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 Report (Date of earliest event reported) MARCH 11, 2002
THE INTERNET ADVISORY CORPORATION
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(Exact name of registrant as specified in its charter)
UTAH 0-16665 87-042635
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State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation or organization)
150 E. 58TH STREET, NEW YORK, NY 10022
(Address of principal executive offices)(Zip Code)
(212) 421-8480
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, If Changed since Last Report.)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 11, 2002 the Internet Advisory Corporation (the "Registrant")
entered into an Acquisition Agreement with Go West Entertainment Inc., a New
York corporation ("Go West") and the shareholders of Go West (the "Go West
Shareholders"). The Go West Shareholders are Richard Goldring, Elliot Osher and
William Osher. Pursuant to the Acquisition Agreement, Registrant acquired all of
the issued and outstanding capital stock of Go West from the Go West
Shareholders, making Go West a wholly owned subsidiary of Registrant in exchange
for 10,000,000 shares of Registrant's restricted common stock.
Go West was formed on May 11, 2001 to establish, own and operate upscale
adult entertainment nightclubs. The principal assets of Go West are a twenty
year lease (the "Lease") on a building at 533-535 West 27th Street, New York, NY
at which Go West intends to open an adult entertainment nightclub during the
fourth quarter of 2002 under the name "Scores West" and a license agreement (the
"License Agreement") with Heir Holding Co., Inc., a Delaware corporation
("Heir") granting Go West the right to use the "Scores" name in New York City
for up to three adult entertainment nightclubs. The determination of the amount
of consideration to pay for the purchase of the Go West shares was based on
projected income from the ownership of three clubs. Heir is the owner of the
intellectual property rights respecting the name "Scores" which is a recognized
name in the adult entertainment industry owing to the success of "Scores
Showroom" a successful and well known adult entertainment nightclub operating at
East 60th Street in New York, NY since 1991. Scores Showroom is owned by Scores
Entertainment, Inc., a New York corporation ("SEI"). Go West intends to model
"Scores West" and all other "Scores" clubs it may operate in the future after
Scores Showroom by providing its customers with a discreet, first class
entertainment experience. Scores West will offer topless dancing, a gourmet
quality restaurant and bar operations.
The License Agreement between Heir and Go West dated August 15, 2001 as
amended on March 3, 2002 grants Go West the right and license to use certain
Scores trademarks in New York City in connection with the operation of up to
three adult entertainment topless dance clubs and the retail sale of commercial
merchandise, including tee-shirts, sweatshirts, sweat pants, jackets, baseball
hats, key rings and other similar merchandise, from each club location. All
merchandise sold pursuant to the License Agreement must be purchased from Heir
at Heir's then current wholesale prices. The License Agreement also provides for
an annual royalty payment of $520,000 to be paid by Go West to Heir. The term of
the License Agreement continues until Go West ceases or discontinues the
operation of Scores West.
The Lease which is dated October 3, 2001 commences May 1, 2002 or June 1,
2002 as determined by Go West and provides for a 20 year lease term. The Lease
provides for a $1,000,000 security deposit, $750,000 of which had been paid to
date, and an escalating annual base rental during the term of the Lease starting
with an annual base rental of $700,000 during year one (1) and ending with an
annual base rental of
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$1,754,784 during year twenty (20). The Lease contains an option to buy the
premises at any time through and including December 31, 2003 at a price of
$10,000,000. Go West intends to renovate the structure at its own expense for
purposes of operating the premises as "Scores West." 10,000 square feet of the
premises, the maximum permitted by New York City law will be utilized by "Scores
West." The west side Manhattan location from which "Scores West" will operate
was carefully chosen by Go West in recognition of New York City's increasingly
restrictive zoning regulations and policies respecting the operation of
establishments that provide adult entertainment. Unlike other parts of Manhattan
that prohibit adult entertainment businesses from operating altogether or
restrict the amount of customer accessible space an establishment can devote to
adult uses, the "Scores West" location contains no such zoning restrictions.
Registrant, Go West, Heir and SEI are affiliated entities. Registrant's
president, chief operating officer, director and principal shareholder, Richard
Goldring is an officer and director of Go West, an officer, director and
shareholder of Heir and the operations manager for Scores Showroom. John
Neilson, Registrant's secretary and director is a management consultant for both
Go West and SEI. Registrant's treasurer and director, Joseph Erickson is the
controller for SEI. Elliot Osher is an officer and director of Go West, an
officer, director and shareholder of Heir and the director of club operations
for Scores Showroom. William Osher is an officer and director of Go West, an
officer and director and shareholder of Heir, and the day manager for Scores
Showroom. Registrant plans to leverage the adult entertainment nightclub
experience of its management in an owner/ operator business model in which it
intends to both own and manage clubs. Pursuant thereto, Registrant is engaged in
negotiations to manage Scores Showroom. As Registrant shifts the focus of its
business to its intended adult entertainment nightclub operations, it continues
to review the ongoing viability of its existing ISP business.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired. To be filed by amendment
within the next 60 days.
(b) Pro Form Financial Information. To be filed by amendment within the
next 60 days.
(c) Exhibits
2.1 Acquisition Agreement dated March 11, 2002 by and among Registrant, Go
West Entertainment Inc. and the shareholders of Go West Entertainment
Inc..
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly cause this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE INTERNET ADVISORY CORPORATION
Dated: March 26, 2002 By: /s/ Richard Goldring
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Richard Goldring
President & Chief Executive Officer
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