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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
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March 9, 2000
Date of Report (Date of earliest event reported)
HOUSEHOLD DIRECT.com, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE
(State or other (Commission 51-0388634
jurisdiction of File Number) (I.R.S. Employer
incorporation Identification No.)
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HOUSEHOLD DIRECT.com, INC.
900 MAIN STREET SOUTH
SOUTHBURY, CONNECTICUT 06488
(Address of principal executive offices) (Zip Code)
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(203) 267-1400
(Registrant's telephone number, including area code)
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CROSS CHECK CORP.
P.O. BOX 1049
NIWOT, CO. 80544
(Former name or former address, if changed since last report)
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Item 1. CHANGES IN CONTROL OF REGISTRANT
On March 9, 2000, HouseHold Direct.com, Inc., a Delaware corporation
("HouseHold" or "Company") executed an Agreement and Plan of Merger with Cross
Check Corp., a Colorado Corporation ("Cross" or the "Registrant") and a Letter
Agreement with the shareholders of Cross whereby HouseHold Direct acquired all
the issued and outstanding shares of the Registrant for the purpose of
completing a merger of HouseHold and Cross. On March 20, 2000 HouseHold and
Cross completed a merger with HouseHold being the surviving entity.
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
HouseHold was originally incorporated as RDI Marketing, Inc., a Florida
corporation ("RDI") on January 2, 1992. The corporation historically had no
material business operations other than maintaining its status. On May 18, 1998
RDI filed a disclosure statement under Rule 15C2-11 of the Securities and
Exchange Act of 1934 ("1934 Act") with the National Association of Securities
Dealers (NASD); RDI received clearance to enter quotations on the OTC Bulletin
Board on June 11, 1998 and began trading under the symbol "RDIM." On July 10,
1998 RDI entered into an Exchange Agreement with Preferred Consumer Network
International, Inc., a Delaware corporation ("PCNI") whereby PCNI became a
wholly owned subsidiary of RDI and the former PCNI shareholders, in the
aggregate, became the majority shareholders of RDI owning ninety percent (90%)
of the issued and outstanding common stock of the Company.
The Company (directly and/or through its then wholly owned subsidiary)
operated a "wholesale buyers club" business whereby consumers could purchase a
membership that would entitle them to purchase certain durable and non-durable
consumer goods at wholesale or factory direct prices. The Company curtailed
material operations in late December of 1998 to allow management to revise its
business plan and to seek capital funding to implement its new business
strategy.
To be consistent with the Company's new business and marketing plan as a
wholesale buyers club, RDI changed its exchange symbol to "BYIT" effective July
12, 1999. Contemporaneously with the symbol change the Company was
reincorporated in the State of Delaware under its current name, HouseHold
Direct.com, Inc.
The Company operates a specialized sales business known as a "wholesale
buyers club." As stated above, a "wholesale buyers club" is a business whereby
consumers purchase a membership which allows them to buy certain durable and
non-durable consumer goods at wholesale and factory direct prices.
Historically buyers clubs have charged up to a $1,500.00 membership fee
upon initial application by the consumer and then charged a handling fee of up
to ten percent (10%) on all member purchases. As part of its business strategy,
the Company has radically reduced the initial membership fee as discussed below.
HouseHold's goal in decreasing the membership fee is to stimulate
membership growth. It is the Company's belief that in order for it to be
profitable, it must have a large membership base. Consequently the Company has
recently embarked on implementing a growth oriented business strategy.
HouseHold's business strategy is two fold: i) consolidate a number
of buyers clubs in different cities across the country by acquisition thereby
allowing the Company to rapidly increase its
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membership base; and ii) implement a new ecommerce website/portal to improve
services to customers and market memberships to prospective members.
As stated earlier, the Company intends to acquire a number of buyers
clubs in different cities across the United States. According to industry
sources, over 150 private/independent buyers clubs exist in the United States
servicing an existing membership base of 2.5 million consumer members. It is
from this group the Company will seek to locate acquisition candidates. As of
the date hereof, the Company has identified and acquired one single unit buying
club in Atlanta, Georgia, Preferred Consumer Services, Inc. ("PCS"). HouseHold
estimates that the PCS acquisition will bring approximately 10,000 members to
the Company with annual product purchase expenditures of approximately 3 million
dollars annually. The Company is currently reviewing other potential
acquisitions but has not entered into any agreements or engaged in any material
negotiations with any specific targets.
HouseHold is unlikely to identify specific targets and enter into any
further material agreements until such time as the Company has raised sufficient
capital to fund any such potential acquisitions.
The Company is currently attempting to concentrate on building
membership. The primary methods the Company is either currently employing or
intends to employ are: i) acquisitions (as described above); ii) marketing and
selling memberships through the Internet; iii) direct mail and telemarketing
solicitation; and iv) the potential use of franchising and joint ventures to
expand the geographical reach of the Company both domestically and
internationally.
Should the Company be successful in acquiring a significant membership
the Company will receive revenues from essentially three sources: i) an initial
application/membership fee of $49.95; ii) monthly maintenance club dues of $9.95
per month; and iii) a service fee of between 5% and 10% of each member's
merchandise purchases made through the Company.
Concurrently with building its membership base, the Company will be
utilizing proprietary data management systems to evaluate its members, their
buying habits and preferences. The information will be used by the Company to
identify and then offer the products most desired by the Company's membership.
Management believes that the increase in product offerings will also increase
customer satisfaction and thus word of mouth customer referrals to the Company.
In addition to acquiring buyers clubs, the Company will also seek to
acquire or enter into strategic relationships with other businesses that will
assist HouseHold in servicing the needs of its members. Included in this group
would be warehouse facilities, packaging and fulfillment service businesses and
shipping companies.
The Company has already acquired Thunderstick, Inc., a business that has
expertise in Internet technology, which will support HouseHold's web site and
ecommerce management software. Currently the Company is in the process of
identifying potential acquisition targets, but has not entered into any
arrangements with or specifically identified any specific companies that they
will acquire or with whom they might enter into a strategic relationship.
Although HouseHold is at an early stage of its development, it has
already acquired PCS and Thunderstick. HouseHold is therefore in the process of
implementing its business plan to put into place the building blocks or
components it believes will make its business a success. These blocks include:
i) the use of state of the art technologies for web site design and ecommerce
application
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software; ii) utilization of centralized purchasing and fulfillment; iii) the
Company's "cost plus" club shopping format and iv) expedited discount shipping
of member's purchases.
HouseHold believes that there are significant opportunities for
marketing its "cost plus" business format through the Company's web site, with
potential members in countries outside of the United States. Consumers in
selected foreign markets would be able to purchase goods that are unavailable or
unique to their local market and at a price significantly lower than comparable
local goods. The Company is aware that there are significant restrictions
concerning certain types of exports and other restrictions that require the
Company to exclude potential customers who are located in certain countries with
whom the Company is prevented, by law, with doing business. HouseHold intends to
comply with all export laws and regulations and believes that such compliance
will not have a material impact on its business.
Item 3. BANKRUPTCY OR RECEIVERSHIP
None.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
As a result of the HouseHold and Cross merger and HouseHold being the
surviving entity, HouseHold's auditors, King Griffin & Adamson, P.C., 14160,
Dallas Parkway, Ninth Floor, Dallas, Texas 75240 will be the auditors of record
for the Company.
Item 5. OTHER EVENTS
None.
Item 6. RESIGNATION AND APPOINTMENT OF DIRECTORS
As a consequence of the HouseHold and Cross merger and HouseHold being
the surviving entity, Cross' Board of Directors will be dissolved. The two
current directors of HouseHold are as follows:
John D. Folger, 50, Director, President and Chief Executive Officer. Mr. Folger
is one of the original founders of HouseHold and has served as its president and
CEO since its inception in 1997. From 1995 to 1996, Mr. Folger was a joint
venture partner and vice president in a business called the Virtual Visitor
Center/Online Business Associates which was an internet business specializing as
a consumer gateway. Mr. Folger is currently active as an equity investor in
Huntingtown Farm, a real estate development that he has been involved in since
1993. Prior to becoming involved with Huntingtown Farm, Mr. Folger acted as a
business consultant with Armour Funding, Inc. and The Investor Group, Inc.
Ann D. Jameson, 57, Director, Vice President of Operations and
Secretary/Treasurer. Ms. Jameson's is also one of the original founders of
HouseHold and has served in her current capacities with the Company since 1997.
Prior to her employment with the Company, Ms. Jameson was an executive
consultant with Laughter Works Seminars, Inc., where she developed specialized
programs and strategies for corporate and small business clients. In 1996, Ms.
Jameson was employed by the Carvel Corporation as Staff Administrator, Human
Resources and Training. Before her employment with Carvel, Ms. Jameson served as
Manager, Community Affairs and Employee Services from 1969 to 1996 for the
Hartford Life Company, a division of the Hartford Insurance Group.
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Both Mr. Folger, as an officer, and Ms. Jameson, as an employee, are
currently involved in the completion of the winding up of Preferred Consumer
Network International, Inc. ("PCNI"). PCNI acquired the operating assets of an
earlier business known as United Buyers Service of Massachusetts, which was
engaged in the sale of memberships in and the operation of a consumer wholesale
buyers club. As a result of the failure of these businesses, certain payroll
taxes were left unpaid. The Internal Revenue Service ("IRS") has instituted
collection of the payroll taxes and placed liens on certain real property of Mr.
Folger and Ms. Jameson. Both parties are currently attempting to obtain and
complete a settlement of the IRS claims.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIALS AND EXHIBITS
HouseHold is currently in the process of completing their first audit
including the audits of its two acquisitions, PCS, Inc. and Thunderstick, Inc.,
and are therefore not available for the initial report herein. The Company
intends to file its audited financials for fiscal years 1998 and 1999 in an
amended 8-K within sixty (60) days of the date hereof.
Exhibits
2.1 Agreement and Plan of Merger
3.1 Certificate of Incorporation
3.2 Bylaws
10.1 Letter Agreement (stock purchase)
Item 8. CHANGE IN FISCAL YEAR
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATE: March 22, 2000
HouseHold Direct.com, Inc.
By: /s/ JOHN D. FOLGER
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John D. Folger
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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2.1 Agreement and Plan of Merger
3.1 Certificate of Incorporation
3.2 Bylaws
10.1 Letter Agreement (stock purchase)