SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of earliest event reported: March 11, 1999
I-Tech Holdings Group, Inc.
Colorado 0-23687 84-137982
(State of Incorporation) (Commission File Number) (IRS Identification No.)
1000-789 W. Pender Street, Vancouver, British Columbia, Canada V6C 1H2
(Address of principal executive offices)(Zip Code)
(604) 331-0995
(Registrant's telephone number, including area code)
1622 York Street, Denver, Colorado 80206
(Former name or address, if changed since last report)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of Registrant.
Pursuant to a Share Exchange and Share Purchase Agreement dated March 11,
1999 (the "SEA") by and among I-Tech Holdings Group, Inc. (the "Corporation" or
"Registrant"), 579818 B.C. Ltd., a British Columbia, Canada corporation
wholly-owned by the Corporation (the "Subsidiary"), Stock Research Group Inc., a
British Columbia, Canada corporation ("Stock Group") and all of the shareholders
of Stock Group, being nine persons (collectively, the "Stock Group
Shareholders"), the Corporation acquired (the "Acquisition") all of the issued
and outstanding common shares of Stock Group from the Stock Group Shareholders
in consideration of the issuance by (i) the Subsidiary to the Stock Group
Shareholders, on a pro-rata basis, of 3,900,000 Class A Exchangeable Shares (the
"Exchangeable Shares") and (ii) by the Corporation issuing to Stocktrans, Inc.
as trustee for the Stock Group Shareholders (the "Trustee") 3,900,000 shares of
common stock (the "Corporation's Shares") to be held under the terms of an
Exchange and Voting Agreement dated March 11, 1999 (the "Trust Agreement") by
and among the Corporation, the Trustee, the Subsidiary and the Stock Group
Shareholders. The relevant terms and conditions of the SEA and the Trust
Agreement are set forth in "Item 2. Acquisition and Disposition of Assets." See
also "Item 7. Financial Statements and Exhibits."
As a result of these transactions, each of the Stock Group Shareholders has
the right to vote, (or to direct the Trustee to vote on behalf of such Stock
Group Shareholder) a number of the Corporation's Shares equal to the number of
Exchangeable Shares held of record by such Stock Group Shareholder. In the
aggregate, the Corporation's Shares issued to the Trustee represent
approximately 55.5% of the Corporation's issued and outstanding shares of common
stock. Hence, the Stock Group Stockholders have effective control of the
Corporation. In addition, three (3) Stock Group Shareholders have the right to
vote or direct the vote of more than 5% of the Corporation's issued and
outstanding common stock as follows:
Mr. Marcus New (the Corporation's Chairman of the Board and Chief Executive
Officer) and his wife, Yvonne New, directly and indirectly through 518464
B.C. Ltd. (a company owned by Mr. New as to 50% and his wife Yvonne New as
to 50%) own a total of 2,745,000 Exchangeable shares and accordingly have
the right to direct the vote of 2,745,000 of the Corporation's Shares which
represent approximately 39% of the Corporation's issued and outstanding
common stock.
Mr. Craig Faulkner (the Corporation's Chief Technology Officer and a
director) directly and indirectly through 569458 B.C. Ltd. owns a total of
915,000 Exchangeable Shares and accordingly has the right to direct the
vote of 915,000 of the Corporation's Shares which represent approximately
13% of the Corporation's issued and outstanding common stock.
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Accordingly, Mr. New and his wife, Yvonne New, along with Mr. Faulkner, may
direct the vote of 3,660,000 of the Corporation's Shares or approximately 52% of
the Corporation's issued and outstanding common stock and have effective control
of the Corporation.
Mr. New, Mr. Faulkner and Mr. John Dawe have been granted options to
purchase 325,000, 195,000 and 15,000 shares, respectively, of the Corporation's
common stock at $2.50US per share. Mr. Les Landes has been granted options to
purchase 745,800 shares of the Corporation's common stock at a price of $0.01US
per share as to 105,000 shares and $1.40US per share as to the balance. The
options have a 5 year term. These options were granted by the Company as of
March 11, 1999 in replacement of options (in equal number and on the same terms
and conditions as options granted by the Corporation's wholly-owned subsidiary
as at January 1, 1999 (the "date of grant")). Twenty (20%) percent of the
options granted by the Corporation will commence to vest (and thereafter be
exercisable) on each anniversary of the date of grant. However, as to Mr.
Landes, the options may be exercised, to the extent vested, only after 2 years
from the date of grant. In addition, as to Mr. Landes an aggregate of 106,800
options will vest and be exercisable only if the Corporation attains certain
performance levels in each of the fiscal years ending December 31, 1999 and
2000. To date none of the options have vested.
Each of Mr. New and Mr. Faulkner have been appointed to the Corporation's
Board of Directors. Mr. Gerald H. Trumbule, Phd. and Mr. Clark Burch continue to
serve as directors. In addition, Mr. New has been elected to serve as the
Corporation's Chairman of the Board, President and Chief Executive Officer; Mr.
Faulkner has been elected to serve as the Corporation's Chief Technology
Officer; Mr. John Dawe has been elected to serve as the Corporation's Vice
President of Finance, Secretary and Treasurer and Mr. Les Landes has been
elected to serve as the Corporation's Chief Operating Officer. Accordingly, the
Corporation's current directors and officers are set forth in the following
table:
NAME POSITION
Marcus New Chairman of the Board and Chief Executive
Officer
Craig Faulkner Director, and Chief Technology Officer
Gerald H. Trumbule, Ph.D. Director
Clark Burch Director
Les Landes Chief Operating Officer
John Dawe Vice President of Finance, Secretary and
Treasurer
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Item 2. Acquisition or Disposition of Assets.
The Corporation acquired on March 11, 1999, through its wholly-owned
Canadian subsidiary, all of the issued and outstanding capital stock of Stock
Group. In consideration therefor, (1) the Subsidiary issued to the Stock Group
Stockholders 3,900,000 Exchangeable Shares and (2) the Corporation issued to the
Trustee 3,900,000 Corporation Shares to be held in trust for the benefit of the
Subsidiary and the Stock Group Stockholders in accordance with the terms of the
Trust Agreement. Neither the Exchangeable Shares nor the Corporation Shares have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"). They are deemed "restricted" securities under the Securities Act and may
not be sold or transferred other than pursuant to an effective registration
statement under the Securities Act or any exemption from the registration
requirements of the Securities Act.
Attributes of the Exchangeable Non-Voting Shares
The SEA was structured so as to provide the Stock Group Stockholders with a
capital tax deferral under applicable Canadian tax law, rules and regulations.
Holders of Exchangeable Shares will not be entitled to receive notice of,
or to attend any meetings of the stockholders of the Subsidiary, or to vote at
any such meetings.
In the event of the liquidation, dissolution or winding up of the
Subsidiary, the holders of the Exchangeable Shares shall be entitled to
participate equally with all of the holders of all classes of the shares of the
Subsidiary entitled in the distribution of the property or assets of the
Subsidiary. The Exchangeable Shares are subject to adjustment or modification in
the event of a stock split or other changes to the capital structure of the
Corporation, so as to maintain the initial one-to-one ratio between the
Exchangeable Shares and the Corporation Shares.
Holders of Exchangeable Shares will be entitled to receive notice of, and
attend any meetings of the stockholders of the Corporation, and to vote at any
such meeting. The Stock Group Stockholders may convert or exchange their
Exchangeable Shares to an equal number of Corporation Shares by giving notice of
the same to the Corporation, and the Corporation may in certain circumstances
convert Exchangeable Shares to Corporation Shares. By having the Exchangeable
Shares exchangeable to the issued Corporation Shares at some time in the future,
the Stock Group Stockholders gain the advantage of being able to vote (directly
or through the Trustee) an equivalent number of Corporation Shares, and are able
to defer certain taxes otherwise payable upon the disposition of their shares in
the capital of Stock Group.
The Trust Agreement sets forth the rights and restrictions applicable to
the Exchangeable Shares and the Corporation Shares. The Corporation Shares are
held by the
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Trustee pending conversion of the Exchangeable Shares to Corporation Shares,
whereupon Corporation Shares will be released by the Trustee to a Stock Group
Shareholder and the Exchangeable Shares will be delivered to the Corporation.
Stock Group Shareholders have the right to vote their interests in the
Corporation through the Trustee as holder of the Corporation Shares. The
Corporation Shares, while held by the Trustee, will not be entitled to
participate in dividends declared by the Corporation; however the Corporation
has agreed that should it declare a dividend on its common shares it will ensure
the Subsidiary has the means to pay a like dividend on its Exchangeable Shares.
The foregoing summary is not a complete description of the terms of the
reported transactions; reference is made to the Exhibits attached hereto as
Exhibits 2.1 and 2.2, each of which is incorporated herein by reference. This
summary is qualified, in its entirety, by such reference.
Business of Stock Group
Stock Group is an Internet based provider of comprehensive business and
financial information to the small and micro cap markets. Since 1995 Stock Group
has focused on small cap companies and currently hosts, creates and disseminates
information to more than 150,000 Internet visitors monthly, which information
includes detailed profiles of companies, industry news, stock quotes, charts,
daily market reports, news releases and other investment tools. In addition
Stock Group, through its own proprietary on-line industry focused community of
Internet sites believes that it has become a primary provider of timely,
accurate investment information in selected industries to small cap investors.
With over 150,000 investor viewers and over 70 million hits per month,
Stock Group is among the top 1% of internet sites for traffic. With over 200
clients, Stock Group believes that it hosts the largest small cap company
community site in North America.
Stock Group currently generates its income from three sources; Internet
services, marketing services and corporate advertising. in addition to web site
creation and monthly maintenance for its corporate clients, Stock Group offers
other web services including private label quotes and charts which allows
viewers to see stock information without leaving the public company's investment
site. To assist small cap companies to gain greater exposure Stock Group markets
the following services; placement of clients' sites on Stock Group's proprietary
financial communities, and access to Stock Group's proprietary E-mail listing of
over 21,000 persons. In addition Stock Group provides advertising management and
design services. Stock Group has recently started generating revenue by offering
advertising space on its sites.
Item 4. Change in Registrant's Certifying Accountant
On March 16, 1999, the Board of Directors of the Registrant approved the
retention of
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the firm of Dale Matheson Carr-Hilton as principal independent accountant to
perform the examination of its financial statements as of December 31, 1999, and
for the year then ended, effective with the resignation of Kish o Leake &
Associates, P.C., the former independent accountant, which occurred on March 16,
1999. Kish o Leake & Associates, P.C. had been principal independent accountant,
having performed audit services for the two most recent fiscal years ended
December 31, 1998 and 1997, and had expressed unqualified opinions on such
financial statements. In connection with those audits and through March 16,
1999, there were no disagreements between the Registrant and Kish o Leake &
Associates, P.C. on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of Kish o Leake & Associates, P.C., would have
caused them to make reference in their reports to the subject matter of the
disagreements.
The Registrant requested Kish o Leake & Associates, P.C. to furnish it with
a letter addressed to the Commission stating whether such firm agrees with the
statements made above and, if not, stating the respects in which they do not
agree. Such letter is attached as an exhibit hereto.
Item 5. Other Events.
Although the Company will still maintain an office at 1622 York Street,
Denver, Colorado 80206 (303) 691-6163, effective March 11, 1999, the Corporation
moved its principal executive office to 1000-789 W. Pender Street, Vancouver,
British Columbia, Canada V6C 1H2. Its telephone number there is (604) 331-0995.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The audited financial statements of Stock Group for the periods ending
December 31, 1998, 1997 and 1996 will be filed shortly by amendment to this Form
8-K.
(b) Pro forma Financial Statements
The Pro forma financial statements for the period ending December 31, 12998
will be filed shortly by amendment to this Form 8-K.
(c) Exhibits
2.1 Share Exchange and Share Purchase Agreement dated March 11, 1999 among
I-Tech Holdings Group, Inc. 579818 B.C. Ltd; Stock Research Group, Inc. and the
individual signatories thereto.
2.2 Exchange and Voting Agreement dated March 11, 1999 among I-Tech
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Holding Group, Inc. 579818 B.C. Ltd., Stock Research Group, Inc., Stocktrans,
Inc. and the individual signatories thereto.
16.0 Letter dated March 16, 1999, regarding change in Certifying
Accountant.
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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 authorised.
I-Tech Holdings Group, Inc.
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(Registrant)
Dated: March 17, 1999 By: "/S/ MARCUS NEW"
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Marcus New, Chief Executive Officer
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