UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3 REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AmeriNet Group.com, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State of incorporation or organization)
65-0957587
(I.R.S. Employer Identification No.)
2500 North Military Trail, Suite 225-C; Boca Raton, Florida
(Address of principal executive offices)
33431
(Zip Code)
Issuer's telephone number: (561) 998-3435
Jeffery G. Klein, Esquire
23123 State Road 7, Suite 350-B, Boca Raton. Florida 33428
(561)470-9010
(Name, address. Including zip code, and telephone number of agent for
service of process)
FromTime to Time after this Registration Statement
Becomes Effective (Approximate date of commencement
of proposed sale to public)
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [x ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering [ ].
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ].
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ]
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CALCULATION OF REGISTRATION FEE
------------------------------------------------------------------------------------------------------
Title of class of Proposed Maximum No. Proposed maximum Amount of
securities to be registered Shares to be registered Aggregate Offering Price Registration Fee
-------------------------------------------------------------------------------------------------------
Common Stock,
Par value $.01 per share 7,851,300 $1,805,799 $476.73
(1) Shares of common stock that may be offered pursuant to this
registration statement consist of 5,234,200 shares of our
company's common stock issuable upon conversion of our Class A
Preferred Stock ("Preferred Stock"). determined as if all of
the Preferred Shares have been converted into shares of common
stock at the conversion rate of 20 shares of our common stock
for each share of Class A Preferred Stock.
(2) A total of 5,234,200 shares will be issued to the shareholders
assuming each share of preferred common stock is converted at
the rate of 20 shares of common stock for each share of
preferred stock. Our company is registering an additional
2,617,100 shares in the event that as a result of the then
trading price of our common stock, the shareholder would be
entitled to receive additional shares of common stock.
(3) Computed pursuant to Rule 457(c) of the Securities Act of
1933, as amended, solely for the purpose of calculating the
registration fee and not as a representation as to any actual
proposed price. The offering price per share and maximum
aggregate offering price and registration fee is based upon
the average of the high and the low price in the market for
the common stock on February 26, 2001.
Our company's stock is quoted on the electronic bulletin board operated
(but not a part of) the National Association of Securities Dealers, Inc.'s
("NASD"), NASDAQ, Inc., subsidiary (the "OTCBB"). The trading symbol for our
company's common stock is " ABUY". Upon conversion of the Preferred Stock, the
Selling Security Holders may sell the shares of common stock described in this
prospectus in public or private transactions, including underwritten
transactions, on or off the NASD's OTCBB, at prevailing market price, or at
privately negotiated prices.
The Selling Security Holders may sell shares directly to purchasers or through
broker/dealers or an underwritten offering. Brokers, dealers or underwriters may
receive compensation in the form of discounts, concessions or commissions from
the selling stockholders. Our company has no knowledge of any such plan or
arrangement. You can obtain more information in the section titled "Plan of
Distribution." Our company will not receive proceeds from the sale of the shares
and will bear substantially all expenses of registration of the shares.
An investment in our company's shares of stock involves a high degree
of risk. You should consider the risks described in this registration statement
which our company believes are real and may have a significant impact on your
investment.
AVAILABLE INFORMATION.
The public may read and copy any materials filed by AmeriNet Group.com,
Inc. (referred to throughout this Registration Statement as "our company") with
the United States Securities and Exchange Commission (the "Commission") at the
Commission's Public Reference Room at 450 Fifth Street, Northwest, Washington,
D.C. 20549. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800- SEC-0330. The Commission
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding our company and other issuers that
file reports electronically with the Commission, at http://www.sec.gov. Our
company maintains a website at http://www.amerinetgroup.com.
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This prospectus constitutes a part of a registration statement on Form
S-3 filed by our company with the Commission under the Securities Act of 1933,as
amended ("Securities Act"). This prospectus does not contain all of the
information set forth in the registration statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission . For
further information with respect to our company and the shares of common stock
offered hereby, reference is made to this Registration Statement. Statements
contained herein concerning the provisions of any document are not necessarily
complete, and each such statement is qualified in its entirety by reference to
the copy of such document filed with the Commission.
Upon request, our company will provide without charge to each person to
whom a copy of this prospectus is delivered a copy of any information that was
incorporated by reference into the prospectus. Our company will also provide
upon request, without charge to each person to whom a copy of this prospectus
has been delivered , a copy of all documents filed from time to time by our
company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended ("Exchange Act"). Requests for copies should be directed to our company
at 2500 North Military Trail, Suite 225-C, Boca Raton, Florida 33431; Attention:
Corporate Information Officer. .
CAVEAT PERTAINING TO FORWARD LOOKING STATEMENTS & CONTEXT
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain of the statements contained
herein, which are not historical facts, are forward-looking statements with
respect to events, the occurrence of which involve risks and uncertainties.
These forward-looking statements may be impacted, either positively or
negatively, by various factors. Information concerning potential factors that
could affect our company is detailed from time to time in our company's reports
filed with the Commission. This Registration Statement contains "forward looking
statements" relating to our company's current expectations and beliefs. These
include statements concerning operations, performance, financial condition,
anticipated acquisitions and anticipated growth. For this purpose, any
statements contained in this Registration Statement, Form 10-KSB, Forms 10QSB or
the Forms 8-K which are incorporated by reference are not statements of
historical fact are forward-looking statements. Without limiting the generality
of the foregoing, words such as "may", "will", "would", "expect", "believe",
"anticipate", "intend", "could", "estimate", or "continue", or the negative or
other variation thereof or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties which are beyond our company's control. Should one or
more of these risks or uncertainties materialize or should our underlying
assumptions prove incorrect, actual outcomes and results could differ materially
from those indicated in the forward looking statements.
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows our company to incorporate by reference the
information filed with them, which means that our company can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this Registration
Statement and later information filed with the Commission will update and
supersede that information. Our company incorporates by reference the documents
listed below and any future filings made with the Commission under Section
13(a), 13(c), 14 or 15(d) of the Exchange Act until our company's offering is
completed.
* Annual Report on Form 10-KSB for the year ended June 30, 2000.
* Annual Report on Form 10-KSB for the year ended June 30, 1999.
* Annual Reports on Form 10-KSB/A for the year ended June 30, 1999.
* Quarterly Reports on Form 10-QSB for the quarters ended September
30, 1999, December 31, 1999, March 31, 2000, September 30, 2000 and
December 31, 2000.
* Current Report on Form 8-K filed on December 16, 1999.
* Current Report on Form 8-K/A filed on January 26, 2000 and amended
on March 3, 2000.
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* Current Report filed on Form 8-K filed on March 29, 2000
* Current Report filed on Form 8-K filed on May 30, 2000
* Current Report filed on Form 8-K filed on June 15, 2000
* Current Report filed on Form 8-K filed on July 17, 2000
* Current Report filed on Form 8-K filed on August 15, 2000
* Current Report filed on Form 8-K filed on November 2,2000
* Current Report filed on Form 8-K filed on January 5,2001
* Current Report filed on Form 8-K filed on February 8,2001
You can obtain a copy of any or all of the documents incorporated by
reference, other than exhibits to the documents, at our website located at
www.amerinetgroup.com, at the Commission's website located at www.sec.gov and by
writing or telephoning our company at the following address: AmeriNet Group.com,
Inc.; 2500 North Military Trail, Suite 225-C; Boca Raton, Florida 33431, phone
(561) 998-3435or by fax (561)998-4635.
TABLE OF CONTENTS
Page Number
About Amerinet........................ 5
Risk Factors.......................... 10
Selling Security Holders.............. 17
Plan of Distribution.................. 18
Description of Capital Stock.......... 19
Legal Matters......................... 21
Experts............................... 21
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AMERINET GROUP.COM, INC
OVERVIEW
Our company is a Delaware holding company engaged in consulting
activities at the holding company level and the advertising and Internet fields
through our wholly owned subsidiaries, Amerinet Communications, Inc.
("AmeriCom") and Wriwebs.com, Inc ("WRI"). AmeriCom has provided advertising,
marketing and e-commerce services to its clients including Internet web design
and sales services, but presently is limited to small advertising projects and
one Internet e-business which is new. WRI is an Internet provider offering
residential and business users web-hosting and design services, as well as a
wide range of other e-commerce solutions including e-mail, personal home pages,
chat rooms and electronic commerce. WRI also offers ancillary services including
leased high-speed Internet access lines as a reseller of long distance service;
web-site development, maintenance and storage; and, Internet advertising,
promotion and consulting.
GENERAL INFORMATION
AmeriNet's principal offices are located at 2500 North Military Trail,
Suite 225-C; Boca Raton, Florida 33431. Its main telephone number is (561)
998-4345 and its general fax number is (561) 998-4635. Its Internet website is
located at www.amerinetgroup.com.
AmeriCom's principal offices are located at 7325 Southwest 32nd Street;
Ocala, Florida 34474; however, its mailing address is Post Office Box 770787;
Ocala, Florida 34477. Its main telephone number is (352) 861-1350 and its
general fax number is (352) 861-1339. AmeriCom's website general e-mail address
is thefirm@callthefirm.com. AmeriCom currently operates under the registered
trade name, The Firm Multimedia.
WRI's principal offices are located at 100 East Sample Road, Suite 210;
Pompano Beach, Florida 3306. Its main telephone number is (954)569-0200 and its
general fax number is (954) 569-0300. Its website address is wriwebs.com
CONSULTING SERVICES
Our Company provides consulting services to unrelated corporations that
desire to become publicly held and to file reports regularly with the
Commission. Our Company makes available to them the procedures that have been
developed for such matters as financial accounting systems; dealing in
transactions with restricted and control securities; promoting compliance with
reporting obligations of officers, directors and stockholders; criteria for
selection of auditors, accountants and transfer agents; avoiding violations of
restrictions on trading through use of inside information; and, assistance in
the initial registration process under both the Securities Act and the Exchange
Act. Our company's compensation for such services is the registration of
securities of the client corporations for issuance directly to our company's
stockholders, providing a direct benefit to our company's stockholders and
providing the client corporations with an increased stockholder base and a link
to securities brokerage firms that make markets in our company's securities. Our
Company believes that consulting operations will introduce numerous corporations
with which our company can do business with in the future, and, in certain
cases, to acquire corporations .
In consideration for providing these services, our company expects our
consulting clients to register a percentage of their common stock for issuance
directly to our company's stockholders, as of an agreed upon date following the
execution of the consulting agreement. The amount of common stock involved will
vary depending upon the circumstances of each transaction. The issuance of
shares to our company's stockholders will be conditioned on prior registration
with the Commission and the failure to conclude such registration would void the
agreement.
Registration of shares directly to our company's stockholders is
necessary in order for our company to avoid inadvertently becoming an investment
company and provides a major benefit to clients in that they obtain a large,
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wide spread base of stockholders, including all of our company's market makers.
The major benefit of the consulting services to our company is that it will be
continuously exposed to emerging companies, some of which should prove to be
attractive acquisition candidates or candidates for strategic operating
alliances (cooperative business activities not involving shares equity
ownership).
FundsAmerica Consulting Agreement
Our company's first consulting agreement was signed on May 18, 1999,
with FundsAmerica Finance Corporation, a recently organized Florida corporation
that operates as a development stage retail finance company concentrating on
refinancing mobile homes ("FundsAmerica"). FundsAmerica believes that reporting
company status will facilitate its ability to package and resell loan
portfolios. Our company will not be involved in FundsAmerica's operations, will
provide only the described consulting services, and makes no predictions as to
the ultimate value of the securities to be distributed to its stockholders after
they are registered with the Commission.
PriMed Consulting Agreement
Our company entered into an agreement on January 31, 2001, with PriMed
Technologies, Inc., and PriMed Technologies LC of Deerfield Beach, Florida
(website at www.primedtech.com; "PriMed"), pursuant to which our company 's
stockholders will, subject to prior registration under Section 5 of the
Securities Act, receive 10% of the common stock of an entity to be formed
consolidating the operations of PriMed and its affiliates ("New PriMed"). The
stock distribution dividend will be issued to our company's stockholders of
record at the close of business on the day the required registration statement
is declared effective by the Commission. As currently contemplated, our
company's stockholders will receive one share of New PriMed common stock for
every 10 shares of our company's common stock held. A copy of the agreement is
filed as an exhibit to th current report on Form 8-K which was filed with the
Commission on February 8, 2001. Negotiations are continuing concerning our
company's acquisition of a majority interest in New PriMed, in addition to the
shares to be issued directly to our company's stockholders.
PriMed, is in the process of consolidating and expanding its current
operations, is involved in the provision of management and support services to
the health care industry along with the latest on-line technologies to its
growing client base of physicians, hospitals and ancillary service organizations
in South Florida. Its website address is primedtech.com.
OPERATING SUBSIDIARIES
AmeriNet Communications, Inc.
On May 11, 2000, our company acquired of all of the capital stock of
Lorilei Communications, Inc., a Florida corporation ("Lorilei"). On October 17,
2000, Lorilei assigned to AmeriCom , some of its assets, and operations,
including the fictitious names "The Firm Multimedia" and "Ocala News Tonight."
AmeriCom agreed, in consideration for the assignment of some of its assets, to
make the mortgage, equipment lease and financing payments disclosed in the
exhibits to the asset purchase agreement as well as to repay funds loaned to
Lorilei by our company. AmeriCom no longer telecasts Ocala News Tonight, a
nightly news show which was broadcast in the Ocala, Florida area. Rather,
management has focused its attention on the development of The Firm Multimedia.
After an unsuccessful attempt by Management to continue the prior business , new
management under the direction of the new president, Edward C. Dmytryk,
undertook a major restructuring which has been completed, including the
elimination of a number of salaried technical personnel and salaried sales
personnel. AmeriCom now only includes essential personnel on a contractual
basis. However, the Ocala facility will likely be closed, and the remaining
operations transferred to other locations and entities.
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AmeriCom's Business
The primary project of AmeriCom at present is the Greengrouper Project.
AmeriCom entered into a licensing agreement with Duffy DeVaul, the founder and
owner of the popular, five year old, recreational fishing
website,www.greengrouper.com. AmeriCom plans to develop the website, which was
established in 1996, has over 13,000 members worldwide and registers monthly
hits in excess of 500,000, into an e-commerce website aimed at capturing a share
of the 120 billion dollar American recreational fishing industry. The website
and a 30-minute weekly television show, will be the cornerstones of AmeriCom's
GreenGrouper project. Plans are also being made for a GreenGrouper magazine.
However, funding is presently a problem, and alliances are being explored to
support this project. Such alliances, or additional funding, will be necessary
in order for the plans to succeed.
Recreational fishing industry statistics show that the number of
participants in the sport now exceeds 50 million, more than twice the number of
golfers and tennis players combined, with average anglers spending $1,100 per
year on their sport. By capitalizing on the growing popularity of the sport, the
earnings potential of the GreenGrouper project is substantial.
Wriwebs.com, Inc.
Acquisition Related Information
Wriwebs.com, Inc., was incorporated in the State of Florida under the name
Web Results Institute, Inc. ("Old WRI"). On April 18, 1999, its name was changed
to Wriwebs.com, Inc. On November 12, 1999, Old WRI was merged into American
Internet and all of Old WRI's capital stock was converted into 531,000 shares of
our company's common stock.
The securities were issued in reliance on the exemption provisions of
Section 4(6) of the Securities Act based on representations by the parties
reflected in the agreement and plan of merger. The transaction was structured as
a "triangular merger" to meet the tax free exchange provisions of Section
368(a)(2)(D) of the Internal Revenue Code of 1986, as amended, and for
accounting purposes, was treated as an investment.
Concurrently with the merger, our company provided $100,000 in expansion
capital to the merged entity and from the time of the closing through June 30,
2000, we have provided it with an additional $111,515. WRI used those funds to
retire debt, fund the increase in payroll resulting from the addition of
American Internet personnel and its own expansion and for marketing, advertising
and working capital. At the time of the merger, our company anticipated
providing the surviving entity with up to $300,000 in funding, in addition to
the $209,259 it had previously provided to American Internet, however, our
company suspended funding to WRI due to its failure to meet projections and the
inadequacy of its financial reporting processes which required extensive
intervention by our company's chief financial officer.
Following WRI's acquisition, Yankees recommended that WRI shift the focus
of its web design and hosting services from the low-end consumer and small
business market to the more lucrative higher-end business market. The latter
market would permit WRI's staff to use their expertise and experience to develop
complex, interactive web designs that justify materially higher prices. The
management of WRI agreed with Yankees and has used a portion of the funds
provided by our company to develop and market increasingly sophisticated web
design products. However, WRI also maintains its presence in the lower cost
market. In December of 1999, we expected such shift in business emphasis to
increase operating costs and to reduce profits over the short term, we believed
that the increased potential earnings would quickly reverse such losses and
result in materially increased profits within the calendar year ending December
31, 2000. Our company's expectations have proven to be accurate and there can be
no assurances that WRI will be profitable in the future.
On January 26, 2001, our company entered into a superseder and settlement
agreement with WRI, as a result of which, WRI will become its own publicly
traded company.
Pursuant to such agreement:
* WRI's authorized capitalization will be increased to 15,000,000
shares, $0.0005 par value and its securities will be registered with
the Securities and Exchange Commission (the "Commission") pursuant to
Section 12(g) of the Exchange Act and Section 5 of the Securities Act;
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* 500,380 of the 531,000 shares of our Company's common stock issued to
acquire WRI will be returned by Michael A. Caputa, WRI's president, in
exchange for cancellation of approximately $512,000 in debt owed by
WRI to our Company and 4,625,000 shares of WRI's common stock to be
issued to Mr. Caputa, Jeffrey B. Levy, WRI's general counsel, and to a
WRI employee stock compensation plan;
* Our Company will distribute 1,375,000 shares of its WRI common stock
to its stockholders of record, as of the business day following the
date a registration statement for such shares is declared effective by
the Commission;
* Our Company will transfer 1,500,000 shares of its WRI common stock to
the Yankee Companies, Inc. ("Yankees"), as consideration for release
of liens on such shares securing existing indebtedness and Yankees'
Agreement to loan WRI funds required to prepare the registration
statement required in conjunction with the WRI stock dividend to our
Company's stockholders; our Company will convey record ownership of
the remaining 7,500,000 shares of WRI's common stock to an escrow
agent, for distribution to designees of Mr. Caputa, if WRI's annual
net, pre-tax profit earnings aggregate to $237,500 over a three year
period, with any shares not earned to be distributed annually as stock
dividends to WRI's stockholders.
The parties believe that WRI will operate more successfully as its own
public company, under Mr. Caputa's leadership, and that our Company's
stockholders will obtain faster and more direct benefits through ownership of
WRI common stock than if WRI continued as a heavily indebted AmeriNet
subsidiary. It is anticipated that as a result of the agreement, WRI's aggregate
loans payable will be reduced to $77,255, plus such funds as are borrowed from
Yankees to pay for the costs of required registration with the Commission. The
parties expect that the required registration statements can be completed and
filed with the Commission within 30 days after completion of required audits of
WRI. However, they cannot provide any assurances as to when such registration
statements will be declared effective by the Commission.
WRI currently hosts over 4,000 websites, is obtaining renewal
commitments from approximately 75% of its web hosting customers and plans to add
at least 20 new web hosting customers per month through increased marketing.
Because of its strong foundation, WRI can expand its gross income without
materially increasing its expenses and hopes to do so through acquisition of
other web hosting companies or their client bases.
A copy of the WRI Plan of Merger Agreement was filed as an exhibit to a
quarterly report on Form 10-QSB filed with the Commission on November 19,1999. A
copy of the superseder and settlement agreement was filed as an exhibit to a
current report on Form 8-K filed with the commission on February 8, 2001.
WRI's Business
Currently, WRI is an Internet presence provider located in Pompano
Beach, Florida offering residential and business users web-hosting and design
services, as well as a wide range of other e-commerce solutions including
e-mail, personal home pages, chat rooms and electronic commerce. WRI also offers
ancillary services including leased high- speed Internet access lines as a
reseller of long distance service; web-site development, maintenance and
storage; and, Internet advertising, promotion and consulting.
Internet web-hosting is a multi-media Internet service that permits
clients to maintain a continued presence on the Internet directly through
high-speed servers and a dedicated tier one connection. The hosting services
available through WRI includes virtual hosting and collocation. Virtual hosting
allows a client's web-site (which may be hosted on either a UNIX or NT server
platform) to be connected to the Internet through WRI's operations center.
Collocation permits a client's Internet content to be hosted on a dedicated
server, eliminating or substantially reducing the capital investments a client
is otherwise required to make and reducing certain of the client's security
concerns associated with connection of the client's private network(s) to a
web-server.
WRI provides web-hosting and Internet access services from initial
simple online brochures to complex interactive multi-media applications. Its
secure network operations center is located at 100 East Sample Road, Suite 210;
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Pompano Beach, Florida with dedicated Dell, Compact and other dedicated servers,
multiple high-speed fiber optic connections to the Internet, and an
uninterruptible power supply and environmental controls, is monitored twenty
four hours a day to minimize service interruptions. WRI maintains high-bandwidth
paths to the Internet with dedicated T1 lines through Intermedia Communications.
WRI currently provides its customers with the following products either
individually or as part of a one-stop package custom designed for each client's
individual needs, including:
Programming and Applications Development:
Customized application development including web-portals, total
e-commerce solutions, e-marketing packages, shopping carts, real-time
audio and video, custom online databases, virtually interactive
communications and purchasing systems. Content management Intranet and
extranet systems Web-site development and maintenance: Web-site
Hosting and Internet Access, shared hosting and co-location services,
Digital Subscriber Lines (DSL), Dedicated access (T-1 and T-3 service)
and Integrated Services Digital Network (ISDN).
WRI's existing services comprise three broad categories: web-site
development and maintenance, e-commerce and training. Web-site development
involves the design and development of a client's web-site production. Working
with clients and utilizing its own graphic designers and programmers, WRI
designs, creates and maintains multi-media, interactive web-sites for its
clients, using the latest applications and development tools, such as Cold
Fusion, HTML and FLASH. WRI has its own web enabled shopping cart that provides
its e-marketing clients with an affordable packaged cart they can lease to sell
their products on-line. WRI offers multi-tiered e-training services including:
(i) one-on-one Internet training for executives; (ii) group training for
non-computer professionals; and, (iii) on-site internships dedicated to the
professional training of students involved with Internet related studies,
providing WRI with a strong, financially sound work force.
WRI's customers are principally located in the Southeast United States
(although it has customers around the world). None of WRI's clients account for
more than 5% of its total business, nor does WRI rely on any supplier for 5% or
more of its required equipment or supplies.
E-Commerce
Many of WRI's clients rely on e-commerce to conduct their business. As
a result, WRI must be able to build web pages that offer customers the latest in
technological innovations and security for on-line transactions. WRI relies on
third party vendors to provide the required processing and secrecy of credit
card transactions.
Sales & Marketing
WRI currently relies on local newspaper to promote its business
operations. Sales representatives are also available to offer existing clients
additional services and features.
Facilities and Equipment
WRI currently leases approximately 3,500 square feet of space at a cost
of $4,000 per month. Management intends to sublease approximately one half of
this space and is currently looking for a prospective sub tenant. WRI has
approximately 10 work stations and 12 servers. Management believes that this
equipment is suitable for its current needs. Any upgrades in computer software
or the purchase of additional hardware will not require the expenditure of
significant sums of capital.
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Competition
WRI functions in a highly competitive industry with few barriers to
entry. It competes with many small local businesses as well as with many larger
national corporations. WRI' s management believes that the key to obtaining a
significant amount of market share is to provide product and service. Customers
can come to WRI and obtain all of their needs and requirements from one single
source; "A One Stop Shop". To become even more effective, WRI will:
* Aggressively promote its custom B2B solutions.
* Move rapidly to reach new regional customers and develop interrelated
strategies there by continuing its global expand.
* Enhance customer service relations to build retention and customer
loyalty.
* Increase sales to existing customers including web maintenance,
updating, pre-set periodic registration, and cyber marketing services.
Governmental Regulations
WRI like all businesses are subject to government regulation at both
the state and federal level. WRI is not aware of any violations of applicable
statutes. While its web site design functions will be subject to local rules and
regulations regarding the conduct of business, as WRI expands into the Internet,
the role of the governement is less clear. Currently, there are few rules and
regulations regarding the operation of an Internet based business. State
governments do not currently tax Internet sales. Should either the states or
federal government implement more stringent rules and regulations regarding the
operation of Internet based busiesses, there is a likelihood that WRI may not be
able to comply with these new rules and regulations.
INVESTMENTS
Our company owns up to 20% of the common stock of both Trilogy
International, Inc. and Vista Vacations International, Inc. Trilogy
International is an e-commerce based company whose principal focus is the sale
of pet care products. Vista Vacations is a cruise and leisure travel marketing,
training and reservation company. Although our company is not involved in the
day to day operations or management of either company, our company continues to
make ourselves available on an "as needed" basis for consulting in such areas as
building strategic alliances, regulatory compliance and in identifying potential
funding sources.
RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties not presently
known or that our company currently deems immaterial may also impair our
company's operations.
In addition, you should carefully consider the information incorporated
by reference, and information that our company files with the Commission from
time to time. If any of the following risks actually occur, our company could be
materially adversely affected. In such case, the trading price of our company's
common stock could decline, and you could lose all or part of your investment.
The following information is complete and accurate as of the date of this
prospectus, but such information may change in the future.
RISKS RELATED TO OUR BUSINESS
Our Anticipated Business Is Not Indicative of our Business History.
Although our company was organized in 1964, our current operations should be
evaluated as if our company was organized during 1998, when all of our current
businesses were organized. Consequently, our company has a limited operating
history on which you may evaluate and you should consider the risks and
difficulties frequently encountered by early stage companies in new,
Page 10
rapidly evolving and technology-dependent markets. If our company fails to
address such risks successfully, our business would be materially and adversely
affected.
Our Company's Quarterly Operating revenue May Deviate Significantly,
Causing the Price of Our Company's Common Stock to Fluctuate. Our Company's
quarterly revenues may be unpredictable and may cause significant volatility in
the price of our common stock. Operating results may fail to meet expectations
causing our common stock to decline precipitously. Some of the factors which
might cause our common stock to fluctuate include:
* Rising costs of expanding our operations.
* The ability to acquire new customers and maintain effective
relationships with our existing clients. * The amount and timing of any
capital expenditures.
You should not rely on quarter to quarter comparisons of our results of
operations as an indication of future performance. It is possible that in some
periods our results of operations may be below the expectations of public market
analysts and investors. In that event, the market price of our company's common
stock may fall.
There are Risks Related to Our Company's Operating and Internal Growth
Strategies. A key element of our strategy to increase profitability and revenues
is to let our management team make the key decisions necessary to implement our
business plan and service our clients. Our company believes that this strategy
will result in projects being completed on a more timely basis and with
increased client satisfaction. However, if our company does not implement
appropriate checks and balances, this decentralized operating strategy could
result in inconsistent operating and financial practices and our overall
profitability could be adversely affected. Another key element of our strategy
is our ability to generate internal growth which will be affected by, among
other factors, our ability to :
Expand the range of service offered to customers; Attract new
customers; Strategically align with larger business partners; Increase
the number of projects performed for existing customers; Hire and
retain employees; Open additional facilities; and Reduce operating and
overhead expenses.
Many of the factors affecting our ability to generate internal growth
may be beyond our control and our company cannot be certain that our strategies
will be successful or that our company will be able to generate cash flow
sufficient to fund our operations and to support internal growth. Our inability
to achieve internal growth could have a material adverse effect on our business,
financial condition and results of operation.
Our company May Make Investments or Acquisitions That Are Not
Successful. Our Company may acquire and integrate complementary businesses,
products, services or technologies, but have limited experience in these
activities. If our company seeks to make investments or acquisitions, they will
be subject to the following risks:
The difficulty of assimilating the operations and personnel of
acquired companies;
The potential disruption of our business;
The inability of our management to maximize our financial and
strategic position by the incorporation of an acquired technology or
business into our service offerings;
The difficulty of maintaining uniform standards, controls, procedures
and policies; and
The potential loss of key employees of acquired businesses, and the
impairment of relationships with employees and customers as a result
of changes in management.
Page 11
Our Company cannot assure you that any completed acquisition will
enhance our business. Most of our acquisitions will require our company to raise
and invest material amounts of cash and all of them will involve the issuance of
a material quantity of common stock causing our existing stockholders to suffer
significant dilution of their interest in our company. In addition, our company
could incur or assume significant amounts of indebtedness in connection with
acquisitions. Acquisitions required to be accounted for under the purchase
method could result in significant goodwill and/or amortization charges. In
addition, an inability to sustain profitability may also result in an impairment
loss in the value of our long-lived assets, principally goodwill, property and
equipment, and other tangible and intangible assets.
Our Equipment May Become Technologically Obsolete. Our business is
currently dependent upon computer-based technology in order to produce the
majority of our services. Because technological change has been extremely
dynamic, technological obsolescence has become an increasingly important factor
when making capital expenditures. No assurances can be provided that our state
of the art systems will remain state of the art for a period sufficient to
amortize their expenditure. Our company's strategy is to incrementally add
equipment piece by piece to our operations as prices for new technology decrease
and as production demand increases, so as to consistently add new, better,
faster computers, cameras, scanners, etc. to our company's available equipment
inventory. There can be no assurance, however, that new advances in technology
will not hasten the obsolescence of our equipment, resulting in additional
necessary capital expense which could be substantial. In this event management
envisions the utilization of leases, financing, or an additional capital
investment in order to satisfy these requirements.
Risks Related to our Acquisition Strategy. A material component of our
growth strategy involves the acquisition, consolidation and roll-up of
compatible advertising and marketing organizations that do not share our
production capability but which have desirable personnel, accounts and sales
facilities. Acquisitions involve a number of special risks, including possible
adverse effects on our operating results, diversion of management's attention,
loss of key personnel, risks associated with unanticipated events or liabilities
and amortization of acquired intangible assets, some or all of which could have
a material adverse effect on our business, financial condition, and results of
operations. Customer dissatisfaction or performance problems at a single
acquired company could have an adverse effect on our reputation. Further, there
can be no assurance that businesses acquired will achieve anticipated revenues
and earnings. To the extent that our company intends to increase our revenues,
expand the markets our company serves and increase our service offerings through
the acquisition of additional companies, there can be no assurance that our
company will be able to identify, acquire, or profitably manage additional
businesses or successfully integrate acquired businesses without substantial
costs, delays or other operational or financial problems. Increased competition
for acquisition candidates may also develop, in which event there may be fewer
acquisition opportunities available as well as higher acquisition costs.
Risks Related to Acquisition Financing and Possible Need for Additional
Capital. Our company plans to finance future acquisitions by using shares of our
common stock for all of the consideration to be paid. In some cases, however it
is probable that our company could be required to make cash investments in the
acquired businesses. In the event that the our stock does not maintain a
sufficient market value, or potential acquisition candidates are otherwise
unwilling to accept our stock as consideration for the sale of their businesses,
our company may be required to use more of our resources, if available, in order
to maintain our acquisition program. If our company has insufficient cash
resources, our growth could be limited unless our company is able to obtain
additional capital through debt or equity financing. There can be no assurance
that other financing will be available on terms our company deems acceptable. If
our company is unable to obtain sufficient financing,, our company may be unable
to fully implement our acquisition strategy.
Intense Competition Could Reduce Our Market Share and Harm Our
Financial Performance. The advertising industry is highly competitive and is
served by numerous small, owner operated private companies, as well as multi
billion dollar public companies. There are no substantial barriers to entry in
our industry and our company expects competition to intensify in the future.
Competition in the industry depends upon a number of factors, including price.
Certain of our competitors may have lower overhead cost structures and may,
therefore, be able to provide their services at lower rates than our company can
provide such services. Certain of our competitors have greater market presence,
engineering depth and marketing capabilities, and financial, technological and
personnel resources than those available
Page 12
to our company. As a result, they may be able to develop and expand their
customer base more quickly, adapt more swiftly to new or emerging technologies
and changes in customer requirements, take advantage of acquisition and other
opportunities more readily, and devote greater resources to the marketing and
sale of their products and services than our company can. Our company cannot
give any assurance that our company will be able to maintain or enhance our
competitive position. Our company also face competition from in-house service
departments of our prospective and existing customer base and cannot be certain
that our existing or prospective customers will continue to out source services
in the future.
Intellectual Property Rights. The relationship between regulators
governing website addresses, the tools used to direct web traffic and laws
protecting intellectual property rights is unclear. Despite any intellectual
property rights that our company may own, our company may not be able to prevent
third parties from acquiring web site addresses that are similar to ours or use
our name or registered marks as a means to link to their web site. Moreover, our
company may not be able to prevent others from duplicating our website or
otherwise creating a website that is deceptively similar to ours in terms of
function and design. If our company is unable to do so, it may not be able to
attract or maintain a loyal customer base and our business could be materially
and adversely affected. Any claims or litigation, with or without merit, could
result in a diversion of management's attention and our financial resources,
which could have a material adverse effect on our business, financial condition
and results of operations. Adverse determinations in such claims or litigation
could have a material adverse effect on our business, financial condition and
results of operations.
Our company relies on a combination of trademark laws, trade secrets
laws and license and non-disclosure agreements to protect our proprietary
information. Our company currently has no registered copyrights or patents or
patent applications pending. It may be possible for unauthorized third parties
to copy aspects of, or otherwise obtain and use, our proprietary information
without authorization. Our company anticipates that providing more complex
services to our clients and increasing the emphasis on commercial clients, our
client contracts may contain provisions granting the client intellectual
property rights to certain work product, including any customized programming or
design work that our company creates for such client. Existing agreements to
which our company is a party are, and future agreements may be, silent as to the
ownership of such rights. To the extent that the ownership of such intellectual
property rights is expressly granted to a client or is ambiguous, our ability to
reuse or resell such rights will or may be limited.
Our company's policy is to execute confidentiality agreements with our
employees and consultants upon the commencement of an employment or consulting
relationship with our company. These agreements generally require that all
confidential information developed or made known to the individual by our
company during the course of the individual's relationship with our company be
kept confidential and not disclosed to third parties. These agreements also
generally provide that inventions conceived by the individual in the course of
rendering services to our company shall be our exclusive property. There can be
no assurance that such agreements will not be breached, that our company would
have adequate remedies for any breach or that our trade secrets will not
otherwise become known to or be independently developed by competitors.
Our Company's Limited Operating History and Revenues Makes Evaluating
Our Business Difficult. The limited operating history of our current business
operations makes it difficult for you to evaluate our prospects.
The Imposition of Governmental Regulation and Other Legal Uncertainties
May Harm Our Business. Our company is not currently subject to direct regulation
by any state, federal or foreign governmental agency, other than regulations
applicable to businesses in general and regulations regarding access to online
commerce. Due to the increasing popularity and use of the Internet and other
online services, it is likely that a number of laws and regulations regarding
user privacy, pricing, content, copyrights and even taxation may be enacted. The
growth and development of the market for online commerce may prompt more
stringent consumer protection laws that impose additional burdens and costs on
those companies doing business online. The enactment of any additional laws or
regulations may decrease the growth or otherwise have a chilling effect on the
use of the Internet and other online services, which in turn could decrease the
demand for our services and increase our cost of doing business. Additionally,
the applicability of existing laws regarding sales and use taxes, property
ownership and personal privacy, to the Internet and online services is
Page 13
uncertain and may take years to resolve. Sales to people in certain states or
countries may give rise to claims that our company is required to qualify to do
business in these jurisdictions and could subject our company to taxes and
penalties for failure to do so. The application of such laws and regulations to
our business could have a materially adverse effect on our business.
Our Company's Failure to Adequately Respond to Rapid Changes in
Technology May Harm Our Business. The market for our services is characterized
by rapid technological changes, changing customer needs, the frequent
introduction of new services and evolving industry standards. These marketing
characteristics are highlighted by the emerging and evolving nature of the
Internet as a market place and the fact that many companies are expected to
introduce new services and content programming through the Internet in the
future. Significant technological changes could render our hardware and software
obsolete. Our future success will depend in large part on our ability to
continuously introduce new services, features and technologies on a timely basis
and improve our website and services as needed. Our company cannot be certain
that our management team will recognize evolving trends, markets and
technologies or be able to adapt and react as these trends, markets and
technologies require.
Uncertainties Regarding the Future of the Internet May Harm Our
Business. Rapid growth of interest in and use of the Internet is a recent
phenomenon. While our company anticipates that growth and interest in the
Internet as a viable commercial marketplace will develop, there can be no
assurance that such growth and interest will continue or realistically project
what the rate of growth will be. Commercial activity on the Internet is highly
competitive and news of dot.com failures are common. The markets for many of our
services are highly dependent upon the ongoing acceptance and use of the
Internet as a vehicle for commerce and communication. Critical issues relating
to the ultimate success of the commercial use of the Internet include security,
reliability, capacity, cost, ease of use, access, quality of service and
acceptance of advertising. These issues remain unresolved and may limit the
growth of Internet use for commercial applications, sites, the amount of traffic
on our web site, and our ability to demonstrate user and member. If on the other
hand, widespread use of the Internet grows too quickly to the point where our
consumer's ability to gain access is impeded, our Internet related business may
be adversely affected.
System Failures May Harm Our Company's Reputation and Business. Our
company's ability to successfully utilize the Internet depends on the efficient
and uninterrupted operation of our computers and communications hardware and
software systems. Our systems and operations are and will continue to be
vulnerable to damage or interruption from fire, flood, power loss, lightning,
power surges, telecommunications failures, break-ins, earthquakes and similar
casualties. Failure of information delivery can occur due to telecommunications
failures, e-mail system failure, hosting site failure and/or local system
failure. Our company has no in-house full time employees to monitor our systems.
Our company presently has very little redundant systems and do not have a formal
disaster recovery plan. Our company carries no business interruption insurance
to compensate in the event of such losses. No assurance is given that our
company will have sufficient resources to purchase redundant systems, implement
an effective disaster recovery plan or purchase business interruption insurance
at acceptable terms. Despite our efforts to insure network security and
integrity, our servers are vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions, which could lead to interruptions
in our business, loss of data and the inability to accept and fulfill customer
orders.
Our company expects that our Internet operations will depend on one or
more independent third parties over whom our company expects to have limited
control. Our company does not plan to own a gateway to the Internet but plan to
rely on an Internet Service Provider to host our website. Our company may
experience temporary service interruptions in website connection and
telecommunications access. Continuous or prolonged interruptions in website
connection or in telecommunications access would have a materially adverse
effect on our company.
Our company may use software that is dependent upon operating system,
database and server software developed and produced by certain third parties.
Our company may discover errors and defects in this software and be forced to
rely on the software providers to correct these errors and defects in a timely
manner. The failure of these software providers to correct these errors and
defects could interrupt our operations and have a material adverse effect on our
company.
Page 14
Actual and Perceived Online Commerce Security Risks May Harm Our Business.
Our company may rely on encryption and authentication technologies licensed from
third parties to provide the security and authentication needed to effect secure
transmission of confidential information, such as customer credit card numbers.
Our company cannot assure that advances in computer capabilities, new
discoveries in the field of cryptography, or other developments will not result
in the compromise or breach of the algorithms that our company uses to protect
customer transaction data. Any compromise of our security could have a
materially adverse effect on our company and its reputation. A party who is able
to circumvent our company's security measures could misappropriate proprietary
information or cause interruptions in our company's operations. Our company may
be required to expend significant capital and other resources to protect against
such security breaches or to resolve problems caused by such breaches. To the
extent that our activities involve the storage and transmission of proprietary
information such as credit card numbers, security breaches could subject our
company to significant liability and have a materially adverse effect on our
company' s operations.
Our company believes that concerns regarding the security of
confidential information transmitted over the Internet prevents many potential
customers from engaging in on-line transactions. If the e-commerce industry
fails to take any action to address this perception or fails to address real
security risks as they arise, our company may not be able to gain market
acceptance of our services and our business may be materially and adversely
affected.
Potential Liability for Information Displayed on Our Company's Web Site
May Require Our Company to Defend Against Legal Claims, Which May Cause
Significant Operating Expenditures. Since our customers view and may download
proprietary and other data from our company, there is the potential that claims
may be made against our company for negligence, copyright or trademark
infringement or other theories of liability based upon the nature or content of
such material. Providers of Internet products and services have been sued in the
past, sometimes successfully, based upon the content of their material. Our
company does not currently carry insurance to cover such liability, but may seek
to obtain a commercial general liability policy and apply for an errors and
omissions type "Cyber Liability" policy. Such insurance, if and when obtained,
may not cover potential claims of this type and may not be adequate to cover all
costs incurred in the defense of such matters. Any costs or liabilities not
covered by insurance could have a materially adverse effect on our company.
Matters Related to Forward Looking Statements. Statements contained in
this Registration Statement that are not purely historical are forward-looking
statements. The forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results, experience and
our company's performance or achievements to be materially different from those
anticipated, expressed or implied by the forward-looking statements. In
evaluating our company, you should carefully consider: successful deployment and
integration of systems; factors affecting internal growth and management of
growth; success of marketing, integration and operational initiatives, including
Internet marketing initiatives; dependence on technology; labor and technology
costs; cost and availability of advertising and promotional efforts; success of
the acquisition strategy and availability of acquisition financing; success in
entering new segments of the advertising industry and new geographic areas;
dependence on commercial leased access rules; risks associated with the
advertising industry generally; seasonal and quarterly fluctuations;
competition; and general economic conditions.
There is a Great Likelihood that Our Company will Require Additional
Financing. Our company may be required to expand operations, take advantage of
market conditions or upgrade technological facilities. Unforeseen difficulties
may result in an increase in our company's expenses. Our company can not assure
you that additional financing can or will be raised on acceptable terms.
Our Company Is Dependent on Key Personnel and Employees. The success of
our company will continue to be highly dependent upon key members of senior
management. The loss of services of any member of our management team could have
a materially adverse effect upon our company and its development. Our future
operations will also depend in part upon the ability to retain current employees
and to attract and retain additional qualified personnel. No assurances can be
given that our company will be able to attract and retain such personnel or, if
able to do so, on favorable terms.
Page 15
RISKS ASSOCIATED WITH THIS OFFERING
Current Prospectus and State Blue Sky Registration Requirements May
Affect the Transferability of Our Company Shares. The purchasers of any
securities registered hereby will be able to resell such securities in the
public market only if the securities are qualified for sale or exempt from
qualification under applicable state securities laws of the jurisdictions in
which the proposed purchasers reside. Although our company intends to seek to
qualify for sale the securities registered hereby in those states in which the
securities may be offered, no assurance can be given that such qualifications
will occur. The securities may be deprived of any value and the market for the
securities may be limited if the securities are not qualified or exempt from
qualification in the jurisdictions in which any prospective purchaser of the
securities then resides.
Limited Public Market For Our Shares. At the present time our company's
shares of common stock is traded on the OTCBB . Shares traded on the OTCBB are
highly volatile and are generally more difficult to dispose of and to obtain
accurate quotations as to price than securities of companies that are traded on
the NASDAQ National Market, the NASDAQ SmallCap Market or the major stock
exchanges. The shares may be transferred in the states in which the securities
have been registered, but may not be transferred elsewhere without strict
compliance with Federal and State securities laws and regulations.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. Commission regulations generally
define a penny stock to be an equity security that has a market price of less
than $5.00 per share, subject to certain exceptions. Such exceptions include any
equity security listed on NASDAQ or a national securities exchange and any
equity security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for three years,
(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or (iii) average annual revenue
of at least $6,000,000, if such issuer has been in continuous operation for less
than three years. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated therewith.
The impact of the regulations applicable to penny stocks on such
securities is a reduction in the market liquidity of such securities by limiting
the ability of broker/dealers to trade such securities and the ability of
purchasers of such securities to sell their securities in the secondary market.
The low price of common stock also has a negative effect on the amount and
percentage of transaction costs paid by individual shareholders and our
potential ability to raise additional capital by issuing additional shares. The
primary reasons for these effects include the internal policies of certain
institutional investors that prohibit the purchase of low-priced stocks, the
fact that many brokerage houses do not permit low-priced stocks to be used as
collateral for margin accounts or to be purchased on margin and certain
brokerage house policies and practices that tend to discourage individual
brokers from dealing in low-priced stocks. In addition, since broker's
commissions on low-priced stocks represent a higher percentage of the stock
price than commissions on higher priced stocks, a low share price of common
stock results in individual shareholders paying transaction costs that are a
higher percentage of their total share value than would be the case if the share
price was substantially higher.
Shares Eligible for Future Sale May Adversely Affect Our Shareholders.
Future sales of substantial amounts of common stock in the public market could
adversely affect market prices of our company's common stock. Upon the
conversion of all of our company's Preferred Stock into common, there will be
approximately of our shares issued and outstanding. The shares registered
hereunder will be freely tradeable without restriction or further registration
under the Securities Act, unless held by our officers, directors or "affiliates"
as that term is defined in Rule 144 promulgated under the Securities Act ("Rule
144"), which shares will be subject to the resale limitations of Rule 144.
You May Be Unable To Sell Your Shares Because There Is No Public Market
for Our Company's Securities. The purchasers of any securities registered hereby
will be able to resell such securities in the public market only if the
securities are qualified for sale or exempt from qualification under applicable
state securities laws of the jurisdictions in which the proposed purchasers
reside. Although our company intends to seek to qualify for sale of the
securities registered hereby in those states in which the securities may be
offered, no assurance can be given that such
Page 16
qualifications will occur. The securities may be deprived of any value and the
market for the securities may be limited if the securities are not qualified or
exempt from qualification in the jurisdictions in which any prospective
purchaser of the securities then resides. The regulations require the delivery,
prior to any transaction involving a penny stock, of a in low-priced stocks. In
addition, since broker's commissions on low-priced stocks represent a higher
percentage of the stock price than commissions on higher priced stocks, the
current low share price of the common stock results in individual shareholders
paying transaction costs that are a higher percentage of their total share value
than would be the case if our share price were substantially higher.
SELLING SECURITY HOLDERS
The shares of common stock being offered by the selling security
holders are issuable upon conversion of our company's Class A Preferred Stock
into shares of common stock. Our Company is registering these shares of common
stock for resale by the selling security holders identified below. The shares
are being registered to permit public secondary trading of the shares, and the
selling security holders may offer the shares for sale from time to time. See
"Plan of Distribution". Our Company has filed on behalf of the selling security
holders an S-3 Registration Statement under the Securities Act with the
Commission, of which this prospectus forms a part, with respect to the resale of
the shares from time to time on the NASDAQ OTCBB, in privately negotiated
transactions, or otherwise, and have agreed to prepare and file such amendments
and supplements to the Registration Statement as may be necessary to keep such
Registration Statement effective until the shares are no longer required to be
registered for the sale thereof by the selling security holders.
The following table sets forth, to our company's knowledge, certain
information relating to the our company's preferred shares and common stock
beneficially owned by each of the Selling Security Holders . Except for Mrs.
Lindsey, an officer and director of our company, and Yankees, which has served
as our company's strategic consultant since November of 1998 and is currently
one of our company's largest creditors and stockholders, none of the Selling
Security Holders has had a material relationship with our company within the
past three years other than as a result of the ownership of the shares or other
securities of our company . The shares included in this prospectus may be
offered from time to time by the Selling Security Holders named below.
Number of Number Percent of
Name and Shares of Number of Common Shares Shares
Address of Preferred Stock of Shares Beneficially Outstanding
Selling Owned Prior to Registered for Owned After After
Shareholder Conversion (1) Conversion(1) Conversion(2)(3) Conversion(4)
----------- -------------- -------------- ---------------- -------------
Yankees 199,500 3,990,000 5,437,908 30.72%
2500 North Military Trail, Suite 225
Boca Raton, Florida 33431
Bolina Trading Corp. S.A. C/0 Jerry Spellman 24,000 480,000 932,390 5.27%
211 South State College Boulevard, Suite 124
Anaheim, California 92806
K Walker Ltd. 3,393 67,860 716,564 4.05%
55 Fredrick Street
Nassau, Bahamas
PalmAir Inc. 16,520 330,400 645,150 3.65%
55 Fredrick Street
Nassau, Bahamas
Vanessa Lindsey Less than
340 Southeast 55th Avenue 2,297 45,940 54,440 1%
Page 17
Ocala, Florida 34470
Debra Ellenson 6,000 120,000 316,287 1.79%
276 South Parkway
Miami, Florida 33160
Scott Heiken 5,000 100,000 245,000 1.38%
2345 Northeast 199th Street
Ventura, Florida 33180
Jonathan Eichner 5,000 100,000 240,000 1.36%
20533 Biscayne Boulevard, Suite 409
Aventura, Florida 33180
(1) Assumes the shareholder converts at the rate of 20 shares of common
stock for every one share of Preferred Stock owned by the shareholder
and does not take into account that each shareholder may receive
additional shares of stock based on the conversion ration. The number
of preferred shares owned by the Selling Shareholders is as of January
31, 2000.
(2) The number of shares of common stock owned by each of the selling
stockholders has been calculated as of December 31, 2001.
(3) Beneficial ownership is determined in accordance with the rules and
regulations of the Commission and generally includes voting or
investment power with respect to securities. Information with respect
to beneficial ownership is based on information as of January 31, 2001
and assumes that there is outstanding an aggregate of 12,465,170
shares of common stock (not including treasury shares). Our company
believes, based on information furnished by the Selling Security
Holders , that the persons named in the table above have sole voting
and investment power with respect to all shares of common stock shown
as beneficially owned by them.
(4) As of January 31, 2001 there were 12,465,170 shares of our common
stock issued and outstanding. Assuming all of the preferred
shareholders convert their preferred shares, there will be 17,699,370
shares issued and outstanding
PLAN OF DISTRIBUTION
The shares of common stock issuable upon conversion of the preferred
stock may be sold from time to time by the Selling Security Holders in one or
more transactions at fixed prices, at market prices a the time of sale, at
varying prices determines a the time of sale or at negotiated prices. The
Selling Security Holders may offer their shares of common stock in one or more
of the following transactions:
* on any national securities exchange or quotation service at which the
common stock may be listed or quoted at the time of sale, including
the NASDAQ OTCBB;
* in private transactions;
* through options;
* by pledge to secure debts and other obligations; or
* any combination of the above.
Page 18
When we use the term "Selling Security Holder" in this prospectus, it
includes donees, pledgees and other transferees who are selling shares received
after the date of this prospectus from a Selling Security Holder whose name
appears in "Selling Security Holders". In addition, if required our company will
distribute a supplement to this prospectus to describe any material change in
the terms of the offering. The shares of common stock described in this
prospectus may be sold from time to time directly by the Selling Security
Holders. Alternatively, the Selling Security Holders may from time to time offer
shares of common stock through underwriters, broker/dealers or agents that
participate in the distribution of the shares of common stock may be deemed to
be "underwriters" within the meaning of the Securities Act. Any profits on the
resale of shares of common stock and any compensation received by any
underwriter, broker/dealer agent may be deemed to be underwriting discounts and
commissions under the Securities Act. The Selling Security Holders may not sell
all of the shares. The Selling Security Holders may transfer, will or gift such
shares by other means not described in this prospectus. To comply with the
securities laws of certain jurisdictions, the common stock must be offered or
sold only through registered or licensed brokers or dealers. In addition, in
certain jurisdictions, the shares may not be offered or sold unless they have
been registered or qualified for sale or an exemption is available and complied
with.
Our company has agreed to pay all reasonable fees and expenses incident
to the filing of this Registration Statement. The Selling Security Holders will
pay all brokerage commissions and similar selling expenses, if any, attributable
to the sale of the shares.
Our company will not receive any proceeds from the sale of the common
stock.
DESCRIPTION OF OUR CAPITAL STOCK
Common Stock
General
Our company is authorized to issue 20,000,000 shares of common stock
having a par value of $ .01 per share. As of December 31, 2000, there were
12,465,170 common shares issued and outstanding. All shares of common stock
outstanding are validly issued, fully paid and non-assessable.
Voting Rights
Each share of common stock entitles the holder thereof to one vote,
either in person or by proxy, at meetings of shareholders. The holders are not
permitted to vote their shares cumulatively. Accordingly, the holders of common
stock holding, in the aggregate, more than fifty percent (50%) of the total
voting rights can elect all of our directors and, in such event, the holders of
the remaining minority shares will not be able to elect any of such directors.
The vote of the holders of a majority of the issued and outstanding shares of
common stock entitled to vote thereon is sufficient to authorize, affirm, ratify
or consent to such act or action, except as otherwise provided by law.
Dividend Policy
All shares of common stock are entitled to participate ratably in
dividends when and as declared by our Board of Directors out of the funds
legally available therefore and subject to the rights, if any, of the holders of
outstanding shares of Preferred Stock. Any such dividends may be paid in cash,
property or additional shares of common stock. Our company has not paid any
dividends since inception and presently anticipates that all earnings, if any,
will be retained for development of our company, and that no dividends on the
shares of common stock will be declared in the foreseeable future. Any future
dividends will be subject to the discretion of our Board of Directors and will
depend upon, among other things, our future earnings, operating and financial
condition, our capital requirements, general business conditions and other
pertinent facts. Our company has not declared any dividends on our company's
common stock and does not expect to do so at any time in the foreseeable future.
There are currently no restrictions on our company's ability to declare
dividends in the future, other than restrictions applicable to all Delaware
corporations involving the source of funds for payment of dividends and their
effects on our company's solvency. In the future, we may use loans from
financial institutions for acquisitions and development. If our company does, it
is likely that such institutions would require restrictions on the payment of
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dividends based on traditional financial ratios designed to predict our
company's ability to repay such loans. However, no specific predictions as to
any such restrictions can be made at this time.
Miscellaneous Rights and Provisions
Holders of common stock have no preemptive or other subscription
rights, conversion rights, redemption or sinking fund provisions. In the event
of our company's dissolution, whether voluntary or involuntary, each share of
common stock is entitled to share ratably in any assets available for
distribution to holders of our company's equity after satisfaction of all
liabilities and payment of the applicable liquidation preference of any
outstanding shares of Preferred Stock.
Under Delaware law, stockholders may take certain actions without the
holding of a meeting by a written consent or consents signed by the holders of a
majority of the outstanding shares of the capital stock of the company entitled
to vote thereon. Prompt notice of the taking of any action without a meeting by
less than unanimous consent of the stockholders will be given to those
stockholders who do not consent in writing to the action. The purposes of this
provision are to facilitate action by stockholders and to reduce corporate
expense associated with annual special meetings of the shareholders. If
shareholder action is taken by written consent, our company will be required to
send each shareholder entitled to vote on the applicable matter, but whose
consent was not solicited, an information statement containing information about
the action taken.
Preferred Stock
Our Company is authorized to issue 5,000,000 shares of Preferred Stock
$0.01 par value of which 261,710 are issued and outstanding. Holders of our
company's common stock are entitled to receive out of the assets of our company
legally available therefore, and as and when declared by our company's Board of
Directors, dividends of every kind declared and paid to holders of our company's
common stock, at a rate per share twenty times that paid per share of common
stock. Each dividend will be paid to the holders of record of shares of the
Class A Preferred Stock as they appear on the stock register of our company on
the last day of the month next preceding the payment date thereof.
Conversion.
The holders of shares of the Class A Preferred Stock will have the
right, at their option, to convert all or any part of such shares into shares of
common stock of our company at any time on and subject to the following terms
and conditions:
The shares of Class A Preferred Stock are convertible at the office of
transfer agent for the Class A Preferred Stock (the "Transfer Agent"),
and at such other place or places, if any, as our company's board of
directors may designate, into fully paid and non-assessable shares
(calculated as to each conversion to the nearest 1/100th of a share) of
common stock.
The number of shares of common stock issuable upon conversion of each
share of the Class A Preferred Stock will be equal to the greater of:
(1) Twenty shares of common stock (the "Set Conversion
Rate"); or
(2) The number of shares of common stock obtained by
dividing the gross price at which the preferred
shares were issued by our company (the "Issuance
Price") by 80% of the closing price for our company's
common stock, as reported on the public stock market
or securities exchange (in both cases, registered as
such by the Commission having the highest average
trading volume in our company's securities (for
purposes of illustration, the following, being
acceptable: The New York Stock Exchange, the NASDAQ
Stock Market, the American Stock Exchange, the OTC
Bulletin Board operated by the NASD, the Electronic
Pink Sheets operated by the National Daily Quotation
Page 20
System, Inc.), on the day the notice of conversion
provided to our ompany is xecuted and dated by the
holder with medallion signature guarantee (the
"Market Conversion Rate"). Our preferred shares were
issued at $5.00 and $4.00per share except for those
share issued to the Yankees Company which were issued
at $2.50 and $2.00per share.
Adjustments
The Set Conversion Rate in effect at any time is subject to adjustment
designed to prevent dilution.
Liquidation Rights
In the event of any liquidation or dissolution or winding up of our
company, voluntary or involuntary, the holders of the Class A Preferred Stock
are entitled to receive, subject to the rights of any other class of stock which
ranks senior to the Class A Preferred Stock as to distribution of assets on
liquidation, but before any distribution is made on any class of stock ranking
junior to the Class A Preferred Stock as to the payment of dividends or the
distribution of assets (including, without limitation, our company's common
stock, a sum per share of Class A Preferred Stock equal to the Issuance Price
per share.
Voting Rights
The Class A Preferred Stock will entitle its holders to twenty votes
for every share held on terms identical to those of holders of twenty shares of
common stock, or if there is more than one class or series of common stock
outstanding, equal to twenty votes by those of shares of common stock having the
greatest voting rights per share.
A certificate of designation creating the Class A Preferred Stock was
filed with the State of Delaware on July 3, 2000. As of December 31, 2000,
261,710 shares of the Class A Preferred Stock are issued and outstanding.
Any holder of the Class A Preferred Stock shall be entitled to convert
any whole number of Preferred Stock into fully paid and nonassessable shares of
common stock in accordance with the Certificate of Designations, Preferences and
Rights for such Preferred Stock. Without our prior consent, a holder shall not
be entitled to convert any preferred shares during the period beginning on and
including the issuance date and ending on and including the date that is 120
days after such issuance date.
Our company shall not issue any fraction of a share of common stock
upon any conversion. If the issuance would result in the issuance of a fraction
of a share of common stock, our company shall round such fraction of a share of
common stock up to the nearest whole share.
LEGAL MATTERS
Certain legal matters with respect to the validity of the issuance of
the securities offered hereby will be passed upon for our company by the law
firm of Jeffrey G. Klein, P.A.
EXPERTS
The financial statements contained in our Annual Report on Form
10-KSB/A for the year ended June 30, 1998 and 1999 which are (all incorporated
by reference in this prospectus have been audited by Daszkal Bolton Manela
Devlin & Co., independent certified public accountants, to the extent and for
the periods set forth in their reports, and are incorporated herein by
reference. Our company's unaudited financial statements for the 6 months ended
December 31, 2000 are filed as part of our Form 10-QSB and are incorporated
herein by reference.
Page 21
PART II. INFORMATION NOT REQUIRED BY PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table is an itemization of all expenses (subject to
future contingencies) incurred or expected to be incurred by our company in
connection with the issuance and distribution of the securities being offered
hereby. Items marked with an asterisk (*) represent estimated expenses. Our
company has agreed to pay all costs and expenses of this offering. Selling
Security Holders will incur no expense.
Item Expense
Commission Registration Fee $476.73
Legal 7,500*
Accounting 500*
Miscellaneous 2,0000*
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Our company's Bylaws and Articles of Incorporation limit, to the
maximum extent permitted by the Delaware Statutes ("Delaware Law"), the personal
liability of directors of monetary damages for breach of their fiduciary duties
as directors, and provides that our company may indemnify its officers,
directors, employees and other agents to the fullest extent permitted by
Delaware Law. Delaware Law provides that a corporation may indemnify a director,
officer, employee or agent made or threatened to be made a party to an action by
reason of the fact that he was a director, officer, employee or agent of the
corporation or was serving at the request of the corporation against expenses
actually and reasonably incurred in connection with such action if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, if he had no reasonable cause to believe his conduct was unlawful.
Delaware Law does not permit a corporation to eliminate a director's duty of
care, and the provisions of the Company's Articles of Incorporation have no
effect on the availability of equitable remedies, such as injunction or
rescission, for a director's breach of the duty of care.
Our company may enter into indemnification agreements with its
directors and officers which may require, among other things, to indemnify such
directors and officers against liabilities that may arise by reason of their
status or service as directors and officers against liabilities (other than
liabilities arising from willful misconduct of a culpable nature), to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified, and to obtain directors' and officers' insurance, if
available on reasonable terms.
ITEM 16. EXHIBITS
All exhibits required to be filed hereby have been filed by our company
and are incorporated by reference.
ITEM 17. UNDERTAKINGS
Our company agrees that during any period in which offers or sales are
being made, a post-effective amendment to this registration statement will:
(1) (i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to
Rule 424(b), if, in the aggregate, the changes in the volume
and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Page 22
Registration Fee" table in the effective registration
statement.
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that
time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, our company
has duly caused this registration statement to be signed on its behalf by the
undersigned, there unto duly authorized.
AMERINET GROUP.COM, INC.
March 05, 2001
BY: /s/ Edward C, Dmytryk
Edward C. Dmytryk President, Chief Executive Officer, Director
In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of our company and in the capacities indicated:
Signature Date Title
/s/ Edward Dmytryk March 05, 2001 President, Chief Executive Officer
& Director
/s/ Lawrence R. Van Etten March 05, 2001 Vice-President,
Chief Operating Officer,Director
/s/ Vanessa H. Lindsey March 05, 2001 Secretary & Director
/s/ David K. Cantley March 05, 2001 Treasurer &Director
/s/ Douglas L. Wilson March 05, 2001 General Counsel & Director
/s/ Anthony Q. Joffe March 05, 2001 Director & Audit Committee Member
/s/ G. Richard Chamberlin March 05, 2001 Director
/s/ J. Bruce Gleason March 05, 2001 Director
/s/ Charles J. Champion, Jr. March 05, 2001 Director & Audit Committee Chair
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