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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A No. 1
Amending Item No. 7*
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 12, 1999.
EBONLINEINC.COM
(Exact Name of Registrant as Specified in Its Charter)
Nevada 0-25022 72-1148906
(State or Other (Commission File Number) (I.R.S. Employee
Jurisdiction of Incorporation) Identification Number)
15825 Shady Grove Road, Suite 50, Rockville, Maryland 20850
(Address of Principal Executive Offices, Including Zip Code)
(301) 947-0100
(Registrant's Telephone Number, Including Area Code)
CERX Venture Corporation
90 Madison Street, Suite 707, Denver, Colorado 80206
(Former Name or Former Address, if Changed Since Last Report)
* The Form 8-K dated July 15, 1999 is being amended to include the financial
statements of the business acquired and pro forma financial information.
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Item 1. Changes in Control of Registrant.
In connection with the Merger (as defined in Item 2 below) of
EBonlineinc.com, Inc. with and into CERX Venture Corporation (the
"Surviving Corporation" or the "Registrant"), effective as of July
12, 1999, Eastbrokers International Incorporated ("Eastbrokers") and
A1 Internet.com, Inc. ("A1 Internet") became owners of approximately
48.94% and 21.36%, respectively, of the Registrant's issued and
outstanding shares of common stock, par value $.001 per share
("Registrant Common Stock"). To effect such change in control, each
share of common stock of EBonlineinc.com, Inc., par value $.01 per
share ("EBonline Common Stock), owned by Eastbrokers and A1 Internet
prior to the Merger was converted into 3,845.39 and 3,916.67 shares
of Registrant Common Stock, respectively, upon consummation of the
Merger. Prior to the Merger, John D. Brasher, Jr., owned 57.9% of
the Registrant Common Stock.
As contemplated by the Plan of Merger (as defined in Item 2 below),
following the Merger, Martin A. Sumichrast, David Lavigne and Bruce
Bertman became directors of the Registrant, and John D. Brasher,
Jr., and Johnny D. Brasher resigned their positions as directors of
the Registrant. Also as contemplated by the Plan of Merger, John D.
Brasher, Jr., entered into certain Stock Purchase Agreements whereby
John D. Brasher, Jr., sold to Martin A. Sumichrast, Bruce Bertman
and EBI Securities Corporation 250,000, 150,000 and 250,000 shares
of Registrant Common Stock, respectively, at the time of the Merger.
Item 2. Acquisition or Disposition of Assets.
On June 28, 1999, the Registrant, EBonlineinc.com, Inc. and John D.
Brasher, Jr., entered into an Agreement and Plan of Merger (the
"Plan of Merger"), providing for the merger of EBonlineinc.com, Inc.
with and into the Registrant (the "Merger"). On July 12, 1999, the
Registrant filed the Articles of Merger and the Certificate of
Merger with the Secretaries of State of the states of Nevada and
Delaware, respectively, consummating the Merger. Immediately prior
to the Merger, the Registrant changed its name from CERX Venture
Corporation to EBonlineinc.com and effected a reverse stock split of
its issued and outstanding shares of common stock on a on a
three-and-one-half-for-ten (3.5:10) basis. The Registrant also
cancelled 117,765 shares of Registrant Common Stock immediately
prior to the Merger. The Registrant is continuing as the sole
surviving corporation and the separate existence of EBonlineinc.com,
Inc. ceased effective as of July 12, 1999.
The Merger is intended to qualify as a tax-free reorganization
pursuant to Section 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended (the "Code"), and the Plan of Merger is intended to
qualify as a "plan of reorganization" for purposes of Section 368 of
the Code. The Registrant intends to continue at least one
significant historic business of EBonlineinc.com, Inc. or to use at
least a significant portion of EBonline's historic business assets
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in a business, in each case within the meaning of Section 1.368-1(d)
of the Treasury Regulations promulgated under the Code.
Martin A. Sumichrast, a director and the President and Treasurer of
the Surviving Corporation, is a director and the Chairman of the
Board, Chief Executive Officer and President of Eastbrokers. Bruce
Bertman, a director of the Surviving Corporation, is the Chairman of
the Board, Chief Executive Officer and President of A1 Internet.
Certain additional information regarding the Merger and the
transactions contemplated by the Plan of Merger is included in the
Plan of Merger which is filed as an exhibit hereto. The foregoing
summary of the Plan of Merger is qualified in its entirety by
reference to the complete text thereof, attached hereto as Exhibits
2.1 and 2.2.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired:
1. Balance Sheet
The above financial statement, referenced under "Index to Financial
Statements of Business Acquired" on page 6, is filed as part of this
report. The business acquired, EBonlineinc.com, Inc., had no
operations from the date of its inception, April 7, 1999, to the
date of its acquisition by the Registrant. Therefore, there is no
information to include in any Statement of Operations or Statement
of Cash Flows.
(b) Pro Forma Financial Information:
1. Pro Forma Condensed Consolidated Balance Sheet.
2. Pro Forma Condensed Consolidated Statement of Operations.
The above pro forma financial statements, referenced under "Index to
Pro Forma Financial Information" on page 13 and filed as part of
this report, combine the historical consolidated balance sheet and
statement of operations information of the business acquired,
EBonlineinc.com, Inc., and the Registrant as if the acquisition had
been consummated at the beginning of each respective accounting
period. These statements have been prepared by management of the
Registrant based upon the historical information included herein and
other financial information. These pro forma statements do not
purport to be indicative of the results which would have occurred
had the acquisition been made on January 1 of each respective period
or which may be expected to occur in the future. The pro forma
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statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form
10-KSB of the Registrant for the year ended December 31, 1998, and
in the Quarterly Reports on Form 10-QSB of the Registrant for the
quarters ended March 31, 1999 and June 30, 1999.
(c) Exhibits
2.1* Agreement and Plan of Merger, dated as of June 28, 1999, by
and among the Registrant, EBonlineinc.com, Inc., and John D.
Brasher, Jr.
2.2* Amendment No. 1 to the Agreement and Plan of Merger, dated
as of June 28, 1999, by and among the Registrant,
EBonlineinc.com, Inc., and John D. Brasher, Jr.
--------------
* Previously filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EBONLINEINC.COM
(Registrant)
Date: September 28, 1999 By: /s/ Susan McAvoy
---------------------
Name: Susan McAvoy
Title: Vice President -
Administration
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Index to Financial Statements of Business Acquired
EBONLINEINC.COM, INC.
(A Development Stage Enterprise)
Independent Auditors' Report 7
Balance Sheet 8
Notes to Financial Statements 9
6
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INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
EBonlineinc.com, Inc.
We have audited the accompanying balance sheet of EBonlineinc.com, Inc. (a
development stage enterprise) as of June 30, 1999. This financial statement is
the responsibility of the Company's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
of the balance sheet provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of EBonlineinc.com, Inc. as of June
30, 1999 in conformity with generally accepted accounting principles.
Denver, Colorado /s/ Spicer, Jeffries & Co.
July 8, 1999 -------------------------------------
SPICER, JEFFRIES & CO.
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EBONLINEINC.COM, INC.
(A Development Stage Enterprise)
Balance Sheet
June 30, 1999
ASSETS
Equipment, at cost (net of accumulated depreciation of $0) $ 15,681
---------
Total Assets 15,681
---------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Advances from affiliated companies $ 14,681
----------
Total liabilities 14,681
----------
Commitments and contingencies
Common stock; par value $0.01; 3,000 shares authorized,
1,000 shares issued and outstanding at June 30, 1999 $ 10
Additional paid in capital 990
---------
Total shareholders' equity 1,000
---------
Total Liabilities and Shareholders' Equity $ 15,681
See notes to financial statements.
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EBONLINEINC.COM, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENT For the Period from
Inception (April 7, 1999) to June 30, 1999
Note 1. Summary of Significant Accounting Policies
Organization and Basis of Presentation
EBonlineinc.com, Inc., a Delaware Corporation, was formed on April 7, 1999
to develop, design, and market an internet presence focused on the development
of an internet community dedicated to national and international mergers and
acquisitions. The Company's activities to date have been primarily related to
organization, raising capital, personnel recruitment, marketing studies, and the
research and development of the Company's website.
The Company is in the development stage and has yet to generate any
revenues and there can be no assurance of future revenues. The Company is
subject to the risks and challenges associated with other companies at a similar
stage of development including dependence on key individuals, successful
development and marketing of its products and services, the acceptance of the
Internet as a medium for advertising, competition from substitute services and
larger companies with greater financial, technical, management and marketing
resources. Further, during the period required to develop commercially viable
products, services and sources of revenues, the Company may require additional
funds that may not be readily available.
Estimates and Assumptions
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Management believes that the estimates utilized in the
preparation of the consolidated financial statements are prudent and reasonable.
Actual results could differ from these estimates.
Fiscal Year-End
The fiscal year-end of EBonlineinc.com, Inc. is March 31.
Equipment
Equipment is carried at cost and is depreciated on a straight-line basis
over the estimated useful life of the related assets ranging from three to ten
years. As of June 30, 1999, the Company was still in the process of developing
its systems and none of the equipment was placed in service as of that date.
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Note 2. Advances from Affiliated Companies
Periodically, the Company will receive operating advances from an
affiliated company. These advances are generally due on demand and are not
subject to interest charges.
Note 3. Commitments and Contingencies
Site Development and Hosting Agreement
The Company has entered into an arrangement with a shareholder to provide
website design, software development and hosting services in connection with
creating and operating sites on the World Wide Web.
Financing Agreement
The Company has entered into an arrangement with a subsidiary of a
shareholder for investment banking and consulting services. Under the terms of
this arrangement, the consultant is entitled to receive compensation for various
services rendered based on a formula as set forth in the agreement. The
consultant is also entitled to receive consulting fees of $10,000 per month for
a period of 12 months commencing with the successful completion of a private
placement as defined in the agreement.
Year 2000
The Company has established a program to address the issues associated
with the Year 2000. To ensure that the Company's computer systems are Year 2000
compliant, the Company reviews its systems and programs on an ongoing basis to
identify potential Year 2000 compliance issues. In addition, some of the
Company's transactions are processed by companies who are external
counterparties. The Company maintains contact with these companies, as well as
other suppliers, to assess their compliance and remediation efforts with respect
to the Year 2000 issues and the Company's exposure to them. The ultimate success
or failure of the corrective plan and the extent of such success or failure
cannot presently be determined.
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Index to Pro Forma Financial Information
Pro Forma Condensed Consolidated Balance Sheet 12
Notes to Pro Forma Condensed Consolidated Balance Sheet 13
Pro Forma Condensed Consolidated Statement of Operations 14
Notes to Pro Forma Condensed Consolidated Statement of Operations 15
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<TABLE>
<CAPTION>
EBONLINEINC.COM
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(Unaudited)
As of June 30, 1999
-------------------------------------------------
CERX Pro forma Pro forma
Venture EBonlineinc.com, Adjustment As adjusted
Corporation Inc. (Unaudited) (Unaudited)
----------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 1,353 $ - $ - $ 1,353
Equipment, at cost (net of
accumulated depreciation
of $0) - 15,681 - 15,681
--------- --------- -------- ----------
Total assets $ 1,353 $ 15,681 - $ 17,034
========= ========= ======== ==========
Liabilities and Shareholders' Equity
Liabilities
Accounts payable 2,580 - - 2,580
Advances 20,193 - (20,193)(a)
Advances from affiliates 184,478 14,681 (184,478)(a) 14,681
--------- -------- --------- --------
Total liabilities 207,251 14,681 (204,671) 17,261
========= ======== ========= ========
Shareholders' Equity
Common stock 5,003 10 487(b,c) 5,550
Paid-in capital 220,992 990 487(b,c) 221,495
Retained earnings/
(accumulated deficit) (431,893) - 204,671 (227,222)
--------- ------- ------- --------
(205,898) 1,000 204,671 (227)
--------- ------- ------- --------
Total Liabilities and
Shareholders' Equity $ 1,353 $15,681 $ - $ 17,034
========= ======= ======== ========
</TABLE>
The accompanying notes and assumptions for the consolidated pro forma
presentation are an integral part of these statements.
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EBONLINEINC.COM
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(Unaudited)
This unaudited Pro forma Condensed Consolidated Balance Sheet is presented as if
EBonlineinc.com ("EBonline") (formerly CERX Venture Corporation ("CERX")) had
owned EBonlineinc.com, Inc. as of January 1, 1999. This unaudited Pro forma
Condensed Consolidated Balance Sheet should be read in conjunction with the
historical financial statements of CERX as presented in Form 10-KSB for the year
ended December 31, 1998. In management's opinion, all significant adjustments
necessary to reflect the acquisition transactions have been made.
This unaudited Pro forma Condensed Consolidated Balance Sheet is not necessarily
indicative of what the actual financial position of the Company would have been
assuming the acquisition transactions had been consummated as of January 1,
1999, nor does it purport to represent the financial position anticipated or
attainable in future periods.
Assumptions:
1. CERX Venture Corporation acquired 100 percent of the outstanding
capital stock of EBonlineinc.com, Inc. in exchange for 3,866,773
shares of CERX common stock. The value assigned to this transaction
by the Board of Directors was $1,000, the fair value of the net
assets acquired.
Adjustments
(a) As of the date of acquisition, the majority shareholder of CERX
agreed to forgive his cash loans and advances together with accrued
interest. The total amount of the loans forgiven was $159,372 and
the total amount of advances forgiven was $20,193 with accrued
interest forgiven of $25,106. The total loans and accrued interest
forgiven was $204,671.
(b) Immediately prior to the acquisition of EBonline, CERX announced a
reverse split of its outstanding common stock in the ratio of 3.5
new shares of common stock in exchange for every 10 shares of common
stock. The number of shares outstanding immediately after this
transaction was 1,633,227.
(c) CERX Venture Corporation acquired 100 percent of the outstanding
capital stock of EBonlineinc.com, Inc. in exchange for 3,866,773
shares of CERX common stock. The value assigned to this transaction
by the Board of Directors was $1,000, the fair value of the net
assets acquired.
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<TABLE>
<CAPTION>
EBONLINEINC.COM
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(Unaudited)
Six Months Ended June 30, 1999
----------------------------------------------------
CERX Pro forma Pro Forma
Venture EBonlineinc.com, Adjustment As Adjusted
Corporation Inc. (Unaudited) (Unaudited)
----------- ---------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenue
Other $ - $ - $204,671(a) $ 204,672
-------- ---------
Total revenue - - 204,671 204,671
------- -------- -------- ---------
Expenses
General and administrative 5,264 - - 5,264
Interest 6,365 - 6,365
------- -------- -------- --------
Total expenses 11,629 - - 11,629
------- -------- -------- --------
Income from continuing
operations before provision
for income taxes (11,629) - 204,671 193,042
Income tax benefit (expense) - - - -
-------- -------- -------- --------
Net income (loss) $(11,629) $ - $204,671 $193,042
========= ======== ======== =========
Pro forma earnings from common shares
Basic $ (0.002) $ - 0.035
Diluted $ (0.002) $ - 0.035
Pro forma weighted shares
outstanding
Basic 5,002,838 1,000 5,500,000
Diluted 5,002,838 1,000 5,500,000
</TABLE>
The accompanying notes and assumptions for the consolidated pro forma
presentation are an integral part of these statements.
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EBONLINEINC.COM
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(Unaudited)
This unaudited Pro forma Condensed Consolidated Statement of Operations is
presented as if the acquisition of EBonlineinc.com, Inc. by EBonlineinc.com
("EBonline") (formerly CERX Venture Corporation ("CERX")) had occurred as of
January 1, 1999. This unaudited Pro forma Condensed Consolidated Statement of
Operations should be read in conjunction with the historical financial
statements of CERX as presented in Form 10-KSB for the year ended December 31,
1998. In management's opinion, all significant adjustments necessary to reflect
the acquisition transactions have been made.
This unaudited Pro forma Condensed Consolidated Statement of Operations is not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the acquisition transactions had been consummated as of
January 1, 1998, nor does it purport to represent the results of operations
anticipated or attainable in future periods.
Assumptions:
1. CERX Venture Corporation acquired 100 percent of the outstanding
capital stock of EBonlineinc.com, Inc. in exchange for 3,866,773
shares of CERX common stock. The value assigned to this transaction
by the Board of Directors was $1,000, the fair value of the net
assets acquired.
Adjustments
(a) As of the date of acquisition, the majority shareholder of CERX
agreed to forgive his cash loans and advances together with accrued
interest. The total amount of the loans forgiven was $159,372 and
the total amount of advances forgiven was $20,193 with accrued
interest forgiven of $25,106. The total loans and accrued interest
forgiven was $204,671.
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