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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KSB
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(Mark One)
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the year ended December 31, 1999
OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from _____ to ______
Commission file number 0-25022
MoneyZone.com
Formerly, EBonlineinc.com
- - --------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)
NEVADA 72-1148906
- - -------------------------------------------- -------------------------------
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification No.)
8701 RED OAK BLVD, SUITE 100, CHARLOTTE,
NORTH CAROLINA 28217
- - --------------------------------------------- -------------------------------
(Address Of Principal Executive Offices) (Zip Code)
(704) 522-1410
- - --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
None.
Securities registered under Section 12(g) of the Exchange Act:
Name of Each Exchange
Title of Each Class On Which Registered
- - -------------------------------------- ----------------------------------
Common Stock, par value $.001 per share The common stock is quoted on the
Over-the-Counter Bulletin Board
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes |X| No |_|
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |_|
State issuer's revenues for its most recent fiscal year: $710.00
The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average of the bid and ask price of
such common equity on February 24, 2000 was approximately $22,358,944.37.
The total number of shares of the registrant's Common Stock, par value $.001 per
share, outstanding on February 24, 2000 was 6,245,835.
Transitional Small Business Disclosure Format: Yes |_| No |X|
Part III of this report incorporates by reference information from the issuer's
proxy statement to be filed by the issuer in connection with its annual meeting
of stockholders to be held on May 23, 2000.
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MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FORM 10-KSB
Page
----
PART I
Item 1. Description of Business..................................... 2
Item 2. Description of Property..................................... 6
Item 3. Legal Proceedings........................................... 6
Item 4. Submission of Matters to a Vote of Security Holders......... 6
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.... 7
Item 6. Management's Discussion and Analysis or Plan of Operation... 8
Item 7. Financial Statements
Index to Historical Financial Statements.................. 11
Independent Auditors' Reports............................. 12
Balance Sheets............................................ 14
Statements of Operations.................................. 15
Statements of Changes in Shareholders' Equity............. 16
Statements of Cash Flows.................................. 19
Notes to Financial Statements............................. 21
Item 8. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure......................... 26
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a) of the Exchange Act.. 27
Item 10. Executive Compensation....................................... 27
Item 11. Security Ownership of Certain Beneficial Owners and
Management...................................................27
Item 12. Certain Relationships and Related Transactions............... 27
Item 14. Exhibits, List and Reports on Form 8-K...................... 29
Signatures.............................................................. 30
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain information set forth in this report includes "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. In addition, from time to time, we may publish forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities and Exchange Act of 1934, as amended,
or make oral statements that constitute forward-looking statements. These
forward-looking statements may relate to such matters as anticipated financial
performance, future revenues or earnings, business prospects, projected
ventures, new products, anticipated market performance and similar matters. The
words "budgeted", "anticipate", "project", "estimate", "expect", "may",
"believe", "potential" and other similar statements are intended to be among the
statements that are considered forward looking statements. Readers are cautioned
not to place undue reliance on these forward looking statements, which are made
as of the date hereof. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. In order to comply with
the terms of the safe harbor, we caution readers that a variety of factors could
cause our actual results to differ materially from the anticipated results or
other expectations expressed in our forward-looking statements. These risks and
uncertainties, many of which are beyond our control, include, but are not
limited to:
o transaction volume in the securities markets
o the volatility of the securities markets
o fluctuations in interest rates
o changes in regulatory requirements which could affect the cost of
doing business
o fluctuations in currency rates
o general economic conditions, both domestic and international
o changes in the rate of inflation and related impact on securities
markets
o competition from existing financial institutions and other new
participants in the securities markets
o legal developments affecting the litigation experience of the
securities industry
o changes in federal and state tax laws which could affect the
popularity of products sold by us
o significant and rapid changes in technology which could negatively
affect our Internet related projects. We undertake no obligation
to release publicly any revisions to the forward looking
statements to reflect events or circumstances after the date
hereof or to reflect unanticipated events or developments.
IMPORTANT TERMS
In this report we use the terms "Company," "we," "us" and "our" to refer
to MoneyZone.com.
GENERAL
MoneyZone.com is an Internet-based business consisting of globally
accessible websites, designed to facilitate mergers, acquisitions and corporate
finance activities. The address for the Company's flagship website is
WWW.MONEYZONE.COM. The Company launched its current website on January 18, 2000,
and has attracted more than 2500 registered members, including business buyers,
business sellers, lending institutions, accredited investors, venture
capitalists, corporate investors, and business service providers. The Company
has also organized MoneyZone Capital Corp., a Delaware Corporation, which is in
the process of seeking licensing as a broker-dealer. Broker-dealer status will
enable the Company to fully facilitate corporate finance transactions via its
websites, and to collect commissions and referral fees.
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BACKGROUND
MoneyZone.com was formed on April 4, 1989 under the name Chelsea Atwater,
Inc. On March 19, 1997, the Company changed its name to Cerx Entertainment
Corporation, and on March 23, 1998, changed its name to Cerx Venture
Corporation. Prior to 1996, the Company had limited operations, while it sought
a business to acquire. On July 15, 1999, the Company effected a merger with
EBonlineinc.com, Inc., a Delaware corporation, and changed its name to
MoneyZone.com. MoneyZone.com completed the development of its primary website
and launched it on January 18, 2000. Our website address is
http://www.moneyzone.com.
INDUSTRY BACKGROUND
Corporate finance support for middle-market companies is generally
comprised of a network of finders, brokers, licensed broker-dealers and smaller
investment banks. These providers typically focus upon specific industry groups
and localized geographic markets. It is often difficult for smaller companies to
locate appropriate corporate finance specialists. A middle-market company
seeking a commercial loan, equity capital, or acquisition opportunity is often
limited by its local network and geographic market.
Many middle-market business owners/managers complete relatively few
significant corporate finance transactions during the course of their careers.
They often do not have in-house corporate finance expertise and must rely upon
facilitators to locate sources of capital, structure debt or equity offerings,
and assist in completing transactions. These companies typically focus upon
capital sources within their immediate geographic markets, even though more
advantageous terms may be available elsewhere.
The advent of the Internet and its rapid development within the past few
years, offers middle-market companies in search of corporate finance services,
the opportunity to more easily locate appropriate service providers without
geographic limits and often at more competitive pricing. Business sellers and
acquirers may now post and search listings worldwide. Lenders and investors
offer capital without regard to geographic boundaries.
CURRENT OPERATIONS
MoneyZone.com operates a website which provides five primary services to
its customers:
o the ability to apply for a commercial loan from a network of more
than 100 lenders,
o the ability to list a business for sale,
o the ability to post an equity funding request,
o search capabilities for professional service providers,
o a business toolkit with resources for business owners
The Company utilizes its website as an aggregator of corporate finance
clients, including business buyers, business sellers, funding seekers, and those
who require advisory services or financial services products. The website also
aggregates financial services providers such as commercial lending institutions,
investors, accredited investors, venture capitalists, corporate investors,
strategic partners, and corporate finance professionals.
MoneyZone.com facilitates transactions between its clients and its
providers utilizing the Company's websites and its corporate finance team. The
Company also directly provides advisory services to its clients.
The Company's target market includes middle-market companies within the
U.S. and Europe, early-stage Information Technology/Information Services
companies, and start-up/ early-stage Internet companies.
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MoneyZone.com competes with many corporate finance websites and considers
its competitive advantages to be as follows:
o A "HIGH TOUCH" COMPONENT: In contrast with most competing sites,
MoneyZone.com has an in-house staff of corporate finance
professionals with extensive experience in all functional areas.
The Company has formed MoneyZone Capital Corporation and is in
the process of licensing it as a broker-dealer. MoneyZone.com
will share fees and commissions with its member service providers.
o FULL COMPLEMENT OF FINANCIAL SERVICES: MoneyZone.com is a megasite
which encompasses most corporate finance functions and services.
Many of its competitors have limited functionality. The Company
intends to be a "one-stop shop" for its clients.
o INTERNATIONAL AFFILIATES: MoneyZone.com is organizing an affiliate
program within Europe which will give the Company a presence in
more than fifteen countries. The country affiliates will be
responsible for all operations while MoneyZone.com will direct the
advertising and marketing campaigns. Ten affiliates are currently
in place.
o CAPTIVE INVESTMENT FUNDS: The Company plans to organize a series
of investment funds (MoneyZone Partners) to invest in early-stage
IT and IS companies. These investments will be sourced via the
MoneyZone network and monitored by its corporate finance team.
o STATE-OF-THE-ART SITE FUNCTIONALITY: MoneyZone.com has developed
the architecture to support tens of thousands of members and their
data in a completely scalable environment. The Company's
functionality and design are highly competitive.
o MANAGEMENT TEAM: The Company's management team has extensive
experience in mergers and acquisitions, corporate finance in
general and the management of public companies. MoneyZone.com
intends to augment its current management team with additional
corporate finance and technology professionals.
SALES AND MARKETING
The Company markets its website through online services, direct mail,
print and other media and affiliate relationships. The Company retains a third
party agency to manage its online advertising sales program. Revenue sources are
advertising sales, membership fees, loan referral fees, affiliate referral fees,
product sales and consulting fees. Upon licensing MoneyZone Capital Corporation
as a broker/dealer, the Company will begin receiving investment banking and
advisory fees.
COMPETITION
MoneyZone.com is engaged in a highly competitive business. With respect to
one or more of its businesses, the Company has substantial competition from
traditional investment banks, loan brokers, business brokers as well as more
than 100 online competitors offering venture capital, commercial loans,
businesses for sale, business products and business services.
MoneyZone.com attempts to differentiate itself from its competitors on the
basis of its branding, reputation, functionality and depth of service.
EMPLOYEES
As of December 31, 1999, MoneyZone.com had 4 full-time employees. As of
March 15, 2000, we had 7 full-time employees. No employees are covered by
collective bargaining agreements, and MoneyZone.com believes its relations are
good with both its employees and its independent contractors and consultants.
RISK FACTORS
INADEQUATE FINANCING TO SUPPORT OUR BUSINESSES COULD HAVE A MATERIAL
ADVERSE EFFECT ON US. We have suffered operating losses and have a limited
operating history which makes our future operating results uncertain. Although
we initially incorporated in 1989 under the name Chelsea Atwater, Inc., we had
no material operations prior to July 1999 when EBonlineinc.com, Inc., a Delaware
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corporation, merged with and into us and we were the surviving corporation. In
connection with that merger, we had a complete change in controlling ownership
and in the members of our board of directors and our management team. Our new
management team then launched our current business. Accordingly, our operations
and business prospects must be considered in light of the risks and difficulties
frequently encountered by companies in the early stages of entry into a new
business segment in a new, rapidly evolving and highly competitive industry. To
address these risks, we must respond effectively to competition, continue to
attract, retain and motivate qualified personnel and continue to improve our
products. As a result of committing significant resources to launch our website,
we were not profitable in the twelve-months ended December 31, 1999. Because we
may need to devote additional resources to developing our business, will need to
increase our revenue to achieve profitability.
WE DEPEND ON CERTAIN KEY MEMBERS OF MANAGEMENT AND THE LOSS OF ANY ONE OF
THEM COULD HAVE A SIGNIFICANT ADVERSE EFFECT ON OUR PERFORMANCE AS A WHOLE We
depend on certain key members of management and the loss of any one of them
could have a significant adverse effect on our performance as a whole. Most
aspects of our business depend on highly-skilled individuals. We devote
considerable resources to recruiting, training and compensating such individuals
and have taken further steps to encourage such individuals to remain in our
employ. Individuals employed by us may, however, choose to leave at any time to
pursue other opportunities. Moreover, operating our business depends principally
on certain key management personnel. Since qualified personnel are in great
demand throughout the software and Internet industries, the loss of any member
of our management team could have a material adverse effect on our business. We
do not maintain key-man life insurance on our officers.
TRANSACTIONS INVOLVING OUR SECURITIES MAY BECOME SUBJECT TO PENNY STOCK
LESS THAT IMPOSE ADDITIONAL SALES PRACTICE REQUIREMENTS ON BROKER-DEALERS WHO
SELL SUCH SECURITIES TO PERSONS OTHER THAN ESTABLISHED CUSTOMERS AND ACCREDITED
INVESTORS. The SEC has adopted regulations which define "penny stock" to include
any equity security other than a security that is registered on a national
securities exchange, authorized for quotation on Nasdaq or has a price of $5.00
or more per share. Since our common stock is quoted on the Over-the Counter
Bulletin Board and not traded on an exchange or authorized for quotation on the
Nasdaq, it is exempt from the definition of penny stock at this time by virtue
of its price per share. If at any time the price of our common stock falls below
$5.00 per share, transactions involving our common stock may become subject to
penny stock rules that impose additional sales practice requirements on
broker-dealers that sell such securities to persons other than established
customers and accredited investors. (Accredited investors include, among others,
individuals with assets in excess of $1,000,000 or annual income exceeding
$200,000 individually or $300,000 together with his or her spouse.) For
transactions subject to penny stock rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have received
the purchaser's written consent to the transaction prior to the purchase.
Additionally, the SEC mandates a risk disclosure document relating to the penny
stock market which the broker-dealer must deliver prior to any transaction
involving a penny stock, unless an exemption applies. The broker-dealer also
must disclose the commissions payable to both the broker-dealer and the
registered representative and disclose current quotations for the securities. If
the broker-dealer is the sole market-maker, the broker-dealer must also disclose
this fact as well as its presumed control over the market. Finally,
broker-dealers must send monthly statements disclosing recent price information
for the penny stock held in the account and information on the limited market in
penny stocks. Consequently, the penny stock rules may restrict the ability of
broker-dealers to sell our securities in the secondary market.
SIGNIFICANT AND RAPID CHANGES IN TECHNOLOGY COULD NEGATIVELY AFFECT OUR
INTERNET-RELATED PROJECTS. The market for Internet products and services has
only recently begun to develop and is rapidly evolving. Significant
technological changes could render our existing Internet-related products and
services obsolete. To be successful, we must adapt to this rapidly changing
market by continually improving the responsiveness, functionality and features
of our products and services to meet our customers' needs. If we are unable to
respond to technological advances and conform to emerging industry standards in
a cost-effective and timely basis, certain portions of our business could be
materially adversely affected.
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ITEM 2. DESCRIPTION OF PROPERTY
MoneyZone.com does not own any real property. The Company leases
approximately 5,000 square feet as its corporate headquarters, which lease
expires on August 31, 2002. At current and anticipated staffing levels,
MoneyZone.com believes its leased space is suitable and adequate. However, if
volume and activity increases, it may necessitate leasing additional office
space.
ITEM 3 LEGAL PROCEEDINGS
We are not currently a party to any legal proceeding, and none of our
officers, directors or affiliates and no beneficial owner of more than five
percent of any of our voting securities is a party to a proceeding in which any
of them have a position or interest adverse to us.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On December 16, 1999, stockholders holding a majority of the shares of our
outstanding stock entitled to vote, from whom we solicited consent, provided us
a written consent in lieu of a meeting to approve changing our name as reflected
on the records of the State of Nevada from EBonlineinc.com to MoneyZone.com.
Each share of our outstanding voting stock is entitled to one vote. Stockholders
owning 3,866,773 shares of voting stock consented in writing to the name change.
There were no votes against, abstentions or broker non-votes.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MoneyZone's Common Stock is traded on the Over the Counter Bulletin Board
under the symbol "MNZN" (previously, the symbol was "EBOL"). The following table
sets forth the reported high and low bid quotations on a calendar year basis of
the Common Stock for the periods indicated. Such quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.
Common Stock
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High Low
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FISCAL 1999
First Quarter N/A N/A
Second Quarter N/A N/A
Third Quarter $6.4375 $4.7500
Fourth Quarter $6.0000 $4.6250
FISCAL 2000
First Quarter (through $9.3750 $5.0000
March 21, 2000)
On March 21, 2000, the closing bid price for MoneyZone's Common Stock as
reported on the Over the Counter Bulletin Board was $ 8.9375 per share. On that
date, there were approximately 177 holders of record of Common Stock (including
entities which hold stock in street name on behalf of other beneficial owners).
MoneyZone has not paid any cash dividends on its Common Stock to date, and
does not anticipate declaration or payment of any dividends in the foreseeable
future. MoneyZone anticipates that for the foreseeable future it will follow a
policy of retaining earnings, if any, in order to finance the expansion and
development of its business. Payment of dividends is within the discretion of
MoneyZone's Board of Directors and will depend upon the earnings, capital
requirements and operating and financial condition of MoneyZone, among other
factors.
On July 15, 1999, upon consummation of our merger with EBonlineinc.com,
Inc., we issued to the former stockholders of EBonlineinc.com, Inc. 3,886,773
shares of our common stock. The transaction was valued at $1,000, the fair
market value of the assets of EBonlineinc.com, Inc. We issued the shares
without registration upon reliance on Section 4(2) of the Securities Act of
1933, as amended.
On October 1, 1999, MoneyZone sold 733,335 restricted shares of Common
Stock in a private placement private investors for $3.00 per share. In
connection with the private placement, MoneyZone also issued 73,333 Class A
Warrants to the Placement Agents as compensation for services rendered in
connection with this transaction.
MoneyZone has relied upon Section 4(2) of the Securities Act of 1933, as
amended, for its private placement exemption, such that the sales of the
securities were transactions by an issuer not involving any public offering. In
each transaction, the purchasers were sophisticated and had access to
information about the Company.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
PLAN OF OPERATION
At December 31, 1999, we had cash and marketable securities in the amount
of $1,244,611 and incurred operating expenses at a rate of $50,000 per month.
While we will not require additional funds to cover operating expenses, we do
expect to raise additional funding to increase our advertising and marketing
expenses.
In April 1999, we launched our initial corporate finance website at
WWW.EBONLINEINC.COM. That site's functionality was limited to a business for
sale and venture capital search and listing process. The website was primarily
designed to support the corporate finance activities of our largest stockholder,
Global Capital Partners, Inc., formerly Eastbrokers International Incorporated.
In December 1999, we purchased the domain name WWW.MONEYZONE.COM and
discontinued the WWW.EBONLINEINC.COM website. Our current flagship website,
WWW.MONEYZONE.COM was launched on January 18, 2000.
Our current operations are focused upon providing services and products
to middle-market businesses via our website. Resources include business for sale
listings, on-line commercial loans, equity funding sources, business news, stock
quotes, business articles, business products and business service providers. We
generate targeted traffic to our website through a combination of traditional
and online advertising and marketing campaigns including print media, banner
ads, email services, direct mail and other online media. Site traffic has
increased consistently since the January 18th launch of WWW.MONEYZONE.COM.
Unique visitors are currently averaging 250,000 per month, and we have more than
2500 registered members.
Our plan of operation for the next year includes:
o Increasing our network of commercial lenders and equity funding sources
throughout the United States and Europe.
o Developing improved functionality for the lending and equity funding
sections so that funding seekers and funding sources may monitor
transactions continuously in real time.
o Licensing MoneyZone Capital Corp. as a broker-dealer so that we may
collect investment banking and advisory fees.
o Enrolling corporate finance affiliates throughout the United States and
Europe who will assist us in aggregating and facilitating corporate
finance transactions.
o Sponsoring MoneyZone Capital Partners Fund I to invest in
business-to-business Internet companies and early-stage information
technology and information services companies. We intend to primarily
co-invest with established venture capital and investment firms.
o Retaining additional corporate finance professionals to expand our
capabilities in facilitating commercial loan and investment banking
transactions.
We believe that there are significant advantages for our member businesses
in utilizing the Internet and WWW.MONEYZONE.COM to arrange commercial loans,
offer themselves for sale, raise equity capital, locate service providers,
access current business news and source related products. Our website is in
operation 24 hours per day, 7 days per week and 365 days per year. We have
members in more than 70 countries. Only one application form is required for
submission to multiple commercial lenders or equity funding sources. Response
times are typically shorter than in off-line transactions. Members may conduct
searches worldwide without time or place constraints. Transaction fees may be
lower than those typically charged by traditional investment banks.
We intend to constantly improve the functionality of our website and to
add services to better support our customers. As we continue to promote
WWW.MONEYZONE.COM and increase our viewership, there will be a larger membership
base providing increased opportunities for customer interaction and completed
transactions. Our corporate finance professionals will also have a larger pool
of potential transactions to facilitate.
We currently have seven (7) employees:
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o Administration/Operations----(2)
o Website engineering and design----(3)
o Corporate finance----(2)
Within the next six months we expect to have approximately twenty (20)
employees as follows:
o Administration/Operations----(5)
o Website engineering and design----(6)
o Corporate finance----(9)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
GENERAL OVERVIEW
Since July 15, 1999, upon consummation of our merger with EBonlineinc.com,
Inc., a Delaware corporation, after which we continued as the surviving
corporation, the Company's activities have been directed toward raising capital
and developing, implementing and marketing an Internet site designed to
facilitate mergers, acquisitions, and the funding of corporate finance
activities. In October, 1999, the Company completed its initial private
placement of funds. A total of 733,335 shares of stock were issued at a
placement cost of $3.00 per share. $2,200,005 of equity funds were raised. Cost
of the issuance of the private placement was $654,893. Net proceeds to the
Company were $1,545,112.
Moneyzone.com is a Web-based business consisting of a website, globally
accessible via the Internet, designed to facilitate mergers, acquisitions and
corporate finance activity. The site attracts businesses seeking merger
opportunities or joint venture partners, looking to sell or acquire businesses
or to obtain debt or equity capital or simply to gain exposure within the
international investment banking community. In addition, the site attracts
accredited investors looking for investment opportunities. We expect that the
combination of finance and the Internet will differentiate MoneyZone.com from
its competition.
LIQUIDITY AND CAPITAL RESOURCES
Through September 30, 1999, we have funded our operations almost
exclusively through cash loans and cash advances provided by shareholders. In
October 1999, the Company complete its initial private placement offering. Net
fund proceeds were used to repay short term loans and advances provided by
shareholders. For the year ended December 31, 1999, we had incurred and paid
website development, general and administrative and overhead expenses of
$305,403. As of December 31, 1999, we had an accumulated a deficit (net loss) of
$724,957 since inception. The Company has cash and marketable securities
amounting to $1,244,611. There are no outstanding loans or debts owed as of
December 31, 1999 other than normal monthly operating expenses.
RESULTS OF OPERATIONS
During the twelve months ended December 31, 1999, we incurred a net loss
from operations of $304,693. Expenses for this first year of the Company's
development are related primarily to the development of the proprietary web
site, to accounting fees, and to costs relating to the Company's SEC filings.
The Company paid rent, salaries, and other general and administrative costs for
the year totaling $305,403. In September 1999, a related party shareholder
forgave $205,898 of promissory notes and related debts. This forgiven debt is
reflected as additional paid in capital.
During the twelve months ended December 31, 1998, we had no revenues and
incurred a net loss of $18,410. Expenses for the year 1998, were related
primarily to miscellaneous operating costs. Operating costs are primarily
related to general and administrative operating costs. The Company paid no
salaries or rent during the first nine months of 1998.
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SELECTED FINANCIAL DATA
April 4, 1989
(Inception) to
December 31, December 31 December 31,
1999 1998 1999
------------- ----------- --------------
BALANCE SHEET DATA
Assets $1,713,217 $1,014
Liabilities 44,335 195,283
Stockholders' equity $1,668,882 $(194,269)
STATEMENT OF OPERATIONS DATA
REVENUES
Operating revenues, net $710 $710
EXPENSES
Operating expenses 305,403 18,410 725,667
Net loss (304,693) (18,410) (724,957)
Net loss per share (0.085) (0.011)
ACQUISITIONS
On June 28, 1999, the Company, the Company's then majority stockholder and
EBonlineinc.com, Inc., a Delaware corporation, and entered into an Agreement and
Plan of Merger providing for the merger of EBonlineinc.com, Inc. with and into
the Company. On July 15, 1999, the Company 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 Company changed its name from Cerx Venture Corporation to
EBonlineinc.com, 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, and
cancelled 117,765 shares of Registrant Common Stock. The Company is continuing
as the sole surviving corporation and the separate existence of EBonlineinc.com,
Inc. ceased effective as of July 15, 1999. The merger was valued at $1,000, the
fair market value of the assets of the non-surviving company. Immediately prior
to the consummation of the merger there were 1,633,227 outstanding shares of the
Company's common stock and immediately thereafter there were 5,500,000
outstanding shares of the Company's common stock.
Also in connection with this merger, one of our primary shareholders
agreed to forgive his cash loans and advances together with accrued interest.
NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128. The new standard replaces primary and fully diluted earnings per
share with basic and diluted earnings per share. We adopted SFAS No. 128
beginning with the interim reporting period ended December 31, 1997. The
adoption did not impact previously reported earnings per share amounts.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." This statement established standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. There were no items of
comprehensive income as defined by SFAS 130 for any of the periods presented.
In June 1998, the FASB issued SFAS No. 133, "Accounting For Derivative
Instruments and Hedging Activities." This Statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. SFAS No.
133 is effective for fiscal years beginning after June 15, 2000. At this time,
we do not believe that this statement will have a significant impact on us.
10
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ITEM 7. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Reports....................................... 12
Balance Sheets...................................................... 14
Statements of Operations............................................ 15
Statement of Changes in Shareholders' Equity........................ 16
Statements of Cash Flows............................................ 19
Notes to Financial Statements....................................... 21
11
<PAGE>
INDEPENDENT AUDITORS' REPORT
To The Shareholders of MoneyZone.com
Charlotte, North Carolina
We have audited the accompanying balance sheet of MoneyZone.com (a development
stage company) as of December 31, 1999, and the related statements of
operations, shareholders' equity, and cash flows for the year then ended, and
the 1999 amounts included in the cumulative amounts from April 4, 1989
(inception) to December 31, 1999. These financial statements are the
responsibility of the management of MoneyZone.com. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statement for the period from inception (April 4, 1989) through
December 31, 1998 were audited by other auditors.
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 financial statements are free of material
misstatements. 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 1999 financial statements referred to above presents fairly,
in all material respects, the financial position of MoneyZone.com (a development
stage company) as of December 31, 1999, and the results of its operations and
its cash flows for the year then ended and the 1999 amounts included in the
cumulative amounts from April 4, 1989 (inception) to December 31, 1999, in
conformity with generally accepted accounting principles.
SPICER, JEFFRIES & CO.
Denver, Colorado
February 24, 2000
12
<PAGE>
INDEPENDENT AUDITORS' REPORT
To The Shareholders of MoneyZone.com (formerly Cerx Venture Corporation)
Charlotte, North Carolina
I have audited the balance sheet of MoneyZone.com (formerly Cerx Venture
Corporation) (a development stage company) as of December 31, 1998, and the
related statements of operations, cash flows and changes in stockholders' equity
for the year then ended and the 1998, 1997 and 1996 amounts included in the
cumulative amounts from April 4, 1989 (inception) through December 31, 1998.
These financial statements are the responsibility of the management of
MoneyZone.com (formerly Cerx Venture Corporation). My responsibility is to
express an opinion on these financial statements based on my audit. The
financial statements of MoneyZone.com (formerly Cerx Venture Corporation) (a
development stage company) for the period from April 4, 1989 (inception) to
December 31, 1995, were audited by other auditors whose opinion, dated February
29, 1996, on those financials was unqualified.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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
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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of MoneyZone.com (formerly Cerx
Venture Corporation) (a development stage company) as of December 31, 1998, and
the results of its operations and cash flows for the year then ended and the
1998, 1997 and 1996 amounts included in the cumulative amounts from April 4,
1989 (inception) through December 31, 1998, in conformity with generally
accepted accounting principles.
/s/ Stephen M. Siedow, P.C.
March 29, 1999
Aurora, Colorado
13
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31,
1999
ASSETS
Current Assets
Cash $ 974,611
Marketable securities 270,000
Prepaid Expenses 353,334
----------
Total Current Assets 1,597,945
Property & equipment, net of
accumulated depreciation of $2,780 115,272
===========
Total Assets $1,713,217
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 44,335
Advances --
Accrued interest
Promissory notes to an officer/stockholders --
-----------
Total liabilities 44,335
-----------
Commitments and contingencies
Shareholders' equity
Preferred stock; $.001 par value; authorized
15,000,000 shares; issued - none --
Common stock; $.001 par value; authorized
50,000,000 shares; 6,245,835 and
1,633,227 shares issued and
outstanding at December 31, 1999
and 1998 6,246
Additional paid in capital 2,387,593
Deficit accumulated during development stage (724,957)
-----------
Total shareholders' equity 1,668,882
-----------
Total Liabilities and Shareholders' Equity $1,713,217
===========
See accompanying notes to financial statements
14
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
April 4, 1989
For the Twelve Months (Inception) to
Ended December 31, December 31,
------------------------- --------------
1999 1998 1999
-------------- ---------- --------------
Service Income $ 710 $ - $ 710
Costs and expenses
Costs related to attempted
Business acquisitions - - 192,020
Web Site and Related Costs 85,731 - 85,731
General and administrative 213,307 7,885 356,345
Interest 6,365 10,525 25,107
Offering Costs - - 66,464
---------- ---------- ------------
Total costs and expenses 305,403 18,410 725,667
---------- ---------- ------------
Net loss $(304,693) $ (18,410) $ (724,957)
========== =========== ============
Basic and diluted net loss per
common share $ (0.085) $ (0.011)
========== ===========
Weighted average common shares
outstanding 3,583,148 1,633,227
========== ==========
See accompanying notes to financial statements
15
<PAGE>
MONEYZONE.COM
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(A DEVELOPMENT STAGE COMPANY)
APRIL 4, 1989 (INCEPTION) TO DECEMBER 31, 1999
Deficit
Additional Accumulated
Common Stock Paid in From
Shares Amount Capital Inception
------ ------ ------- ---------
Balance, April 4, 1989 (inception) - $ - $ - $ -
Common stock issued for cash,
March 29, 1989 at $.017 per share 132,216 132 2,118
Common stock issued for cash,
March 29, 1989 at $.036 per share 297,408 297 10,453
Common stock issued for cash,
April 3, 1989 at $.036 per share 69,164 69 2,431
Common stock issued for cash,
April 7, 1989 at $.017 per share 29,381 29 471
Common stock issued for cash,
April 7, 1989 at $.036 per share 41,498 42 1,458
Common stock issued for cash,
May 23, 1989 at $.006 per share 57,131 57 293
Common stock issued for cash,
May 23, 1989 at $.011 per share 101,203 101 1,049
Common stock issued for cash,
May 31, 1989 at $.006 per share 6,529 7 33
Net loss (825)
--------------------------------------------
Balances at December 31, 1989 734,530 734 18,306 (825)
Net Loss (18,014)
--------------------------------------------
Balances at December 31, 1990 734,530 734 18,306 (18,839)
Net Loss (59)
--------------------------------------------
Balances at December 31, 1991 734,530 734 18,306 (18,898)
Net Loss (142)
--------------------------------------------
Balances at December 31, 1992 734,530 734 18,306 (19,040)
Net Loss 0
--------------------------------------------
16
<PAGE>
MONEYZONE.COM
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(A DEVELOPMENT STAGE COMPANY)
APRIL 4, 1989 (INCEPTION) TO DECEMBER 31, 1999
Deficit
Additional Accumulated
Common Stock Paid in From
Shares Amount Capital Inception
------ ------ ------- ---------
Balances at December 31, 1993 734,530 734 18,306 (19,040)
Common stock issued for out of
pocket expenses incurred, valued
at $.006 per share 241,580 242 1,238 -
Net loss (1,787)
------------------------------------------
Balances at December 31, 1994 976,110 976 19,544 (20,827)
Net loss (12,773)
------------------------------------------
Balances at December 31, 1995 976,110 976 19,544 (33,600)
Common stock issued for out of
pocket expenses incurred, valued
at $.061 per share 40,240 40 2,425
Common stock issued pursuant to an
asset purchase agreement, valued
at $.001 per share 390,131 390
Recission of common stock issued
pursuant to an asset purchase
agreement, valued at $.001 per
share (390,131) (390)
Common stock issues for out of
pocket expenses and legal fees
incurred, valued at $.245 per
share 600,554 601 146,566
Net loss (233,902)
-------------------------------------------
Balances at December 31, 1996 1,616,904 1,617 168,535 (267,502)
Common stock issued for cash,
May 8, 1997 at $.1531 per
share 16,323 16 2,484
Related party forgiveness of debt 53,343
Net loss (134,352)
--------------------------------------------
Balances at December 31, 1997 1,633,227 1,633 224,362 (401,854)
Net loss (18,410)
---------------------------------------------
17
<PAGE>
MONEYZONE.COM
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(A DEVELOPMENT STAGE COMPANY)
APRIL 4, 1989 (INCEPTION) TO DECEMBER 31, 1999
Deficit
Additional Accumulated
Common Stock Paid in From
Shares Amount Capital Inception
------ ------ ------- ---------
Balances, December 31, 1998 1,633,227 1,633 224,362 (420,264)
EBonlineinc.com, Inc. acquisition 3,866,773 3,867 (2,867)
Related party forgiveness of debt 205,898
Issuance of common stock at $3.00 733,335 733 1,544,379
per share, less offering
costs of $654,893
Issuance of common stock in
connection with acquisition of
property at $5.00 per share 12,500 13 62,487
Issuance of warrant for future
consulting 353,334
Net loss 304,693
-------------------------------------------
Balances, December 31, 1999 6,245,835 6,246 2,387,593 (724,957)
-------------------------------------------
See accompanying notes to financial statements
18
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
April 4, 1989
For the Twelve Months (Inception) to
Ended December 31, December 31,
1999 1998 1999
----------- -------- ------------
Cash flows from operating
activities
Net income (loss) $ (304,693) $(18,410) $(724,957)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Write-down to market of
trading securities 27,398 27,398
Depreciation and amortization 2,778 2,778
Capital contributed by
shareholder for legal fees - - 53,343
Common stock issued for costs
advanced and services - - 151,112
Changes in operating assets and
liabilities
Accounts payable 41,755 2,441 44,335
Accrued interest - 10,524 18,741
--------- ---------- --------
Net cash used in operating
activities (232,762) (5,445) (427,250)
--------- ---------- ---------
Cash flows from investing
activities
Purchase of property and equipment (55,550) - (55,550)
Purchase of marketable
securities (297,398) - (297,398)
Net cash acquired on acquisition
of EBonlineinc.com, Inc. 1,000 - 1,000
---------- ----------- ---------
Net cash used in investing
activities (351,948) - (351,948)
----------- ----------- ---------
Cash flows from financing
activities
Proceeds from sale of common
stock, net 1,545,112 - 1,566,652
Proceeds from notes payable - 61,850 159,372
Advances from stockholders 13,195 (60,000) 27,785
---------- ----------- ---------
Net cash provided by financing
activities 1,558,307 1,850 1,753,809
---------- ----------- ---------
Net increase (decrease) in cash 973,597 (3,595) 974,611
Cash and cash equivalents,
beginning of period 1,014 4,609 -
----------- ----------- ---------
Cash and cash equivalents,
period end of $ 974,611 $ 1,014 $ 974,611
=========== ============ ==========
See accompanying notes to financial statements
19
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
April 4, 1989
For the Twelve Months (Inception) to
Ended December 31, December 31,
1999 1998 1999
--------- -------- ------------
Supplemental disclosure of cash flow
information
Common stock issued for property $62,500 $ - $62,500
======= --------- ========
Common stock issued for services $353,334 $ - $353,334
======== --------- =========
Forgiveness of debt $205,898 $ - $205,898
======== --------- =========
-
The Company purchased all of
the common stock of
EBonlineinc.com, Inc. for
stock. In connection with
the acquisition, the fair
value of net assets acquired
was as follows:
Fair value of assets $15,681
Liabilities assumed (14,681)
--------
Common stock issued $ 1,000
========
See accompanying notes to financial statements
20
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE A. ORGANIZATION, BUSINESS, AND CONSOLIDATION
The financial statements presented are those of MoneyZone.com, a Nevada
corporation and a development stage company (the "Company"). The Company was
incorporated on April 4, 1989 under the laws of the State of Nevada under the
name Chelsea Atwater, Inc., later changing its name to CEREX Entertainment
Corporation and subsequently to CERX Entertainment Corporation, CERX Venture
Corporation and, on July 8, 1999, in connection with the merger of
EBonlineinc.com, Inc., a Delaware corporation, with the Company, to
EBonlineinc.com. Upon consummation of the merger, EBonlineinc.com, Inc. ceased
to exist and the Company was the sole surviving entity. On December 16, 1999,
the Board of Directors approved the Company changing its name to MoneyZone.com.
The Company's activities to date have been directed toward raising
capital, developing, implementing and marketing an Internet site designed to
facilitate mergers, acquisitions, and the funding of corporate finance
activities.
NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reporting 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 period.
Actual results could differ from those estimates.
DEFERRED INCOME TAXES
Deferred income taxes reflect temporary differences in reporting results
of operations for income tax and financial accounting purposes. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized.
STOCK-BASED COMPENSATION
In October, 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation" SFAS No. 123 encourages, but does not require,
companies to record compensation expense for stock-based employee compensation
plans at fair value. The Company has elected to account for its stock-based
compensation plans using the intrinsic value method prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB
No. 25). Under the provisions of APB No. 25, compensation cost for stock options
is measured as the excess, if any, of the quoted market price of the Company's
common stock at the date of grant over the amount an employee must pay to
acquire the stock.
LOSS PER COMMON SHARE
Loss per common share is computed by dividing the net loss by the weighted
average shares outstanding during the period. Common stock equivalents are not
included in the weighted average calculation since their effect would be
anti-dilutive.
21
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS CONT'D.
NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS 107, "Disclosures about Fair Value of Financial Instruments,"
requires the Company to report the fair value of financial instruments, as
defined. Substantially all of the Company's assets and liabilities are carried
at fair value or contracted amounts which approximate fair value. Estimates of
fair value are made at a specific point in time, based on relative market
information and information about the financial instrument, specifically, the
value of the underlying financial instrument.
At December 31, 1998 the fair value of the Company's payables, accrued
interest and promissory notes due to an officer/shareholder is not practicable
to estimate due to the related party nature of the underlying transactions and
the indefinite payment terms.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost and are depreciated on a
straight-line basis over the estimated useful life of the related assets of five
years.
CASH AND CASH EQUIVALENTS
For purposes of the consolidated financial statements, the Company
considers all demand deposits held in banks and certain highly liquid
investments with maturities of 90 days or less other than those held for sale in
the ordinary course of business to be cash equivalents.
STOCK SPLIT
In July, 1999, in connection with our merger with EBonlineinc.com, Inc.,
the shareholders approved and the Company effected a 3.5 for 10 reverse split of
the Company's common stock and a cancellation of 117,766 shares of common stock,
resulting in an effective reverse split ratio of 3.2646:10. Unless otherwise
noted, all references to shares and share prices, including retroactive
treatment, reflect the reverse split on the basis of the effective ratio.
RECLASSIFICATIONS
Certain amounts in prior periods have been reclassified to conform to the
current presentation.
NOTE C. STOCKHOLDERS' EQUITY AND RELATED PARTY TRANSACTIONS
PREFERRED STOCK
On February 10, 1997, the Company's Board of Directors designated
4,000,000 shares of preferred stock as the Series A, 6.75% Non-Voting
Convertible Preferred Stock. No shares of the Series A, 6.75% Non- Voting
Convertible Preferred Stock have been issued. On March 31, 1998, the Company
cancelled the designation of the Series A, 6.75% Non-Voting Convertible
Preferred Stock.
The Company has a total of 15,000,000 preferred shares, $.001 par value,
authorized. Dividends, voting rights and other terms, rights and preferences of
these preferred shares have not been designated but may be designated by the
Board of Directors from time to time.
22
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS CONT'D.
COMMON STOCK
In 1989, the Company sold 734,530 shares of common stock to fifteen
persons for the aggregate sum of $19,040. Of these shares 262,800 common shares
were sold to officers and directors of the Company for $3,900.
On September 21, 1994, the Company issued 241,580 shares of common
stock to John D. Brasher Jr., the Company's principal shareholder and
president for out of pocket expenses paid on behalf of the Company. These
share were valued at $.006 per share or $1,480.
On January 25, 1996, the Company issued 40,240 shares of common stock
to John D. Brasher Jr., for out of pocket expenses paid on behalf of the
Company. These shares were valued at $.061 per share or $2,465.
On December 28, 1996, a majority of the Company's shareholders approved a
restructuring of the Company's authorized capital including (1) a reduction in
the authorized common shares from 250,000,000 to 50,000,000, (2) an increase in
the authorized preferred shares from 5,000,000 to 15,000,000, (3) a change in
par value to $.001 for both the common and preferred stock. All shares and per
share amounts have been restated to reflect this restructuring of the Company.
On December 31, 1996, the Company issued 600,554 shares of common stock
to John D. Brasher Jr., for Company expenses advances and legal services
provided by Brasher & Company. These shares were valued at $.245 per share
or $147,167.
On May 8, 1997, the Company sold 16,323 shares of common stock to a
corporation for cash of $2,500.
On October 1, 1999 the Company sold 733,335 common shares pursuant to a
private placement offering at $3.00 per share. Costs of the offering were
$654,893, leaving net proceeds to the Company of $1,545,112. In connection with
this offering, warrants to purchase 73,333 shares of the Company's common stock
at $3.00 per share were issued to the private placement agent. These warrants
will expire five years from the date of issuance.
On December 15, 1999 the Company issued warrants to purchase 176,667
shares of the Company's common stock at $3.00 per share under a one year
consulting agreement. The warrants will expire on December 31, 2002.
RELATED PARTY TRANSACTIONS
On December 30, 1997, Brasher & Company, of which John D. Brasher, Jr.
is the sold owner, forgave $53,343 of accrued legal expenses advanced on
behalf of the Company. The Company has recorded this debt forgiveness as a
capital contribution.
During 1998, John D. Brasher Jr., the Company's majority shareholder
and president, loaned the Company $61,850 and these funds subsequently were
used to partially repay advances of $60,000.
In July, 1999, the Company owed John D. Brasher Jr., sole owner and
president, an aggregate of $159,372 in demand promissory notes and $25,106 of
accrued interest (8% simple interest per annum) for cash loans and advances of
$21,420 for expenses of the Company. These amounts were forgiven by the
shareholders, and because of the related party nature, the Company recorded this
transaction as additional paid-in capital.
23
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS CONT'D.
NOTE D. MERGER
On June 28, 1999, the Company, the Company's then majority stockholder and
EBonlineinc.com, Inc., a Delaware corporation, and entered into an Agreement and
Plan of Merger providing for the merger of EBonlineinc.com, Inc. with and into
the Company. On July 15, 1999, the Company 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 Company changed its name from Cerx Venture Corporation to
EBonlineinc.com, 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, and
cancelled 117,765 shares of Registrant Common Stock. The Company is continuing
as the sole surviving corporation and the separate existence of EBonlineinc.com,
Inc. ceased effective as of July 15, 1999. The merger was valued at $1,000, the
fair market value of the assets of the non-surviving company. Immediately prior
to the consummation of the merger there were 1,633,227 outstanding shares of the
Company's common stock and immediately thereafter there were 5,500,000
outstanding shares of the Company's common stock.
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. Since the merger, the
Company has continued at least one significant historic business of
EBonlineinc.com, Inc. or to use at least a significant portion of the historic
business assets of EBonlineinc.com, Inc. in a business.
NOTE E. COMMITMENTS AND CONTINGENCIES
The Company entered into a lease agreement beginning in January, 2000 for
office space in Charlotte, North Carolina. Minimum future rentals under this
non-cancelable lease are as follows:
Year Amount
2000 $ 54,400
2001 81,600
2002 68,000
--------
Total $204,000
--------
The Company has deposits in banks exceeding the FDIC insured amount of
$100,000. The amount in excess of $100,000 is subject to loss should the bank
cease business.
NOTE F. STOCK OPTIONS AND WARRANTS
1994 COMPENSATORY STOCK OPTION PLAN
The Company has adopted a compensatory stock option plan (the "CSO Plan")
which allows for the issuance of options to purchase up to 1,632,296 shares of
stock to employees, officers, directors and consultants of the Company. The CSO
Plan is not intended to qualify as an "incentive stock option plan" under
Section 422 of the Internal Revenue Code. Options will be granted under the CSO
Plan at exercise prices to be determined by the Board of Directors or other CSO
Plan administrator. No options have been granted under the CSO Plan to date.
This plan expired December 31, 1999.
1994 EMPLOYEE STOCK COMPENSATION PLAN
The Company has adopted an employee stock compensation plan (the "ESC
Plan") which allows for the issuance of up to 1,632,296 shares of stock to
employees, officers, directors and consultants of the Company. The ESC Plan will
be administered by the Board of Directors through a committee of directors. As
of December 31, 1998, the Company had awarded 657,116 shares of common stock
under this plan. During 1999, no options were awarded under this plan. This plan
expired September 20, 1999.
24
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS CONT'D.
NOTE G. INCOME TAXES
The Company has an unused net operating loss carryforward of approximately
$297,000, of which approximately $98,000 expires in 2014 and the remainder in
various periods through 2013. However, the ability to utilize such losses to
offset future taxable income is subject to various limitations imposed by the
rules and regulations of the Internal Revenue Service. A portion of the net
operating losses is limited each year to offset future taxable income, if any,
due to the change in ownership of MoneyZone.com's outstanding common stock. This
net operating loss carryforward may result in future income tax benefits of
approximately $101,000; however, because realization is uncertain at this time,
a valuation reserve in the same amount has been established. Deferred income
taxes reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities and
assets as of December 31, 1999 are as follows:
1999 1998
---- ----
Deferred tax liabilities $ - $ -
-------- -------
Deferred tax assets:
Net operating loss carryforward $100,980 $62,128
Accrued expenses - 5,865
--------- -------
100,980 67,993
Valuation allowance (100,980) (67,993)
--------- --------
$ - -
--------- --------
The valuation allowance for deferred tax assets increased by $32,987 and
$7,180 during 1999 and 1998, respectively.
25
<PAGE>
ITEM. 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND ACCOUNTING AND
FINANCIAL DISCLOSURE
Effective September 3, 1999, we dismissed Stephen M. Siedow, P.C., our
former accountant previously engaged as the principal accountant to audit our
financial statements. The decision to change accountants was approved by our
board of directors.
No report of Stephen M. Siedow, P.C., on our financial statements of
either of the past two fiscal years or any subsequent interim period contained
an adverse opinion or a disclaimer of an opinion, or was qualified or modified
as to audit scope or accounting principles. However, the auditor's report
contained an uncertainty regarding the company's ability to continue as a going
concern. During the past two fiscal years and subsequent interim periods
preceding our dismissal of Stephen M. Siedow, P.C., there were no disagreements
with Stephen M. Siedow, P.C., on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to the satisfaction of Stephen M. Siedow, P.C., would
have caused it to make reference to the subject matter thereof in connection
with its report.
Effective September 3, 1999, we engaged Spicer, Jeffries & Co. as the
principal accountant to audit our financial statements.
On November 12, 1999, we filed with the SEC an amendment to our Current
Report on Form 8-K initially filed on September 10, 1999. The amendment
contained a letter from our former accountant concerning the statements made in
our initial Current Report on Form 8-K regarding our former accountant. We
hereby incorporate that letter by reference to the amended Form 8-K and have
included it as an exhibit to this annual report.
The Company has had no disagreements with Spicer, Jeffries & Co. on any
matter of accounting principles or practices, financial statements disclosure,
or auditing scope or procedure, which, if not resolved to the satisfaction of
Spicer, Jeffries & Co., would have caused it to make reference thereto in their
report on the financial statements.
26
<PAGE>
PART III
ITEMS 9-12 (INCLUSIVE)
The information required by Items 9, 10, 11 and 12 will appear in the
MoneyZone.com Proxy Statement for the Annual Meeting of Stockholders to be held
on May 23, 2000, which will be filed pursuant to Regulation 14A under the
Securities Exchange Act of 1934 and is incorporated by reference in this Report
pursuant to General Instructions G(3) of Form 10-KSB (other than the portions
thereof not deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934). In addition, the information set forth below is provided
as required by Item 9.
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth the names and ages of the members of the
Company's Board of Directors, executive officers, and the position with the
Company held by each:
Name Age Position
- - ---- --- --------
Martin A. 33 Chairman, Director
Randall F. Greene 50 President and Chief Executive
Officer
Susan McAvoy 30 Vice President and Secretary
Nicholas Pili 27 Vice President
Craig Kendall 43 Chief Financial Officer
Bruce Bertman 41 Director
Anthony Paquin 40 Director
MARTIN A. SUMICHRAST, the Chairman of the Board, has served as Chairman of
the Board, Chief Executive Officer and President of Global Capital Partners,
Inc. since December 1998, Vice Chairman since March 1997, and a Director
since its inception in 1993. Mr. Sumichrast is a founder of Global Capital
Partners, Inc. and was formerly Executive Vice President and Chief Financial
Officer. Mr. Sumichrast is Chairman of Global Capital Partners North
America, Inc., which is a subsidiary of Global Capital Partners, Inc. Mr.
Sumichrast is also a Director of Omni Nutraceuticals and A1 Internet.com, Inc.
RANDALL F. GREENE, the Chief Executive Officer and a nominee to the Board of
Directors, joined MoneyZone.com from Premier Chemical Products, Inc., which
he founded in 1995 and of which he was the President and CEO. Prior to
founding Premier Chemical Products, Mr. Greene was the Chairman and CEO of
Blevins Concession Supply Co. from 1988 to 1995. From 1977 to 1986, Mr.
Greene was the President and CEO of Coastland Corp. of Florida (NASDAQ:
CLFL), an investment firm.
SUSAN MCAVOY, a Vice President and Secretary, joined MoneyZone.com in August
1999. From 1996-1999, she served as assistant to the Board of Director of Global
Capital Partners, Inc. Prior to 1996, Ms. McAvoy was a full-time student at the
University of Maryland Baltimore County.
NICHOLAS PILI, a Vice President, served from December of 1998 to June of 1999 as
the Marketing Director for Internet Services UK, Ltd., where he was primarily
responsible for developing the web site WWW.BUSINESSFORSALE.COM. From February
1998 to December 1998, he was the project manager and team leader for Monarch
27
<PAGE>
Recruitment, Ltd., an executive-level recruiting firm. From June of 1995 to
January 1998, he founded and developed the magazine Business & Premises for
Sale. From this magazine, Mr. Pili developed the Internet site
WWW.BUSINESSFORSALE.COM.
CRAIG KENDALL, the Chief Financial Officer, joined MoneyZone.com in June 1999.
From June 1995 to June 1999, he had been the President of Kendall & Company, an
accounting services firm. From June 1989 to June 1995, he was the Chief
Financial Officer for RENEX Corporation, a computer data communication software
development and manufacturing firm. He is a licensed Certified Public Accountant
in the states of Maryland and Virginia.
BRUCE BERTMAN, a director of the Company, has served as a Director since June
1999. From 1988 to 1991, he served as Regional Manager and Operating Officer of
Inacomp Computer Centers, a predecessor of Inacom. From 1991 to 1993, Mr.
Bertman was Vice President of Microware Distributors, a computer product
distribution organization, in charge of government reseller programs on a
national basis. In 1993, Mr. Bertman founded Computer Ease, LLC, where he served
as its President until A1 Internet.com, Inc. acquired that company in 1999. He
is currently Chief Executive Officer, Treasurer and Chairman of the Board of A1
Internet.com, Inc.
ANTHONY PAQUIN, a director of the Company since June 1999, has served as
Netivation.com's Chairman of the Board, President, and Chief Executive Officer
since September of 1997. Netivation.com has developed and operates Internet
communities focused on public policy (votenet.com) and healthcare (medinex.com).
Mr. Paquin was a candidate in the primary elections for the United States House
of Representatives in Idaho's First Congressional District during 1997 and 1998.
Mr. Paquin co-founded Agency One Corporation, a company that developed software
for the insurance industry, in 1989, and served as its President and Chief
Executive Officer until 1993. Agency One Corporation was acquired in 1993 by
Agency Management Services ("AMS"), an insurance software company, and a
subsidiary of CNA Financial Corporation. Mr. Paquin served as Senior Vice
President of Marketing of AMS from 1993 to March 1997. Mr. Paquin also founded
and is the President of the Idaho Technology Association.
28
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits Required by Item 601 of Regulation S-B.
1. See Index to Exhibits on pages 31 of this report.
B. Reports on Form 8-K.
1. On November 12, 1999, we filed an amendment to our Current Report on
Form 8-K initially filed on September 10, 1999. See "Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure."
29
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has duly caused this amendment to this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MONEYZONE.COM
- - --------------------------------------------------------------------------------
(Registrant)
By:/s/ Martin A. Sumichrast
- - --------------------------------------------------------------------------------
(Martin A. Sumichrast, Chairman)
Date: March 29, 2000
- - --------------------------------------------------------------------------------
In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:/s/ Martin A. Sumichrast
- - --------------------------------------------------------------------------------
(Martin A. Sumichrast, Director)
Date: March 29, 2000
- - --------------------------------------------------------------------------------
By:/s/ Randall F. Greene
- - --------------------------------------------------------------------------------
(Randall F. Greene, President and Chief Executive Officer)
Date: March 29, 2000
- - --------------------------------------------------------------------------------
By:/s/ Craig Kendall
- - --------------------------------------------------------------------------------
(Craig Kendall, Chief Financial Officer*)
Date: March 29, 2000
- - --------------------------------------------------------------------------------
By/s/ Anthony Paquin
- - --------------------------------------------------------------------------------
(Anthony Paquin , Director)
Date: March 29, 2000
- - --------------------------------------------------------------------------------
By:/s/ Bruce Bertman
- - --------------------------------------------------------------------------------
(Bruce Bertman, Director)
Date: March 29, 2000
- - --------------------------------------------------------------------------------
* Craig Kendall is the Company's principal accounting officer.
30
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(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., incorporated by reference to Current Report on form 8-K (File
No. 000-25022), dated as of July 15, 1999.
(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., incorporated by reference to Current
Report on form 8-K (File No. 000-25022), dated as of July 15, 1999.
(3.1)* Certificate of Incorporation, dated as of April 4, 1989,
incorporated by reference to Registration Statement on Form 10-SB
(File No. 0-25022), dated as of October 27, 1994.
(3.2)* Certificate of Amendment to Certificate of Incorporation, dated
as of November 8, 1990, incorporated by reference to Registration
Statement on Form 10-SB (File No. 0-25022), dated as of October 27,
1994.
(3.3)* Certificate of Amendment to Certificate of Incorporation, dated
as of October 26, 1994, incorporated by reference to Registration
Statement on Form 10-SB (File No. 0-25022), dated as of October 27,
1994.
(3.4)** Certificate of Increase in Number of Authorized Shares of Common
Stock, dated as of July 8, 1996, amending the Certificate of
Incorporation.
(3.5)** Certificate of Amendment to Certificate of Incorporation, dated as
of March 12, 1997.
(3.6)* Certificate of Amendment to Certificate of Incorporation, dated
as of March 20, 1998, incorporated by reference to Annual Report on
Form 10-KSB (File No. 000-25022), dated as of April 14, 1998.
(3.7)* Certificate of Amendment to Certificate of Incorporation, dated
as of March 31, 1998, incorporated by reference to Annual Report on
Form 10-KSB (File No. 000-25022), dated as of April 14, 1998.
(3.8)** Certificate of Amendment to Certificate of Incorporation, dated
as of July 8, 1999.
(3.9)** Certificate of Amendment to Certificate of Incorporation, dated as
of July 22, 1999.
(3.10)** Certificate of Amendment to Certificate of Incorporation, dated as
of December 17, 1999
(3.11)* By-Laws of MoneZone.com, incorporated by reference to Registration
Statement on Form 10-SB (File No. 0-25022), dated as of October
27, 1994.
(4.1)** Form of Registration Rights Agreement, dated as of October 1,
1999, by and among EBonlineinc.com, and each of the investors
listed on Exhibit A thereto.
(10.1)** Agreement to Sublease, dated as of February 1, 2000, between
MoneyZone.com and Fidelity Mortgage, Inc.
(10.2)** Consent to Sublease, dated as of February 11, 2000, by and among
MoneyZone.com, Fidelity Mortgage, Inc. and Highwoods/Forsyth
Limited Partnership.
(16) * Letter of former accountant, Stephen M. Siedow, P.C., dated as of
November 10, 1999, incorporated by reference to amended Current
Report of Form 8-K/A (File No. 000-25022), dated as of November
12, 1999.
(21)** Subsidiaries of MoneyZone.com
(22)* Information Statement on Schedule 14C, incorporated by reference
to Schedule 14C (File No. 000-25022), dated as of March 20, 2000.
(27)** Financial Data Schedule. (Electronic filing only.)
- - --------------------
* Previously filed.
** Filed herewith.
<PAGE>
CERTIFICATE OF INCREASE
IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK OF
CHELSEA ATWATER, INC.
(PURSUANT TO NRS 78.207)
The undersigned being respectively the President of Vice President, and
the Secretary or Assistant Secretary, of CHELSEA ATWATER, INC. (the "Company"),
a corporation organized and existing under the laws of the State of Nevada in
accordance with the provisions of N.R.S. Section 78.207(1) of the General
Corporation Law of Nevada, do hereby certify as follows:
1. That the Board of Directors of the Company has determined and
authorized that there shall be an increase in the number of shares of
authorized common stock of the Company and a corresponding increase in the
number of shares of Common Stock issued and outstanding (the "INCREASE") as
herein provided;
2. That the number of authorized shares of Common Stock of the Company
before the Increase hereby effected is 50,000,000, each share having a par
value of $0.001; and the number of authorized shares of preferred stock is
5,000,000, each share having a par value of $.001 per share and which shall
remain unaffected by the Increase;
3. That, pursuant to N.R.S. 78.207(1), the Company's Board of
Directors has authorized the Increase in the number of the Company's
authorized shares of Common Stock from 50,000,000 to 250,000,000; and the
number of authorized shares of Common Stock after the Increase shall be
250,000,000 each having a par value of $0.001, all of which shall continue
to be designated as Common Stock; however, the number of authorized
preferred shares shall remain at 5,000,000 and shall not change or
increase;
4. That each share of Common Stock existing at the effective time of
the Increase shall thereupon be increased in number and changed into FIVE
(5) Shares of Common Stock, and that following the Increase, each holder of
issued and outstanding Common Stock in the Company shall receive FIVE (5)
shares of Common Stock for every share of Common Stock held by such holder
prior to the effective time of the Increase;
5. That no fractional Common Shares shall be issued as a result of the
Increase; and every fractional share resulting shall be rounded up to the
nearest whole number as permitted by N.R.S. 78.205(2)(b);
6. That the Increase of authorized shares of Common Stock and the
means by which the Increase shall be effected have been duly and properly
authorized and resolved by the Company's Board of Directors pursuant to a
unanimous written consent dated July 5, 1996, and that the transactions
described herein do not require shareholder approval pursuant to NRS
78.207(1);
<PAGE>
7. That the Increase in the number of authorized shares of the
Company's Common Stock shall be effective on the date this Certificate is
filed with the Office of the Secretary of State of the State of Nevada, as
provided in NRS 78.207(4)(f); and
8. That the Company's Articles of Incorporation shall be deemed
amended as provided in this Certificate on the date this Certificate is
filed with the Office of the Secretary of State of the State of Nevada, as
provided in NRS 78.207(4).
IN WITNESS WHEREOF, the Company has caused this Certificate of Increase to
be signed as of the date below by the persons indicated.
DATED: July 8, 1996 CHELSEA ATWATER, INC.
By /S/ JOHN D. BRASHER JR.
------------------------------
John D. Brasher Jr., President
ATTEST:
By /S/ MARK T. COOPER
--------------------------------
Mark T. Cooper, Ass't. Secretary
<PAGE>
ACKNOWLEDGEMENT
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above jurisdiction, personally came and appeared JOHN
D. BRASHER JR., the President of CHELSEA ATWATER, INC., who after being duly
sworn declared that he executed the foregoing Certificate of Increase as his
free act and deed and that the statements therein set forth are true and
correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on July 8, 1996.
X /S/ ELIZABETH M. CROSSE
----------------------------------
Notary Public
<PAGE>
-----------------------
CEREX ENTERTAINMENT CORPORATION
-----------------------
CERTIFICATE OF AMENDMENT
to
ARTICLES OF INCORPORATION
to
CEREX ENTERTAINMENT CORPORATION
CEREX ENTERTAINMENT CORPORATION, a corporation organized on April 4, 1989,
and existing under and by virtue of the Nevada General Corporation Law, does
hereby certify that:
A. The name of the corporation is CEREX ENTERTAINMENT CORPORATION.
B. Under authority of Section 78.195 of the Nevada General Corporation Law,
Article FIFTH, Part I of the Certificate of Amendment to the Corporation's
Certificate of Incorporation expressly vests authority in the Board of Directors
to prescribe the series, number of each series, voting powers, designations,
preferences, limitations, restrictions and relative rights of the Corporation's
preferred shares, without shareholder approval.
C. The Board of Directors of the Corporation has, by the unanimous written
consent of its members taken on February 20, 1997, pursuant to Section 78.315 of
the Nevada General Corporation Law, duly adopted a resolution setting forth an
amendment to the Certificate of Incorporation of the Corporation designating and
establishing a series of preferred stock consisting of 4,000,000 preferred
shares known as the:
"SERIES A, 6.75% NON-VOTING CONVERTIBLE PREFERRED STOCK"
D. The Corporation submits this Certificate of Amendment to its Certificate
of Incorporation for the purpose of establishing and designating such series of
preferred stock as required by Section 78.1955 of the Nevada General Corporation
Law.
E. A copy of the "Resolution of the Board of Directors Establishing a
Series of Shares of Preferred Stock of CEREX ENTERTAINMENT CORPORATION" dated as
February 20, 1997, setting forth the text of the amendment prescribing the
series, number of each series, voting powers, designations, preferences,
limitations, restrictions and relative rights of the Series A, 6.75% Non-Voting
Convertible Preferred Stock, is attached hereto as EXHIBIT A and is incorporated
by references in this document as if fully set forth herein.
F. No shares of the Series A, 6.75% Non-Voting Convertible Preferred Stock
have been issued.
G. No approval of the corporation's shareholders is necessary in regard to
this amendment or its filing with the Nevada Secretary of State.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment as of the below date.
DATED: March 6, 1997 CEREX ENTERTAINMENT CORPORATION
By /S/ JOHN D. BRASHER JR.
-----------------------------------
John D. Brasher Jr., President
X /S/ ELIZABETH M. CROSSE
--------------------------------------------
Elizabeth M. Crosse, Asst. Secretary
<PAGE>
ACKNOWLEDGEMENT
STATE OF COLORADO )
) ss:
COUNTY OF DENVER )
I HEREBY CERTIFY that before me, the undersigned Notary Public, duly
qualified and commissioned in and for the above jurisdiction personally came and
appeared John D. Brasher Jr., President of CEREX ENTERTAINMENT CORPORATION, a
Nevada corporation, who acknowledged that he signed the foregoing document and
that the statements therein contained are true and correct.
SWORN TO AND SUBSCRIBED before me on March 6, 1997.
X /S/ ELIZABETH M. CROSSE My Commission Expires: August 16, 1997
--------------------------------
Notary Public
<PAGE>
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
CERX VENTURE CORPORATION
(a Nevada Corporation)
CERX VENTURE CORPORATION, a corporation organized and existing under and by
virtue of the General Corporation Law of Nevada (the "Corporation"), DOES HEREBY
CERTIFY THAT:
A. The Board of Directors of the Corporation by the unanimous written
consent of its members, filed with the minutes of the Board, duly adopted a
resolution setting forth a proposed amendment to the Certificate of
Incorporation of the Corporation in order to (i) change the name of the
Corporation from CERX VENTURE CORPORATION to EBONLINE.COM, INC., (ii) identify
the directors named in the Certificate of Incorporation as members of the first
Board of Directors of the Corporation and (iii) reflect a reverse stock split of
the Corporation's outstanding common stock., par value $.001 per share on a
one-for-five basis, declaring such amendment to be advisable and directing that
the proposal be placed before the shareholders of the Corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that Article FIRST of the Certificate of Incorporation of the
Corporation be amended to provide as follows:
"FIRST. The name of this corporation is EBONLINE.COM, INC."
RESOLVED, that Article FOURTH of the Certificate of Incorporation of the
Corporation be amended to provide as follows:
"FOURTH. The names and addresses of the members of the
first Board of Directors are:
NAME MAILING ADDRESS
John D. Brasher, Jr. 90 Madison Street, Suite 707
Denver, Colorado 80206
Johnny D. Brasher P.O. Box 1686
Ferriday, Louisiana 71334"
<PAGE>
RESOLVED, that the first full paragraph of Article FIFTH of the Certificate
of Incorporation of the Corporation be amended to provide as follows:
"FIFTH. The aggregate number of shares of capital stock
of all classes which the Corporation shall have authority to
issue is SIXTY-FIVE MILLION (65,000,000), of which FIFTY
MILLION (50,000,000) shares having a par value of $.001 per
share shall be of a class designated "COMMON STOCK" (or
COMMON SHARES") and FIFTEEN MILLION (15,000,000) shares
having a par value of $.001 per share shall be of a class
designated "PREFERRED STOCK" (or PREFERRED SHARES"). The
Common Stock will be reverse split on a one-for-five basis
so that each share of Common Stock issued and outstanding as
of July 9, 1999 (the "Declaration Date") shall
automatically be converted into and reconstituted as
one-fifth of a share of Common Stock (the "Reverse Split").
No fractional shares will be issued by the Corporation as a
result of the Reverse Split. In lieu thereof each
Stockholder whose shares of Common Stock are not evenly
divisible by five will receive one additional share of
Common Stock for the fractional share that such Stockholder
would otherwise be entitled to as a result of the Reverse
Split. All shares of the Corporation shall be issued for
such consideration or considerations as the Board of
Directors may from time to time determine. The designations,
voting powers, preferences, optional or other special rights
and qualifications, limitations or restrictions of the above
classes of stock shall be as follows:"
B. Other than the changes described above, there are no amendments to the
Certificate of Incorporation.
C. Pursuant to resolution of the Corporation's Board of Directors, the
foregoing Certificate of Amendment was duly approved by affirmative vote of the
holders if a majority of the Corporation's 5,002,838 shares of capital
stock outstanding and entitled to vote on the proposed amendment, and therefore
sufficient for approval, all in accordance with the General Corporation Law of
Nevada and the existing Certificate of Incorporation and bylaws of the
Corporation.
D. This amendment was duly adopted in accordance with the provisions of
Section 78.390 of the General Corporation Law of Nevada.
[signatures on following page]
2
<PAGE>
IN WITNESS WHEREOF, CERX VENTURE CORPORATION has caused this Certificate of
Amendment to be signed by its President, and attested by its Assistant
Secretary, as of the date below.
DATED: July 7, 1999 CERX VENTURE CORPORATION
By: /s/ John D. Brasher, Jr.
----------------------------------------
JOHN D. BRASHER, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
By: /s/ Elizabeth Crosse
--------------------------------
ELIZABETH CROSSE
ASSISTANT SECRETARY
3
<PAGE>
ACKNOWLEDGMENTS
STATE OF COLORADO )
) SS.
COUNTY OF DENVER )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned
and qualified in and for the above jurisdiction, personally came and appeared
JOHN D. BRASHER, JR., the President and Chief Executive Officer of CERX VENTURE
CORPORATION, who after being duly sworn declared that he executed the foregoing
Certificate of Amendment as his free act and deed and that the statements
therein set forth are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
July 7, 1999.
My
Commission
Expires October 22, 2001
STATE OF COLORADO )
) SS.
COUNTY OF DENVER )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned
and qualified in and for the above jurisdiction, personally came and appeared
MARK T. COOPER, the Assistant Secretary CERX VENTURE CORPORATION, who after
being duly sworn declared that he executed the foregoing Certificate of
Amendment as his free act and deed and that the statements therein set forth are
true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
July 7, 1999.
My
Commission
Expires October 22, 2001
<PAGE>
CERTIFICATE OF AMENDMENT
to
ARTICLES OF INCORPORATION
of
EBONLINEINC.COM
(a Nevada Corporation)
EBONLINEINC.COM, a corporation organized and existing under and by virtue
of the General Corporation Law of Nevada (the "Corporation"), DOES HEREBY
CERTIFY THAT:
A. The Board of Directors (the "Board") of the Corporation by the unanimous
written consent of its members, filed with the minutes of the Board, duly
adopted a resolution setting forth a proposed amendment to the Certificate of
Incorporation of the Corporation in order to change the name of the Corporation
from EBONLINEINC.COM to EBonlineinc.com, declaring such amendment to be
advisable and directing that the proposal be placed before the stockholders of
the Corporation for consideration thereof. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that it is advisable that the Corporation change its name from
EBONLINEINC.COM to "EBonlineinc.com" and that Article FIRST of the Certificate
of Incorporation of the Corporation, as amended to the date hereof, be amended
to provide as follows:
"FIRST. The name of this corporation is EBonlineinc.com."
B. Other than the change described above, there are no amendments to the
Certificate of Incorporation.
C. Pursuant to resolution of the Corporation's Board of Directors, the
foregoing Certificate of Amendment was duly approved by affirmative vote of the
holders of a majority of the Corporation's 5,500,000 shares of capital stock
issued and outstanding and entitled to vote on the proposed amendment, and
therefore sufficient for approval, all in accordance with the General
Corporation Law of Nevada and the existing Certificate of Incorporation and
by-laws of the Corporation.
D. This amendment was duly adopted in accordance with the provisions of
Section 78.390 of the General Corporation Law of Nevada.
<PAGE>
IN WITNESS WHEREOF, EBONLINEINC.COM has caused this Certificate of
Amendment to be signed by its President, and attested by its Secretary, as of
the date below.
DATED: July 19, 1999 EBONLINEINC.COM
By: /s/ Martin A. Sumichrast
---------------------------------
Name: Martin A. Sumichrast
Title: President
Attest:
By: /s/ Kevin D. McNeil
- - ------------------------------
Name: Kevin D. McNeil
Title: Secretary
ACKNOWLEDGEMENTS
STATE OF )
) ss:
COUNTY OF )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and qualified
in and for the above jurisdiction, personally came and appeared MARTIN A.
SUMICHRAST, the President of EBONLINEINC.COM, who after being duly sworn
declared that he executed the foregoing Certificate of Amendment as his free act
and deed and that the statements therein set forth are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on July 19, 1999.
/s/ Robin Ketchem Maes
----------------------------------
Notary Public
My Commission Expires:
<PAGE>
STATE OF )
) ss:
COUNTY OF )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above jurisdiction, personally came and appeared Kevin
D. McNeil, the Secretary of EBONLINEINC.COM, who after being duly sworn declared
that he executed the foregoing Certificate of Amendment as his free act and deed
and that the statements therein set forth are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on July 19, 1999.
/s/ Susan McAvoy
----------------------------------
Notary Public
My Commission Expires:
<PAGE>
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
EBONLINEINC.COM
(a Nevada Corporation)
EBOnlneinc.com, a corporation organized and existing under and by virtue
of the General Corporation Law of Nevada (the "Corporation"), DOES HEREBY
CERTIFY THAT:
A. The Board of Directors of the Corporation by the unanimous written
consent of its members, filed with the minutes of the Board, duly adopted a
resolution setting forth a proposed amendment to the Certificate of
Incorporation in order to (i) change the name of the Corporation from
EBonlineinc.com to MoneyZone.com, and (ii) identify the directors named in the
Certificate of Incorporation, declaring such amendment to be advisable and
directing that the proposal be placed before the shareholders of the Corporation
for consideration thereof. The resolution setting forth the proposed amendment
is as follows:
RESOLVED, that Article FIRST of the Certificate of Incorporation of the
Corporation be amended to provide as follows:
"FIRST. The name of the corporation is MoneyZone.com".
B. Other than the changes described above, there are no amendments
to the Certificate of Incorporation.
C. Pursuant to resolutions of the Corporation's Board of Directors, the
foregoing Certificate of Amendment was duly approved by affirmative vote of the
holders of 3,866,773 of the Corporation's 6,156,668 shares of capital stock
issued and outstanding and entitled to vote on the proposed amendment, and
therefore sufficient for approval, all in accordance with the General
Corporation Law of Nevada and the existing Certificate of Incorporation and
by-laws of the Corporation.
D. This amendment was duly adopted in accordance with the provisions
of Section 78.390 of the General Corporation Law of Nevada.
IN WITNESS WHEREOF, Ebonlineinc.com has caused this Certificate of
Amendment to be signed by its Vice President, as of the date below.
Dated: December 17, 1999 EBONLINEINC.COM
By: /S/ Susan McAvoy
Name: Susan E. McAvoy
Title: Vice President
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, Jacqueline C. McIver, A Notary Public for the above state and county
certify that Susan E. McAvoy, personally came before me this date and
acknowledged that she is Vice President of EBONLINEINC.COM, a corporation and
that she as Vice President being duly authorized to do so, executed the
foregoing on behalf of the corporation.
WITNESS my hand and seal this 17th day of December, 1999.
/S/ Jacqueline C. McIver
Notary Public
My Commission Expires: 6-29-00
<PAGE>
FORM OF REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made effective as
of ____________, 1999 by and among EBonlineinc.com, a Nevada corporation having
its principal place of business at 15285 Shady Grove Road, Suite 50, Rockville,
Maryland 20850 (the "Company"), and each of the individuals and entities listed
on Exhibit A to this Agreement (the "Investor(s)").
RECITALS
A. Each Investor listed in Exhibit A has subscribed for shares of
common stock of the Company ("Shares"), pursuant to a non-public offering of
such Shares by the Company.
B. As partial consideration for purchase of the Shares by the Investors
the Company has offered to provide the Investors with certain registration
rights as set forth herein.
In consideration of the foregoing and the promises and covenants
contained herein, the parties agree as follows:
SECTION 1
DEFINITIONS
As used in this Agreement the following terms shall have the following
meanings:
1.1 "AFFILIATE" shall mean any person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with a specified person.
1.2 "COMMON STOCK" shall mean the $.001 par value Common Stock of the
Company.
1.3 "COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.4 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
1.5 "HOLDER" OR "HOLDERS" shall mean any Investor owning Shares or any
permitted transferee thereof in accordance with Section 2.10 hereof.
1.6 "INITIAL CLOSING" shall mean the initial closing of the Private
Placement in which the Shares were sold, pursuant to a Private Placement
Memorandum dated August 2, 1999.
1.7 "INITIATING HOLDERS" shall mean the Investors or permitted
transferees of the Investors under Section 2.10 hereof who, in the aggregate,
are Holders of not less than fifty percent (50%) of the outstanding Shares.
1.8 "INVESTOR(S)" shall mean the individuals and entities listed in
Exhibit A to this Agreement.
<PAGE>
1.9 The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
1.10 "REGISTRATION EXPENSES" shall mean all expenses incurred in
complying with registrations, filings or qualification under Sections 2.1 and
2.2 hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursement of counsel
for the Company, blue sky fees and expenses, the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company and Selling Expenses).
1.11 "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
1.12 "SELLING EXPENSES" shall mean all underwriting documents and
selling commissions applicable to the sale and all fees and disbursements of
special counsel for any Holder (except as provided in Section 1.10).
1.13 "SHARES" shall mean the shares of Common Stock sold pursuant to
the Private Placement Memorandum dated August 2, 1999.
SECTION 2
REGISTRATION RIGHTS
2.1 DEMAND REGISTRATION.
(a) DEMAND FOR REGISTRATION. In case the Company shall receive
from Initiating Holders a written demand that the Company effect any
Registration with respect to all or a part of the Shares at any time after six
months, and until two years and six months from the Initial Closing, the Company
will:
(i) promptly give written notice of the proposed
Registration to all other Holders; and
(ii) use its diligent efforts to effect such Registration
within 90 days of receipt of such written demand
(including, without limitation, the execution of an
undertaking to file post-effective amendments and
appropriate compliance with applicable regulations
issued under the Securities Act and any other
governmental requirements or regulations), as may be so
requested and as would permit or facilitate the public
offer and sale, for a period of not less than nine (9)
consecutive months (the "Effectiveness Period") of all
or such portion of such Shares as are specified in such
request in writing received by the Company within
fifteen (15) days after receipt of such written notice
from the Company; provided, that the Company shall not
be obligated to take any action to effect any such
Registration pursuant to this Section 2.1:
A) In any particular jurisdiction in which
the Company would be required to execute
a general consent to service of process
in effecting such Registration unless
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the Company is already subject to
service in such jurisdiction and except
as may be required by the Securities
Act;
B) If the Shares have been Registered
pursuant to Section 2.2 of this
Agreement; or
C) After the Company has effected one (1)
such Registration pursuant to this
Section 2.1(a), such Registration has
been declared or ordered effective and
the securities offered pursuant to such
Registration have been sold.
Subject to the foregoing clauses (A) through (C), the Company
shall file a registration statement covering the Shares so requested pursuant to
this Section 2.1(a).
(b) UNDERWRITING. If the Initiating Holders intend to
distribute the Shares covered by their request by means of an underwriting, they
shall so advise the Company as part of their request made pursuant to Section
2.1 and the Company shall include such information in the written notice
referred to in Section 2.1(a)(i). The right of any Holder to Registration
pursuant to Section 2.1 shall then be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's Shares in
the underwriting to the extent requested and provided herein.
The Company shall (together with all Holders and other parties
proposing to distribute their Shares through such underwriting) enter into an
underwriting agreement in customary form with the representative(s) of the
underwriter or underwriters (the "Underwriter's Representative") selected for
such underwriting by the Initiating Holders. Notwithstanding any other provision
of this Section 2.1, if the Underwriter's Representative advises the Initiating
Holders in writing that marketing factors require a limitation of the number of
Shares to be underwritten, the Initiating Holders shall so advise all holders of
Shares, and the underwriter may limit the number of Shares to be included in the
Registration and underwriting on a pro rata basis based on the total number of
Shares entitled to Registration held by the participating Holders. The Company
and/or the Underwriter's Representative may, in their sole discretion, round the
number of Shares offered hereunder to the nearest 100 Shares. No Shares excluded
from the underwriting by reason of the Underwriter's Representative marketing
limitation shall be included in such Registration.
If any Holder of Shares disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom prior to effectiveness
of the registration statement by written notice to the Company, the
Underwriter's Representative and the Initiating Holders. The Shares so withdrawn
shall also be withdrawn from Registration; provided, however, that, if by the
withdrawal of such Shares a greater number of Shares held by other participating
Holders may be included in such registration (up to the maximum of any
limitation imposed by the Underwriter's Representative), then the Company shall
allocate such greater number of Shares to such Holders in proportion, as nearly
as practicable, to the respective amount of Shares held by such participating
Holders.
If the Underwriter's Representative has not limited the number
of Shares to be underwritten, the Company may include securities for its own
account or for the account of other shareholders of the Company in such
Registration if the Underwriter's Representative so agrees.
2.2 COMPANY REGISTRATION. If at any time or from time to time, the
Company shall determine to Register any of its securities, either for its own
account or the account of a security holder or holders exercising their
respective demand registration rights, other than (i) a registration on Form S-8
(or a similar or successor form) relating solely to employee stock option, stock
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purchase or other benefit plans, or (ii) a registration on Form S-4 (or similar
or successor form) relating solely to a transaction pursuant to Rule 145, as
promulgated by the Commission, the Company will:
(a) give to each Holder written notice of its intention at
least 20 days before filing each such registration statement with respect
thereto; and
(b) include in such Registration all the Shares specified in a
written request or requests, made within fifteen (15) days after receipt by such
Holder of the notice given pursuant to 2.1(a). The Company shall register the
Shares "for the shelf", that is, for future sale, not as part of the
underwriting. Except for the first such underwriting, the provisions of Section
2.1(b) shall apply to any other Registration under this Section 2.2.
(c) notwithstanding the provisions of this Section 2.2, the
Company has the right at any time after giving notice pursuant to Section 2.2(a)
to elect not to file, or to withdraw, such Registration prior to effectiveness.
2.3 DELAY PERIODS, SUSPENSION OF SALES.
(a) If at any time prior to the expiration of the
Effectiveness Period, counsel to the Company (which counsel shall be experienced
in securities laws matters) has determined in good faith that it is reasonable
to conclude that the filing of a registration statement pursuant to Section
2.1(a) or the compliance by the Company with its disclosure obligations in
connection with such registration statement may require the disclosure of
information which the Board of Directors of the Company has identified as
material and which the Board of Directors has determined that the Company has a
BONA FIDE business purpose for preserving as confidential, then the Company may
delay the filing or the effectiveness of such registration statement (if not
then filed or effective, as applicable) and shall not be required to maintain
the effectiveness thereof or amend or supplement such registration statement for
a period (an "Information Delay Period") expiring three business days after the
earlier to occur of (A) the date on which such material information is disclosed
to the public or ceases to be material or the Company is able to so comply with
its disclosure obligations and Commission requirements or (B) up to 90 days
after the Company notifies the Holders of the Shares included therein of such
good faith determination. Each such Information Delay Period begun during the
Effectiveness Period shall suspend the Effectiveness Period until the end of
each such Information Delay Period. There shall be permitted no more than two
Information Delay Periods during any twelve month period.
(b) If at any time prior to the expiration of the
Effectiveness Period, the Company is advised by a nationally recognized
investment banking firm selected by the Company that, in such firm's written
reasonable opinion addressed to the Company (a copy of which shall be delivered
to each Holder of Shares Registered under the registration statement), sales of
Shares pursuant to such registration statement at such time would materially
adversely affect any immediately planned underwritten public equity financing by
the Company, the Company shall not be required to maintain the effectiveness of
such registration statement or amend or supplement such registration statement
for a period (a "Transaction Delay Period") commencing on the date of pricing of
such equity financing and expiring three business days after the earliest to
occur of (A) the abandonment of such financing or (B) 90 days after the
completion of such financing. Each such Transaction Delay Period begun during
the Effectiveness Period shall suspend the Effectiveness Period until the end of
each such Transaction Delay Period. There shall be permitted no more than two
Transaction Delay Periods during any twelve month period.
(c) A Transaction Delay Period and an Information Delay Period
are hereinafter collectively referred to as "Delay Periods" or a "Delay Period."
The Company will give prompt written notice to each Holder of Shares included in
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the registration statement of each Delay Period. Such notice shall be given (A)
in the case of an Information Delay Period, as soon as practicable after the
Board of Directors makes the determination referenced in Section 2.3(a), and (B)
in the case of a Transaction Delay Period, at least 20 days in advance of the
commencement of such Delay Period. Such notice shall state to the extent, if
any, as is practicable, an estimate of the duration of such Delay Period. Each
such Holder, be acceptance of any Shares, agrees that upon receipt of such
notice of Delay Period such Holder will (x) forthwith discontinue disposition of
Shares pursuant to such Registration statement and (y) not deliver any
prospectus forming a part of the registration statement in connection with any
sale of Shares until the expiration of such Delay Period.
2.4 BLUE SKY QUALIFICATION. The Company hereby covenants to take all
reasonable efforts to qualify or register the Shares included in a registration
statement for offering and sale under the securities or blue sky laws of such
states as are reasonably requested by the Holders in writing; provided, however,
that the Company shall not be obligated to execute or file any consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
2.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any Registration pursuant to Section 2.1 or Section 2.2 shall be
borne by the Company and all Selling Expenses relating to securities registered
by the Holders shall be borne by the Holders of such securities pro rata on the
basis of the number of securities so registered; provided, however, that the
participating Holders shall pay, pro rata, all expenses of any registration
proceeding begun pursuant to Section 2.1 if the Registration request is
subsequently withdrawn at any time at the request of the Holders of a majority
of the Shares to be Registered, unless such withdrawal is due to material
adverse information pertaining to the Company as of the date of filing the
Registration which was previously not known to the Holders.
2.6 REGISTRATION PROCEDURES. In the case of each Registration effected
by the Company pursuant to this Section 2, the Company will keep each Holder
advised in writing as to the initiation of each Registration and as to the
completion thereof. At its expense the Company will:
(a) Keep such Registration effective until the earlier to
occur of (A) the completion of the Effectiveness Period or (B) the Holder or
Holders have completed the distribution described in the registration statement
relating thereto; and
(b) Furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request.
2.7 INDEMNIFICATION.
(a) The Company will indemnify and hold harmless, and does
hereby undertake to indemnify and hold harmless, each Holder, each of its
officer, directors and partners, and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, with respect to which
Registration has been effected pursuant to this Section 2.5, and each
underwriter, if any, and each person who controls any underwriter within the
meaning of Section 15 of the Securities of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or actions in respect thereof
to which they may become subject), including settlement of any litigation,
commenced or threatened, to which they may become subject under the Securities
Act, the Exchange Act, or other federal or state law, arising out of this
Agreement or based on any alleged untrue statement or a material fact contained
in any registration statement, prospectus, offering circular or other document
or amendments thereto, or based on any alleged omission to state therein a
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material fact required of the Company in connection with any such Registration,
or any violation by the Comoany of any federal, state or common law rule or
regulation applicable to Company and relating to action or inaction required of
Company in connection with any such Registration. Further, the Company will
reimburse each such Holder, each of its officers, directors and partners, and
each person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal or any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extend that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by an instrument
executed by such Holder or underwriter.
(b) Each Holder will, if Shares held by such Holder are
included in the securities as to which such Registration is being effected,
indemnify and hold harmless the Company, each of its directors and officers,
agents and employees, each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act, and
each other such Holder, each of its officers, directors and partners and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof to which they may become subject), including settlement of
any litigation under the Securities Act, the Exchange Act, or other federal or
state law arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or amendments thereto, which
material fact was provided in writing by the Holder for inclusion in any such
documents, or any violation by the Holder of any federal, state or common law
rule or regulation applicable to such Holder and relating to action or inaction
required of such Holder in connection with any such Registration. Further, each
Holder will reimburse the Company, such other Holders, such directors, officers,
persons, underwriters or control persons of the Company, such other Holders or
the underwriters, for any legal or any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, in each case (other than a violation of law, rule
or regulation) to the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument executed by such Holder. Notwithstanding the foregoing,
the obligations of such Holders hereunder shall be limited to an amount equal to
the proceeds to each such Holder of Shares from the sale of such Shares as
contemplated herein.
(c) Each party entitled to indemnification under this Section
2.5 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
deliver written notice to the Indemnifying Party of commencement thereof. The
Indemnifying Party, at its sole option, may participate in or assume the defense
of any such claim or any litigation resulting therefrom with counsel reasonably
satisfactory to the Indemnified Party and the Indemnified Party may participate
in such defense at such party's expense. The failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligation under this Section 2.6 except to the extend that such failure to give
notice shall materially adversely affect the Indemnifying Party in the defense
of any such litigation. No Indemnifying Party, in the defense of any such claim
or litigation shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term a release from all liability in respect to such claim or
litigation by the claimant or plaintiff to such Indemnified Party.
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2.8 INFORMATION BY HOLDER. Each Holder of Shares included in any
Registration shall furnish to the Company such information regarding such Holder
and the distribution proposed by such Holder as the Company may request in
writing and as shall be required in connection with any Registration referred to
in this Section 2.
2.9 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of Shares which are Restricted Securities to the public without
registration, the Company agrees:
(a) To make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;
(b) To use its diligent efforts to file with the Commission in
a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act at all times after it has become subject
to such reporting requirements; and
The Company further shall furnish forthwith upon request a
written statement as to its compliance with the reporting requirements of said
Rule. The Company shall provide forthwith upon written request a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company as Investors may reasonably request in availing
itself of any rule or regulation of the Commission allowing Investor to sell any
such Shares without registration.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights granted each
Investor under this Agreement may not be assigned except: (i) to a purchaser of
more than 5,000 Shares (as appropriately adjusted for stock dividends, stock
splits, stock combinations, recapitalizations, consolidations and the like);
(ii) to a successor entity to an Investor pursuant to a reorganization or
recapitalization of an Investor, (iii) to an Affiliate of an Investor, or (iv)
to the partners of an Investor or to the estate or heirs of such a partner or to
a trust for the benefit of such a partner, his or her spouse or descendants;
provided, that the Company receives notice within twenty (20) days following
such assignment.
2.11 TERMINATION OF REGISTRATION RIGHTS.The rights granted pursuant to
this Agreement shall terminate as to each Investor (and permitted transferee
under Section 2.10 above) upon the occurrence of any of the following:
a) At such time as all Shares held by such Investor or permitted
transferee can be sold pursuant to Rule 144 (or its successor
provision) within the three-month time period referred to in Rule
144(e);
b) At such time as all Shares held by such Holder can be sold under
Rule 144(k) (or its successor provision);
2.12 "MARKET STAND-OFF" AGREEMENT. Each Holder agrees not to sell or
otherwise to transfer or dispose of any Shares held by such Holder during the
period not to exceed two hundred seventy (270) days as requested by the managing
underwriter following the effective date of the first registration statement of
the Company filed under the Securities Act after the Initial Closing, provided
that all officers and directors enter into similar agreements. Such agreement
shall be confirmed in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop-transfer instructions with respect to
the Shares subject to the foregoing restriction until the end of such period.
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SECTION 3
MISCELLANEOUS
3.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Colorado.
3.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Investor and the closing
of the transactions contemplated hereby.
3.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein and
subject to compliance with the provisions herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties thereto.
3.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereto. This
Agreement may only be amended or waived by a writing signed by all parties to
this Agreement; provided, however, that Holders of a majority of the Shares then
held by the Holders or any permitted transferee thereof, acting together, may
waive or amend (either generally or in a particular instance and either
retroactively or prospectively), on behalf of all Investors, Holders and
permitted transferees, any provisions hereof affecting Investors, so long as the
effect thereof will be that all such Investors, Holders and permitted
transferees will be treated equally.
3.5 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to an Investor, at such Investor's address set forth on Exhibit
A, or at such other address as Investor shall have furnished to the Company in
writing, or (b) if to any other holder of any Registerable Securities, at such
address as such holder shall have furnished the Company in writing, or, until
any such holder so furnishes an address to the Company, then to and at the
address of the last holder of such Registerable Securities who has so furnished
an address to the Company, or (c) if to the Company, one copy should be sent to
the attention of the President. If notice is provided by mail, notice shall be
deemed to be given upon proper deposit in the mail (and if outside the United
States, sent by airmail).
3.6 DELAY OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any holder of any Registerable Securities upon any
breach or default of the Company under this agreement, shall impair any such
right, power or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing or as provided in Section 3.4
of this Agreement. All remedies, either under this Agreement, or by law or
otherwise afforded to any holder, shall be cumulative and not alternative.
3.7 EXPENSES. Except as provided in Section 2, the Company and each
Investor shall bear its own expenses and legal fees incurred on its behalf with
respect to this Agreement and the transactions contemplated hereby.
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3.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one instrument, and each of
which may be executed by less than all of the parties to this Agreement.
3.9 SEVERABILITY. In the event that any provisions of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided, that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to any party.
3.10 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
EBONLINEINC.COM
By _______________________________
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AGREEMENT TO SUBLEASE
This AGREEMENT dated as of the 1st day of February 2000, between
FIDELITY MORTGAGE, INC., having an officer at 8044 Montgomery Road, Suite 200,
Cincinnati, Ohio 45326 (hereinafter referred to as "Sublessor"), and
MoneyZone.com, a Nevada corporation, having an office at 8701 Red Oak Boulevard,
Charlotte, NC 28217 (hereinafter referred to as "Sublessee").
W I T N E S S E T H
WHEREAS Sublessor is the lessee under a certain lease agreement with
Highwoods/Forsyth Limited Partnership ("Lessor"), dated September 01, 1997, for
that certain premises located in the City of Charlotte State of North Carolina
described as that certain first (1st) floor office space, suite 100 of that
certain office building known as Live Oak on land located at Oak Hill Business
Park with a street address of 8701 Red Oak Boulevard consisting of approximately
5100 rentable square feet (the "Property"), to which lease reference is hereby
made as if the same were herein set forth at length, which lease, together with
amendment and modifications heretofore and hereinafter entered into, are
collectively hereinafter referred to as the "Prime Lease" and are attached
hereto as Exhibit "A"; and
WHEREAS, the parties hereto have agreed that Sublessor shall
sublease the Property to Sublessee commencing on February 1, 2000, or when
Lessor consents to this sublease, whichever will last occur, and ending on
August 31, 2002 (the "Term"), unless otherwise sooner terminated in accordance
with the provisions of this sublease.
NOW, THEREFORE, the parties hereto hereby covenant and agree as
follows:
<PAGE>
1. Sublessor hereby leases to Sublessee for the Term the 5100 approximate
rentable square feed of the space on the 1st floor of said building, shown
on Exhibit B attached hereof and made a part hereof.
2. Commencing on April 1, 2000, Sublessee shall pay to Sublessor monthly rent
of six thousand eight hundred dollars ($6,800.00), plus any additional rent
mentioned in Paragraph 6. Any partial months rent shall be prorated for the
actual number of days that this sublease is outstanding.
3. Sublessee shall pay the rent provided for herein in advance on the first
day of each and every month during the term without deduction, setoff,
notice or demand. Sublessee shall pay to Sublessor upon execution of this
Sublease the sum of six thousand eight hundred dollars ($6,800.00) as rent
for April 2000.
4. The Property shall be used for general offices and for no other purpose.
5. Sublessee shall not assign this sublease nor sublet the Property in whole
or in part; nor shall Sublessee permit its interest in this sublease to be
vested in any third party by operation of law or otherwise.
6. Sublessee shall be liable for all additional use by Sublessee of electrical
current in excess of such electric current provided by the Lessor under the
Prime Lease. If Sublessee shall procure any additional services from the
building, such as alterations or after-hour air conditioning, Sublessee
shall pay for same at the rates charged therefor by the Lessor and shall
make such payments to the Sublessor or Lessor, as Sublessor shall direct.
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Any rent or other sums payable by Sublessee under this Paragraph 6 shall be
additional rent and collectable as such.
7. This sublease is subject and subordinate to the Prime Lease. Except as may
be inconsistent with the terms hereof, Sublessee agrees to be bound by, and
to fully comply with, all the terms, covenants and conditions contained in
the Prime Lease; and in case of any breach hereof by Sublessee, Sublessor
shall have all the rights against Sublessee as would be available to the
Lessor against the Sublessor under the Prime Lease if such breach were by
the Sublessor thereunder.
8. Notwithstanding anything herein contained, the only services or rights to
which Sublessee is entitled hereunder are those to which Sublessor is
entitled under the Prime Lease.
9. Sublessee shall neither do nor permit anything to be done which would cause
the Prime Lease to be terminated or forfeited by reason of any right of
termination or forfeiture reserved or vested in the Lessor under the Prime
Lease, and Sublessee shall indemnify and hold Sublessor harmless from and
against all claims of any kind whatsoever by reason of any breach or
default on the part of Sublessee or by reason of which the Prime Lease may
be terminated or forfeited.
10. Sublessee shall pay the Landlord on the execution and delivery of the
sublease the sum of six thousand eight hundred dollars ($6,800.00) as
security deposit full and faithful performance of the terms, covenants and
conditions of this sublease on Sublessee's part to be performed or
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observed, including but not limited to payment of rent and additional rent
in default or for any other sum which Sublessor may expend or be required
to expend by reason of Sublessee's defaults. Sublessor may use or apply all
or any portion of the security deposit for the payment of any rent or other
amount then due hereunder and unpaid; for the payment of any other sum for
which Sublessor may become obligated by reason of Sublessee's default or
breach, or for any loss or damaged sustained by Sublessor as a result of
Sublessee's default or breach. Sublessee agrees to indemnify and save
Sublessor harmless against any and all suits, judgments, claims, demands,
liabilities, losses or damages which may arise against, or incurred by
Sublessor as a result or consequence of Sublessee's failure to perform or
keep any of the terms, covenants, rentals and conditions required to be
kept and performed by Sublessee under the sublease. If Sublessee shall
fully and faithfully comply with all the terms, covenants and conditions of
this sublease, on Sublessee's part to be performed or observed, the
security, or any unapplied balance thereof, shall be returned to Sublessee
after the expiration of this sublease and after the removal of Sublessee
and surrender of possession of the Property to Sublessor.
11. Sublessor shall, at Sublessor's own expense, maintain General/Liability
Insurance Coverage with liability limits of not less than $1,000,000.00 per
occurrence for the Bodily Injury and/or Property Damage Liability and
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$50,000 per occurrence for Fire/Legal Liability. Said insurance coverage
shall remain in force during the term of this agreement.
12. Sublessee agrees to accept possession of the Property in "as is" condition.
13. Sublessee, upon expiration or other termination of the Term of this
sublease, covenants to quit and surrender to Sublessor the Property, broom
clean, in good order and condition, ordinary wear and tear, damage by fire
or other casualty expected, and at Sublessee's expense, to remove all
property of Sublessee. Any property not so removed shall be deemed
abandoned by Sublessee and may be retained or disposed of at Sublessee's
expense by Sublessor.
14. Sublessee represents and warrants that except for CB Richard Ellis and
Queens Property, Sublessee has not retained, contracted or otherwise dealt
with any real estate broker, salesperson, or finder in connection with the
sublease, and no such person initiated or participated in the negotiation
of the sublease. Sublessee shall indemnify and hold Sublessor harmless from
and against any and all liabilities and claims for commissions and fees
arising out of a breach of the foregoing representations.
15. Sublessee represents that it has read and is familiar with the terms of the
Prime Lease, as well as any amendments, modifications and extensions
thereto, and agrees to be bound by the terms contained therein and in all
future amendments to modifications thereto.
16. All prior understandings and agreements between the parties are merged
within this Agreement, which alone fully and completely sets forth the
-5-
<PAGE>
understanding of the parties; and this sublease may not be changed or
terminated orally or in any manner other than by an agreement in writing
and signed by the party against whom enforcement of the change or
termination is sought.
17. Any notice or demand which either party may or must give to the other
hereunder shall be in writing and delivered personally or sent by
registered mail or by overnight delivery addressed if to Sublessor, as
follows:
Delta Funding Corporation
1000 Woodbury Road, Suite 200
Woodbury, New York 11797
ATTN: Office Manager
and if to Sublessee, as follows:
MoneyZone.Com
8701 Red Oak Boulevard, Suite 100
Charlotte, NC 28217
ATTN: Susan McAvoy, Vice President
Either party may, by notice in writing, direct that future notices or demands be
sent to a different address.
18. This agreement shall be governed by and be construed and interpreted in
accordance with the laws of the State of New York without regard to the
conflicts of laws rules thereof. Tenant agrees to submit to the
jurisdiction of any United States Federal court sitting in the Eastern
District of New York or any New York State court sitting in the County of
Nassau in the State of New York.
19. The covenants and agreements herein contained shall bind and insure to the
benefit of Sublessor, the Sublessee, and their respective executors,
administrators, successors and assigns.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed as of the day and year first above written.
FIDELITY MORTGAGE, INC.
(Sublessor)
By:/s/ Mark Miller
-----------------------------------------
Its: Vice President
MoneyZone.com
(Sublessee)
By: /S/ RANDALL GREENE
-----------------------------------------
Its: President
<PAGE>
CONSENT TO SUBLEASE
This Agreement is made as of the 11th day of February 2000 by and among
Highwoods/Forsyth Limited Partnership ( the "Landlord") and Fidelity Mortgage,
Inc. (the Sublessor"), and MoneyZone.com (the "Sublessee").
RECITALS
I. Sublessor and Landlord entered into that certain Lease dated March
11, 1998 (the "Lease") with respect to 8701 Red Oak Blvd., Suite
100, Charlotte, Mecklenburg County, North Carolina (the "premises").
II. Sublessor has entered into that certain Sublease (the "Sublease")
dated __________, __________, pursuant to which Sublessor has sublet
all or a portion of the Premises (the "Subleased Premises") to
Sublessee. A copy of the Sublease is attached to this Agreement as
Exhibit "A".
III. Sublessor and Sublessee have requested that Landlord consent to
the subletting of the Subleased Premises by Sublessor to
Sublessee.
In consideration of the foregoing, the mutual covenants and conditions
contained in this Agreement, and other good and valuable considerations,
the receipt and sufficiency of which are hereby acknowledged, the parties
to this Agreement, intending to be legally bound, agree as follows:
1. INCORPORATION OF RECITALS. The parties warrant and represent that
the foregoing Recitals are accurate and correct and incorporate
them in this agreement. All capitalized terms used in this
agreement shall have the same definitions as set forth in the
Lease unless otherwise specifically indicated or unless the
context clearly indicates as contrary intent.
2. CONSENT TO SUBLETTING. Landlord consents to the subletting of the
Subleased Premises by Sublessor to Sublessee. This consent does
not constitute approval by, nor agreement with, any of the
provisions of the Sublease by Landlord. In addition, nothing
contained in this agreement or the Sublease shall be construed as
amending the Lease in any respect. Any purported modifications to
the Lease contained in the Sublease will effect the rights and
obligations as between Sublessor and Sublessee only and shall not
be binding on Landlord. Sublessor and Sublessee specifically
acknowledge that Landlord is not a party to the Sublease. Except
as expressly provided in this Agreement, the Lease shall remain
unmodified and in full force and effect and the parties hereby
ratify and confirm the terms of the Lease.
3. WARRANTIES AND REPRESENTATIONS. Sublessor and Sublessee warrant
and represent to Landlord the following:
<PAGE>
(a) The Lease is binding and enforceable upon the Sublessor
and nothing done pursuant to the Sublease nor this
Agreement shall affect the liability of Sublessor under
the Lease.
(b) To the best of Sublessee's knowledge, Landlord is in
full and complete compliance with all of its obligations
under the Lease.
(c) The Lease, as described above, has not been otherwise
amended or modified, either orally or in writing, and
represents the entire agreement between Landlord and
Sublessor with respect to the Premises.
(d) Neither Sublessor nor Landlord is in default under
the Lease, and Sublessor is not aware of any state of
facts which, but for the giving of notice and/or the
passage of time, would be a default by either party
under the Lease. Sublessor is not entitled to any
credit offset, or reduction in rent or other charges
due or to become due under the Lease for any reason
whatsoever. Sublessor has no current defenses to the
enforcement of the Lease by Landlord, and there
currently exists no claims or any facts which could
give rise to any claims by Sublessor against
Landlord.
(d) Neither the Lease not any rights of Sublessor under
the Lease have been assigned by Sublessor. Other
than pursuant to the Sublease, the Premises have not
been sublet by Sublessor. No person or entity other
than Sublessee and Sublessor are entitled to possess,
use, or occupy the Premises pursuant to any license,
concession, or other agreement, whether oral or
written. Neither Sublessor's estate under the Lease
or any of its rights under the Lease have been
mortgaged or pledged to any third party, whether as
security for a loan or otherwise.
4. NO RELEASE. This Agreement shall not be deemed to release or
discharge, in any manner, the liability of Sublessor, as Tenant,
under the Lease nor any guarantors of the Lease, and their
respective liabilities shall remain in full force and effect and
to the same extent as existed prior to this Agreement.
5. FURTHER SUBLETTING OR ASSIGNMENT. This Agreement shall not be
construed as permitting any further subletting of the Premises or
assignment of the Lease except in strict accordance with the
terms of the Lease.
6. SUBLESSEE'S AGREEMENT. Sublessee confirms that it has read and is
fully familiar with the terms of the Lease. Sublessee shall
comply with all applicable terms and conditions of the Lease to
be performed by the Tenant under the Lease.
-2-
<PAGE>
7. CONTINUING LIABILITY. The Liability of Sublessor and any
immediate and remote successor in interest of Sublessor (by
assignment or otherwise), and the due performance of the
obligations of the Lease on the Tenant's part to be performed or
observed, shall not in any way be discharged, released, or
impaired by any (i) agreement which modifies any of the rights or
obligations of the parties under the Lease, (ii) stipulation
which extends the term within which an obligation under the Lease
is to be performed, (iii) waiver of the performance of an
obligation required under the Lease, or (iv) failure to enforce
any of the obligations set forth in the Lease.
8. SUBORDINATION. The Sublease shall be subject and subordinate in
all respects to the Lease and to all renewals, modifications, and
extensions of the Lease. Sublessee's rights to use and enjoy the
Premises are based solely on the Sublease and Sublessee has no
other rights in and to the Subleased Premises. Landlord has no
obligation to Sublessee for the performance of any of the terms,
covenants, conditions, and agreements of the Sublessor under the
Sublease. Should Sublessor be in default under the Lease,
Landlord shall have the right, at its option, which include, but
are not limited to, termination of the Lease or the rights to
occupy and possess the Premises, or both. Unless Landlord elects
otherwise, if for any reason the Lease or the Sublessor's rights
to occupy or possess the Premises are terminated, the Sublease
shall also be terminated and Sublessee shall have no right,
title, or interest in and to the Subleased Premises, through the
Sublease or otherwise, and, accordingly, it shall vacate the
Subleased Premises upon request of the Landlord. If Landlord
elects that the Sublease shall survive the termination of the
Lease or termination of Sublessor's rights to occupy and posses
the Premises, Sublessee will attorn to the Landlord and continue
to perform its obligations under the Sublease as if the Lease or
Sublessor's rights to occupy and possess the Premises had not
been terminated the Sublease were a direct lease between Landlord
and Sublessee.
9. BENEFIT AND BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement, their
legal representatives, successors, and permitted assigns.
10. AMENDMENT. This Agreement may not be changed, modified or
discharged in whole or in part except by an agreement in writing
signed by all parties to this Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed this
Agreement as of the date first above stated.
-3-
<PAGE>
WITNESSES: LANDLORD:
/S/ MELISSA J. PEARCE HIGHWOODS REALTY LIMITED PARTNERSHIP
- - ------------------------------------
MELISSA J. PEARCE By:/S/ Thomas Cochran
- - ------------------------------------ ----------------------------------------
Print or Type Name
/S/ STEPHANIE D. BROWN [CORPORATE SEAL]
- - ------------------------------
STEPHANIE D. BROWN
Print or Type Name
WITNESSES: SUBLESSOR:
FIDELITY MORTGAGE, INC.
- - ------------------------------
By: /S/ Mark Miller
- - ------------------------------ --------------------------------------
Print or Type Name
[CORPORATE SEAL]
- - ------------------------------
Print or Type Name
WITNESSES: SUBLESSEE:
/S/ SUSAN MCAVOY MONEYZONE.COM
- - ------------------------------
By: /S/ RANDALL GREENE
SUSAN MCAVOY ----------------------------------------
- - ------------------------------
Print or Type Name
_ [CORPORATE SEAL]
- - ------------------------------
Print or Type Name
EXHIBIT 21
Jurisdiction of
Company Incorporation
------- ---------------
MoneyZone Capital Corp. Delaware
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
MONEYZONE.COM'S FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 974,611
<SECURITIES> 270,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,597,945
<PP&E> 118,052
<DEPRECIATION> 2,780
<TOTAL-ASSETS> 1,713,217
<CURRENT-LIABILITIES> 44,435
<BONDS> 0
0
0
<COMMON> 6,246
<OTHER-SE> 1,662,636
<TOTAL-LIABILITY-AND-EQUITY> 1,713,217
<SALES> 710
<TOTAL-REVENUES> 710
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 299,038
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,635
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (304,694)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (304,693)
<EPS-BASIC> .085
<EPS-DILUTED> .085
</TABLE>
