SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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 1. 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 financial statements of FNI required to be filed with
this report are not currently available and are not included with this
report. The registrant hereby undertakes to file such such financial
statements as soon as practicable, but in any event not later than 60
days after the due date of this report on Form 8-K.
(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)
January 23, 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
marketing 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
accounting 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
