SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d)
of The Securities Act of 1934
Date of Report (Date of earliest event reported):
January 16, 1998
WORLDWIDE INTERNET MARKETING, INC.
(Exact name of registrant as specified in its charter)
COLORADO 0-25818 84-1293163
(State or other jurisdiction Commission (I.R.S. Employer
of incorporation or Number Identification No.)
organization)
14 East Main Street
P. O. Box 309
Los Gatos, CA 95301
(Address of Principal Office) Zip Code
Issuer's telephone number: (408) 354-6081
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) In accordance with the terms of an Agreement for Purchase and
Sale of Stock dated January 16, 1998, executed to memorialize an oral
agreement made between the parties on December 5, 1997, on January 16,
1998, the registrant formally completed the acquisition of a controlling
interest in Futurenet Online International, Inc., a Colorado corporation
(FNI), by purchasing 80% (800,000 shares) of the issued and outstanding
common stock of FNI from Futurenet Online, Inc., a California
corporation (FNO).
FNO is a wholly-owned subsidiary of Futurenet, Inc., a Nevada
corporation, formed to serve as an operating entity to engage in the
network marketing business using the name and the business system
developed by Futurenet. On September 30, 1997, FNO formed FNI as
a wholly-owned subsidiary of FNO, for the purpose of assigning to FNI
all rights to engage in the network marketing business in countries
outside the United States using the name and business system developed
by Futurenet.
In addition to acquisition of shares of FNI, as part of the same
transaction, the registrant acquired 1,000,000 warrants to purchase
shares of Futurenet. Each warrant entitles the holder thereof to
purchase one share of common stock of Futurenet at a price of $1.00 per
share at any time during a period of three years commencing on January
16, 1998.
The purchase price for the 800,000 shares of FNI was $3,000,000
which was paid $1,000,000 in cash and $2,000,000 through execution of
a promissory note in favor of FNO. The note bears interest at the rate
of 6% per annum, requires quarterly payments commencing April 15, 1998,
and is due and payable in full no later than January 15, 2000. The
quarterly payments due under the note are equal to $15.00 multiplied by
the number of television set-top internet access devices sold by FNI
during the immediately preceding quarter.
The purchase price for the 1,000,000 warrants of Futurenet was
$1,000,000 which was paid in cash.
The funds used by the registrant for payment of the $2,000,000
cash portion of the purchase price of the Shares and Warrants were funds
received by the registrant from the private placement sale of its shares
to accredited investors.
The purchase price and terms of payment for the FNI shares were
determined by negotiations between the registrant and FNO. However,
the negotiations were not completed on an arm's length basis because
Alan J. Setlin, who is Chairman of the Board and CEO of FNO, is also the
direct or indirect owner of a total of 4,989,000 shares of common stock
of the registrant, representing approximately 53.72% of its issued and
outstanding stock.
The purchase price for the Futurenet Warrants was based upon the
closing bid price for the common stock of Futurenet as of December 5,
1997 (the date of the oral agreement memorialized by the written
agreement dated January 16, 1998 which is attached hereto as an
Exhibit). The agreement by Futurenet to sell the Warrants to the
registrant was intended to provide an inducement and incentive to the
registrant to proceed with the purchase of the Shares.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) The following financial statements are filed as part of this
report:
(1) The audited balance sheet of the registrant for its fiscal
year ended January 31, 1998, is for a date after the consummation of the
acquisition of FNI. In addition, the operating results of FNI for a
full fiscal year (or for such shorter period for which FNI has been in
existence) are reflected in the audited financial statements of the
registrant for its fiscal year ended January 31, 1998. Accordingly, in
accordance with the provisions of Rule 3-05(b) of Regulation S-X, the
financial statements of FNI which would otherwise be required to be
filed with this report, are hereby incorporated by reference from the
registrant's report on Form 10-KSB for its fiscal year ended January 31,
1998, which report was filed with the Commission on May 18, 1998.
(c) The following Exhibits are filed as part of this report:
Exhibit (2) - Agreement for Purchase and Sale of Stock
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WORLDWIDE INTERNET MARKETING, INC.
(Registrant)
May 29, 1998
(Date)
/s/ __________________________
Frederick Neebling, President
(Signature)
Exhibit 2 -
AGREEMENT FOR PURCHASE AND SALE OF STOCK
THIS AGREEMENT, made and entered into this 16th day of
January, 1998, to memorialize an oral agreement entered into on or about
December 5, 1997, by and between Worldwide Internet Marketing, Inc.,
a Colorado corporation, hereinafter referred to as "Buyer," Futurenet
Online, Inc., a California corporation, hereinafter referred to as
"Seller," and Futurenet, Inc., a Nevada corporation, hereinafter
referred to as "Futurenet";
WITNESSETH:
WHEREAS, Seller is a wholly-owned subsidiary of Futurenet,
formed to serve as the operating entity to engage in the network marketi
ng business using the name and the business system developed by
Futurenet; and
WHEREAS, on or about September 30, 1997, Seller formed
Futurenet Online International, Inc., a Colorado corporation,
(hereinafter "FNI"), as a wholly-owned subsidiary corporation of Seller,
for the purpose of assigning to FNI all rights previously held by Seller
to engage in the network marketing business in countries outside of the
United States using the name and business system developed by the
Futurenet; and
WHEREAS, Seller is the owner of 1,000,000 shares of common
stock of FNI, constituting 100% of the issued and outstanding common
stock of FNI; and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, pursuant to and in accordance with the terms of
this Agreement, 800,000 shares of common stock of FNI, representing 80%
of the issued and outstanding common stock of FNI; and
WHEREAS, as an inducement and incentive to Buyer to proceed
with the purchase of shares of common stock of FNI, simultaneously with
the purchase of such shares, Futurenet desires to sell to Buyer and
Buyer desires to purchase from Futurenet, pursuant to and in accordance
with
the terms of this Agreement, 1,000,000 warrants to purchase shares of
common stock of Futurenet at a price of $1.00 per share.
NOW THEREFORE, for and in consideration of the mutual
covenants and conditions contained herein, the parties hereto agree as
follows:
1. Sale of Shares. Seller hereby sells and Buyer hereby
purchases 800,000 shares of common stock of FNI (the "Shares"). The
purchase price for the Shares shall be $3,000,000.00, payable in the
manner specified herein.
2. Sale of Warrants. Futurenet hereby sells and Buyer
hereby purchases 1,000,000 warrants of Futurenet (the "Warrants"), each
of which entitles the holder thereof to purchase one share of common
stock of Futurenet at a price of $1.00 per share at any time during a
period of three years commencing on the date of this Agreement. The
purchase price for the Warrants shall be $4,000,000 payable in the
manner specified herein.
3. Payment of Purchase Price for Shares. The purchase
price for the Shares shall be payable as follows:
(a) $1,000,000 payable in cash, certified funds or wire transfer, prior
receipt of which is hereby acknowledged by Seller; and
(b) $2,000,000 through execution by Buyer of a promissory note in
the form attached hereto as Exhibit A. Such promissory note shall be
executed at Closing provided for herein, shall bear interest at the rate
of 6% per annum, and if not sooner paid, shall be due and payable in
full on
January 15, 2000. The note shall require quarterly payments throughout
its term in an amount equal to $15.00 multiplied by the number of
television set-top internet access devices sold by FNI during the
immediately preceding quarter. The first such quarterly payment shall
be
due and payable on or before April 15, 1998, and the amount of payment
due on that date shall be based on sales of television set-top internet
access
devices sold by FNI during the period from December 5, 1997 (the date
of the oral agreement which is being memorialized by execution of this
Agreement) through and including March 31, 1998. Additional quarterly
payments shall be due and payable on each July 15, October 15, and
January 15 thereafter throughout the term of the note until it is paid
in
full, with payment amounts determined by sales of television set-top
internet access devices during the immediately preceding calendar
quarter.
For purposes of calculating the amount of each quarterly payment due
under the note, the number of television set-top internet access devices
sold by FNI during any calendar quarter shall be based on cash accountin
g
and shall reflect the number of such devices for which FNI received
payment in full during the quarter.
4. Payment of Purchase Price for Warrants. The purchase
price for the Warrants shall be payable $1,000,000 in cash, certified
funds
or wire transfer, prior receipt of which is hereby acknowledged by
Futurenet.
5. Closing. The Closing of the transactions provided for
herein shall take place at 10:00 a.m. on January 16, 1998, at the
offices
of Seller, or at such other date and time as the parties may mutually
agree
in writing. At the Closing, Seller shall deliver to Buyer certificates
representing the Shares endorsed in blank with signature guaranteed, and
Futurenet shall deliver to Buyer certificates for the Warrants. At the
Closing, Buyer shall deliver to Seller the fully executed promissory
note
in the form attached hereto as Exhibit A.
6. Representations and Warranties of Seller. Seller hereby
makes the following representations and warranties, each of which is
being relied upon by Buyer:
6.01 Organization, Capitalization, etc.
(a) FNI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Colorado,
and is qualified in no other state. FNI does not own property or conduct
any activities in any other state which would require qualification to
do
business in such other state.
(b) The authorized capital stock of FNI consists
of 1,000,000 shares, no par value common stock. As of the date of
execution of this Agreement, FNI has a total of 1,000,000 shares of its
common stock issued and outstanding. All of the shares owned by the
Seller are owned free and clear of any liens, claims, options,
charges, or
encumbrances of whatsoever nature. The Seller has the unqualified right
to sell, assign, and deliver the Shares and, upon consummation of the
transaction contemplated by this Agreement, the Buyer shall acquire good
and valid title to the Shares, free and clear of all liens, claims,
options,
charges, and encumbrances of whatsoever nature. The Buyer
acknowledges that the Shares being acquired from the Seller are
unregistered and are therefore "restricted" securities. There are no
outstanding options or other agreements of any nature whatsoever
relating
to the issuance by FNI of any shares of its capital stock.
6.02 Articles of Incorporation and Bylaws. Copies
of the Articles of Incorporation and Bylaws of FNI, as amended to date,
as delivered to Buyer following execution of this Agreement, will be
complete and accurate as of the date of delivery. The minute books of
FNI contain sufficient and accurate records of all meetings of the
stockholders and directors of FNI and of all other corporate action
taken
by its stockholders and directors. The stock ledger books of FNI as
delivered to the Buyer following execution of this Agreement, will
accurately reflect the names of the record holders of all issued and
outstanding shares of FNI.
6.03 Authority; No Violation. The execution and
delivery of this Agreement by the Seller and the consummation by Seller
of the transactions contemplated hereby have been duly authorized.
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will constitute a
violation or default under any term or provision of the Articles of
Incorporation or Bylaws of FNI or Seller, or of any contract,
commitment, indenture, other agreement or restriction of any kind or
character to which FNI or the Seller is a party or by which FNI or the
Seller is bound.
6.04 Financial Statements. Financial statements for FNI
are not currently available. However, Seller represents that the
financial
information regarding FNI previously provided to Buyer by Seller,
receipt
of which is acknowledged by Buyer, is true and correct and provides a
fair and accurate presentation of the financial condition and the
assets and
liabilities (whether accrued, absolute, contingent, or otherwise) of
FNI as
of the date provided. By execution of this Agreement, Buyer and Seller
acknowledge and agree that as a newly formed entity, the current
financial
condition of FNI is not a significant factor in the completion of the
transaction described herein. Notwithstanding the foregoing, however,
Seller hereby represents and warrants that any and all audited financial
statements of FNI which are required to be filed by Buyer to satisfy its
reporting obligations under the Securities Exchange Act of 1934 shall be
provided to Buyer in a timely fashion following Closing.
6.05 Tax Returns. FNI has duly filed, or prior to
Closing will file all tax reports and returns required to be filed by
it, and
has fully paid, or will as of Closing have fully paid, all taxes and
other
charges claimed to be due from it by federal, state, or local taxing
authorities (including without limitation those due in respect of its
properties, income, franchises, licenses, sales, and payrolls); there
are no
liens upon any of FNI's property or assets; there are not now any
pending
questions relating to, or claims asserted for, taxes or assessments
asserted
against FNI.
6.06 Undisclosed Liabilities. Except to the extent
reflected in the financial information regarding FNI previously
provided
to Buyer, FNI, as of such date, had no liabilities or obligations of any
nature, whether absolute, accrued, contingent, or otherwise and whether
due or to become due. Further, the Seller does not know or have any
reasonable grounds to know of any basis for the assertion against FNI of
any liability or obligation of any nature or in any amount not fully
reflected in such financial information.
6.07 Litigation. There are no actions, proceedings, or
investigations pending or, to the knowledge of Seller, threatened against
FNI, and the Seller does not know or have any reason to know of any
basis for any such action, proceedings, or investigation. There is no event
or condition of any kind or character pertaining to the business, assets, or
prospects of the FNI that may materially and adversely affect such
business, assets or prospects.
6.08 Disclosure. The Seller has disclosed to the Buyer
all facts material to the assets, prospects, and business of FNI. No
representation or warranty by the Seller contained in this Agreement, and
no statement contained in any instrument, list, certificate, or writing
furnished to the Buyer pursuant to the provisions hereof or in connection
with the transaction contemplated hereby, contains any untrue statement
of a material fact or omits to state a material fact necessary in order to
make the statements contained herein or therein not misleading or
necessary in order to provide a prospective purchaser of the business of
FNI with proper information as to FNI and its affairs.
6.09 Certified List of Officers and Directors and of Bank
Accounts. The Seller has delivered to Buyer a true and complete list
certified by FNI's Secretary, as of December 5, 1997, and as of the date
of Closing, showing: (i) the names of all of FNI's directors and officers;
and (ii) the name of each bank in which FNI has an account, or safe
deposit box, and the names of all persons authorized to draw thereon, or
to have access thereto.
6.10 No Employees. As of December 5, 1997 (the
date of the oral agreement which is being memorialized by execution of
this Agreement), and as of the date of Closing, FNI will have no
employees.
6.11 No Contracts or Commitments. Except as listed in
Schedule 6.11 attached hereto and incorporated herein by this reference,
FNI did not have as of December 5, 1997 (the date of the oral agreement
which is being memorialized by execution of this Agreement), and as of
the date of Closing will not have, any commitments, agreements or
contracts outstanding other than it's contract with the Seller pursuant to
which Seller has transferred and assigned to FNI all of its right, title and
interest in and to use of the "Futurenet" tradename and business system
in countries outside the United States, including, but not limited to, the
right to market television set-top internet access devices using the network
marketing system developed by Futurenet.
7. Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties, each of which is
being relied upon by Seller and by Futurenet:
7.01 Organization, etc. The Buyer is a corporation
formed under the laws of the State of Colorado.
7.02 Authority; No Violation. The execution and
delivery of this Agreement by the Buyer and the consummation by the
Buyer of the transactions contemplated hereby have been duly authorized.
Neither the execution nor the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will constitute a
violation of the laws of Colorado or the laws of any state of the United
States.
7.03 Representations Regarding the Acquisition of the
Shares and Warrants.
(a) THE UNDERSIGNED BUYER
UNDERSTANDS THAT THE SHARES AND THE WARRANTS
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES AGENCIES;
(b) The Buyer is not an underwriter and is
acquiring the Shares and the Warrants solely for investment and not with
a view to, or for, resale in connection with any distribution within the
meaning of the federal securities act, the state securities acts or any other
applicable state securities acts;
(c) The Buyer understands the speculative nature
and risks of acquisition of the Shares and the Warrants and confirms that
the Shares and the Warrants are suitable and consistent with Buyer's
investment program and that Buyer's financial position enables it to bear
the risk of the investment, and that there may not be any public market for
the Shares or the Warrants purchased herein;
(d) Neither FNI, Seller nor Futurenet is under
any obligation to register or seek an exemption under any federal and/or
state securities acts for any sale or transfer of the Shares or the Warrants
by the Buyer, or to cause or permit the Shares or the Warrants to be
transferred in the absence of any such registration or exemption and the
Buyer herein must hold the Shares and the Warrants indefinitely unless
they are subsequently registered under any federal and/or state securities
acts or an exemption from registration is available;
(e) The Buyer has had the opportunity to ask
questions of FNI, Seller and Futurenet and receive additional information
from them to the extent they possessed such information, or could acquire
it without unreasonable effort or expense to the extent necessary to
evaluate the merits and risks of any investment in the Shares and the
Warrants. Further, the Buyer has been given: (1) All material books and
records of FNI; (2) all material contracts and documents relating to the
proposed transaction; and, (3) an opportunity to question FNI, Seller and
Futurenet and the executive officers of such companies, concerning FNI
and Futurenet.
8. Liabilities; Indemnification by Seller. Seller hereby
agrees to indemnify and hold Buyer and FNI harmless from liability for
any undisclosed debts and obligations of FNI which may be outstanding
as of the date hereof.
9. Survival of Representations, Warranties and Agreements.
All representations, warranties and agreements contained herein shall
survive the Closing.
10. Notices. All notices, letters, requests, demands and other
communications hereunder shall be in writing and shall be deemed to be
duly given if delivered in person or deposited in the United States mail
(registered or certified, return receipt requested) or otherwise actually
delivered:
a. If to Seller:
Futurenet Online, Inc.
28460 Avenue Stanford
Valencia, CA 91355
ATTN: Christopher Lobato
b. If to Buyer:
Worldwide Internet Marketing, Inc.
14 E. Main Street
P.O. Box 309
Los Gatos, CA 95031
ATTN: Frederick Neebling
With a copy to:
Thomas K. Russell, Esq.
32 Antibes
Laguna Niguel, CA 92677
c. If to Futurenet:
Futurenet, Inc.
28460 Avenue Stanford
Valencia, CA 91355
ATTN: Alan J. Setlin
11. Binding Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties, their heirs, legal representatives,
successors and assigns.
12. Entirety. This Agreement shall be deemed to constitute the
entire agreement of the parties and supersedes any and all prior
agreements, arrangements, or understandings between the parties relating
to the subject matter hereof. No oral understandings, statements,
promises or inducements contrary to the terms of this Agreement exist.
The representations, warranties, covenants and agreements between the
parties shall be as set forth herein, and neither party shall be bound by any
prior, contemporaneous or subsequent statement, condition, representation
or understanding unless the same is set forth in a written amendment
attached hereto.
13. Governing Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
BUYER:
WORLDWIDE INTERNET
MARKETING, INC.,
a Colorado corporation
By: /s/Frederick Neebling,
President
SELLER:
FUTURENET ONLINE,
INC., a California
corporation
By: /s/Christopher Lobato
President
FUTURENET:
FUTURENET, INC.,
a Nevada corporation
By: /s/Alan J. Setlin
President
