
to a net loss of $(220) for the year ended December 31, 1994. In
addition, at December 31, 1995, the Company had total assets of
$47,377 (which amount includes $45,342 of deposited funds being
held in escrow pursuant to Rule 419) and total liabilities of
$4,474.
For the three months ended March 31, 1996 and March 31,
1995, the Company had no revenues. The Company had a net loss of
$(130) for the three months ended March 31, 1996 as compared to a
net loss of $(236) for the three months ended March 31, 1995. In
addition, at March 31, 1996, the Company had total assets of
$47,317 (which amount includes $45,867 of deposited funds being
held in escrow pursuant to Rule 419) and total liabilities of
$4,544.
<PAGE>
In May 1996, the Company executed an agreement with Cyberia,
Inc., a California corporation ("Cyberia"), and its shareholders
to acquire all of the issued and outstanding shares of capital
stock of Cyberia in exchange for 25,500,000 shares of Common
Stock of the Company (the "Acquisition"). Assuming successful
completion of this Reconfirmation Offering and the Acquisition,
the business of Cyberia shall be the sole business of the
Company.
Cyberia, Inc.
Cyberia was incorporated in the State of California in
February 1994. Its business primarily consists of creating
original music for television commercials. Cyberia has retained
the services of various composers to create original music for
use by the advertising industry to promote products and services.
Results of Operations
Net sales for the year ended December 31, 1995 increased to
$488,237 as compared to net sales for the year ended December
31, 1994 of $93,307, an increase of $394,930. This increase is
primarily due to Cyberia's relative inactivity during 1994
subsequent to its incorporation in February 1994.
Cyberia reported an operating loss of $(45,030) for the year
ended December 31, 1995 as compared to net income of $14,055 for
the year ended December 31, 1994. This change resulted primarily
from the increase in total expenses in 1995 of $529,445 compared
to total expenses of $78,452 in 1994 when Cyberia was relatively
inactive. In addition, in 1995, Cyberia incurred various costs
and expenses normally associated with a start-up business.
Sales for the three months ended March 31, 1996 increased to
$306,859 as compared to sales for the three months ended March
31, 1995 of $94,500, an increase of $212,359. Cyberia reported
net income of $137,165 for the three months ended March 31, 1996
as compared to net income of $19,909 for the three months ended
March 31, 1995, an increase of $117,256. This change resulted
primarily from an increase in sales in the first quarter of 1996
compared to the first quarter of 1995 when Cyberia emerged from a
relatively inactive 1994. Total expenses for the three months
ended March 31, 1996 were $169,362 as compared to $73,526 for the
three months ended March 31, 1995. This change is primarily due
to costs associated with the increase in sales for the first
quarter of 1996 as compared to the comparable 1995 period.
Liquidity and Capital Resources
At March 31, 1996, Cyberia had working capital of $96,994
compared to a working capital deficit of $(35,453) at December
31, 1995. The ratio of current assets to current liabilities was
approximately 2.93 to 1 at March 31, 1996 compared to 1 to 1.22
at December 31, 1995. At March 31, 1996, Cyberia had
stockholders' equity of $107,189 compared to a stockholders'
deficiency of $(29,975) at December 31, 1995. This increase in
working capital
<PAGE>
and stockholders equity is primarily due to an increase in cash
flow from operating activities achieved during the first quarter
of 1996, resulting in an increase in cash at March 31, 1996,
reduction in accounts payable and accrued expenses and an
elimination of deferred income of $148,157.
To date, Cyberia has funded its activities principally from
cash flow generated from operations. It is anticipated that
Cyberia's continuing cash flow from operations will be sufficient
to meet its cash and working capital requirements at least
through 1997.
BUSINESS
Introduction
The Company was organized under the laws of the State of
Delaware on February 24, 1994. The Company was organized for
the purpose of creating a corporate vehicle to seek, investigate
and, if such investigation warrants, acquire an interest in
business opportunities presented to it by persons or firms who or
which desire to employ the Company's funding in their business or
to seek the perceived advantages of a publicly-held corporation.
In October 1995, the Company completed an initial public offering
(the "Offering") of 500,000 shares of its Common Stock at a price
of $.10 per share pursuant to a Registration Statement declared
effective by the Securities and Exchange Commission on June 30,
1995. In May 1996, the Company executed an agreement with
Cyberia, Inc. a California corporation ("Cyberia"), and its
shareholders to acquire all of the issued and outstanding shares
of capital stock of Cyberia in exchange for 25,500,000 shares of
Common Stock of the Company (the "Acquisition").
Assuming successful completion of this Reconfirmation
Offering and the Acquisition, the business of Cyberia shall be
the sole business of the Company.
Background and History of Cyberia
Cyberia was incorporated in the State of California in
February 1994 by Grammy Award winning producer Jay Rifkin and
Academy Award winning composer Hans Zimmer to create original
music for television commercials. Cyberia has retained the
services of various composers to create original music for use by
the advertising industry to promote products and services. Such
original music is produced, recorded and mixed at the recording
studio of Media Ventures, which is operated by Jay Rifkin and
Hans Zimmer located in Santa Monica, California. To date, the
music created and produced by Cyberia has played a role in the
production in television advertising for many national and
international products and services including General Motors,
Coca-Cola, Lincoln Mercury, Jaguar, Black & Decker, AT&T, MCI,
Motorola, American Express, Duracell, and Philip Morris.
<PAGE>
Overview of Business and Production Process
The services of Cyberia are retained by either a commercial
production company or advertising agency. In connection
therewith, Cyberia has retained the services of sales
representatives who offer Cyberia's services in specific
territories. The sales representative will explain the services
of Cyberia by showing the potential client a demonstration video
reel, featuring commericals that Cyberia has scored, that are
representative of the quality of music composed and the
production standards employed by Cyberia. If the agency is
interested in the work of Cyberia, the sales representative will
arrange a meeting, usually by conference call, with the Executive
Music Producer and the Agency Producer to discuss generally the
musical style required. The Executive Producer will negotiate
the production budget and check schedules of the desired
composer. The Executive Producer will then submit to the Agency
Producer, a written bid outlining all the costs involved
producing a piece of original music for the agency. The Agency
Producer will then evaluate the bid and when accepted, submit to
Cyberia a purchase order agreeing to the costs to be incurred.
Cyberia will then invoice the agency for one-half of the above
budget prior to the beginning of the project.
A meeting will then be arranged, by conference call or by
personal meeting, with the Executive Music Producer, the composer
and the advertising agency creative team. A discussion will
usually entail the commerical's visual style, meaning and target
demographies so that Cyberia has a clear understanding of the
musical direction. After the commercial is shot and edited, the
composer will receive a copy of the commerical on video tape.
The composer will have a room setup with his composing equipment,
keyboards, guitars, samplers and effects gear. The composer will
then write a piece of music based upon the input of the client
and a meeting will be held to play the new music for the client.
After the music is finally approved by the agency, it may also
need the approval of the agency's client. Upon receipt of the
final approval, the music is recorded to digital audio tape,
musicians are hired to play and the music is mixed by an audio
engineer. The final music is delivered by the agency producer on
DAT (high quality digital audio tape). The invoice for the
remainder of the approved budget is then forwarded to the client.
Revenues and Clients
Cyberia's revenues to date have primarily derived from
production fees. Cyberia will generally realize 50% of the
production fees upon a contract award and the final 50% is
normally received within 60 days of the final invoice.
Cyberia's clients are primarily major domestic and
international corporations. During the year ended December 31,
1995, Cyberia did business with three customers whose sales
comprised approximately 10%, 19% and 35%, respectively, in net
sales. Cyberia does not, however, believe the loss of any single
customer would have a material adverse effect on its operations.
<PAGE>
Competition
The markets for Cyberia's services are intensively
competitive and characterized by significant price competition.
Cyberia has a large number of competitors which range from large
national and international concerns to small owner/operator
shops. In addition, there are numerous other entities which
compete in the low end and mid-price range in the music
production market. Many of the competitors have the advantage of
larger installed customer bases then Cyberia. Many potential
customers in Cyberia's target markets are often reluctant to
commit significant resources to replace their current suppliers,
despite increased creative ability and technological advantages
which Cyberia believes it provides. In addition, Cyberia
competes with licensors of pre-recorded music who are able to
license their products at a lower price than creating original
music. As a result of the above factors, there can be no
assurance that Cyberia will compete successfully in the future.
Cyberia believes that its ability to compete depends on
elements both within and outside its control including the
quality of the creative team, success and timing of marketing and
advertising efforts, the performance of competitors and price and
availability. There can be no assurance that Cyberia will be
able to compete successfully with respect to these factors. In
addition, there can be no assurance that Cyberia will
successfully differentiate its services from the services of its
competitors or that the marketplace will consider Cyberia's
services to be superior to the competing services. Moreover,
Cyberia's competitors may introduce additional services that are
competitive with those of Cyberia, and there can be no assurance
that Cyberia's services can compete effectively with such new
services. Although the management of Cyberia believes that its
music services have certain creative and technological advantages
over its competitors, maintaining such advantages will requires
continued investment by Cyberia in sales and marketing and
customer service and support. There can be no assurance that
Cyberia will have sufficient resources to be able to maintain
such competitive advantages.
Employees
Cyberia currently employs eight persons, four of whom are
the officers of Cyberia, two of whom are technical staff and two
of whom are office administrators. In addition, Cyberia has
obtained the services of outside sales representatives to market
Cyberia's services, and composers to create original music for
Cyberia's projects.
Property
Cyberia maintains its executive offices pursuant to an oral
agreement, on a month-to-month basis, in office space provided by
Media Ventures, which is owned by Jay Rifkin and Hans Zimmer (see
"Management"). Such offices are located at 1547 14th Street,
Santa Monica, California 90404. Cyberia believes these premises
are suitable for its present needs and does not anticipate the
need to identify and lease any other premises.
<PAGE>
MANAGEMENT
Directors and Executive Officers
Upon successful completion of the proposed Acquisition, the
Company's Directors and Executive Officers are expected to be as
follows:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Jay Rifkin 41 President, Chief Executive Officer,
Treasurer and Director
Hans Zimmer 39 Vice President, Secretary and
Director
Mark S. Levy 29 Executive Vice President, General
Manager
Elisa M. Perlman 29 Financial Manager
Martin Rifkin 35 Director
</TABLE>
All officers and directors are expected to serve for a term
of one year or until their successors are duly qualified and
appointed.
Jay Rifkin has been President, Chief Executive Officer and a
Director of Cyberia since its inception in February 1994. Since
1989, Mr. Rifkin has been President of Mojo Music, Inc. which is
a general partner of Media Ventures, which operates a recording
studio in Santa Monica, California. Mr. Rifkin is an award
winning music producer and engineer having received a Grammy
Award as Producer for Best Children's Album and American Music
Awards for Producer of Best Album and Best Soundtrack. Jay
Rifkin is the brother of Martin Rifkin.
Hans Zimmer has been Vice President and a Director of
Cyberia since its inception in February 1994. Mr. Zimmer has
been President of Remote Control Productions, Inc., which is a
general partner of Media Ventures since 1989. Mr. Zimmer is an
award winning composer having received an Academy Award and
Golden Globe for Best Original Score for "The Lion King". He
also received a Grammy Award as Producer of Best Children's Album
and Best Instrumental Arrangement with Accompanying Vocalist for
"The Lion King". Mr. Zimmer also received an Academy Award
Nomination for Best Original Score for the film "Rainman". He
has composed the scores for numerous other major motion pictures
including but not limited to "Black Rain", "Driving Miss Daisy",
"Bird on a Wire", "Days of Thunder", "Pacific Heights", "Thelma &
Louise", "Crimson Tide" and "Nine Months".
Mark S. Levy has been Executive Vice President and General
Manager of Cyberia since its inception in February 1994. Mr.
Levy has also served as General Manager of Media
<PAGE>
Ventures since June 1993. Previously thereto, and from 1992 to
1993, he served as Production Auditor for Propaganda Films in
Los Angeles. Mr. Levy also co-founded an independent record
company and served as a Financial Analyst at Geffen Records
from 1991 to 1992.
Elisa M. Perlman has been Financial Manager of Cyberia since
its inception in February 1994. Ms. Perlman has also served as
Financial Manager of Media Ventures since June 1993. Previously,
from 1991 to 1993, she worked as the accountant for the business
management firm Savitsky, Satin and Geibelson, who at the time
were the business managers for Hans Zimmer, Jay Rifkin and Media
Ventures. She received her C.P.A. in 1991, while working as a
senior in the tax and audit departments at Kenneth Leventhal and
Company.
Martin Rifkin has been President, Secretary, Treasurer
and a Director of the Company since its inception. Upon
completion of the proposed Acquisition, it is expected that he
will resign as President, Secretary and Treasurer of the Company
and remain a Director. Since December 1985, Mr. Rifkin has been
a Director of Nutrition Now Incorporated ("Nutrition Now"), a
company which manufactures and markets nutritional supplements
and, since November 1987, he has been its Secretary and Treasurer
and since February 1992, its President. Also, from August 1988
to February 1992, he was its Vice President. In addition, Mr.
Rifkin has been, since April 1985, Vice President and a Director
of Nova International Films, Inc. ("Nova"), a company which
principally has been engaged in the business of financing and
producing motion pictures. Such company is at the present time
relatively inactive. In addition, Mr. Rifkin has been Treasurer
and Director of Profit Merchandising Corp. ("PMC") since
September 1983 and Vice President since June 1985. PMC is
engaged in the distribution of weatherstripping products. Martin
Rifkin is the brother of Jay Rifkin.
Nutrition Now previously filed reports and other information
with the Commission pursuant to Section 15(d) of the Exchange Act
but filed a Form 15 on September 28, 1990 which suspended its
obligation to file reports with the Commission. Nova is
currently subject and files reports pursuant to Section 15(d) of
the Exchange Act. PMC previously filed under a Regulation A
offering but does not file reports with the Commission. Such
offering was filed with the Commission on February 17, 1984 and
authorized by the Commission to commence as of June 5, 1984.
Executive Compensation
The current sole officer and director (Martin Rifkin) of the
Company has received no cash compensation to date and the Company
has no employment agreement with him. He will receive no
compensation for his services upon completion of this
Reconfirmation Offering; however, he will be reimbursed for
actual expenses incurred in connection with searching out and
investigating merger and acquisition candidates.
The following table sets forth information relating to the
cash compensation paid by Cyberia for the year ended December 31,
1995 to each of Cyberia's highest paid executive officers whose
aggregate cash compensation exceeded $60,000 per annum, and to
all executive officers as a group:
<PAGE>
<TABLE>
<CAPTION>
Name of Individual Capacities in Cash
or Number in Group Which Served Compensation
<S> <C> <C>
Jay Rifkin President, Chief $85,000
Executive Officer
Hans Zimmer Vice President $65,000
All Executive Officers $150,000
as a Group (3 persons)
</TABLE>
The Company does not initially intend to pay Directors for
attending Board of Directors Meetings.
Employment Agreements
Each of Jay Rifkin and Hans Zimmer has entered into an
employment agreement with Cyberia, effective as of February 1994.
Each agreement is for a term of one year, automatically renewable
for successive one year periods unless terminated by either party
as set forth therein, and provides for compensation as determined
by the Board of Directors.
Potential Conflicts of Interest and Other Blank Check Offerings
The proposed business of the Company following the
Acquisition raises potential conflicts of interest between the
Company and its proposed officers and directors. All of the
Company's proposed officers and directors are involved in various
business activities. With respect thereto, they are or may
become officers, directors, controlling shareholders and/or
partners of other entities engaged in a variety of businesses,
similar and dissimilar to the business of the Company. Because
of these affiliations, there are potential conflicts of interest
in their acting as officers and directors of the Company. Such
potential conflicts of interest include, among other things,
time, effort and corporate opportunity involved in their
participation in other business transactions. Since only
limited policies have been established for the resolution of
such a conflict, the Company may be adversely affected should
such individuals choose to place their other business interests
before those of the Company. No assurance can be given that such
potential conflicts of interest will not cause the Company to
lose potential opportunities. Additional conflicts of interest
and non arm's-length transactions may also arise in the future in
the event the Company's officers and directors are involved in
the management, or are shareholders, of any company which the
Company may transact business. Failure by Management to resolve
conflicts of interest in favor of the Company may result in
liability of Management to the Company. Management has and will
continue to have an affirmative obligation to disclose conflicts
of interest to the Company's Board of Directors or shareholders.
<PAGE>
Martin Rifkin has been an officer and director of three
other blank check companies which completed offerings of
securities as follows.
1. Capital Ventures Inc. ("Capital Ventures") - Pursuant
to a registration statement effective as of April 9, 1987,
Capital Ventures in August 1987 completed an initial public
offering with the sale of 1,500,000 units at $.10 per unit
(raising gross proceeds of $150,000) with each unit consisting of
one share of common stock, one A warrant and one B warrant. The
purpose of the offering was to obtain funding from persons
purchasing in the offering in order to provide a vehicle to merge
with or acquire business opportunities. Mr. Rifkin was President
of Capital Ventures from its inception until it acquired Starrett
Trading, Inc. ("Starrett") as of December 11, 1987. In
connection with said acquisition, Capital Ventures issued
15,000,000 shares of previously unissued common stock in exchange
for all of the shares of outstanding stock of Starrett, and Mr.
Rifkin simultaneously resigned as an officer of Capital Ventures.
Mr. Rifkin, who was also a director of Capital Ventures since its
inception, continued to serve as a director. Thereafter, and
pursuant to an agreement dated December 10, 1990, Capital
Ventures reversed the transaction with Starrett as of December
28, 1990 whereby (i) Capital Ventures transferred all of the
previously acquired shares of common stock of Starrett in
exchange for the 15,000,000 shares of common stock of Capital
Ventures previously issued, (ii) Capital Ventures was left with
$25,000 in cash and no liabilities of any kind, and (iii) Mr.
Rifkin resumed the position of President and became Treasurer of
Capital Ventures. In order to preserve its minimal amount of
cash and due to its lack of business activities, Capital Ventures
did not file its periodic reports under the Exchange Act during
the 1991 year. On January 29, 1992, Capital Ventures filed a
Form 15 which suspended its obligation to file reports with the
Commission for the periods commencing January 1, 1992. In May
1992, Capital Ventures entered into a letter of intent to acquire
Hi-Tech Computer Products, Inc. ("Hi-Tech"). On June 11, 1992,
Capital Ventures filed late with the Commission its periodic
reports under the Exchange Act which had been due for the periods
ended December 31, 1990, March 31, 1991, June 30, 1991, September
30, 1991 and December 31, 1991. On June 25, 1992, Capital
Ventures completed the acquisition of Hi-Tech. In connection
with such transaction, Capital Ventures acquired 1,000 shares of
common stock of Hi-Tech (100% of its outstanding securities) in
exchange for 4,250,000 shares of common stock of Capital Ventures
(representing 94% of the then outstanding securities of Capital
Ventures). In addition, in connection with such transaction, Mr.
Rifkin simultaneously resigned as an officer and director. To
Mr. Rifkin's knowledge, Capital Ventures has not filed any
reports for any periods subsequent to December 31, 1991 and is
therefore no longer a reporting company with the Commission.
2. Enterprise Venture Corp. ("Enterprise") - Pursuant to a
registration statement effective as of July 2, 1987, Enterprise
in September 1987 completed an initial public offering with the
sale of 1,466,500 units at $.10 per unit (raising gross proceeds
of $146,665) with each unit consisting of one share of common
stock, one A warrant and one B warrant. The purpose of the
offering was to obtain funding from persons purchasing in the
offering in order to provide a vehicle to merge with or acquire
business opportunities. Mr. Rifkin was President and Director of
Enterprise since its inception until it acquired Equipment
Leasing Services, Inc. ("Equipment Leasing") in December 1987.
<PAGE>
In connection with such transaction, Enterprise acquired all of
the outstanding shares of common stock of Equipment Leasing in
exchange for 2,000,000 shares of previously unissued common stock
of Enterprise. In addition, the then three stockholders of
Equipment Leasing purchased an aggregate of 2,000,000
outstanding shares of common stock of Enterprise from
Enterprise's then officers and directors (including Martin
Rifkin) for $25,000 in cash. In connection with such
transaction, Mr. Rifkin simultaneously resigned as an officer and
director. In addition, Enterprise thereafter changed its name to
Beaver Creek Silver Company, Inc. To Mr. Rifkin's knowledge,
such company has not filed any reports and is no longer a
reporting company with the Commission since February 1990.
3. Mutual Venture Corp. ("Mutual") - Pursuant to a
registration statement effective as of April 3, 1990, Mutual in
June 1990 completed an initial public offering with the sale of
545,000 units (raising gross proceeds of $54,500) with each unit
consisting of one share of common stock, one A warrant and one B
warrant. The purpose of the offering was to obtain funding from
persons purchasing in the offering in order to provide a vehicle
to merge with or acquire business opportunities. Mr. Rifkin was
President, Secretary and Director of Mutual from its inception
until it acquired Nasshorn Sportswear Corp. ("Nasshorn") in
September 1990. In connection with such transaction, Mutual
acquired all of the outstanding shares of common stock of
Nasshorn in exchange for 3,000,000 shares of previously unissued
common stock of Mutual. In addition, in connection with such
transaction, Mr. Rifkin sold 3,250,000 shares of common stock
owned by him in Mutual to certain affiliates of Nasshorn for an
aggregate of $4,000. Also, Mr. Rifkin was retained by Mutual as
a consultant for one year at a total fee of $6,000. In
connection such transaction, Mr. Rifkin simultaneously resigned
as an officer and director of Mutual as of September 1990. To
Mr. Rifkin's knowledge, in June 1991, Nasshorn changed its name
to Onecard Health Systems Corp. ("Onecard"). In addition, to Mr.
Rifkin's knowledge, Onecard has not filed reports and is no
longer a reporting company with the Commission since August 1992.
In addition to the foregoing companies, Mr. Rifkin was
President, Chairman of the Board, director and a principal
stockholder of Complete Capital Corp. ("Complete Capital"), a
blank check company, which filed a Registration Statement with
the Commission in June 1990. Subsequently, Complete Capital
decided to abandon such offering which was never declared
effective by the Commission. Mr. Rifkin may go forward with this
blank check entity in the future.
Certain detailed information and financial data about the
above companies may be obtained by reviewing the registration
statements on file with the Commission, together with other
subsequent filings.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this
Prospectus, the number and percentages (before and after
completion of the proposed Acquisition) of shares of Common Stock
of the Company owned of record and beneficially by each current
<PAGE>
and proposed officer and/or director of the Company and by any
other person who owns and will own upon completion of the
Acquisition more than 5% of the Company's outstanding Common
Stock and by all officers and directors as a group.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Before Acquisition After Acquisition
Name and Address Shares Percent Shares Percent
<S> <C> <C> <C> <C>
Jay Rifkin -0- -0- 12,000,000 40.0%
1547 14th Street
Santa Monica, CA 90404
Hans Zimmer -0- -0- 12,000,000 40.0%
1547 14th Street
Santa Monica, CA 90404
Mark S. Levy -0- -0- 1,500,000 5.0%
1547 14th Street
Santa Monica, CA 90404
Martin Rifkin 4,050,000 90.0% 4,050,000 13.5%
501 S.E. Columbia
Shores Blvd.
#350
Vancouver, WA 98661
All Officers and
Directors 4,050,000 90.0% 29,550,000 98.5%
as a Group (4 Persons)
</TABLE>
CERTAIN TRANSACTIONS
The Company was incorporated on February 24, 1994, under the
laws of the State of Delaware, with an authorized capitalization
of 50,000,000 shares of Common Stock, $.0001 par value each. In
April 1994, the Company issued 4,000,000 shares to Martin Rifkin
for cash consideration of $1,000.
In April 1994, the Company borrowed $4,000 from Martin
Rifkin in order to pay certain operating expenses of the Company
and expenses of this offering. Such loans are due on demand and
bear interest at 7% per annum. The Company intends to repay
these loans from the proceeds of this offering. As of June 30,
1996, a total of $4,607 is owing to Mr. Rifkin representing
principal of $4,000 and accrued interest of $607. (See "Use of
Proceeds").
In May 1996, the Company executed an Agreement and Plan of
<PAGE>
Tax Free Reorganization with Cyberia and the shareholders of
Cyberia pursuant to which upon successful completion of this
Reconfirmation Offering the Company intends to acquire all of the
issued and outstanding shares of capital stock of Cyberia in
exchange for 25,500,000 shares of Common Stock of the Company.
In 1995, Cyberia paid approximately $40,000 to Media
Ventures, a company operated by Jay Rifkin and Hans Zimmer, for
sound mixing and recording services. Cyberia also paid Media
Ventures $18,375 for related overhead costs. As of December 31,
1995, $18,375 is due to Media Ventures for these costs.
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 50,000,000 shares of
Common Stock, par value $.0001. There are currently outstanding
4,500,000 shares. Assuming completion of the proposed
Acquisition, there will be 30,000,000 shares outstanding. The
holders of Common Stock have one vote per share for the election
of Directors, without provision for cumulative voting, and on all
other matters. Thus, holders of more than 50% of the shares
voting for the election of Directors can elect all the
Directors, if they choose to do so. The Common Stock is not
redeemable and has no conversion or preemptive rights. All of
the shares of Common Stock, when issued, will be fully paid and
non-assessable. In the event of liquidation of the Company, the
holders of Common Stock will share equally in any balance of the
corporate assets available for distribution to them after
satisfaction of creditors and the holders of the Company's senior
securities such as debenture holders, if any. The Company may
pay dividends in cash or in securities or other property when and
as declared by the Board of Directors from funds legally
available therefor but has paid no cash dividends on its Common
Stock. The Company presently believes that in the foreseeable
future, all of its earnings, if any, will continue to be retained
for use in its business and, therefore, there is no assurance
when, or if ever, dividends may be paid.
Market for the Company's Common Stock
At the present time, there is no public market for the
securities of the Company. It is unlikely that a regular trading
market will develop at the conclusion of the Reconfirmation
Offering, or if developed, that such market will be sustained, or
that the securities purchased by the public hereunder may be
resold at their original offering price or any other price. It
should be noted that the present sole officer and director of the
Company and the current shareholders of Cyberia will own
approximately 98% of the outstanding shares of common stock upon
completion of the Acquisition and, as a result, there is no
likelihood of an active public trading market, as that term is
commonly understood, developing for the shares. (See also "Risk
Factors - Lack of Public Market for Securities").
<PAGE>
Transfer Agent
The Transfer Agent for the Common Stock of the Company
is Idata, Inc., 14675 Midway Road, Suite 221, Dallas, Texas
75244.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law contains
various provisions entitling directors, officers, employees or
agents of the Company to indemnification from judgments, fines,
amounts paid in settlement and reasonable expenses, including
attorneys' fees, as the result of an action or proceeding
(whether civil, criminal, administrative or investigative) in
which they may be involved by reason of being or having been a
director, officer, employee or agent of the Company provided
said persons acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the
Company (and, with respect to any criminal action or proceedings,
had no reasonable cause to believe that the conduct complained
of was unlawful). Also, the Certificate of Incorporation of the
Company states that the indemnification provisions of Section
145 of the Delaware Corporation Law shall be utilized to the
fullest extent permitted.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended, may be permitted to
directors, officers, or persons controlling the Company pursuant
to the foregoing provisions or otherwise, the Company has been
informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Company
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
PLAN OF DISTRIBUTION
The Company through its sole officer and director, and
without the use of a professional underwriter, offered and sold
to the public 500,000 shares of the Company's Common Stock,
$.0001 par value. The Offering was publicly offered only in the
State of New York. In this regard, the Company effected the
appropriate filings in order to publicly offer and sell the
shares in the State of New York.
The Company and its Management have not yet determined
whether or not the Company or anyone acting on its behalf will
take affirmative steps to request or encourage any broker-dealer
<PAGE>
to act as a market maker for the Company's securities.
Therefore, the Company is not able to indicate when, how and by
whom such efforts may be undertaken or whether consultants may be
utilized in connection therewith. There have been no preliminary
discussions nor are there any understandings between the Company
or anyone acting on its behalf and any broker-
dealer regarding the participation of any such broker-dealer in
the future trading market, if any, for the Company's securities.
SEC Rules
The Company's Common Stock is covered by a Securities and
Exchange Commission rule that imposes additional sales practice
requirements on broker/dealers who sell such securities to
persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their
spouses). For transactions covered by the rule, the broker/dealer
must make a special suitability determination for the purchaser
and have received the purchaser's written agreement to the
transaction prior to the sale. Consequently, the rule may affect
the ability of purchasers in this offering to sell their shares
in the secondary market.
Securities and Exchange Commission rules impose additional
sales practice requirements on broker/dealers who sell penny
securities. These rules require a summary of certain essential
items. The items include the risk of investing in penny stocks in
both public offerings and secondary marketing; terms important to
an understanding of the function of the penny stock market, such
as "bid" and "offer" quotes, a dealers "spread" and broker/dealer
compensation; the broker/dealer compensation, the broker/dealers
duties to its customers, including the disclosures required by
any other penny stock disclosure rules; the customers rights and
remedies in cases of fraud in penny stock transactions; and, the
NASD's toll free telephone number and the central number of the
North American Securities Administrators Association, for
information on the disciplinary history of broker/dealers and
their associated persons.
Rule 419
The Company's Offering and this Reconfirmation Offering are
being conducted in accordance with Commission Rule 419 which was
adopted to strengthen the regulation of securities offerings by
"blank check" companies, which Congress has found to have been
common vehicles for fraud and manipulation in the penny stock
market. The Company is a "blank check" company subject to Rule
419. Accordingly, investors in the Offering receive the
substantive protection provided by Rule 419. Rule 419 requires
that the securities to be issued and the funds received in a
"blank check" offering be deposited and held in an escrow account
until an acquisition meeting specific criteria is completed.
Before the acquisition can be completed and before the funds and
securities can be released, the "blank check" company is required
to update its registration statement with a post-effective
amendment and, after the effective date thereof, the "blank
check" company is required to furnish investors with a prospectus
(which forms a post-effective amendment to its registration
<PAGE>
statement) containing specified information, including a
discussion of the business and the audited financial statements
of the proposed acquisition candidate. According to the Rule, the
investors must have no fewer then 20 and no more than 45 business
days from the effective date of the post-effective amendment to
decide whether to remain investors or require the return of their
investment funds. Unless a sufficient number of investors elect
to remain investors, all of the deposited funds in the escrow
account must be returned to all investors and none of the
securities will be issued. Rule 419 further provides that if the
"blank check" company does not complete an acquisition meeting
the specified criteria within 18 months of the date of this
Prospectus, all of the deposited funds must be returned to
investors. (See "Prospectus Summary - Investors Rights to
Reconfirm Investment Under Rule 419").
This Prospectus serves as the prospectus required pursuant
to Rule 419 for investors in the Offering to consider
reconfirming their investment in the Company as a result of the
Company's proposed Acquisition.
REPORTS TO SHAREHOLDERS
The Company intends to provide holders of its Common Stock
with annual audited financial statements as soon as practicable
after the end of each fiscal year. In addition, the Company may,
from time to time, issue unaudited interim reports and financial
statements whenever deemed appropriate by its board of directors.
LITIGATION
No material legal proceedings to which either the Company or
Cyberia is a party or of which any of their properties is the
subject are pending or to the knowledge of management are known
to be contemplated.
LEGAL OPINIONS
Danzig, Garubo & Kaye, 75 Livingston Avenue, Roseland, New
Jersey 07068 has acted as counsel for the Company in connection
with this Reconfirmation Offering.
EXPERTS
The audited financial statements of the Company which are
included in this Prospectus have been examined by Glasser and
Haims, P.C., 99 West Hawthorne Avenue, Valley Stream, New York
11580. The audited financial statements of Cyberia which are
included in this Prospectus have been examined by Singer, Lewak,
Greenbaum & Goldstein, LLP, 10960 Wilshire Boulevard, Suite 1100,
Los Angeles, California 90024. These financial statements have
been so included in reliance upon the opinion of such accountants
given upon their authority as experts in auditing and accounting.
<PAGE>
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange
Commission, Washington, D.C., a Registration Statement on Form
SB-2, relating to the Offering and this Reconfirmation Offering.
This Prospectus does not contain all of the information set forth
in the Registration Statement including the exhibits and
schedules thereto. Statements contained in this Prospectus as to
the contents of any contract or other document referred to are
not necessarily complete and in each instance reference is made
to the copy of such contract or other document filed as an
exhibit to the Registration Statement. For further information
with respect to the Company and the Common Stock, reference is
made to such Registration Statement, including the exhibits and
schedules thereto. The Registration Statement, including the
exhibits and schedules thereto, may be inspected without charge
at the Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. Copies of all or any part of such material may
be obtained from the Commission upon payment of certain fees
prescribed by the Commission.
<PAGE>
GLASSER & HAIMS, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
99 WEST HAWTHORNE AVENUE
VALLEY STREAM, N.Y. 11580
ALVIN M. GLASSER, C.P.A. (516) 568-2700
IRWIN M. HAIMS, C.P.A. TELECOPIER
(516) 568-2911
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
THE BOARD OF DIRECTORS
NW VENTURE CORP.
We have audited the accompanying balance sheets of NW Venture
Corp. (a development stage company) as of December 31, 1995 and
the related statements of operations, stockholder's equity, and
cash flows for the period then ended. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of NW Venture Corp. (a development stage company) as of December
31, 1995 and the results of its operations and cash flows for the
periods indicated above in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 2 to the financial statements, the Company's ability to
continue is dependent upon the successful completion of the
offering. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
/s/Glasser & Haims
GLASSER & HAIMS, P.C.
Valley Stream, New York
March 4, 1996
<PAGE>
GLASSER & HAIMS, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
99 WEST HAWTHORNE AVENUE
VALLEY STREAM, N.Y. 11580
ALVIN M. GLASSER, C.P.A. (516)568-2700
IRWIN M. HAIMS, C.P.A. TELECOPIER
(516)568-2911
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
THE BOARD OF DIRECTORS
NW VENTURE CORP.
We have audited the accompanying balance sheets of NW Venture
Corp. (a development stage company) as of December 31, 1995 and
the related statements of operations, stockholder's equity, and
cash flows for the period then ended. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of NW Venture Corp. (a development stage company) as of December
31, 1995 and the results of its operations and cash flows for the
periods indicated above in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 2 to the financial statements, the Company's ability to
continue is dependent upon the successful completion of the
offering. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
GLASSER & HAIMS, P.C.
Valley Stream, New York
March 4, 1996
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash in bank $ 1,727
TOTAL CURRENT ASSETS $ 1,727
OTHER ASSETS
Organization Expenses
(Net of Amortization) $ 308
Escrow Account (Note 2) 45,342
TOTAL OTHER ASSETS
45,650
TOTAL ASSETS $ 47,377
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Interest payable $ 474
Loans payable
(on demand with interest
at 7%) 4,000
TOTAL CURRENT LIABILITIES $ 4,474
STOCKHOLDERS' EQUITY
Common stock, $.0001 par
value, 50,000,000 shares
authorized, 4,500,000
shares issued and
outstanding (Note 2) 450
Capital in excess of par
value 50,550
Deficit accumulated during
development stage (8,097)
TOTAL STOCKHOLDERS' EQUITY 42,903
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 47,377
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD
2/24/94
1/1/95 (INCEPTION)
THROUGH THROUGH
12/31/95 12/31/94
<S> <C> <C>
REVENUE $ 0 $ 0
EXPENSES 778 292
NET (LOSS)
FROM OPERATIONS $ (778) $ (292)
OTHER INCOME:
INTEREST 393 72
NET (LOSS) $ (385) $ (220)
(LOSS) PER SHARE $ (.0001) $ 0
AVERAGE NUMBER OF
SHARES OUTSTANDING 4,125,000 4,000,000
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FEBRUARY24,1994(INCEPTION)
THROUGH DECEMBER 31, 1995
DEFICIT
CAPITAL ACCUMULATED
IN DURING
EXCESS OF DEVELOPMENT
SHARES AMOUNT PAR VALUE STAGE TOTAL
<S> <C> <C> <C> <C> <C>
Balance,
February 24, 1994 - $ - $ - $ - $ -
Issuance of shares
to Company officers
and directors
for Cash,
April 21, 1994 4,000,000 400 600 1,000
Net (Loss) for the
period ended
December 31,1994 (220) (220)
Balance,
Dec. 31, 1994 4,000,000 $ 400 $ 600 $ (220) $ 780
Offering Expenses
October 1995 (7,492) (7,492)
Issuance of shares
by Public Offering
October 11, 1995 500,000 50 49,950 50,000
Net (Loss) for
the year ended
December 31, 1995 (385) (385)
4,500,000 $ 450 $50,550 $ (8,097) $42,903
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
INCREASE (DECREASE) IN CASH
FOR THE PERIOD FEBRUARY 24, 1994 (INCEPTION)
THROUGH DECEMBER 31, 1995
FOR THE PERIODS
2/24/94
1/1/95 (INCEPTION)
THROUGH THROUGH
12/31/95 12/31/94
<S> <C> <C>
Cash flows from operating activities: $ (385) $ (220)
Net income
Adjustment to reconcile net income to net
cash provided by operating activities:
Amortization 100 92
Increase in interest payable 280 194
Net cash provided (used) by
operating activities $ (5) $ 66
Cash flows from financing activities:
Payment for organization expenses $ (500)
Payment for offering expenses (5,351) (2,141)
Increase in escrow account (342)
Increase in loans payable 4,000
Proceeds from issuance of common stock 5,000 1,000
Net cash provided (used) by
financing activities $ (693) $ 2,359
Net increase (decrease) in cash $ (698) $ 2,425
Cash at beginning of period 2,425 -0-
Cash at end of period $ 1,727 $ 2,425
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
Organization and Dividend Policy
NW Venture Corp. (the "Company"), was incorporated under the laws of the
State of Delaware on February 24, 1994, and has adopted a December 31
Fiscal Year. The Company is in the development stage, has not commenced
operations, and is in the process of selling its securities to the public
(see Note 2). At the present time, the Company has not paid any dividends,
and any future dividends will depend on the Company's financial
requirements and other relevant factors.
Earnings Per Share
The computation of earnings per share is based on the weighted average
number of shares outstanding during the period.
Amortization
Organization expenses are being amortized over sixty months. Amount shown
is net of amortization of $192
Income Taxes
There have been no earnings through December 31, 1995 and accordingly, no
provision for Federal income taxes is reflected in the accompanying
financial statements. The Company has a net operating loss carryover of
$605.
NOTE 2: PROPOSED PUBLIC OFFERING OF SECURITIES
Five Hundred Thousand (500,000) shares of Common Stock was offered at a
purchase of $.10 per share. The offering was completed on October 11, 1995.
The Company is a "blank check" company and therefore is subject to Rule
419. Accordingly, investors in this offering will receive the substantive
protection provided by Rule 419. Rule 419 requires that the securities to
be issued and the funds received in a "blank check" offering be deposited
and held in escrow account until an acquisition meeting specific criteria
is completed. Before the acquisition can be completed and before the funds
(except for an amount up to 10% of the deposited funds) and securities can
be released, the "blank check" company is required to update its
registration statement with a post-effective amendment and, after the
effective date therefor, the "blank check" company is required to furnish
investors with a prospectus (which forms a part of the post-effective
amendment to its registration statement) containing specified information,
including a discussion of the business and the audited financial statements
of the proposed acquisition candidate. According to the Rule, the
investors must have no fewer than 20 and no more than 45 business days from
the effective date of the post-effective amendment to decide whether to
<PAGE>
remain investors or require the return of their investment funds. Unless a
sufficient number of investors elect to remain investors, all of the
deposited funds in the escrow account must be returned to all investors and
none of the securities will be issued. Rule 419 further provides that if
the "blank check" company does not complete an acquisition meeting the
specified criteria within 18 months, all of the deposited funds must be
returned to investors.
NOTE 3: COMMITMENTS & CONTINGENCIES
a. At present, the Company does not employ any pe.sons on a salary basis.
The Company's sole officer devotes such time as is required for the
development of the Company without compensation.
In the event the Company successfully completes the acquisition of a
business opportunity, the Board of Directors may award a finder's fee to
Martin Rifkin if the acquisition is largely due to his efforts. The amount
of this finder's fee will not exceed $2,500.
The Company does not initially intend to pay Directors for attending
Board of Directors Meetings.
b. The Company maintains its offices on a rent free, month-to-month basis
in office space provided by its sole officer and director. The office
is located at 501 S.E. Columbia Shores Boulevard, #350, Vancouver,
Washington 98661.
NOTE 4: POTENTIAL CONFLICTS OF INTEREST
The Company's sole officer, director and stockholder is involved in various
business activities. With respect thereto, he is or may become an officer,
director, controlling shareholder and/or partner of other entities engaged
in a variety of business, similar and dissimilar to the business of the
Company, including other "blank check" companies which may also seek
similar available business opportunities. Because of these affiliations
and because of the minor amount of time devoted to the Company by the
Company's sole officer, director and stockholder, there are potential
conflicts of interest in his acting as an officer and director of the
Company. To the extent the Company's sole officer, director and
stockholder engages in such other activities, he will have possible
conflicts of interest in directing opportunities to other companies,
entities or persons with which he is or may be associated or have an
interest, rather than direct such opportunities to the Company. Such
potential conflicts of interest include, among other things, time, effort
and corporate opportunity involved in his participation in other business
transactions. Since only limited policies have been established for the
resolution of such a conflict, the Company may be adversely affected should
he choose to place his other business interests before those of the
Company. No assurance can be given that such potential conflicts of
interest will not cause the Company to lose potential opportunities.
Additional conflicts of interest and non arm's-length transactions may also
arise in the future in the event the Company's sole officer, director and
stockholder is involved in the management, or is a stockholder, of any
company which the Company may merge with or acquire or with which the
Company may transact business.
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
MARCH 31, 1996
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash in bank $ 1,167
TOTAL CURRENT ASSETS $ 1,167
OTHER ASSETS
Organization Expenses
(Net of Amortization) $ 283
Escrow Account 45,867
TOTAL OTHER ASSETS 46,150
TOTAL ASSETS $47,317
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Interest payable $ 544
Loans payable
(on demand with interest at 7%) 4,000
TOTAL CURRENT LIABILITIES $ 4,544
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value,
50,000,000 shares authorized,
4,500,000 shares issued and
outstanding (Note 2) $ 450
Capital in excess of par value 50,550
Deficit accumulated during
development stage (8,227)
TOTAL STOCKHOLDERS' EQUITY 42,773
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $47,317
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD
1/1/96 1/1/95
THROUGH THROUGH
3/31/96 3/31/95
<S> <C> <C>
REVENUE $ 0 $ 0
EXPENSES 665 253
NET (LOSS) FROM OPERATIONS $ (665) $ (253)
OTHER INCOME:
INTEREST 535 17
NET (LOSS) $ (130) $ (236)
(LOSS) PER SHARE $ 0 $ 0
AVERAGE NUMBER OF
SHARES OUTSTANDING 4,500,000 4,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
INCREASE (DECREASE) IN CASH
FOR THE PERIODS
1/1/96 1/1/95
THROUGH THROUGH
3/31/96 3/31/95
<S> <C> <C>
Cash flows from operating
activities: $ (130) $ (236)
Net income
Adjustment to reconcile net
income to net cash provided
by operating activities:
Amortization 25 25
Increase in interest payable 70 70
Net cash provided (used) by
operating activities $ (35) $ (141)
Cash flows from financing
activities:
Increase in escrow account (525) 0
Net cash provided (used) by
financing activities $ (525) $ 0
Net increase (decrease) in cash $ (560) $ (141)
Cash at beginning of period 1,727 2,425
Cash at end of period $ 1,167 $ 2,284
</TABLE>
<PAGE>
NW VENTURE CORP.
NOTES TO FINANCIAL STATEMENTS
The financial information herein is unaudited. However, in
the opinion of management, such information reflects all
adjustments (consisting of normal recurring accruals) necessary
for a fair presentation of the results of operations for the
periods being reported. Additionally, it should be noted that
the accompanying condensed financial statements do not purport to
be complete disclosures in conformity with generally accepted
accounting principles.
The results of operations for the three months ended March
31, 1996 are not necessarily indicative of the results of
operations that may be expected for the full fiscal year ending
December 31, 1996.
These condensed statements should be read in conjunction with
the Company's financial statements for the year ended December
31, 1995.
<PAGE>
Report of Independent Certified Public Accountants
Board of Directors and Stockholders
Cyberia, Inc.
We have audited the accompanying balance sheet of Cyberia, Inc.
as of December 31, 1995, and the related statements of
operations, stockholders' (deficiency) equity, and cash flows for
the period February 24, 1994 (inception) to December 31, 1994 and
for the year ended December 31, 1995. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Cyberia, Inc. as of December 31, 1995, and the results of its
operations and its cash flows for the period February 24, 1994
(inception) to December 31, 1994 and for the year ended
December 31, 1995, in conformity with generally accepted
accounting principles.
Los Angeles, California
April 18, 1996
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
BALANCE SHEET
December 31, 1995
ASSETS
<S> <C>
Current assets
Cash $ 80,020
Accounts receivable 64,522
Work in process 19,007
Other current assets 334
Total current assets
163,883
Other assets 5,478
$169,361
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued expenses $ 32,804
Due to affiliate (note 3) 18,375
Deferred income 148,157
Total liabilities 199,336
Stockholders' deficiency
Common stock: no par value, authorized
1,000,000 shares, issued and outstanding
1,000 shares 1,000
Accumulated deficit (30,975)
Total stockholders' deficiency (29,975)
$169,361
</TABLE>
The accompanying notes are an intergal part of these financials.
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
STATEMENTS OF OPERATIONS
For the year ended December 31, 1995 and the
period February 24, 1994 (inception) to December 31, 1994
1995 1994
<S> <C> <C>
Net sales (note 4) $ 488,237 $ 93,307
Cost of sales 265,944 33,388
General and administrative expenses 263,501 45,064
Total expenses 529,445 78,452
(Loss) income from operations (41,208) 14,855
Other income 1,043
(Loss) income before taxes (40,165) 14,855
Income taxes 4,865 800
Net (loss) income $ (45,030) $ 14,055
</TABLE>
The accompanying notes are an intergal part of these financials.
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
STATEMENTS OF STOCKHOLDERS' (DEFICIENCY) EQUITY
For the year ended December 31, 1995 and the
period February 24, 1994 (inception) to December 31, 1994
Common Stock Accumulated
Shares Amount Deficit Total
<S> <C> <C> <C> <C>
Balance, February 24, 1994
Issuance of common stock 1,000 $1,000 $ $ 1,000
Net income 14,055 14,055
Balance, December 31, 1994 1,000 1,000 14,055 15,055
Net loss (45,030) (45,030)
Balance, December 31, 1995 1,000 $1,000 $(30,975) $(29,975)
</TABLE>
The accompanying notes are an intergal part of these financials.
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
STATEMENTS OF CASH FLOWS
For the year ended December 31, 1995 and the
period February 24, 1994 (inception) to December 31, 1994
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (45,030) $ 14,055
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities
Depreciation and amortization 4,370
(Increase) decrease in:
Accounts receivable (45,836) (18,686)
Work in process (19,007)
Other current assets (262) (72)
Other assets (5,647)
Increase (decrease) in:
Accounts payable and accrued
expenses 21,413 11,391
Due to affiliates 18,375
Deferred income 148,157
Net cash provided by operating activities 82,180 1,041
Cash flows used in investing activities:
Purchase of computer equipment (4,201)
Cash provided by financing activities:
Issuance of common stock 1,000
Net increase in cash 77,979 2,041
Cash, beginning of period 2,041
Cash, end of period $ 80,020 $ 2,041
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the periods for income taxes: $ 4,865 $ 800
<PAGE>
The accompanying notes are an intergal part of these financials.
<PAGE>
CYBERIA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Line of Business
Cyberia, Inc. (the "Company") was incorporated in California
in February 1994. The Company, composes background music
for television and radio commercials which are aired
throughout the world. The Company sells its services to
customers in the United States.
Estimates
In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements, as well as
the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Work-in-process
Work-in-process consists of cost incurred on uncompleted
contracts. Deposits and progress billings are recorded as
deferred revenue.
Revenue Recognition
Revenues from contracting services are recognized upon
completion of the contract.
Income Taxes
The Company has elected under the Internal Revenue Code to be
an "S" corporation. In lieu of corporate income taxes, the
stockholders of an "S" corporation are taxed on their
proportionate share of the Company's taxable income.
For the year beginning January 1, 1996, the Company has elected
to revoke the "S" corporation status for income tax purposes;
therefore, the Company will be taxed at the federal and state
statutory rates.
NOTE 2 - COMMITMENTS
The Company leases certain facilities for its corporate and
operations offices under long-term lease agreements. At
December 31, 1995, the future minimum lease payments are as
follows:
</TABLE>
<TABLE>
<CAPTION>
Year ending
December 31,
<S> <C>
1996 $28,800
1997 9,600
$38,400
</TABLE>
Rent expense was $28,800 and $19,200 for 1995 and 1994, respectively.
<PAGE>
NOTE 3 - RELATED PARTY TRANSACTIONS
In 1995, the Company paid approximately $40,000 to Media
Ventures, which has common ownership, for sound mixing and
recording services. The Company also paid Media Ventures
$18,375 for related overhead cost. As of December 31, 1995,
$18,375 is due to Media Ventures.
NOTE 4 - SALES
During the year ended December 31, 1995, the Company did
business with three customers whose sales comprised
approximately 10%, 19%, and 35%, respectively, of net sales.
During the period ended December 31, 1994, the Company did
business with four customers whose sales comprised
approximately 20%, 20%, 23%, and 32%, respectively, of net
sales.
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
BALANCE SHEET
MARCH 31,1996
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets
Cash $112,805
Accounts receivable 34,196
Other current assets 43
Total current assets 147,044
Non-current assets
Property, plant and equipment(net) 4,717
Organization Expenses(net) 678
Other assets 4,800
Total non-current assets 10,195
Total assets 157,239
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 21,432
Due to affiliate 28,618
Total liabilities 50,050
Stockholders' equity
Common stock 1,000
Retained earnings 106,189
Total stockholders' equity 107,189
Total liabilities & stockholders' equity $157,239
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
FOR
THE PERIODS
1/1/96 1/1/95
THROUGH THROUGH
3/31/96 3/31/95
<S> <C> <C>
Sales $306,859 $94,500
Cost of sales 137,556 54,150
General and administrative expenses 31,806 19,376
Total expenses 169,362 73,526
Net income from operations 137,497 20,974
Other income 500 0
Net income before taxes 137,997 20,974
Income taxes 832 1,065
Net income 137,165 19,909
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDING MARCH 31,1996
(Unaudited)
FOR THE PERIODS
1/1/96 1/1/95
THROUGH THROUGH
3/31/96 3/31/95
<S> <C> <C>
Cash flow from operating activities:
Net income $137,165 $19,909
Adjustments to reconcile net income
to net cash provided by operating
activities Increase) decrease in:
Accounts receivable 30,326 18,686
Work in process 19,007 0
Other current assets 291 (109)
Increase (decrease) in:
Accounts payable
and accrued expenses (11,373) (8,088)
Due to affiliates 10,243 19,594
Deferred income (148,157) 0
Net cash provided by operating activities 37,502 49,992
Cash flows used in investing activities:
Purchase of computer equipment (4,717)
Net increase in cash 32,785 49,992
Cash, beginning of period 80,020 2,041
Cash, end of period $112,805 $52,033
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period
for income taxes $832 $1,065
</TABLE>
<PAGE>
CYBERIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31,1996
(UNAUDITED)
The results of operations for the interim periods shown in this
report are not necessarily indicative of results to be expected
for the fiscal year. In the opinion of management, the
information contained herein reflects all adjustments necessary
to make the results of operations for the interim periods a fair
statement of such operations. All such adjustments are of a
normal recurring nature.
Note 1: Subsequent events:
On July 25, 1996, Cyberia, Inc. opened a line of credit in the
amount of $130,000.00 with Republic Bank California, N. A. at 445
N. Bedford Drive, Beverly Hills, CA 90212. The term of the line
of credit is from July 25,1996 through August 31,1997 at an
interest rate of prime + 0.75% per annum. We are required to
observe a thirty (30) consecutive day out-of-debt period prior to
the August 31, 1997 review date.
<PAGE>
NW VENTURE CORP.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma consolidated balance sheet and
statement of operations of NW Venture Corp. give effect to the
following transaction:
In May 1996, NW Venture Corp. executed an agreement with
Cyberia, Inc., a California Corporation, and its
shareholders to acquire all of the issued and outstanding
shares of capital stock of Cyberia, Inc. For accounting
purposes, the acquisition will be treated as a
recapitalization of NW Venture Corp., with Cyberia, Inc. as
the acquirer (reverse acquisition).
The unaudited pro forma information is based on the historical
financial statements of Cyberia, Inc. giving effect to the
aforementioned transaction and the assumptions and adjustments in
the accompanying notes to the unaudited pro forma financial
statements.
The unaudited pro forma consolidated balance sheet as of December
31,1995 and March 31,1996, and the consolidated statement of
operations for the year ended December 31,1995 and the three
months ended March 31,1996 give effect to the acquisition of
Cyberia, Inc. as if it had occurred January 1, 1995.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of operating results which would have been
achieved had the acquisitions been consummated as of the
beginning of the period and should not be construed as
representative of the future operating results. The unaudited
pro forma consolidated financial statements should be read in
conjunction with the financial statements of Cyberia, Inc. and NW
Venture Corp. at December 31,1995 and March 31,1996.
The following notes set forth an explanation of the assumptions
and adjustments used in preparing the unaudited pro forma
consolidated balance sheet and statement of operations:
Adjustments to December 31,1995 Balance Sheet
(a) To record the acquisition of NW Venture Corp. accounted
for as a reverse merger
(b) To adjust common stock and additional paid-in capital
for the recapitalization of Cyberia, Inc. as a result
of the reverse merger.
Adjustments to March 31, 1996 Balance Sheet
(a) To record the acquisition of NW Venture Corp.
accounted for as a reverse merger
(b) To adjust common stock and additional paid-in capital
for the recapitalization of Cyberia, Inc. as a result
of the reverse merger.
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31,1996
(Unaudited)
Historical Pro Forma
Adjustments
NW Venture Increase Pro Forma
Corp. Cyberia,Inc. (Decrease) Combined
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash $ 1,167 $112,805 $113,972
Accounts receivable 0 34,196 34,196
Other current assets 0 43 43
Total current
assets 1,167 147,044 0 148,211
Non-current assets
Property, plant
and equipment(net) 0 4,717 4,717
Organization
Expenses(net) 283 678
961
Escrow account 45,867 45,867
Other assets 4,800 4,800
Total non-current
assets 46,150 10,195 0
56,345
Total assets $47,317 $157,239 $0 $204,556
LIABILITIES &
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
and accrued
expenses $ 544 $ 21,432 $ 21,976
Due to affiliate 28,618 28,618
Loans payable 4,000 4,000
Total liabilities 4,544 50,050 0 54,594
Stockholders'
equity
Common stock 450 1,000 1,550(b) 3,000
Additional paid
in capital 50,550 (1,550)(b) 40,773
(8,227)(a)
Retained
earnings/
(deficit) (8,227) 106,189 8,227(a) 106,189
Total
stockholders'
equity 42,773 107,189 0 149,962
Total liabilities
& stockholders'
equity $47,317 $157,239 $0 $204,556
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
MARCH 31,1996
(Unaudited)
Historical Pro Forma
Adjustments
NW Venture Increase Pro Forma
Corp. Cyberia,Inc. (Decrease) Combined
<S> <C> <C> <C> <C>
Sales $ 0 $306,859 $306,859
Cost of sales 0 137,556 137,556
General and
administrative
expenses 665 31,806 32,471
Total Expenses 665 169,362 0 170,027
Net income (loss)
from operations (665) 137,497 0 136,832
Other income 535 500 1,035
Net income (loss)
before taxes (130) 137,997 0 137,867
Income taxes 0 832 832
Net income (loss) ($130) $137,165 $0 $137,035
Income per share $0.01
Weighted average
shares outstanding 30,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31,1995
(Unaudited)
Historical Pro Forma
Adjustments
NW Venture Increase Pro Forma
Corp. Cyberia,Inc. (Decrease) Combined
ASSETS
<S> <C> <C> <C> <C>
Current Assets
Cash $1,727 $ 80,020 $ 81,747
Accounts receivable 0 64,522 64,522
Work in Process 0 19,007 19,007
Other current
assets 0 334 334
Total current
assets 1,727 163,883 0 165,610
Non-current assets
Organization
Expenses(net) 308 678 986
Escrow account 45,342 0 45,342
Other assets 0 4,800 4,800
Total non-
current
assets 45,650 5,478 0 51,128
Total assets $47,377 $169,361 $0 $216,738
LIABILITIES &
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
and accrued
expenses $ 474 $ 32,804 $ 33,278
Due to affiliate 0 18,375 18,375
Deferred Income 0 148,157 148,157
Loans payable 4,000 0 4,000
Total liabilities 4,474 199,336 0 203,810
Stockholders' equity
Common stock 450 1,000 1,550(b) 3,000
Additional paid
in capital 50,550 0 (1,550)(b) 40,903
(8,097)(a)
Accumulated
deficit (8,097) (30,975) 8,097(a) (30,975)
Total
stockholders'
equity 42,903 (29,975) 0 12,928
Total liabilities
& stockholders'
equity $47,377 $169,361 $0 $216,738
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
DECEMBER 31,1995
(Unaudited)
Historical Pro Forma
Adjustments
NW Venture Increase Pro Forma
Corp. Cyberia,Inc. (Decrease) Combined
<S> <C> <C> <C> <C>
Sales $ 0 $488,237 $ 488,237
Cost of sales 0 265,944 265,944
General and
administrative
expenses 778 263,501 264,279
Total expenses 778 529,445 0 530,223
Net loss
from operations (778) (41,208) 0 (41,986)
Other income 393 1,043 1,436
Net loss
before taxes (385) (40,165) 0 (40,550)
Income taxes 0 4,865 4,865
Net loss ($385) ($45,030) $0 ($45,415)
Loss per share $0.00
Weighted average
shares outstanding 29,625,000
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
24. Indemnification of Directors and Officers
Reference is made to Section 145 of the Delaware General
Corporation Law which contains various provisions entitling
directors, officers, employees or agents of the Company to
indemnification from judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys' fees, as the result
of an action or proceeding (whether civil, criminal,
administrative or investigative) in which they may be involved by
reason of being or having been a director, officer, employee or
agent of the Company provided said persons acted in good faith
and in a manner reasonably believed to be in or not opposed to
the best interests of the Company (and, with respect to any
criminal action or proceedings, had no reasonable cause to
believe that the conduct complained of was unlawful). Also, the
Certificate of Incorporation of the Company states that the
indemnification provisions of Section 145 of the Delaware
Corporation Law shall be utilized to the fullest extent
permitted.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers,
or persons controlling the Company pursuant to the foregoing
provisions, or otherwise, the Company has been informed that in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
25. Other Expenses of Issuance and Distribution
<TABLE>
<CAPTION>
The expenses of the offering are estimated to be as follows. All
of such expenses will be paid by the Company.
<S> <C>
Registration Fees $ 100.00
Accounting Fees 1,000.00*
Legal Fees 10,000.00*
Printing, Blue Sky Fees,
Transfer Agent Fees,
Miscellaneous Fees and
Expenses 2,900.00*
TOTAL $14,000.00*
</TABLE>
*Estimated
<PAGE>
26. Recent Sales of Unregistered Securities
In April 1994, the Registrant sold 4,000,000 shares of Common
Stock to Martin Rifkin for $1,000.
The aforesaid securities were issued without registration under
the Securities Act of 1933, as amended, by reason of the
exemption from registration afforded pursuant to the provisions
of Section 4(2) thereof as transactions by an issuer not
involving any public offering. No underwriting discounts or
commissions were paid in connection with any of such issuances.
<PAGE>
27. Exhibits
Exhibit
Number
3.1 Registrant's certificate of incorporation(1)
3.2 Registrant's by-laws(1)
4.1 Specimen certificate for common stock(1)
4.2 Promissory Note with Martin Rifkin(1)
5.1 Opinion of David M. Kaye, Esq.(1)
10.1 Agreement and Plan of Tax Free Reorganization dated
May 22, 1996 by and among NW Venture Corp., Cyberia, Inc.
("Cyberia") and the shareholders of Cyberia
24.1 Consent of Danzig, Garubo & Kaye
24.2 Consent of Glasser & Haims, P.C.
24.3 Consent of Singer, Lewak, Greenbaum & Goldstein, LLP
28.1 Escrow Agreement (form)(1)
(1) Filed with original filing.
<PAGE>
28. Undertakings
To file during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement.
To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
To reflect in the Prospectus any facts or events arising after
the effective date of this Registration Statement (for the most
recent post-effective amendment thereof) which individually, or,
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement, including (but not limited to) any
addition or deletion of a managing Underwriter.
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause
to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3
or Rule 14c-3 under the Securities Exchange Act of 1934; and,
where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus,
to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to
provide such interim financial information.
The undersigned registrant hereby undertakes to provide to the
<PAGE>
underwriter at the closing specified in the underwriting
agreements, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 being permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit of proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
SB-2 and authorized this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
the City of Vancouver, State of Washington on the 8th of
August, 1996.
NW VENTURE CORP.
By:/s/Martin Rifkin
Martin Rifkin,
President
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/Martin Rifkin President, Secretary, 8/8/96
Martin Rifkin Treasurer, Director
Principal Executive Officer
and Principal Financial
Officer)
<PAGE>
Registration No. 33-83418-LA
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
EXHIBITS
filed with
POST EFFECTIVE AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NW VENTURE CORP.
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Page
Exhibit Number Number
<S> <C> <C>
3.1 Registrant's certificate of incorporation(1)
3.2 Registrant's by-laws(1)
4.1 Specimen certificate for common stock(1)
4.2 Promissory Note with Martin Rifkin(1)
5.1 Opinion of David M. Kaye, Esq.(1)
10.1 Agreement and Plan of Tax Free Reorganization
dated May 22, 1996 by and among NW Venture Corp.,
Cyberia, Inc. ("Cyberia")and the shareholders of
Cyberia
24.1 Consent of Danzig, Garubo & Kaye
24.2 Consent of Glasser & Haims, P.C.
24.3 Consent of Singer, Lewak, Greenbaum & Goldstein,
LLP
28.1 Escrow Agreement (form)(1)
</TABLE>
(1)Filed with original Filing.
<PAGE>
Exhibit 10.1
AGREEMENT AND PLAN OF TAX FREE REORGANIZATION
THIS AGREEMENT AND PLAN OF TAX FREE REORGANIZATION dated as of
the 22nd day of May, 1996, by and among NW Venture Corp., a
Delaware corporation ("NWV"), Cyberia, Inc., a California
corporation ("Cyberia"), and the shareholders listed at the end
of this Agreement (collectively referred to as the "Shareholders"
and individually referred to as the "Shareholder").
W I T N E S S E T H :
WHEREAS, the Shareholders own free and clear of any liens or
encumbrances all of the issued and outstanding shares (the
"Cyberia Shares") of the capital stock of Cyberia (the "Cyberia
Common Stock"); and
WHEREAS, NWV desires to acquire the Cyberia Shares in exchange
for 25,500,000 shares of NWV Common Stock (as defined in Section
2.04 below) which will represent 85% of the then issued and
outstanding shares of NWV Common Stock, in a tax free transaction
pursuant to the provisions of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986;
NOW, THEREFORE, for and in consideration of the mutual
representations, warranties, covenants and undertakings herein
contained, and on the terms and subject to the conditions set
forth herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 Sale and Purchase of Stock. Subject to and upon the terms
and conditions contained herein, at the Closing (as hereinafter
defined), each of the Shareholders shall sell, assign, transfer,
convey and deliver to NWV, free and clear of any liens, claims,
encumbrances and charges whatsoever, and NWV shall purchase,
accept and acquire from each of the Shareholders the number of
Cyberia Shares designated opposite such Shareholder's name on
Exhibit 1.01 which Cyberia Shares in the aggregate constitute
100% of the issued and outstanding shares of Cyberia Common Stock
and owned by the Shareholders.
1.02 Closing. The closing of the transaction contemplated hereby
(the "Closing") shall take place at the offices of Danzig, Garubo
& Kaye, Esqs., 75 Livingston Avenue, Roseland, New Jersey 07068,
or such other place as shall be mutually agreed upon on such date
which is no later than five business days following completion
of the actions referred to in Sections 5.07 and 6.08 below, or on
such other date as shall be mutually agreed upon by the parties
hereto (the actual time and date of closing being hereinafter
referred to as the "Closing Date").
<PAGE>
1.03 Purchase Price. In consideration of the Cyberia Shares to be
purchased from the Shareholders, NWV at the Closing shall deliver
to each of the Shareholders, certificates representing the number
of shares of NWV Common Stock set forth opposite each
Shareholder's name on Exhibit 1.03 hereto, or an aggregate of
25,500,000 shares of NWV Common Stock, which shares, in the
aggregate, will represent 85% of the then issued and outstanding
shares of NWV Common Stock, free and clear of any liens, claims,
encumbrances or charges whatsoever, except as otherwise provided
in this Agreement.
1.04 Instruments of Transfer; Further Assurances. In order to
consummate the transaction contemplated hereby, the following
documents and instruments shall be delivered at Closing:
(a) Documents from Shareholders. Shareholders shall
deliver to NWV at the Closing stock certificates representing the
Cyberia Shares plus a duly executed stock power or other instrument
of transfer for each such stock certificate with appropriate signature
guarantees in proper form to transfer to NWV good and marketable
title to the Cyberia Shares.
(b) Documents from NWV. NWV shall deliver to the
Shareholders at the Closing stock certificates representing in
the aggregate 25,500,000 shares of NWV Common Stock which the
Shareholders are entitled, in accordance with Exhibit 1.03.
It is agreed that at the Closing it will be sufficient to satisfy
this requirement by delivering to the Shareholders an appropriate
opinion letter from counsel to NWV.
(c) Further Documents. At the Closing, and at all times
thereafter as may be necessary (i) the parties shall produce such other
documents and certificates as required by Articles V and VI
hereof, (ii) the Shareholders shall execute and deliver to NWV
such other instruments of transfer as shall be reasonably
necessary or appropriate to vest in NWV good and indefeasible
title to the Cyberia Shares and to comply with the purposes and
intent of this Agreement, and (iii) NWV shall execute and deliver
to Shareholders such other instruments, certificates and
documents as shall be reasonably necessary or appropriate to
convey to Shareholders 25,500,000 shares of NWV Common Stock and
to comply with the purposes and intent of this Agreement.
ARTICLE II
NWV'S REPRESENTATIONS AND WARRANTIES
NWV represents, warrants and covenants that:
2.01 Organization and Good Standing. NWV is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware, with all requisite power and authority
<PAGE>
to carry on the business in which it is and/or has been engaged,
to own the properties it owns, to execute and delivery this
Agreement, to consummate the transactions contemplated hereby and
to take all of the other actions provided for in or contemplated
hereby. NWV is and has been qualified to transact business and
is in good standing in all jurisdictions where the nature or
conduct of its business so requires. NWV has no subsidiaries.
2.02 Authorization and Validity. The execution, delivery and
performance of this Agreement by NWV has been duly authorized by
the Board of Directors of NWV and, subject to satisfying the
requirements of Rule 419 of Regulation C under the Securities Act
of 1933, as amended (the "1933 Act"), constitutes the valid and
binding agreement of NWV enforceable in accordance with its
terms, and neither the execution or delivery of this Agreement
nor the consummation by NWV of the transactions contemplated
hereby (i) violates any statute or law or any rule, regulation or
order of any court or any governmental authority, or (ii)
violates or conflicts with, or constitutes a default under or
will constitute a default under, any contract, commitment,
agreement, understanding, arrangement, restriction of any kind to
which NWV is a party or by which NWV is bound.
2.03 No Violation. NWV is not in violation of any term of any
mortgage, indenture loan agreement, credit instrument, judgment,
decree, order, statute, rule or regulation to which it is subject
or by which it is bound. Neither the execution, delivery or
performance of this Agreement nor the consummation of any of the
transactions contemplated hereby now or at any time in the future
(whether with the giving of notice or passage of time or both)
will (a) conflict with, or result in a violation or breach of the
terms, conditions and provisions of, or constitute a default
under, the Articles of Incorporation or By-Laws of NWV or any
agreement, indenture or other instrument or undertaking of any
kind or nature under which NWV is bound or to which the assets of
NWV are subject, or result in the creation or imposition of any
lien, claim, charge or encumbrance upon any of such assets or
upon any of the stock of NWV, or (b) violate or conflict with any
judgment, decree, order, statute, rule or regulation of any court
or any public, governmental or regulatory agency or body having
jurisdiction over NWV or the properties or assets of NWV. To the
best of NWV's knowledge, NWV has complied in all material respect
with all applicable laws, regulations and licensing requirements,
and has filed with the proper authorities all necessary
statements and reports, tax returns and all other filings of any
kind or nature due at any time up through the date hereof. NWV
possesses all necessary licenses, franchises, permits and
governmental authorizations to conduct it business as now
conducted.
2.04 Capitalization. The authorized capital stock of NWV consists
solely of 50,000,000 shares of Common Stock, $.0001 par value per
<PAGE>
share (the "NWV Common Stock"), of which amount 4,500,000 shares
are issued and outstanding. All of such issued and outstanding
shares have been validly issued and are fully paid and
non-assessable. There are no outstanding warrants, options,
subscriptions or other rights of any kind or nature by which any
person or entity can acquire any additional shares of Common
Stock or other securities of any kind or nature of NWV; no
shareholder of NWV or other person or entity is entitled to any
preemptive rights, rights of first refusal or other rights of any
kind or nature arising out of or relating to the issuance of the
25,500,000 shares of the NWV Common Stock to the Shareholders
under this Agreement; and, except as disclosed in this Agreement,
there are no other commitments requiring the issuance of any
additional shares of the capital stock of NWV. The 25,500,000
shares of the NWV Common Stock to be issued to the Shareholders
at the Closing will be duly authorized, fully paid and
non-assessable shares; subject to no lien, claim, charge or
encumbrance of any kind or nature; will not be subject to any
shareholders agreement (except such as may exist among the
Shareholders), right of first refusal or preemptive rights; and
will constitute 85% of the then issued and outstanding shares of
the NWV Common Stock.
2.05 Corporate Records. The copies of the Articles of Incorporation
and all amendments thereto and the By-Laws of NWV that will be
delivered to the Shareholders at or prior to the Closing are
true, correct and complete. The minute book of NWV, copies of
which will be delivered to the Shareholders at or prior to the
Closing will contain minutes of all meetings of and consents to
all actions taken without meetings by the Board of Directors and
the shareholders of NWV since the formation of NWV, all of which
will be accurate in all material respects. The books and
records, financial and others of NWV are in all material respects
complete and correct.
2.06 Financial Statements/SEC Filings. NWV has furnished Cyberia and
the Shareholders a copy of NWV's audited financial statements for
the fiscal years ended December 31, 1994 and December 31, 1995
and unaudited financial statements for the period ended March 31,
1996 (the "NWV Financial Statements"). The NWV Financial
Statements fairly present the financial condition of NWV as of
their respective dates thereof and the results of its operations
for those periods, in accordance with generally accepted
accounting principles consistently applied. NWV did not have, as
of the date of each such balance sheet, except as to the extent
reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in
the balance sheet or the notes thereto prepared in accordance
with generally accepted accounting principles. Except as set
forth in Exhibit 2.06 hereto, NWV is current in all applicable
Securities and Exchange Commission ("SEC"), tax and other
reporting and filing obligations consistent with law and its
contractual undertakings (if any).
<PAGE>
2.07 Absence of Liabilities. NWV has no liabilities, whether fixed or
contingent, due or not yet due, asserted or not yet asserted,
including without limitation all amounts which may be due under
any contracts, agreements or undertakings entered into by or on
behalf of NWV except as set forth in Exhibit 2.07 hereto or the
NWV Financial Statements. In addition, NWV has not guaranteed,
become liable for or agreed to stand behind or assume the
obligations of any person or entity, and is not contingently
liable for any debt, obligation, expense or liability.
2.08 Absence of Certain Changes. Except as disclosed in the NWV
Financial Statements or as set forth on Exhibit 2.08 hereto since
March 31, 1996, NWV has not: (a) suffered any material adverse
change in its financial condition, assets, liabilities or
business; (b) contracted for or paid any capital expenditures;
(c) incurred any indebtedness or borrowed money, issued or sold
any debt or equity securities or discharged or incurred any
liabilities or obligations except in the ordinary course of
business as heretofore conducted; (d) mortgaged, pledged or
subjected to any lien, lease, security interest or other charge
or encumbrance any of its properties or assets; (e) paid any
material amount on any indebtedness prior to the due date,
forgiven or cancelled any material amount on any indebtedness
prior to the due date, forgiven or cancelled any material debts
or claims or released or waived any material rights or claims;
(f) suffered any damage or destruction to or loss of any assets
(whether or not covered by insurance); (g) acquired or disposed
of any assets or incurred any liabilities or obligations; (h)
made any payments to its affiliates or associates or loaned any
money to any person or entity; (i) formed or acquired or disposed
of any interest in any corporation, partnership, joint venture or
other entity; (j) entered into any employment, compensation,
consulting or collective bargaining agreement or any other
agreement of any kind or nature with any person or group, or
modified or amended in any respect the terms of any such existing
agreement; (k) entered into any other commitment or transaction
or experience any other event that relates to or affect in any
way this Agreement or to the transactions contemplated hereby, or
that has affected, or may adversely affect NWV's business,
operations, assets, liabilities or financial condition; or (l)
amended its Certificate of Incorporation or By-Laws, except as
otherwise contemplated herein.
2.09 Title to Assets. NWV holds good and marketable title, free and
clear of all liens and encumbrances, to all properties, assets
and licenses required in connection with its business, except as
set forth in Exhibit 2.09 hereto.
2.10 Certain Agreements. Except as set forth in Exhibit 2.10 hereto,
NWV is not in default of any contract, agreement, undertaking or
arrangement material to the operation of its business.
<PAGE>
2.11 Labor Agreements and Labor Relations. NWV has no collective
bargaining or union contracts or agreements. NWV is in
compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor
practices; there are no charges of discrimination or unfair
labor practice charges or complaints against NWV pending or
threatened before any governmental or regulatory agency or
authority; and, there is no labor strike, dispute, slowdown or
stoppage actually pending or threatened against or affecting NWV.
2.12 Employment Arrangements. Except as set forth in Exhibit 2.12
hereto, NWV has no employment or consulting agreements or
arrangements, written or oral, which are not terminable at the
will of NWV, or any pension, profit-sharing, option, other
incentive plan, or any other type of employment benefit plan, or
any obligation to or customary arrangement with employees for
bonuses, incentive compensation, vacations, severance pay,
insurance or other benefits.
2.13 Material Contracts. Set forth in Exhibit 2.13 hereto is a true
and complete list of all material leases, agreements, contracts,
commitments and equipment rentals to which NWV may be a party or
by which it or any of its property may be bound, including
without limitation, all loan agreements, labor agreements,
mortgages, security agreements and the like, whether written or
oral.
2.14 Patents, Trademarks and Service Marks. Exhibit 2.14 hereto lists
all patents, trade names, trademarks and service marks, all
patent, trademark and service mark registrations or applications,
both domestic and foreign, presently owned, possessed, used or
held by NWV and all copyrights and copyright applications and
registrations, domestic and foreign, relating to the business or
proposed business of NWV, all of which are collectively referred
to as the "Proprietary Rights". Exhibit 2.14 hereto also lists
all licenses, if any, granted by or to NWV. NWV has not granted
to any person, firm or corporation, any right, license or
privilege in any of the Proprietary Rights or the know-how used
in the business or proposed business of NWV nor have such
Proprietary Rights or know-how been revealed to any persons other
than its employees, customers and consultants. NWV possesses all
rights necessary to continue to conduct its business or proposed
business, and to utilize the processes and market its products
and services heretofore utilized and marketed in the conduct of
such business, without payment of any royalties, fees or other
consideration.
2.15 Disclosure. No representation or warranty by NWV in this
Agreement nor any statement or certificate furnished or to be
furnished by it pursuant hereto or in connection with the
transaction contemplated hereby contains or will contain any
untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained
therein not false or misleading.
2.16 Consents. No authorization, consent, approval, permit or license
of, or filing with any governmental or public body or authority,
any lender or lessor or any other person or entity is required to
authorize, or is required in connection with the execution,
<PAGE>
delivery and performance of this Agreement, the agreements
contemplated hereby, or the consummation of the transactions
contemplated hereby or thereby, on the part of NWV, except for
obtaining approval from the stockholders of NWV.
2.17 Compliance with Laws. There are no existing violation of any
applicable federal, state or local law or regulation involving
the property or business of NWV; there are no known, noticed or
threatened violations or any state of facts involving NWV which
would constitute such a violation; and this Agreement and the
consummation of the transactions contemplated hereby will not
give rise to any such violation.
2.18 Litigation. NWV has not had any legal action or administrative
proceeding or investigation instituted or, to the best of NWV's
knowledge, threatened against it. NWV is not (a) subject to any
continuing court or administrative order, writ, injunction or
decree applicable specifically to NWV or to its business, assets,
operations or employees, or (b) in default with respect to any
such order, writ, injunction or decree. NWV knows of no basis
for any such action, proceeding or investigation.
2.19 Tax and Franchise Returns. NWV has prepared and filed, or has
caused to be prepared and filed, with the appropriate United
States, state and local government agencies, and all political
subdivisions thereof, all tax and franchise returns required to
be filed by, on behalf of or on account of the operations of NWV;
all such returns required to be filed have been so filed; and all
taxes, assessments, interest and penalties required to be paid in
respect of all periods covered thereby have and will be paid.
Such returns accurately reflect the taxes due for the periods
covered thereby, except for amounts which, in the aggregate, are
immaterial. There are no present disputes as to taxes of any
nature payable by NWV.
2.20 NWV Schedules. NWV has delivered to Cyberia the following
separate schedules, which are collectively referred to as "NWV
Schedules", certified by an officer of NWV to be complete and
accurate:
(a) Schedule "A": a copy of NWV's audited financial
statements for the fiscal years ended December 31, 1994 and 1995
and unaudited financial statements for the period ended March 31, 1996;
<PAGE>
(b) Schedule "B": a copy of NWV's Prospectus dated June
30, 1995;
(c) Schedule "C": a schedule showing the name and location
of each bank or other institution in which NWV has an account or safe
deposit box, the names of all persons authorized to draw thereon
or to have access thereto, and the amount deposited in each
account and a description of the property held in each safe
deposit box;
(d) Schedule "D": copies of Certificate of Incorporation
and all amendments thereto and By-Laws; and
(e) Schedule "E": A stockholders list containing the names and
addresses of record.
2.21 Delivery of Exhibits and Schedules. Any Exhibit provided for
hereunder and any NWV Schedule not delivered contemporaneously
with the execution of this Agreement shall be delivered by NWV as
soon as practicable and, in any event, prior to the Closing. All
lists or other statements, information or documents set forth in
or attached to any Exhibit or NWV Schedule delivered herewith or
delivered hereunder after the execution of this Agreement shall
be deemed to be representations and warranties by NWV with the
same force and effect as if such lists, statements, information
and documents were set forth herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CYBERIA AND THE SHAREHOLDERS
Cyberia and each of the Shareholders, jointly and severally,
represent, warrant and covenant that:
3.01 Organization and Good Standing. Cyberia is a corporation duly
organized, validly existing and in good standing under the laws
of its state of incorporation, with all requisite power and
authority to carry on the business in which it is and/or has been
engaged, and to own the properties it owns. Cyberia has all
requisite power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and
to take all of the other actions provided for in or contemplated
hereby. Cyberia is and has been qualified to transact business
and is in good standing in all jurisdictions where the nature or
conduct or its business so requires. Cyberia has no
subsidiaries, direct or indirect.
3.02 Authorization and Validity. The execution, delivery and
performance of this Agreement by Cyberia or the Shareholders, as
the case may be, has been duly authorized by the Board of
Directors of Cyberia and constitutes the valid and binding
agreement of Cyberia and each of the Shareholders, enforceable in
<PAGE>
accordance with its terms, and neither the execution or delivery
of this Agreement nor the consummation by Cyberia or the
Shareholders of the transactions contemplated hereby (i) violates
any statute or law or any rule, regulation or order of any court
or any governmental authority, or (ii) violates or conflicts
with, or constitutes a default under or will constitute a default
under, any contract, commitment, agreement, understanding,
arrangement, or restriction of any kind to which Cyberia or the
Shareholders are a party or by which Cyberia or the Shareholders
are bound. Each Shareholder has full right and power to sell
and deliver the Cyberia Shares owned by him to NWV as
contemplated by this Agreement.
3.03 No Violation. Cyberia is not in violation of any term of any
mortgage, indenture, loan agreement, credit instrument, judgment,
decree, order, statute, rule or regulation to which it is subject
or by which it is bound. Neither the execution, delivery or
performance of this Agreement nor the consummation of any of the
transactions contemplated hereby now or at any time in the future
(whether with the giving of notice or passage of time or both)
will (a) conflict with, or result in a violation or breach of the
terms, conditions and provisions of, or constitute a default
under, the Articles of Incorporation or By-Laws of Cyberia or
any agreement, indenture or other instrument or undertaking of
any kind or nature under which Cyberia is bound or to which the
assets of Cyberia are subject, or result in the creation or
imposition of any lien, claim, charge or encumbrance upon any of
such assets or upon any of the stock of Cyberia or (b) violate or
conflict with any judgment, decree, order, statute, rule or
regulation of any court of any public, governmental or regulatory
agency or body having jurisdiction over Cyberia or the properties
or assets of Cyberia. Cyberia has complied in all material
respects with the applicable laws, regulations and licensing
requirements, and has filed with the proper authorities all
necessary statements and reports, tax returns and all other
filings of any kind or nature due at any time up through the date
hereof. Cyberia possesses all necessary licenses, franchises,
permits and governmental authorizations to conduct its business
as now or heretofore conducted and as this Agreement contemplates
it will be conducting after the Closing.
3.04 Capitalization. Exhibit 3.04 hereto sets forth the authorized
and issued and outstanding shares of capital stock of Cyberia.
Each outstanding share of capital stock of Cyberia is legally
and validly issued and fully paid and non assessable. There are
no outstanding warrants, options, subscriptions or other rights
of any kind or nature by which any person or entity can acquire
any additional shares of capital stock of Cyberia or other
securities of any kind of nature of Cyberia; no shareholder of
Cyberia, or other person or entity is entitled to any preemptive
rights, rights of first refusal or other rights of any kind or
nature arising out of or relating to the sale of the Cyberia
Shares to NWV under this Agreement; and there are no other
<PAGE>
commitments requiring the issuance of any additional shares of
the capital stock of Cyberia. The Cyberia Shares are duly
authorized, fully paid and non-assessable shares; subject to no
lien, claim, charge or encumbrance of any kind or nature; will
not be subject to any shareholders agreement, right of first
refusal or preemptive rights; and will constitute 100% of the
issued and outstanding shares of Cyberia Common Stock.
3.05 Corporate Records. The copies of the Articles of Incorporation
and all amendments thereto and the By-Laws of Cyberia that will
be delivered to NWV at the Closing are true, correct and
complete. The minute book of Cyberia, copies of which will be
delivered to NWV at the Closing contain minutes of all meetings
of and consents to all actions taken without meetings by the
Board of Directors and the shareholders of Cyberia , since the
formation of Cyberia , all of which are accurate in all material
respects. The books and records, financial and others of Cyberia
are in all material respects complete and correct.
3.06 Financial Statements. Cyberia has furnished NWV a copy of the
audited consolidated financial statements of Cyberia for the
fiscal years ended December 31, 1994 and 1995 and unaudited
financial statements for the period ended March 31, 1996 (the
"Cyberia Financial Statements"). The Cyberia Financial
Statements fairly present the financial condition of Cyberia as
of their respective dates, and the results of operations for
those periods, in accordance with generally accepted accounting
principles consistently applied. Cyberia did not have, as of the
date of each such balance sheet, except as to the extent
reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in
the balance sheet or the notes thereto prepared in accordance
with generally accepted accounting principles.
3.07 Absence of Liabilities. Cyberia has no liabilities, whether
fixed or contingent, due or not yet due, asserted or not yet
asserted, including without limitation all amounts which may be
due under any contracts, agreements or undertakings entered into
by or on behalf of Cyberia , as the case may be, except as set
forth in Exhibit 3.07 hereto or the Cyberia Financial Statements.
In addition, Cyberia has not guaranteed, become liable for or
agreed to stand behind or assume the obligations of any person or
entity, and is not contingently liable for any debt, obligation,
expense or liability.
3.08 Absence of Certain Changes. Except as disclosed in the Cyberia
Financial Statements or as set forth in Exhibit 3.08 hereto,
since March 31, 1996, Cyberia has not (a) suffered any material
adverse change in its financial condition, assets, liabilities or
business; (b) contracted for or paid any capital expenditures;
(c) acquired or disposed of any assets or incurred any
liabilities or obligations or borrowed money, issued or sold any
<PAGE>
debt or equity securities or discharged or incurred any
liabilities or obligations except in the ordinary course of
business as heretofore conducted; (d) mortgaged, pledged or
subjected to any lien, lease, security interest or charge or
encumbrance any of their properties or assets; (e) paid any
material amount on any indebtedness prior to the due date,
forgiven or cancelled any material debts or claims or released or
waived any material rights or claims; (f) suffered any damage or
destruction to or loss of any asset (whether or not covered by
insurance); (g) acquired or disposed of any assets or incurred
any liabilities or obligations; (h) made any payments to its
affiliates or associates or loaned any money to any person or
entity; (i) formed or acquired or disposed of any interest in any
corporation, partnership, joint venture or other entity; (j)
entered into any employment, compensation, consulting or
collective bargaining agreement or any other agreement of any
kind or nature with any person or group, or modified or amended
in any respect the terms of any such existing agreement; (k)
entered into any other commitment or transaction or experienced
any other event that relates to or affects in any way this
Agreement or to the transactions contemplated hereby, or that has
affected, or may adversely affect the business, operations,
assets, liabilities or financial condition of Cyberia; or (l)
amended the Certificate of Incorporation or By-Laws of Cyberia.
3.09 Title to Assets. Cyberia holds good and marketable title, free
and clear of all liens and encumbrances, to all properties,
assets and licenses required in connection with its business,
except as set forth in Exhibit 3.09 hereto.
3.10 Certain Agreements. Except as set forth in Exhibit 3.10 hereto,
Cyberia is not in default of any contract, agreement, undertaking
or arrangement material to the operation of its business.
3.11 Labor Agreements and Labor Relations. Cyberia has no collective
bargaining or union contracts or agreements. Cyberia is in
compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor
practices; there are no charges of discrimination or unfair
labor practice charges or complaints against Cyberia pending or
threatened before any governmental or regulatory agency or
authority; and, there is no labor strike, dispute, slowdown or
stoppage actually pending or threatened against or affecting
Cyberia.
3.12 Employment Arrangements. Except as set forth in Exhibit 3.12
hereto, Cyberia has no employment or consulting agreements or
arrangements, written or oral, which are not terminable at the
will of Cyberia, or any pension, profit-sharing, option, other
incentive plan, or any other type of employment benefit plan, or
any obligation to or customary arrangement with employees for
<PAGE>
bonuses, incentive compensation, vacations, severance pay,
insurance or other benefits.
3.13 Material Contracts. Set forth in Exhibit 3.13 hereto is a true
and complete list of all material leases, agreements, contracts,
commitments and equipment rentals to which Cyberia may be a party
or by which it or any of its property may be bound, including
without limitation, all loan agreements, labor agreements,
mortgages, security agreements and the like, whether written or
oral.
3.14 Patents, Trademarks and Service Marks. Exhibit 3.14 hereto lists
all patents, trade names, trademarks and service marks, all
patent, trademark and service mark registrations or applications,
both domestic and foreign, presently owned, possessed, used or
held by Cyberia and all copyrights and copyright applications and
registrations, domestic and foreign, relating to the business or
proposed business of Cyberia, all of which are collectively
referred to as the "Proprietary Rights". Exhibit 3.14 hereto
also lists all licenses, if any, granted by or to Cyberia.
Cyberia has not granted to any person, firm or corporation, any
right, license or privilege in any of the Proprietary Rights or
the know-how used in the business or proposed business of Cyberia
nor have such Proprietary Rights or know-how been revealed to any
persons other than its employees, customers and consultants.
Cyberia possesses all rights necessary to continue to conduct its
business or proposed business, and to utilize the processes and
market its products and services heretofore utilized and marketed
in the conduct of such business, without payment of any
royalties, fees or other consideration.
3.15 Disclosure. No representation or warranty by Cyberia or any
Shareholder in this Agreement nor any statement or certificate
furnished or to be furnished by it pursuant hereto or in
connection with the transactions contemplated hereby contains or
will contain any untrue statement or a material fact or omits or
will omit to state a material fact necessary to make the
statements contained therein not false or misleading.
3.16 Consents. No authorization, consent, approval, permit or license
of, or filing with, any governmental or public body or authority,
any lender or lessor or any other person or entity is required to
authorize, or is required in connection with the execution,
delivery and performance of this Agreement, the agreements
contemplated hereby, or the consummation of the transactions
contemplated hereby or thereby, on the part of Cyberia or any
Shareholder.
3.17 Compliance with Laws. There are no existing violations of any
applicable federal, state or local law or regulation involving
the property or business of Cyberia; there are no known, noticed
or threatened violations or any state of facts involving Cyberia
which would constitute such a violation; and this Agreement and
<PAGE>
the consummation of the transactions contemplated hereby will not
give rise to any such violation.
3.18 Litigation. Cyberia, and the Shareholders have not had any legal
action or administrative proceeding or investigation instituted
or threatened against them. Cyberia, and the Shareholders are
not (a) subject to any continuing court or administrative order,
writ, injunction or decree applicable specifically to Cyberia,
and the Shareholders or to their business, assets, operations or
employees, or (b) in default with respect to any such order,
writ, injunction or decree. Such persons know of no basis for
any such action, proceeding or investigation.
3.19 Tax and Franchise Returns. Cyberia has prepared and filed, or
has caused to be prepared and filed, with all the appropriate
United States, state and local government agencies, and all
political subdivisions thereof, all tax and franchise returns
required to be filed by, on behalf of or on account of the
operations of Cyberia ; all such returns required to be filed
prior to the Closing will be so filed; and all taxes,
assessments, interest and penalties required to be paid in
respect of all periods covered thereby have and will be paid.
Such returns accurately reflect the taxes due for the periods
covered thereby, except for amounts which, in the aggregate, are
immaterial. There are no present disputes as to the taxes of any
nature payable by Cyberia.
3.20 Investment Intent. Each of the Shareholders represents and
confirms to NWV that he, she or it (a) is aware of the limits on
resale imposed by virtue of the nature of this Agreement, and (b)
is receiving the consideration hereunder, to the extent that such
consideration consists of securities issued without registration
under the 1933 Act in reliance on the exemption from registration
contained in Section 4(2) of the 1933 Act, for investment and
without any view to the sale, resale or other distribution
thereof in any manner that is in violation of the 1933 Act. The
certificates representing such securities, when delivered to the
Shareholders, may have appropriate orders restricting transfer
placed against them on the records of the transfer agent for such
securities and will have placed upon them a legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION
OF THE COMPANY'S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT."
3.21 Cyberia Schedules. Cyberia has delivered to NWV the following
separate schedules, which are collectively referred to as the
<PAGE>
"Cyberia Schedules", certified by an officer of Cyberia to be
complete and accurate.
(a) Schedule "A": copies of the audited financial statements
of Cyberia for the fiscal years ended December 31, 1994 and 1995 and
unaudited financial statements for the period ended March 31,
1996; and
(b) Schedule "B": copies of the Certificate of Incorporation and
By-Laws of Cyberia, including all amendments thereto.
3.22 Delivery of Exhibits and Schedules. Any Exhibit provided for
hereunder and any Cyberia Schedule not delivered
contemporaneously with the execution of this Agreement shall be
delivered by Cyberia as soon as practicable and, in any event,
prior to the Closing. All lists or other statements, information
or documents set forth in or attached to any Exhibit or Cyberia
Schedule delivered herewith or delivered hereunder after the
execution of this Agreement shall be deemed to be representations
and warranties by Cyberia and the Shareholders with the same
force and effect as if such lists, statements, information and
documents were set forth herein.
ARTICLE IV
COVENANTS
4.01 Investigative Rights. As between NWV, on one hand, and Cyberia,
on the other, until the Closing Date, each party shall provide
to the other party, and such other party's counsels, accountants,
auditors, and other authorized representatives, full access
during normal business hours and upon reasonable advance written
notice to all of each party's properties, books, contracts,
commitments and records (collectively, the "records") for the
purpose of examining the same. Each party shall furnish the
other party with all information concerning each party's affairs,
as the other party may reasonably request and shall furnish the
exhibits and schedules required by this Agreement which were not
delivered contemporaneously with the execution of this Agreement.
4.02 Conduct of Business. Prior to the Closing, NWV and Cyberia shall
conduct their business in the normal course, and Cyberia shall
cause the business of to be conducted in the normal course, and
shall not sell, pledge, or assign any assets, without the prior
written approval of the other party, except in the regular course
of business. Except as otherwise provided herein, neither NWV
nor Cyberia shall amend their Articles of Incorporation or
By-Laws, declare dividends, redeem or sell stock or other
securities, incur additional or newly-funded liabilities, acquire
or dispose of fixed assets, change employment terms, enter into
any material or long-term contract, guarantee obligations of any
<PAGE>
third party, settle or discharge any balance sheet receivable for
less than its stated amount, pay more on any liability than its
stated amount, or enter into any other transaction other than in
the regular course of business. From time to time prior to
Closing, each party will deliver or cause to be delivered to the
other party, supplemental information concerning events
subsequent to the date hereof which would render any statement,
representation or warranty made in this Agreement or any
information contained in exhibit or any schedule required by such
section inaccurate or incomplete in any material respect.
4.03 Rule 419. NWV shall use its best efforts to complete the
requirements of paragraphs (e)(1) and (2) of Rule 419 of
Regulation C under the 1933 Act as soon as reasonably possible.
Cyberia and each of the Shareholders will timely furnish NWV and
its counsel with all cooperation deemed reasonably necessary or
desirable by NWV and its counsel in connection with the
preparation of a Post-Effective Amendment to its Registration
Statement on Form SB-2 and with all information concerning
Cyberia and the Shareholders reasonably necessary or desirable
for inclusion in such Post-Effective Amendment.
ARTICLE V
CONDITIONS PRECEDENT TO NWV'S PERFORMANCE
5.01 Conditions. NWV's obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions
set forth in this Article V. Except with respect to the
conditions specified in Section 5.07, NWV may waive any or all of
these conditions in whole or in part without prior notice;
provided, however, that no such waiver of a condition shall
constitute a waiver by NWV of any other condition of or any of
NWV's other rights or remedies, at law or in equity, if Cyberia
and the Shareholders shall be in default of any of their
representations, warranties or covenants under this Agreement.
5.02 Accuracy of Representation. Except as otherwise permitted by
this Agreement, all representations and warranties by Cyberia and
the Shareholders in this Agreement, or in any written statement
that shall be delivered to NWV by Cyberia and the Shareholders
under this Agreement shall be true and accurate on and as of the
Closing Date as though made at that time.
5.03 Performance. Cyberia and the Shareholders shall have performed,
satisfied, or complied with all covenants, agreements and
conditions required by this Agreement to be performed or complied
with by it, on or before the Closing Date.
5.04 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the
transaction contemplated by this Agreement or to its
<PAGE>
consummation, shall have been instituted or threatened against
any of the parties hereto on or before the Closing Date.
5.05 Schedules. Cyberia and the Shareholders shall have delivered to
NWV all exhibits and schedules required under Article III hereof
and there shall have been no disclosure in any exhibit or
schedule delivered by Cyberia and the Shareholders after the date
of execution and delivery of this Agreement, or the documents
described therein, which does or may have a materially adverse
effect on the value of the business of Cyberia or on its
respective assets, properties or goodwill except as already
disclosed to NWV in writing as of the date hereof.
5.06 Good Standing. Cyberia shall have delivered to NWV a certificate
dated as of the Closing Date (or such earlier date reasonably
satisfactory to NWV) of the Secretary of State of the State of
incorporation of Cyberia attesting to the good standing of
Cyberia.
5.07 Rule 419 Compliance. NWV shall have satisfied the requirements
of paragraphs (e)(1) and (2) of Rule 419 of Regulation C under
the 1933 Act.
5.08 Certificate. Cyberia and each of the Shareholders shall have
delivered to NWV a certificate dated the Closing Date, and signed
by an authorized officer of Cyberia and each of the Shareholders
certifying that each of the conditions specified in Sections 5.02
through 5.06 hereof have been fulfilled.
ARTICLE VI
CONDITIONS PRECEDENT TO
CYBERIA'S AND SHAREHOLDERS' PERFORMANCE
6.01 Conditions. Cyberia's and the Shareholders' obligations
hereunder shall be subject to the satisfaction, at or before the
Closing, of all of the conditions set forth in this Article VI.
Except with respect to the conditions specified in Section 6.08,
Cyberia and the Shareholders may waive any or all of these
conditions in whole or in part without prior notice; provided,
however, that no such waiver of a condition shall constitute a
waiver by Cyberia and the Shareholders of any other condition of
or any of Cyberia's or the Shareholders' rights or remedies at
law or in equity, if NWV shall be in default of any of its
representations, warranties or covenants under this Agreement.
6.02 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by NWV in this
Agreement or in any written statement that shall be delivered to
Cyberia and/or the Shareholders by NWV under this Agreement shall
be true and accurate on and as of the Closing Date as though
made at that time.
<PAGE>
6.03 Performance. NWV shall have performed, satisfied and complied
with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it, on or before
the Closing Date.
6.04 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the
transaction contemplated by this Agreement or to its
consummation, shall have been instituted or threatened against
any of the parties hereto on or before the Closing Date.
6.05 Outstanding Number of Shares. As of the Closing, NWV shall have
4,500,000 shares of the NWV Common Stock outstanding, excluding
the shares of the NWV Common Stock to be issued by to the
Shareholders hereunder.
6.06 Schedules. NWV shall have delivered to Cyberia and the
Shareholders all exhibits and schedules required under Article II
hereof and there shall have been no disclosure in any exhibit or
schedule delivered after the date of execution and delivery of
this Agreement, or the documents described therein, which does or
may have a materially adverse effect on the value of the business
of NWV or on its assets, properties or goodwill except as already
disclosed to Cyberia and the Shareholders in writing as of the
date hereof.
6.07 Good Standing. NWV shall have delivered to Cyberia a certificate
dated as of the Closing Date (or such earlier date reasonably
satisfactory to Cyberia) of the Secretary of State of the State
of incorporation of NWV attesting to its good standing.
6.08 Rule 419 Compliance. NWV shall have satisfied the requirements
of paragraphs (e)(1) and (2) of Rule 419 of Regulation C under
the 1933 Act.
6.09 Officer's Certificate. NWV shall have delivered to Cyberia
and the Shareholders a certificate, dated the Closing Date, and
signed by an authorized officer of NWV, certifying that each of
the conditions specified in Sections 6.02 through 6.08 have been
fulfilled.
ARTICLE VII
INDEMNIFICATION
7.01 Mutual Indemnification. Cyberia and the Shareholders agree,
jointly and severally, to indemnify, defend and hold harmless NWV
(and its officers and directors), and NWV agrees to indemnify,
defend and hold harmless each of Cyberia (and its officers and
directors) and the Shareholders, from and against any and all
liabilities, damages, losses, claims, costs and expenses
(including reasonable attorneys' fees) suffered or incurred as a
<PAGE>
result of any misrepresentation or breach of any of their
respective representatives and warranties or non-performance of
any of their respective covenants, agreements or obligations to
be performed under this Agreement.
7.02 Notice of Claim. In the event that any legal proceedings shall
be instituted or that any claim shall be asserted by any person
in respect of which payment may be sought by any party hereto
(the "Claimant") from any other party hereto (the "Indemnitor")
under the provisions of this Article VII, the Claimant shall
promptly cause written notice of the assertion of any claims of
which it, he or they, have knowledge which is covered by this
indemnity to be forwarded to the Indemnitor, and the Indemnitor
shall have the right, at its, his or their option and sole
expense, to be represented by counsel of its choice and to defend
against, negotiate, settle or otherwise deal with any proceeding,
claim or demand which relates to any loss, liability, damage or
deficiency indemnified against hereunder; provided, however, that
the Claimant may participate in any such proceeding with counsel
of its choice and at its expense. To the extent the Indemnitor
elects not to defend such proceeding, claim or demand and the
Claimant defends against, settles or otherwise deals with any
such proceeding, claim or demand, the Claimant will act
reasonably and in accordance with its good faith business
judgment. The parties hereto agree to cooperate fully with each
other in connection with the defense, negotiation or settlement
of any such legal proceeding, claim or demand. After any final
judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent
jurisdiction and the expiration of the time in which to appeal
therefrom, or settlement shall have been consummated, or the
Claimant and the Indemnitor shall have arrived at a mutually
binding agreement with respect to each separate matter
indemnified by the Indemnitor hereunder, the Claimant shall
forward to the Indemnitor notice of any sums due and owing by it
pursuant to this Agreement with respect to such matter and the
Indemnitor shall be required to pay all of the sums so owing to
the Claimant within ten (10) days after the date of such notice.
ARTICLE VIII
MISCELLANEOUS
8.01 Amendment. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by the
party against which enforcement of the amendment, modification or
supplement is sought.
8.02 Parties in Interest. This Agreement shall be binding on and
inure to the benefit of and be enforceable by NWV, Cyberia and
the Shareholders, their respective heirs, executors,
administrators, legal representatives, successors and assigns.
<PAGE>
The representations, warranties and other provisions hereof shall
survive the Closing.
8.03 Assignment. Neither this Agreement nor any right created hereby
shall be assignable by any party hereto.
8.04 Notice. Any notice or other communication hereunder must be in
writing and given by hand delivery, registered or certified mail
with return receipt requested, or nationally recognized overnight
courier service, at the following addresses:
If to NWV:
NW Venture Corp.
501 SE Columbia Shores Blvd.-#350
Vancouver, WA 98661
Attn: Martin Rifkin, President
With a copy to:
Danzig, Garubo & Kaye, Esqs.
75 Livingston Avenue
Roseland, New Jersey 07068
Attn: David M. Kaye, Esq.
If to Cyberia and the Shareholders:
Cyberia, Inc.
1547 14th Street
Santa Monica, CA 90404
Each such notice shall be deemed given at the time delivered by
hand, if personally delivered; three business days after being
deposited in the mail, postage prepaid, if mailed; and the next
business day after timely delivery to the courier, if sent by
overnight courier. Any party may change its address or addresses
for notice by written notice given to the other parties.
8.05 Entire Agreement. This Agreement and the exhibits and schedules
hereto supersede all prior agreements and understandings between
the parties relating to the subject matter hereof, except that
the obligations of any party under any agreement executed
pursuant to this Agreement shall not be affected by this Section.
8.06 Costs, Expenses and Legal Fees. Whether or not the transactions
contemplated hereby are consummated, each party hereto shall bear
its own costs and expenses (including attorneys' fees) except
that each party hereto agrees to pay the costs and expenses,
including reasonable attorneys' fees, incurred by the other
parties in successfully (i) enforcing any of the terms of this
Agreement against a party alleged to be in breach, or (ii)
proving that the other parties breached any of the terms of this
<PAGE>
Agreement in any material respect.
8.07 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws
effective during the term hereof, such provision shall be fully
severable and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision never
comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its
severance hereof. Furthermore, in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as
part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be
possible and still be legal, valid and enforceable.
8.08 Governing Law. This Agreement and the rights and obligations of
the parties hereto shall be governed, construed and enforced in
accordance with the laws of the State of Delaware.
8.09 Termination of Agreement. This Agreement may be terminated at
any time before the Closing:
(a) by mutual consent of the parties hereto;
(b) by NWV (provided it is not in breach hereunder) if any of the
conditions precedent set forth in Article V hereof have not been
met or waived in writing by NWV on or before the Closing Date;
(c) by Cyberia and the Shareholders (provided they are not in
breach hereunder) if any of the conditions precedent set forth in
Article VI hereof have not been met or waived in writing by
Cyberia and the Shareholders on or before the Closing Date.
Unless the termination has been caused by the willful failure of
NWV, on one hand, or Cyberia and the Shareholders, on the other
hand, as the case may be, to perform or satisfy any agreement,
undertaking or condition to be performed or satisfied by it
hereunder, NWV shall have no further obligation or liability to
Cyberia and the Shareholders under this Agreement, and Cyberia
and the Shareholders shall have no further obligation or
liability to NWV under this Agreement.
8.10 Brokers. The parties hereto represent and agree that no broker
has brought about the transactions contemplated by this Agreement
and no finder's fee has been paid or is payable by any party.
Each of the parties hereto shall indemnify and hold the others
harmless from and against any and all claims, losses, liabilities
or expenses which may be asserted against it as a result of its
dealings, arrangements or agreements with any such broker or
person.
<PAGE>
8.11 Announcements. NWV and Cyberia will consult and cooperate with
each other as to the timing and content of any announcements of
the transactions contemplated hereby to NWV's stockholders, the
general public, or to employees, customers or suppliers.
8.12 Captions and Gender. The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect any of the terms or provisions hereof. Whenever required
by the context hereof, the singular shall include the plural and
vice versa; the masculine gender shall include the feminine and
neuter gender and vice versa; the word "person" shall include a
natural person as well as a corporation, partnership, firm of
other form of association.
8.13 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all
of which shall constitute one and the same instrument.
8.14 Waiver. No waiver of any term or provision hereof shall be
effective unless in writing, signed by the parties to be charged.
8.15 Confidential Information. Except in connection with the
consummation of the transactions contemplated herein, each party
agrees not to disclose any confidential information or trade
secrets received by it from any other party pursuant to the terms
of this Agreement, including but not limited to, the contents of
customer lists. In the event this Agreement is terminated for
any reason, each party shall continue to hold such information in
confidence and shall, to the extent requested by the party from
which the information was received, promptly return to the latter
all written material received from it.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
NW Venture Corp.
By:/s/Martin Rifkin
Name:Martin Rifkin
Title:President
Cyberia, Inc.
By:/s/Jay Rifkin
Name:Jay Rifkin
Title:President
Shareholders:
/s/Jay Rifkin
Jay Rifkin
/s/Hans Zimmer
Hans Zimmer
/s/Mark Levy
Mark Levy
<PAGE>
LIST OF EXHIBITS
Exhibit 1.01 - Cyberia Shareholders
Exhibit 1.03 - Shares of NWV Common Stock
Exhibit 2.06 - SEC and Other Filing Obligations of NWV
Exhibit 2.07 - Absence of Liabilities of NWV
Exhibit 2.08 - Absence of Certain Changes of NWV
Exhibit 2.09 - Title to Assets owned by NWV
Exhibit 2.10 - Default of Certain Agreements involving NWV
Exhibit 2.12 - Employment Arrangements of NWV
Exhibit 2.13 - Material Contracts of NWV
Exhibit 2.14 - Patents, Trademarks and Service Marks of NWV
Exhibit 3.04 - Capitalization of Cyberia
Exhibit 3.07 - Absence of Liabilities of Cyberia
Exhibit 3.08 - Absence of Certain Changes of Cyberia
Exhibit 3.09 - Title to Assets owned by Cyberia
Exhibit 3.10 - Default of Certain Agreements involving Cyberia
Exhibit 3.12 - Employment Arrangements of Cyberia
Exhibit 3.13 - Material Contracts of Cyberia
Exhibit 3.14 - Patents, Trademarks and Service Marks of Cyberia
<PAGE>
CONSENT OF COUNSEL
We hereby consent to the reference to our name under the heading
"Legal Opinions" in the Prospectus constituting part of the
Registration Statement on Form SB-2 of NW Venture Corp.
/s/Danzig, Garubo & Kaye
Danzig, Garubo & Kaye
Roseland, NJ
August 6, 1996
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated April 18, 1996 accompanying the
financial statements of Cyberia, Inc. contained in this Post
Effective Amendment No. 1 Registration Statement on Form SB-2 and
Prospectus. We consent to the use of the aforementioned report
in the Registration Statement and Prospectus, and to the use of
our name as it appears under the caption "Experts."
/s/Glasser & Haims
Glasser & Haims, P.C.
Valley Stream, New York
August 5, 1996
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated April 18, 1996 accompanying the
financial statements of Cyberia, Inc. contained in this Post
Effective Amendment No. 1 Registration Statement on Form SB-2 and
Prospectus. We consent to the use of the aforementioned report
in the Registration Statement and Prospectus, and to the use of
our name as it appears under the caption "Experts."
<PAGE>
