UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORTS OF SMALL BUSINESS ISSUERS
[X] Quarterly report pursuant section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 2001
[ ] Transition report pursuant section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission file number: 0-26901 .
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iJOIN SYSTEMS, INC. .
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(Exact name of small business issuer as specified in its charter)
Delaware 65-0869393
- ----------------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2505 Second Avenue, Suite 500, Seattle, WA 98121 .
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(Address of principal executive offices)
206-374-8600
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(Issuer's telephone number)
--------------------------------------------------------------.
(Former Name and Former Address, if Changed Since Last Report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes..X..No...
Applicable only to corporate issuers:
As of October 31, 2001, the number of shares of common stock, par value
$.0001 per share, outstanding was 5,929,288.
Transitional Small Business Disclosure Format (check one); Yes..X..No...
IJOIN SYSTEMS, INC.
FORM 10-QSB
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 2001 (unaudited) and F-1
December 31, 2000
Consolidated Statements of Operations for the three (3) months
and nine (9) months ended September 30, 2001 and 2000 (unaudited) F-2
Consolidated Statements of Cash Flows for the nine (9) months
ended September 30, 2001 and 2000 (unaudited) F-3
Consolidated Statement of Stockholders' Equity for the nine (9)
months ended September 30, 2001 (unaudited) F-4
Notes to Consolidated Financial Statements F-5
Item 2. Plan of Operations 2
PART II. OTHER INFORMATION 4
Item 2. Changes in Securities and Use of Proceeds 4
Item 6. Exhibits and Reports on Form 8-K 4
SIGNATURES 5
Item 1. Financial Statements
1
iJoin Systems, Inc.
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2001 December 31,
(unaudited) 2000
Current assets
Cash $ 56,793 $ 585,257
Accounts receivable 774,401 321,521
Related party receivable 27,541 --
Finished goods inventory 108,721 --
Prepaid expenses and deposits 90,442 345,905
---------- ----------
Total current assets 1,057,898 1,252,683
Property and equipment, net 519,766 478,977
Other assets
Goodwill, net 691,494 --
Other 42,201 42,201
---------- ----------
Total assets $ 2,311,359 $ 1,773,861
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable $ 1,700,004 $ 311,163
Accrued liabilities 81,302 189,580
Deferred revenue 138,959 --
Deferred compensation 8,750 --
Shareholder loans 150,000 11,254
Notes payable 574,000 --
----------- -----------
Total current liabilities 2,653,015 511,997
Convertible note payable -- 1,000,000
Stockholders' equity (deficit)
Preferred stock, $0.0001 par value - authorized, 10,000,000 shares,
liquidation value $750,000 30 30
Common stock, $0.0001 par value - authorized, 40,000,000 shares 578 538
Additional paid-in capital 8,178,635 3,222,799
Deferred stock compensation (1,470,375) --
Subscription receivable (144,900) (284,400)
Accumulated deficit (6,905,624) (2,677,103)
----------- -----------
(341,656) 261,864
----------- -----------
Total liabilities and stockholders' equity (deficit) $ 2,311,359 $ 1,773,861
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-1
iJoin Systems, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended September 30, Nine months ended September 30,
-------------------------------- -------------------------------
2001 2000 2001 2000
-------------- ------------- ------------ ---------------
(Development (Development
Stage Company) Stage Company)
Net sales $ 1,687,729 $ -- $ 3,376,236 $ --
Cost of sales 1,335,481 -- 2,452,838 --
----------- ----------- ------------ -----------
Gross profit 352,248 -- 923,398 --
Operating expenses
Selling and marketing 119,304 -- 344,187 --
Research and development -- 46,798 1,910 90,171
General and administrative 1,056,258 851,774 4,544,255 1,755,655
----------- ----------- ------------ ------------
Total operating expenses 1,175,562 898,572 4,890,352 1,845,826
----------- ----------- ------------ ------------
Loss from operations (823,314) (898,572) (3,966,954) (1,845,826)
Other income (expense)
Interest (1,462) 13,521 (265,596) 14,153
Other, net -- (660) 4,029 (10,674)
----------- ----------- ------------ ------------
Net loss $ (824,776) $ (885,711) $ (4,228,521) $(1,842,347)
=========== =========== ============ ===========
Net loss per share - basic and diluted $ (0.14) $ (0.16) $ (0.72) $ (0.36)
=========== =========== ============ ===========
The accompanying notes are an integral part of these financial statements.
F-2
iJoin Systems, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine month period ended September 30,
(unaudited)
Increase (decrease) in cash 2001 2000
(Development
Cash flows from operating activities Stage Company)
Net loss $ (4,228,521) $ (1,842,347)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 211,171 --
Common stock issued for interest expense 254,000 --
Warrants issued for services 43,500 --
Common stock issued for services 5,000 --
Amortization of deferred compensation 1,195,206 --
Loss on disposal of assets 23,538 --
Changes in operating assets and liabilities:
Accounts receivable and related party receivable (480,421) --
Deferred compensation 8,750 --
Finished goods inventory (890) --
Prepaid expenses and deposits 250,866 (43,116)
Accounts payable 1,377,587 247,929
Accrued liabilities (86,291) 27,924
Deferred revenue 138,959 --
------------ -------------
Net cash used in operating activities (1,287,546) (1,609,610)
Cash flows from investing activities
Cash paid for assets of Right! Systems' Boise TRB assets (309,593) --
Purchases of property and equipment (32,359) (136,971)
Proceeds from the sale of property and equipment 3,034 --
------------ -------------
Net cash used in investing activities (338,918) (136,971)
Cash flows from financing activities
Proceeds from notes payable, less issuance costs 732,500 1,000,000
Proceeds from shareholder loans 150,000 --
Proceeds from sale of common stock 215,500 --
Net proceeds from issuance of preferred stock -- 2,629,000
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Net cash provided by financing activities 1,098,000 3,629,000
------------ -------------
Net increase (decrease) in cash (528,464) 1,882,419
Cash at beginning of period 585,257 --
------------ -------------
Cash at end of period $ 56,793 $ 1,882,419
============ ============
Supplemental non-cash investing and financing activities:
Issuance of preferred stock for purchase of Right! Systems' Boise TRB assets $ 687,693 $ --
Conversion of note payable and accrued interest to common stock $ 1,065,602 $ --
Preferred stock issued or subscription receivable $ -- $ 99,900
Warrants issued in connection with converible debt $ -- $ 77,908
The accompanying notes are an integral part of these financial statements.
F-3
iJoin Systems, Inc.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Nine months ended September 30, 2001
(unaudited)
Preferred stock Common stock Additional
---------------------- ------------------- paid - in
Shares Amount Shares Amount capital
------ ------ ------ ------ ----------
Balance at January 1, 2001 (development stage company) 300,000 $ 30 5,384,820 $ 538 $ 3,222,799
Conversion of special voting common shares to Preferred
A special shares 2 -- (30,000) (30) 30
Conversion of note payable to common stock -- -- 213,121 21 1,065,581
Conversion of note payable to common stock -- -- 40,000 4 253,996
Common stock issued for purchase of Right! Systems
Boise assets -- -- 260,000 26 687,667
Proceeds received for stock subscription receivable -- -- -- -- --
Conversion of note payable to common stock, less
issuance costs of $21,500 -- -- 64,800 6 158,494
Issuance of common stock -- -- 15,547 2 70,998
Issuance of common stock for services -- -- 1,000 1 4,999
Issuance of warrants for services -- -- -- -- 43,500
Stock options granted to employees with exercise prices
below fair value -- -- -- -- 2,665,581
Amortization of deferred stock compensation -- -- -- -- --
Exercise of warrants for common stock at $0.05 per share -- -- 100,000 10 4,990
Net loss -- -- -- -- --
Balance at September 30, 2001 300,002 $ 30 6,049,288 $ 578 $ 8,178,635
Deferred
stock Subscription Accumulated
compensation receivable deficit Total
------------ ------------ ----------- -----
Balance at January 1, 2001 (development stage company) $ -- $ (284,400) $(2,677,103) $ 261,864
Conversion of special voting common shares to Preferred
A special shares -- -- -- --
Conversion of note payable to common stock -- -- -- 1,065,602
Conversion of note payable to common stock -- -- -- 254,000
Common stock issued for purchase of Right! Systems
Boise assets -- -- -- 687,693
Proceeds received for stock subscription receivable -- 144,500 -- 144,500
Conversion of note payable to common stock, less
issuance costs of $21,500 -- -- -- 158,500
Issuance of common stock -- -- -- 71,000
Issuance of common stock for services -- -- -- 5,000
Issuance of warrants for services -- -- -- 43,500
Stock options granted to employees with exercise prices
below fair value (2,665,581) -- -- --
Amortization of deferred stock compensation 1,195,206 -- -- 1,195,206
Exercise of warrants for common stock at $0.05 per share -- (5,000) -- --
Net loss -- -- (4,228,521) (4,228,521)
Balance at September 30, 2001 $ (1,470,375) $ (144,900) $(6,905,624) $ (341,656)
The accompanying notes are an integral part of this financial statement.
F-4
iJoin Systems, Inc.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2001
(unaudited)
The unaudited interim financial statements of iJoin Systems, Inc. (Company) as
of September 30, 2001, and for each of the three-month and nine-month periods
ended September 30, 2001 and 2000, have been prepared by the Company pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosure normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the entire fiscal year
ending December 31, 2001. The accompanying unaudited financial statements and
related notes should be read in conjunction with the audited financial
statements of the iJoin Systems, Inc., enclosed herein, as of December 31, 2000,
and the audited carved-out financials of Right! Systems, Inc. Boise, Idaho
Technology Resale Business, filed in the Company's Form 8K/A on July 20, 2001.
1. Presentation
Effective May 7, 2001, iJoin entered into an Agreement and Plan of Merger
(Acquisition) with Tech Creations, Inc. (Tech), a non-operating public shell
company. As a result of the Acquisition, all of iJoin's issued and outstanding
shares of common and preferred stock, with the exception of Series B preferred
stock, were exchanged for Tech's common stock at a 5 to 1 ratio. In conjunction
with the Acquisition, the then shareholders of iJoin, Inc. appointed all three
of the Company's to the Board of Directors. The new Board of Directors and
former management of iJoin, Inc. assumed control of the operations and
management of the resulting company, iJoin Systems, Inc. The Acquisition
resulted in the owners and management of iJoin having effective operating
control of the combined entity.
Under accounting principles generally accepted in the United States of America,
the Acquisition is considered to be a capital transaction in substance, rather
than a business combination. That is, the Acquisition is equivalent to the
issuance of stock by iJoin for the net monetary assets of Tech accompanied by a
recapitalization, and is accounted for as a change in capital structure.
Accordingly, the accounting for the Acquisition is identical to that resulting
from a reverse acquisition, except that no goodwill is recorded. Under reverse
takeover accounting, the post-reverse-acquisition financial statements of the
"legal acquirer" Tech, are those of the "legal acquiree" (iJoin), meaning the
accounting acquirer.
Accordingly, the financial statements of Tech as of and for the three-months and
nine-months ended September 30, 2001, are the historical financial statements of
iJoin and have been adjusted for the share exchange contained in the Agreement
and Plan of Merger as follows:
F-5
iJoin Systems, Inc.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2001
(unaudited)
(a) Every five shares of iJoin common (including those shares issuable
upon conversion of iJoin Series A and Series C preferred stock but
excluding 1,500,000 shares of Series B preferred stock) issued and
outstanding was automatically converted into the right to receive one
share of Tech common stock. The 1,500,000 shares of Series B preferred
stock were exchanged for 300,000 shares of preferred stock of Tech.
The common stock and preferred stock exchanged, in addition to the
existing Tech shares outstanding, collectively resulted in the
recapitalization of the Company.
(b) Loss per share calculations include the Company's change in capital
structure for all periods presented.
On February 7, 2001, the Company acquired certain assets and assumed certain
liabilities of the Idaho operations of Right! Systems, Inc. (Boise TRB) for a
purchase price of $1,012,307. Consideration paid included $312,307 in cash and
1,300,000 shares of the Company's Series C convertible preferred stock. Net
assets acquired consisted primarily of inventory, other current assets, property
and equipment and accrued liabilities. The transaction was accounted for under
the purchase method of accounting.
As a result of the acquisition of the assets of Right! Systems, Inc. Boise,
Idaho Technology Resale Business, the Company is no longer considered a
development stage company. The Statement of Operations for the three and nine
months ended September 30, 2001 includes the operations of Right! Systems, Inc.
Boise, Idaho Technology Resale Business beginning on the acquisition date of
February 6, 2001. Goodwill representing the excess of cost over the fair value
of net assets acquired is being amortized over its estimated useful life of 10
years.
2. Management Plans
- -------------------
As of September 30, 2001, the Company had an accumulated deficit of $341,656 and
a deficit in working capital of $1,595,117. The Company incurred a net loss of
$4,228,521 for the nine months ended September 30, 2001. To date, the Company
has financed the majority of its operations and acquisitions through the net
proceeds from its equity offerings and through borrowings. The Company is
actively pursuing new investment capital into the Company to support operations
and for proposed acquisitions. These financings will take the form of equity,
convertible debentures and other types of debt. Management believes that the
Company will be able to raise sufficient future investment in order to meet its
obligations as they become due including those of its subsidiary and its planned
acquisition as discussed in note 8. However, there is no certainty that the
Company will be able to raise sufficient capital to fund its operations or to
finance its expansion plans.
3. Revenue Recognition
- ----------------------
Revenue is derived from the resale of computer hardware, installation and
configuration of systems to end-users. Revenue from the sale of each system is
recognized upon delivery of the product if remaining vendor obligations are
insignificant and collection of the resulting receivable is probable, otherwise
revenue from such systems is deferred until such time as vendor obligations are
met and collection is reasonably assured.
In conjunction with the acquisition, the Company entered into an agreement with
Right! Systems, Inc. of Olympia, Washington (Right! Systems), whereby Right!
Systems is processing a portion of the Company's sales and purchases of
inventory for resale on behalf of the Company. Upon completion of the
transaction by Right! Systems, the gross margin of the transaction, less a
percentage kept by Right! Systems, is remitted to the Company and recorded as
revenue.
4. Accounts Receivable
-------------------
F-6
iJoin Systems, Inc.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2001
(unaudited)
The Company considers accounts receivable to be fully collectible; accordingly,
no allowance for doubtful accounts is provided. Should amounts become
uncollectible, they will be charged to operations when that determination is
made.
5. Inventories
- --------------
Inventory is valued at the lower of cost or market utilizing the first-in,
first-out (FIFO) cost basis. Inventory consists primarily of computer hardware
and parts.
6. Loss Per Share
- -----------------
Basic loss per share is based on the weighted average number of common shares
outstanding during the period. The weighted average shares for computing basic
loss per share were 5,992,621 and 5,384,820 for the three-months ended September
30, 2001 and 2000, respectively, and 5,912,842 and 5,156,912 for the nine-months
ended September 30, 2001 and 2000, respectively. Diluted loss per share includes
the effect of all potentially dilutive common stock issuances. Diluted loss per
share is not presented because the effect would be anti-dilutive. At September
30, 2001 and 2000, there were 995,313 and 590,440, respectively, shares of
common stock issuable upon exercise of stock options and warrants then
outstanding.
7. Deferred Stock Compensation
---------------------------
In connection with the reverse acquisition, the Company granted options to
employees with exercise prices below the market value of the Company's common
stock. Accordingly, the Company recognized deferred stock compensation of
$2,665,581 based on the difference between the market value of the Company's
stock and the exercise price of the options. For the three-months and
nine-months ended September 30, 2001, the Company recognized stock compensation
expense of approximately $227,700 and $1,195,200, respectively, in conjunction
with the vested options.
8. New Authoritative Accounting Pronouncements
-------------------------------------------
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141 (SFAS 141), Business Combinations. SFAS
141 applies to all business combinations initiated after June 30, 2001. The
Statement also applies to all business combinations accounted for using the
purchase method for which the date of acquisition is July 1, 2001 or later. The
adoption of SFAS 141 will not have an impact on the Company's financial
statements.
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142 (SFAS 142), Goodwill and Other Intangible
Assets. The
F-7
iJoin Systems, Inc.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2001
(unaudited)
provisions of SFAS 142 are required to be applied starting with fiscal years
beginning after December 15, 2001, with earlier application permitted for
entities with fiscal years beginning after March 15, 2001, provided that the
first interim financial statements have previously been issued. The statement is
required to be applied to all goodwill and other intangible assets recognized in
its financial statements to that date. The initial application of SFAS 142 will
result in the Company no longer amortizing its goodwill.
9. Letter of Intent
- -------------------
On May 1, 2001, the Company entered into a letter of intent to acquire a company
that engages in the business of developing information technology solutions in
exchange for cash and shares of the Company's common stock. As of September 30,
2001, the Company was still negotiating the terms of any proposed acquisition.
There can be no assurances that acceptable terms can be agreed upon, or that any
proposed acquisition will be consummated.
F-8
Item 2. Plan of Operations
------------------
When used herein, the words "may", "will", "expect", "anticipate", "continue",
"estimate", "project", "intend", "plan" and similar expressions are intended to
identify forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, regarding events, conditions and
financial trends that may affect the Company's future plans of operations,
business strategy, operating results and financial position. All statements,
other than statements of historical facts, included or incorporated by reference
in this Form 10-QSB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature thereof),
business strategy, expansion and growth of the Company's business and
operations, and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it believes
are appropriate in the circumstances. Such statements are not guarantees of
future performance and are subject to risks and significant uncertainties and
that actual results may differ materially from those included within the
forward-looking statements as a result of various factors. The occurrence of any
unanticipated events may cause actual results to differ from those expressed or
implied by the forward-looking statements contained herein. You are cautioned
not to place undue reliance on these statements, which speak only as of the date
of this report.
Overview
iJoin Systems, Inc. (the "Company" or "iJoin") was incorporated on October
8, 1998, as Tech-Creations, Inc. The Company changed its name to iJoin Systems,
Inc. effective May 7, 2001, in connection with the merger (the "Acquisition") by
and among the Company, iJoin, Inc. and IJC Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of the Company formed for purposes of
the Acquisition ("IJC"). Pursuant to the Acquisition, iJoin, Inc. became a
wholly-owned subsidiary of the Company. iJoin, Inc. was incorporated on January
6, 2000 for the purpose of developing an "intelligent business Web" to
streamline information technology (IT) processes and automatically integrate
disparate vendors into a single source. A single source provider enables IT
professionals to procure, deploy, and maintain custom solutions and lower their
total cost of technology ownership. As of September 30, 2001, the intelligent
business web development has not yet been completed.
Plan of Operations
The Company has incurred recurring losses from operations and has a total
accumulated deficit of $6,905,624 at September 30, 2001. The continued
development of the Company's technology and products will not only require a
commitment of substantial funds, but will require additional capital for new
versions of the technology as new partners are introduced. However, the rate at
which the Company expends its resources is variable, may be accelerated, and
will depend on many factors.
During the quarter ended September 30, 2001, the Company raised a total of
$324,000, in the form of a loan, for an aggregate of $948,000 raised in equity
and debt financings as of September 30, 2001. The Company will need to raise
substantial additional capital to fund the expansion of its
-2-
operations and may seek such additional funding through public or private equity
or debt financing. There can be no assurance that such additional funding will
be available on acceptable terms, if at all.
The Company had $56,793 cash on hand as of September 30, 2001. However,
the Company's continued existence as a going concern is ultimately dependent
upon its ability to secure additional funding for completing and marketing its
technology and the success of its future operations. The Company plans to raise
the capital required to sustain operations and seek potential acquisitions to
complement its business strategy. The Company is currently in discussions with
several groups regarding funding. There can be no assurances that the Company
will be able to obtain funding on terms acceptable to the Company, or that it
will be able to obtain funding at all.
In addition to sustaining its operations, the Company intends to raise
additional capital required to acquire business operations and assets consistent
with its business plan. It is the Company's strategy to acquire systems
integrators perceived as profitable or as producing sufficient revenues, which
acquisition(s) would enable the Company to capitalize on the long-standing,
entrenched customer relationships of any acquired business as well as increased
geographic diversification. Management believes that most of these systems
integrators typically only supply a portion of the IT solutions required by
their customers. By leveraging these acquisitions, and taking advantage of
synergies and perceived cost savings, it is the Company's intention to use its
existing technology and strategic partnerships to capture a share of the
remaining IT solution needs of such customers and realize increased gross
margins. As part of this strategy, the Company, on May 1, 2001, entered into a
letter of intent to acquire a company that engages in the business of developing
IT solutions in exchange for cash and shares of the Company's common stock. As
of September 30, 2001, the Company was still negotiating the terms of any
proposed acquisition. There can be no assurances that acceptable terms can be
agreed upon, or that any proposed acquisition will be consummated.
On May 7, 2001 the Company completed the Acquisition, as a result of which
all of iJoin, Inc.'s issued and outstanding shares of common stock and, after
the conversion, the preferred stock, with the exception of Series B preferred
stock, were exchanged for the common stock of the Company at a 5 to 1 ratio and
the Company changed its name to iJoin Systems, Inc. The Acquisition resulted in
the stockholders and management of iJoin, Inc. being granted effective operating
control of the combined entity. Pursuant to the 5:1 exchange ratio used in the
Acquisition, every five shares of iJoin, Inc. common stock issued and
outstanding at the effective time of the Acquisition was automatically converted
into the right to receive one share of the common stock of the Company. By its
terms, the Acquisition also provided for the Company to issue (i) to the holders
of the Series B preferred stock of iJoin, Inc., 300,000 shares of the Company's
convertible Series B Preferred Stock (convertible into 300,000 shares of the
Company's common stock) and (ii) to the holders of the shares of special voting
stock of iJoin, Inc., 2 shares of the Company's convertible Series A Special
Voting Preferred Stock, representing an aggregate of 30,000 shares of the
Company's common stock issuable upon the exchange of certain exchangeable shares
of the Canadian subsidiary of iJoin, Inc. In addition, the Company assumed
outstanding warrants and options of iJoin, Inc.
-3-
PART II - OTHER INFORMATION
Item 2. Changes In Securities And Use Of Proceeds
-----------------------------------------
On August 24, 2001 the Company issued 100,000 shares of the common stock of
the Company upon the exercise, at an exercise price of $.05 per share, of that
warrant dated as of January 6, 2000 between iJoin, Inc. and an individual
investor. The issuance of such shares was based, in part, upon representations
and warranties of such individual, including a representation as to its status
as an "accredited" investor (as such term is defined in Rule 501(a) of
Regulation D under the Securities Act of 1933, as amended (the "Securities
Act")). This sale was exempt from the registration requirements of the
Securities Act pursuant to Regulation D promulgated by the Securities and
Exchange Commission (the "SEC") under section 4(2) of the Securities Act.
On July 9, 2001 the Company issued to two members of its Board of Directors
options to purchase up to 20,000 shares of the common stock of the Company
pursuant to the Company's 2001 Stock Option Plan. The options are exercisable at
a price of $11.00 per share, and were issued as compensation for their serving
on the Board.
Item 6. Exhibits And Reports On Form 8-K
--------------------------------
(a) Exhibits:
None.
(b) Reports on Form 8-K:
On July 12, 2001, the Company filed a Current Report on Form 8-K
relating to Item 4, Change in Certifying Accountant, in connection with the
dismissal of Dorra Shaw & Dugan, and the engagement of Grant Thornton, as
the Company's certifying accountant.
On July 20, 2001, the Company filed an amended Current Report on Form
8-K/A relating to Item 7, Financial Statements, providing the requisite
financial statements relating to the Merger by and among the Company,
iJoin, Inc. and IJC Acquisition Corp.
On September 27, 2001, the Company filed an amended Current Report on
Form 8-K/A relating to Item 8, Change in Fiscal Year, announcing its
decision, in connection with the Merger by and among the Company, iJoin,
Inc. and IJC Acquisition Corp., to adopt a fiscal year end of December 31,
2001.
-4-
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
Date: November 14, 2001 iJoin Systems, Inc.
By: /s/ Raj Kapoor
------------------------------------
Raj Kapoor
Chief Financial Officer
(duly authorized officer)
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