SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
March 4, 2004
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Date of Report
(Date of Earliest Event Reported)
visionGATEWAY, INC.
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(Exact name of Registrant as specified in its Charter)
Nevada 0-30499 84-0911532
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(State or other jurisdiction) (Commission File No.) (IRS Employer I.D. No)
12707 High Bluff Drive, Suite 200, San Diego, CA 92130, USA
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(Address of Principal Executive Offices)
1-858-794-1416
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(Registrant's Telephone Number)
Chiropractic 21 International, Inc.
5525 South 900 East, Suite 110
Salt Lake City Utah 84117
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(Former name or Former Address if Changed)
DOCUMENTS INCORPORATED BY REFERENCE
Form 8-K current report filed on March 4, 2004 in response to Item 9 of
this report.
Form 10-KSB, Annual Report, for the fiscal year ended April 30, 2003 in
response to Part II, "Recent Sales of Unregistered Stock" and information
relating to the former officers and directors of the Company.
Item 1. Change in Control
On March 4, 2004, Chiropractic 21 International, Inc., the former name
of the Company, hereafter referred to as "Chiropractic" in parts of this text
to indicate the activities of the Company prior to its acquisition of
visionGATEWAY, Inc., a Nevada corporation, (hereafter "Vision Nv") pursuant to
an Agreement and Plan of Reorganization (the "Reorganization Agreement"), a
copy of which is enclosed as Exhibit 2.1, and the changes in control affected
by the Reorganization Agreement. Under the terms of the Reorganization
Agreement, Chiropractic exchanged a total of 36,040,500 shares of Chiropractic
common stock in exchange for 100% of the common stock of Vision Nv and as a
result of that exchange, the shareholders of Vision Nv became shareholders of
Chiropractic and Vision Nv became a subsidiary of Chiropractic. Due to the
number of shares exchanged, (a total of approximately 95.3% of the total
number of presently outstanding shares of Chiropractic) the shareholders of
Vision Nv, as a group, became the majority shareholders of Chiropractic and
the principal shareholders of Vision Nv became the new control shareholders of
Chiropractic. At the closing of the transaction, and after a reverse split of
the Chiropractic outstanding shares on the basis of one new share for every
three shares of common stock required by the Reorganization Agreement prior to
the closing with Vision Nv, and the further requirement of the Reorganization
Agreement for the cancellation of 780,000 additional shares of Chiropractic
common stock, after the closing with Vision Nv, the original shareholders of
Chiropractic retained a total of 1,777,717 shares of Chiropractic common
stock, after adjustment for the issue of 300,000 shares for services or 4.7%
of the total number of outstanding shares of common stock of Chiropractic.
Upon closing the transaction described above, Chiropractic changed its
name to visionGATEWAY, Inc., hereafter referred to as "Vision" or the
"Company," as required by the provisions of the Reorganization Agreement.
At the closing of the Reorganization Agreement, all of the officers and
directors of Chiropractic resigned in seriatim and appointed officers and
directors from Vision Nv as new directors and officers of Chiropractic.
The former officers and directors of Chiropractic, prior to the closing
with Vision Nv were as follows:
President and a Director: Kirsten Lovato
Secretary and a Director: Vickie Jenson
Vice President and a Director: Nick Lovato
For information relating to the former officers and directors of the
Company reference is made to Part III, Item 9 "Directors, Executive Officers,
Promoters and Control Persons" of the Company's Form 10-KSB filed for the
fiscal year ended April 30, 2003, which is hereby incorporated by this
reference.
The new officers and directors of the Company after the closing with
Vision Nv are as follows:
Name Age Office
Andrew Brett Wotton 47 Chairman of the Board of Directors
and a Director
Martin G. Wotton 42 President and a Director
Michael Emerson 54 Vice President and Chief Executive
Officer, Director and Secretary-
Treasurer
Trevor Tappenden 57 Director
Michael Bromley 38 Vice President and Chief Operating
Officer for Asia Pacific
For information on the background, business resumes and addresses of the
new officers and directors of the Company see "Directors and Executive
Officers, Promoters and Control Persons" and "Background Information of
Directors and Officers" in Part I below.
The new principal shareholders of the Company (i.e. those shareholders
known to the Company who hold 5% or more of its outstanding common stock) are:
NAME OF STOCKHOLDER NUMBER OF SHARES PERCENTAGE OF
OWNERSHIP
Aspen Capital Partners Ltd (1) 23,000,000 60.8%
Andrew Brett Wotton (2) 1,100,000 2.9%
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(1) Andrew Brett Wotton, the brother of Martin G. Wotton, is the sole
shareholder of Aspen Capital Partners Limited, a New Zealand
corporation, ("Aspen") and therefore all of the shares of Aspen may be
attributed to Andrew Brett Wotton. Martin G. Wotton, President of the
Company, is a director of Aspen, but he does not own any of the shares
of Aspen and owns no shares of the Company. Andrew Brett Wotton also
owns 350,000 shares of the Company individually and he is the sole
shareholder of Aspen Horticulture Limited, also a New Zealand
corporation, which owns 750,000 shares of the Company's common stock,
the shares of which may also be attributable to Andrew Brett Wotton.
Because of these affiliations, Andrew Brett Wotton may be deemed to be a
principal shareholder of the Company and its parent. Aspen is also a
parent of the Company due to its holdings. Martin G. Wotton disclaims
any beneficial interest in the shares attributable to or owned by his
brother.
(2) Includes 350,000 shares of common stock personally owned by Andrew Brett
Wotton and 750,000 shares owned by Aspen Horticulture Limited. As set
forth above in Note 1, Andrew Brett Wotton may also be deemed to be the
holder of the 23,000,000 shares held by Aspen Capital Partners Limited.
(3) All of the principal shareholders and officers are at present residents
of Australia or New Zealand. Mr. Emerson is expected to devote most of
his time to the Company's affairs based in the United States.
For more information with respect to principal shareholders see
"Security Ownership of Certain Beneficial Owners and Management" in Part I
below.
Item 2. Acquisition or Disposition of Assets
As stated above, in March 2004, the Company acquired visionGATEWAY,
Inc., a corporation organized under the laws of Nevada in 1999 ("Vision Nv"),
in a transaction involving the exchange of 36,040,500 shares of the Company's
common stock for all of the issued and outstanding common stock of Vision Nv
pursuant to a Reorganization Agreement, a copy of which is filed as Exhibit
2.1, which intended the transaction to be a tax free exchange of shares under
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Under the terms of the Reorganization Agreement, Vision Nv would become
a wholly owned subsidiary upon the full exchange of shares with the
shareholders of Vision Nv and the Company would succeed to the business and
operations of Vision Nv. To date, approximately 63.8% of the Vision Nv
shareholders have exercised their right to exchange their shares of common
stock in Vision Nv for the shares of Chiropractic. It is expected that all
shareholders of Vision Nv will exchange their shares as contemplated by the
Reorganization Agreement.
The Reorganization Agreement provided for an extension of the offer to
the shareholders of Vision Nv to exchange their common stock for shares of
Chiropractic for a period of 180 days from the closing date. This was done to
allow the shareholders of Vision Nv additional time to comply with the
Reorganization Agreement, due to the long distances from Australia to the
United States.
Further provisions of the Reorganization Agreement required Chiropractic
to reverse split its outstanding common stock prior to the closing on the
basis of one (1) new share of common stock for every three (3) shares held.
Other provisions of the Reorganization Agreement required certain former
principal shareholders of Chiropractic to surrender and cancel 780,000 pre-
split shares (See the "Reorganization Agreement" Exhibit 2.1 Filed herewith
and Schedule 1.6.1 to that Agreement).
Additionally, any shareholder who owned five percent (5%) or more of
Chiropractic's common stock prior to the closing was required to sign a lock-
up/leak-out agreement (See Exhibit 1.7.1 of the attached Reorganization
Agreement).
After the closing, the Company was required by the Reorganization
Agreement to adopt a consulting agreement (See Schedule 1.8.1 of the
Reorganization Agreement) for non-capital raising services of certain
individuals and called for the issuance of 300,000 shares to such persons as
compensation for their services. These shares have not been issued as of the
date of this Report. The shares are required to be registered on Form S-8 if
and when the Company is eligible for the use of Form S-8.
Except for the issuance of stock on Form S-8 in consideration of the
consulting services described above, The Reorganization Agreement further
restricts the issuance of additional shares of common stock on Form S-8 for a
period of one (1) year without approval of the pre-closing directors of the
Company.
The Company and Vision Nv also received an indemnification agreement
from Jenson Services to indemnify them from any breach of warranty or false
representation made in the Reorganization Agreement and any past liabilities
of Chiropractic existing prior to the closing.
The business of the Company as now conducted and other information is
described below in Parts I and II.
PART I
Background
visionGATEWAY, Inc. (the "Company" or " Vision") is a corporation
organized in 1970 under the laws of Nevada, and until recently was known as
Chiropractic 21 International, Inc.("Chiropractic"). Chiropractic was an
inactive public corporation for a number of years until March 4, 2004 when it
acquired a majority interest in visionGATEWAY, Inc., ("Vision Nv") a
corporation organized on September 13, 1999, also under the laws of Nevada.
Upon its acquisition of Vision Nv, all of the operations and business of the
Company consisted of Vision Nv's business which the Company now operates
through Vision Nv.
Vision Nv is the primary holding company for the software business now
being conducted and described herein below. Vision Nv results from two
further prior acquisitions by Vision Nv, visionGATEWAY Pty Ltd an Australian
corporation organized to distribute and market the products of Vision Nv and
Software Innovisions Pty Ltd, also an Australian corporation, which was
engaged in the development of business software and the developer of the
INTERScepter TM Internet Resource Management ("IRM") software described
below. These acquisitions were made during the first half of 2002 and by June
2002, all became acquired by Vision Nv.
The shareholders of visionGATEWAY Pty Ltd. and Software Innovisions Pty
Ltd. all became shareholders of Vision Nv as a result of their exchange of
shares with Vision Nv, and as a further result of the exchange of shares with
the Company, are now shareholders of the Company with Vision Nv presently
being owned by the Company. The acquisition by the Company of Vision Nv
contemplated a 100% exchange of shares, so that Vision Nv would be wholly
owned by the Company, but all of the shareholders of Vision Nv have not
completed their exchange as of the date hereof; however, at this time
sufficient exchanges have been made so that the Company owns more than a
majority of the shares of Vision Nv and it is contemplated that all of the
remaining shareholders of Vision Nv will shortly exchange all of their shares
for the Company's shares.
The information given below is presented as the business and operations
of the Company synonymously with Vision Nv; although, the Company is at
present primarily a holding company without business operations of its own.
Description of Business.
Vision is an Enterprise Software Solutions company in the
commercialization stage. The Company, through its subsidiary corporations, is
now engaged in the development, distribution and marketing of business
software solutions with global distribution possibilities. Although total
sales during its last two fiscal years was only approximately (US)$ 43,000,
the Company considers itself in the commercialization stage of its development
rather than as a development stage enterprise, because its product, the
INTERScepterTM software business program, its principal product at this time,
is ready for sale and distribution. The Company is presently primarily engaged
in sales activities to develop markets for its product.
Vision Nv (through its Australian subsidiaries) has been operating for
a total of three years, commencing in 2000. The Company's principal product
("INTERScepterTM") is an Internet Resource Management software tool. This
product is an enterprise business solution that helps to improve company
earnings by assisting organizations in understanding, managing and exploiting
Internet usage and valuable resources, including bandwidth, systems and
employee productivity. INTERScepterTM software empowers managers to
effectively control, schedule and utilize costly Internet resources, while
placing responsibility on users to self manage and modify their Internet usage
behavior. Its return on investment to corporate and government enterprises is
approximately three months.
The Internet is an ever growing global communications and commerce
medium. Traditional organizations (both government and corporate) continue to
demonstrate a significant growth in their need for integration of Internet
based technologies into their core business and marketing needs. As a result,
chief operating and financial officers and managers of business units are
faced with two very compelling issues:
1. Managing large amounts of information from the Internet while
meeting their corporate and government obligations.
2. Measuring and managing the growing non-productive use of the
Internet by staff at work, who use the Internet while at work for
non-productive, personal purposes.
The Company recognized a market opportunity for the development of
software solutions to identify and redirect non-productive use of staff
employees at work to profitable uses of their time and Internet availability.
Based on the Company's preliminary investigations of market demand for this
type of product, it believed that going ahead with the INTERScepterTM project
was more than justified.
The benefit of the Company's product to its customers is based on a real
return on investment in a short period of time, while also improving
productivity and reducing costs through the use of its software tools.
The three primary industry segments for INTERScepterTM at present are:
(1) Education. INTERScepterTM was originally developed for the
education environment to meter and cost control internet usage by
students and staff. It contains tailored functionality around the
volume of Internet use, the type of Internet usage and
functionality for improved learning in lecture and classroom
activities. INTERScepterTM can reduce Internet cost and bandwidth
usage; it can allocate costs to cost centers and allow students to
be charged correctly according to their own personal use beyond
base level quotas. Through its access policy facilities, it
allows teachers to "regain control of the classroom" without
having to revert to the IT department. In Australia, it has been
accepted by two State Education Departments.
(2) Government. INTERScepterTM allows government agencies to record
internet traffic, the type of usage made and allows costs to be
allocated against the proper budget. In the Company's opinion,
significant benefits can be achieved through implementing Internet
policy by use of the INTERScepterTM software. It provides the
means to self manage the use of the Internet as well as reducing
direct Internet and bandwidth costs.
(3) Private Enterprise. Businesses have a need to maximize
productivity to achieve better performance to stakeholders through
a combination in top line performance or bottom line cost
reduction. The product allows for both outcomes and can be
focused on a particular business objective or a series of them as
required. As has been said, INTERScepterTM has an excellent return
on investment for businesses, providing payback in the first three
months against annual costs. It benefits the business with a
growth agenda or one that is looking to streamline costs.
At this time the INTERScepterTM business software program is the
Company's only product; however, the Company is involved in ongoing
development of other software solutions for business and other purposes.
The Company has an international presence. Its core software research
and development team is based in Brisbane, Australia. The main office for
marketing and distribution is close to Sydney, Australia. The Company's
principal office will be located in San Diego, California. Sales offices have
been established in Los Angeles, at Marina del Rey, and sales activities have
commenced in Asia through the Company's Malaysian and Singapore channel
partners. New sales opportunities are also being evaluated in other locations
in Asia, as well as the United Kingdom. New distribution channels are being
negotiated in Australia through various strategic partners.
Principal emphasis for sales is currently directed at the United States,
while new partnerships are being formed in Australia to focus on corporate
sales there.
Sales and Marketing.
INTERScepterTM is marketed and sold as a business tool, not as a
technical product, although it is, in the Company's opinion, technically
robust and innovative. The sales proposition is primarily commercial and
is targeted at senior management not solely the IT department. The
Company's business model is to use outsourced sales channels and to offer
substantial margin to its channel partners, which will encourage early and
considerable commitment. The value chain in the product also provides
substantial service revenue opportunities to channel partners. The Company
offers significant product breadth to meet the holistic requirements in
Internet Resource Management.
The Company's strategic decisions, dependent on available capital,
are based on rapidly building on an international scale. Three key sales
channels will be utilized: Sales acceleration firms, large technology
resellers and niche technology firms. Additionally, the company has set a
price point and payment model that will encourage product trial and
adoption. This product distribution business model also facilitates
further growth through the introduction of complementary products in the
future.
The majority of the Company's revenues will come from product
licenses. As described above, the Company's principal product is the
INTERScepterTM software tool. It is sold through a network of distribution
channels consisting of technology resellers and other distribution
outlets, which the Company refers to as its "channel partners." The
Company is able to achieve this because of the type of product it has. It
provides measurable added value to resellers with only marginal overheads.
In the United States, the Company has engaged a Sales Acceleration
Partner, AMP5 Inc., to assist in the development of opportunities in all
segments. They are also assisting the Company to build a reseller network
and twelve key resellers are now in place. In addition the Company is
finalizing Letters of Intent for two major distribution arrangements and
is currently negotiating with another six potential channel partners.
As a result of these channel partner activities, the Company has end
user opportunities that are being pursued across the USA with a number of
Universities, Educational institutions, Government Departments, and
Corporate enterprises.
Pricing for the INTERScepterTM is currently based around a three year
contract License Pack followed by an ongoing Update Pack. In the three
year license contract pricing is based on the number of workstations
accessing the internet rather the number of users in an organization.
Channel Partners are contracted to the Company through a Channel
Partner Agreement which sets out the terms and conditions of the
arrangement, including responsibilities of the parties, product pricing,
volume discounts, and channel partner commissions which vary according the
value of product sold in a calendar year.
INTERScepterTM - The Internet Resource Management (IRM) Solution
The Internet impacts every aspect of today's busy organization so it
is no surprise that every executive in an organization can benefit from
deploying INTERScepterTM to manage Internet resources.
Internet Resource Management "(IRM)" is the Company's approach to
helping organizations maximize their return on investment in Internet
services. Unlike simple content filtering solutions, IRM calls for a more
holistic approach to understanding and managing the constellation of
Internet resources in any organization.
Most organizations lack a comprehensive understanding of what
Internet resources are being used and how, making it all but impossible to
ensure they are being used productively, or to predict or plan for their
growth. With IRM, an organization can monitor and report usage, set and
enforce policies, and improve productivity.
Competition.
The Company does not believe that it has any direct competition with
respect to its INTERScepterTM software program and it is not aware of any
competitor offering the same complete solution with the full elements of
the software for sale.
There is, however, substantial indirect competition from products
which address issues of immediate concern to clients such as Internet
security and violation of web resources. These products address "bad
behavior" on network usage. Policing activities tend, however, to
intimidate users and bad behavior goes underground and re-offending will
generally occur. INTERScepterTM assists staff to police their own behavior
and guides them to do what is best.
Competition is also realized from filtering software. Filters
eliminate offending materials from the web but the INTERScepterTM approach
is one of self management rather than forced elimination.
Other products which provide reporting and presentation of gathered
statistics, analytics and performance measurement also offer competition
for the Company's product.
There are other competitors in the market as well, however, they
mainly supply the home market for parental control of the Internet. Some
other products are hardware based and cover the aspect of INTERScepterTM
that controls bandwidth usage. In the Company's opinion, no other product
has the same total coverage as INTERScepterTM.
It must, nevertheless, be considered that competition in the
business software industry is intense, with many companies making entries
into the market every day. Most of the competitors in the industry are
very large businesses with far greater resources than the Company in terms
of capital, size and number of employees. The Company is insignificant in
this industry and its growth will depend on many variables not in its
control, including lack of capital and the ability to obtain additional
funding for its operations and development plus many other unforeseen
economic and competitive conditions.
Sources and availability of raw materials and the names of principal
suppliers.
Vision is a producer of software and is not dependent on any one
supplier for raw materials for its software products. The underlying
technologies are built on publicly available components that are used in
conjunction with other software products.
Dependence on one or a few customers.
Vision has outsourced its sales channels and has established or is
in process of making alliances with distribution channels in numerous
locations and, consequently, most of its sales are generated from these
various sources. At this time there is no single reseller or group of
resellers upon which the Company is dependent.
Patents, trademarks, licenses, franchises, concessions, royalty agreements
or labor contracts, including duration.
The Company has registered product trade marks, trade names and
logos in Australia and is now in the process of registering these items in
the United States. The Company is dependent on its trademark for
INTERScepterTM to distinguish its software from other products in the
market and to create a market identity for its product. Patents are under
consideration for version 2 of INTERScepterTM. Gray Cary of San Diego has
been engaged in regard to these matters.
At the present time there are no patents in effect upon which the
Company is dependent. There are also no concession agreements,
franchises, licenses, royalty agreements or labor agreements in effect at
this time.
Government approval.
The Company is not subject to direct governmental regulation in the
conduct of its business.
Effect of existing or probable governmental regulations on the business.
At the present time, based on the Company's business as now
conducted, direct governmental regulation of its business is not
anticipated.
The Company is, however, subject to the Sarbanes-Oxley Act in the
conduct of its business as follows:
Sarbanes-Oxley Act
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley
Act of 2002. This Act imposes a wide variety of new regulatory
requirements on publicly-held companies and their insiders. Many of these
requirements will affect the Company. For instance:
The Company's chief executive officer and the chief financial
officer must now certify the accuracy of all periodic reports
that contain financial statements;
Periodic Reports of the Company must disclose management's
conclusions about the effectiveness of the Company's
disclosure controls and procedures; and
The Company is not permitted to make any loan to any director
or officer and it may not modify any existing loans.
The Sarbanes-Oxley Act has required the Company to review its
current procedures and policies to determine whether they comply with the
Sarbanes-Oxley Act and the new regulations promulgated thereunder. The
Company will continue to monitor its compliance with all future
regulations that are adopted under the Sarbanes-Oxley Act and it will take
whatever actions are necessary to ensure that it is in compliance.
This Act may also result in higher operating costs to comply as well
as higher professional fees.
The Estimated amount of Capital spent during each of the last two fiscal
years on research and development activities, and the extent to which the
cost of such activities are borne directly by its customers.
The estimated amount spent on research and development in the last
two fiscal years is approximately (US)$ 450,000. All of these expenses
have been borne by the Company.
Costs and effects of compliance with environmental laws (federal state and
local).
The Company has not had any significant cost or effect with respect
to compliance with environmental laws, either in the United States or in
Australia.
Number of employees and number of full time employees.
As at March 22, 2004, the total number of employees of the Company
is seven (7) full-time employees of which six (6) were engaged in
production activities and one (1) was engaged in administrative
operations. The Company also uses the services of eleven part-time
employees or contract service employees in the areas of product
development, accounting and sales functions. Over the course of 2004 the
company anticipates that it will be increasing its full-time work force to
47 as needed to support its proposed growth, dependent on future sales
prospects and the availability of capital.
Management's Discussion and Analysis or Plan of Operation
Forward-Looking Statements
Statements made in this Form 8-K, particularly in this section,
which are not purely historical are forward-looking statements with
respect to the goals, plan objectives, intentions, expectations, financial
condition, results of operations, future performance and business of the
Company, including, without limitation, (i) the Company's ability to raise
capital and (ii) statements preceded by, followed by or that include the
words "may," "could," "should," "expects," "projects," "anticipates,"
"believes," "estimates," "plans," "intends," "targets," or similar
expressions.
Forward-looking statements involve inherent risks and uncertainties,
and important factors (many of which are beyond the Company's control)
that could cause actual results to differ materially from those set forth
in the forward-looking statements, including the following: general
economic or industry conditions, either nationally, internationally or in
the communities in which the Company conducts its business, changes in the
interest rate environment, legislation or regulatory requirements,
conditions of the securities markets, the Company's ability to raise
capital, changes in accounting principles, policies or guidelines,
financial or political instability, acts of war or terrorism, other
economic, governmental, regulatory and technical factors affecting the
Company's operations, products, services and prices.
Accordingly, results actually received may differ materially from
results expected in these statements. Forward-looking statements speak
only as of the date they were made. The Company does not undertake, and
specifically disclaims, any obligation to update any forward-looking
statements to reflect events or circumstances occurring after the date
such statements were made.
Plan of Operation
Funding
The Vision Nv business over the last two years has focused on
product development and building its market positioning, presence and
distribution channels. In the last six to nine months, the three key
aspects of expenditure have been:
* Building reseller networks and client opportunities through
its US base in conjunction with its partner AMP5, Inc.
("AMP5");
* Restructuring its channels in Australia and Asia in
conjunction with the addition of a new executive, Michael
Bromley, as Vice President Strategic Business Development &
COO for Asia Pacific;
* Development of INTERScepterTM version 2 with significant
enhancements in functionality and a new underlying platform in
Linux.
Since mid-2003 Vision Nv has focused on arranging major funding that
will enable it to take full advantage of the significant platform that has
been built through its product development and distribution channels.
This funding will drive sales in global markets with a key focus on the
USA. It also enables the company to focus on some new product initiatives
that are aligned to market needs and sales potential.
In the second half of 2003, Vision Nv has been able to acquire
investment funds for working capital of around (Australian)$500,000. This
has enabled it to pay key creditors, cover the salaries of the development
staff in Brisbane, office expenses in Brisbane, Sydney, San Diego and
recently Los Angeles, the employment of new sales and marketing staff, pay
the retainer for AMP5's services, and travel expenses related to the
development of sales efforts in USA, as well as trips to Asia for sales
and investment.
The company continues to obtain bridge financing to meet the key
short term requirements of activating the outsourced sales force in the
USA, ramping up the US operational presence, commencing Asian and UK
sales, and providing additional working capital for specific revenue
related development projects. The bridging is to a main round of funding
that is anticipated within the next six to twelve months in two tranches,
to provide additional working capital for next stage growth in global
markets.
The Company anticipates that sales revenue will commence in second
quarter of 2004 in the USA, Australian, and Asian markets.
New Business Advisors
Vision Nv has engaged the following to assist the company with its
global expansion and in particular US operations :
* Legal - Gray Cary of San Diego, CA - at this time the priorities are
- protection of IP and trading names in US including potential
patent filings
- assist with special contracts for distribution deals that are
being finalized.
- employment issues and contracts as the company increases
its US hires.
- public company requirements
* Web-site development - Guidance, Inc, Marina del Rey, CA
* Corporate and tax advisors - Ernst & Young, San Diego
* US Business Immigration issues - Egan LLC (Allied with Ernst & Young
LLP) of Toronto Canada
* Corporate/Product Marketing - Mindshare
Research & Development
Due to the delays early 2003 in investor funding, new product
development was put on hold until June 2003. In conjunction with new
funding commitments from mid 2003 onwards, the R&D division was revamped
and specific R&D plans were incorporated. This was enhanced with the
opening of the company's new R&D Center in Brisbane during February 2004.
The key component of this has been version 2.0 ("V2") of INTERScepterTM.
V2 is currently in beta test and should be formally released by June 2004.
V2 will provide enhanced sales potential in the company's growing market
place.
Version 2.0 provides a number of major improvements over the current
version 1.2. Apart from the change to a Linux operating environment for the
INTERScepterTM Gateway system component, there are a number of other
improvements in functionality as listed below.
* Port Management
* Simplified and More Flexible Directory Structure
* Intranet Based Management
* Refreshed Intranet Interfaces
* Client Notifications System
* Improved Rollback Support
As a result of global exposure to the Vision Nv Business Model through
investor forums and reseller networks, there is significant interest from
other businesses for the Company to consider adding on synergistic product
modules and expand the product offering.
The INTERScepterTM product provides the underlying Internet Resource
Management platform on which other modules can be added. These will include
modules provided by Vision Nv as well as specialist modules from third
parties such as:
* Whole of network traffic monitoring and analysis tools
* Facilities to monitor, control and charge internet traffic over
mobile telephony (including PDA's with phones)
* Facilities to monitor, control and charge VOIP traffic (an
INTERScepterTM Plus module to be available in 2004)
* Specialist content review modules as "plug-ins"
* Process improvement tools eg video conferencing - a strategic
cooperative marketing alliance with a Texas based company is
currently being finalized
Business Strategy
The strategy to be adopted for the development of a strong, sustainable
market for these products across key global markets incorporates a number of
elements including:
* The continuing development or acquisition of innovative
technology products providing business solutions to the market.
* The strengthening of a global market presence, a clear corporate
and product identity, branding, and wide promotion of the
brand(s).
* The growth of distribution channels through resellers and OEM's
with strong dedicated sales teams to directly market the products
to their own existing and potential clients.
These proposals and initiatives are integral components of a co-
ordinated marketing strategy designed to exploit the identified key market
segments and distribution channels to maximize the potential for the
successful and profitable distribution of the products globally.
Distribution and Marketing
Current Sites - INTERScepterTM is currently installed in 21 sites
covering over 4,000 workstations and 40,000 users in three countries
Australia, USA and Malaysia.
Significant New Sales Initiatives are underway in USA and Australia.
With new investor funding flowing and the listing event completed, the
company's focus is to drive sales. In the USA, all the AMP5 team members (a
key part of Vision's outsourced sales force) are active with sales
opportunities across the USA with Michael Emerson driving the team from the
Company's base in Los Angeles. The company has also commenced a recruitment
campaign for new Business Development and Pre-Sales Technical staff.
The Company is also launching a series of Seminars across the USA over
the next three months in conjunction with AMP5. The first will be in Marina
del Rey, California, where hundreds of local education institutions have been
invited. Feedback so far has been very positive. The second will be in New
York. These seminars will also be used to introduce major new distribution
deals that are currently being finalized, and to bring new channel partners
into the program. The April 27th event will be a visionGATEWAY sponsored
Symposium focusing on "The Escalating Problems of Internet Usage in
Education."
The Company now has twelve channel partners in the USA and are in
negotiations with six other major companies. They are providing a good
spread over Education, Government and Corporate markets.
Michael Bromley is driving the Australasia region from Sydney where new
Australian opportunities are also opening up.
Initiatives with new channels have resulted in a number of government
departments and corporates agreeing to establish trials of INTERScepterTM.
A Melbourne based organization commenced as a channel partner recently.
As part of their review of the potential of INTERScepterTM they conducted a
preliminary survey of existing customers that has yielded great interest.
Negotiations are nearing completion with a major systems distributor to
take INTERScepterTM on board in an "appliance" model variation where
INTERScepterTM will be linked to specific brand name servers and taken to
their major corporate clients.
Private Schools in Queensland - The company has had a recent surge in
interest in INTERScepterTM from a number of private schools in the Brisbane
area as a result of the performance at the Company's existing client, St.
Peter's Lutheran College Indooropilly. The company was referred by a
technical service provider, Etherworks, who has now become a channel partner
to service these clients and to sell to the many others in this segment.
In the Asian markets, while initial interest was high in Malaysia and
Singapore late in 2003, it became subdued over the Holiday season. The
Company believes it will require a more active and regular intervention with
the channels to produce the results it desires in these countries. With the
current hiring of new Business Development and Pre-Sales Technical staff
these objectives can be achieved in the near term.
Reports to Security Holders
The Company will voluntarily deliver to all Security holders an annual
report which will contain audited financial statements.
The Company regularly files reports with the Securities and Exchange
Commission (the "Commission"). These reports include annual reports on Form
10-KSB, quarterly reports on Form 10-QSB and current reports on Form 8-K.
The public may read and copy any materials the Company files with the
Commission at the Commission's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. You may obtain information about the Public
Reference Room of the Commission by calling the Commission at 1 800 SEC 0330.
The Commission also maintains an Internet site that contains reports, proxy
and information statements and other information regarding issuers that file
electronically that may be accessed at the Commission's web site address:
http:// www.sec.gov.
Description of Property
All office space in the company's four offices in USA and Australia is
leased. Each area has the ability for expansion of space required as the
company grows.
Vision Nv's Australian offices are:
Brisbane Office:
Level 1
132 Racecourse Road
Ascot, Queensland 4007
The telephone number is +617 3868 1078 and the telefax number is +617
3868 1074.
Total number of square feet is approximately 3,337, of which the
majority is dedicated to research and development functions. The building in
which the office is located is a modern office building near Brisbane,
Australia. The premises is held subject to a three year lease from February
2004 at an annual rental of (Australian)$84,000.
Sydney Office:
Suites 102 and 103
133 Alexander Street
Crows Nest
New South Wales 2065
The telephone number for the Company's Sydney office is +612 9965 7269
and the telefax number is +612 9439 2738
Total number of square feet is approximately 377, all of which is
dedicated to administrative and sales functions. The building in which the
office is located is a modern office building near Sydney.
The Sydney office has been leased from Excen Corporation since November
2001. It is a fully serviced office facility and includes use of shared
reception staff and board room facilities. The term of the lease is for 12
months, renewable in November at an annual rental of (Australian)$ 35,000.
The USA offices are as follows:
San Diego (Del Mar) Office:
12707 High Bluff Drive
Suite 200
San Diego, California 92130
The office telephone number is 1 858 794 1416 and the telefax number is
1 858 794 1450. The Company is provided a fully serviced office facility at
this location under a quarterly renewable lease with HQ Global Workplaces,
which commenced in March 2003 at an annual rental of (US)$ 2,500.
The Company's San Diego office is part of a fully serviced office with
shared reception and administrative staff and use of boardroom facilities on
the second floor of a modern office building. Of the total number of square
feet approximately all of the space is used for office and administrative
purposes.
This office serves as the Company's main office in the United States
and will be expanded to become the Company's principal office in
approximately two (2) months.
The Company also occupies office space in the Marina del Rey, Los
Angeles. The location is:
4134 Del Rey Avenue
Suite 12
Marina del Rey, California, 90292
The Marina del Rey office telephone number is 1 310 754 3466 and the
telefax number is 1 310 754 4010.
The Marina del Rey office provides fully serviced office facilities
with shared reception and use of boardroom facilities and currently consists
of 220 square feet that is primarily dedicated to sales. It will be expanded
over the coming months. The premises is leased from Guidance, Inc. since
November 2003 and a new lease for one year was entered into in March of 2004
at an annual rental of (US)$ 7,200.
Security Ownership of Certain Beneficial Owners and Management
To the best knowledge of management, the following table sets forth the
beneficial ownership of persons who owned more than five percent (5%) of the
Company's common stock after the acquisition of Vision Nv and the share
holdings of the officers and directors of the Company individually and as a
group. Each person has sole voting and investment or dispositive power with
respect to the shares described as owned. Except for Andrew Brett Wotton,
all shares are owned of record and beneficially. Common Stock is the only
class of securities issued.
NAME OF SHAREHOLDER POSITION NUMBER PERCENTAGE
AND ADDRESS OF SHARES OF
OWNED OWNERSHIP
Aspen Capital Partners Ltd Principal Shareholder 23,000,000 60.8%
206 Tablelands Road
Opotiki, New Zealand
Andrew Brett Wotton (1 and 2) Chairman of the Board 1,100,000 2.9%
206 Tablelands Road of Directors and a
Opotiki, New Zealand Director
Martin Wotton (3) President and a -0- (3) 0%
79 Markwell Street Director
Hamilton, Queensland 4007
Australia
Michael F. Emerson (4) Vice President, Chief 1,700,000 4.5%
25 Reynolds Crescent Executive Officer and
Beacon Hill NSW 2100 a Director
Australia
Trevor W. Tappenden Director 50,000 0.13%
9 Hawksburn Close
South Yarra VIC 3141
Australia
Michael Bromley Vice President 150,000 0.4%
9/26 Parriwi Road
Mosman NSW 2088
Australia
All Officers and Directors
As a Group (4 Persons) 26,000,000 68.75%
____________________
(1) All of the shares owned by Aspen Capital Partners Limited, ("Aspen"), a
New Zealand corporation, (i.e. 23,000,000 shares) are attributable to
Andrew Brett Wotton because he is the sole shareholder and a director
of said corporation. As a result of these holdings and the holdings
described in Note 2 below, Andrew Brett Wotton and Aspen may be deemed
to be principal shareholders and parents of the Company.
(2) Includes 350,000 shares individually owned by Andrew Brett Wotton and
750,000 shares owned by Aspen Horticulture Limited., also a New Zealand
corporation, of which Andrew Brett Wotton is the sole shareholder. As
stated above in Note 1, Andrew Brett Wotton may be deemed the
beneficial holder of the 23,000,000 shares of Aspen. Therefore, the
total number of shares either owned by Andrew Brett Wotton beneficially
directly or indirectly held by him is 24,100,000.
(3) Martin G. Wotton disclaims any beneficial interest in any of the shares
either owned by or attributable to his brother Andrew Brett Wotton.
(4) Excludes 1,000,000 Shares of Common Stock issuable (but not yet issued)
to Mr. Emerson as part of executive remuneration arrangements. See
"Executive Compensation."
(5) Excludes 300,000 Shares of Common Stock issuable (but not yet issued)
for non-capital raising services under the provisions of the
Reorganization Agreement.
(6) Assumes all of the Shareholders of Vision Nv will exercise their right
under the Reorganization Agreement to exchange their shares in Vision
Nv for shares of the Company.
Directors and Executive Officers, Promoters and Control Persons
The following table sets forth the names, positions held and ages of
the Company's new directors and officers as of the date of this Report:
NAME AGE POSITIONS WITH
THE COMPANY
Andrew Brett Wotton 47 Chairman of the Board of Directors
and a Director
Martin G. Wotton 42 President and a Director
Michael Emerson 54 Vice President, Chief Executive
Officer and a Director
Michael Bromley 38 Vice President, Chief Operating
Officer for Asia Pacific
Trevor W. Tappenden(1) 57 Director
________________________
(1) Mr. Tappenden is not an employee of the Company
Each director is newly appointed to the Company since March 4, 2004;
however, all have served previously with Vision Nv for varying periods from
November 2001 until the present.
Each director is appointed until the next annual meeting of
shareholders and until his successor is elected and qualified.
There are no family relationships between the officers and directors
named above; except that Andrew Brett Wotton, Chairman of the Board of
Directors, and the sole shareholder and a director of Aspen Capital Partners
Limited ("Aspen"), a principal shareholder and a parent of the Company, is
the brother of Martin G. Wotton who is the President of the Company and a
director of Aspen and the Company. At the present time there are no
committees of the Board of Directors and no executive or audit committee in
particular because the Board has not had time to make new appointments as
yet; however, the Board will make appointments to these and other committees
within a short time. It is expected that Mr. Tappenden will become the
Chairman of the Audit Committee when formed. The Company is also mindful of
its obligations under the Sarbanes-Oxley Act with respect to directors and
will comply as soon as possible.
All of the directors and officers named above are residents of
Australia or New Zealand. The Board intends to expand its membership and
will propose for election or appointment, where appropriate, American
directors to the Board. It is anticipated that Michael F. Emerson will
devote most of his time to the Company's business affairs based in the United
States.
Background Information of Directors and Officers
Andrew Brett Wotton. Mr. Wotton has been a director of Vision Nv since
March of 2002 and is presently Chairman of the Board of Directors of the
Company. Mr. Wotton established Aspen Capital Partners Limited ("Aspen") in
August 2001 as a vehicle to diversify his extensive New Zealand held
investments, specifically in the horticultural industry. Mr. Wotton is a
director and sole shareholder of Aspen. Since 1990, Mr. Wotton has been an
officer and a director of Aspen Horticulture Limited, a New Zealand
corporation, involved in the ownership of kiwifruit orchard properties and
contract management services.
Martin G. Wotton. Mr. Wotton has been Chairman of the Board of
Directors of Vision Nv since November of 2001 and is currently the President
and a Director of the Company, having been appointed on March 4, 2004. Since
August 2001, Mr. Wotton has also been a director and an officer of Aspen
Capital Partners Limited ("Aspen"). Aspen is the Company's principal
shareholder as a result of the exchange of shares which took place on March
4th 2004. Since July 2001, Mr. Wotton has also been Chairman of Software
Innovisions Pty Ltd, a new principal second tier subsidiary of the Company
resulting from the Company's acquisition of Vision Nv. Previously, Mr.
Wotton was also Chairman of VisionGlobal Corporation (from 1998 - present), a
Nevada corporation, ("VisionGlobal") which was a development-stage
corporation located in the United States and which proposed to engage in the
business of providing wireless broadband Internet services, among other
potential services. However, VisionGlobal was not able to raise sufficient
capital to either engage in business or develop its proposed product and in
2001, VisionGlobal filed for Chapter 7 Bankruptcy protection under the US
Bankruptcy Code. The case is still pending in the United States District
Court, Bankruptcy Division, for the Northern District of California in San
Francisco, California, and is not as yet resolved.
Mr. Wotton is a graduate of the New Zealand Commercial Pilot's School,
class of 1981, and upon completion of his course requirements, he received
commercial pilot qualifications and he also completed a flight instructor's
rating. Mr. Wotton also holds Australian Securities Course Credits (1986-
1988); and has been an Australian Securities Dealer Representative (1986
1996) and acted as a Senior Equity Derivatives Representative (1992 - 1996).
Michael F. Emerson. Mr. Emerson has acted as Vice President and Chief
Executive Officer of the Company since his appointment on March 4, 2004. He
previously has served as Chief Executive Officer and a Director of Vision
Nv since March of 2002 and of visionGATEWAY Pty Ltd (Australia) from October
2001 to the present. His previous business associations include service as a
director of Micel Pty Ltd, Australia, from March 2001 until the present. He
was also Vice President and Business Unit Leader for Cap Gemini Ernst and
Young from May 2000 to February 2001. He was a Partner of and Business Unit
Leader of Ernst & Young, Australia, from November 1989 until May 2000. Mr.
Emerson is a graduate of La Trobe University, Bundoora, Victoria, Australia
class of 1974, where he received the degree of Bachelor of Economics with
Honors. He majored in Mathematical Economics and International Economics.
Trevor W. Tappenden. Mr. Tappenden is a Chartered Accountant in
Australia. He has been a Senior Partner in the firm of Ernst & Young,
Australia, from 1982 until his retirement in March of 2003. In addition,
Mr. Tappenden has served in the following capacities:
Heide Museum of Art Director; Chairman, Finance and Audit 2002 - Present
Committee; member of the Capital and
Fund raising Committee; Chairman of
The Board of Directors (as of August
2002.
Mietta Foundation (Foundation to support younger people 2002 - Present
in the Arts and Food Industries);
Board Member.
Victorian Interpreting (State Government Enterprise); Board 2002 - Present
And Translation Service Member.
Southern Rural Water Member of Audit Committee 2002 - Present
Hawthorn Football Member, President's Advisory Board. 2001 - Present
Club
CEDA Director, Chairman, Audit Committee 2000 - Present
RMIT School of Business Member, Dean's Advisory Board 2000 - Present
RMIT University Member of Council; Chairman of 2003 - Present
Audit and Risk Management
Committee
RMIT Vietnam Holdings Director 2003 - Present
Dairy Food Safety Victoria Director 2003 - Present
Ernest Heine Family Foun- (Charitable Foundation) Co-Trustee 1997 - Present
dation
Buckfast Pty Ltd (Investment Company); Director; Sec- 1982 - Present
retary
Kelso Investments Australia (Investment Company); Director 1997 - Present
Pty Ltd
Mr. Tappenden is also a member of the following professional associations:
Associate of the Institute of 1996 - Present
Chartered Accountants in Australia
Fellow of the Institute of 1989 - Present
Company Directors
Fellow of the Taxation 1986 - 2003
Institute of Australia
Affiliate of the Securities 1982 - 2003
Institute of Australia
Registered Company Auditor 1982 - 2003
Mr. Tappenden graduated from the Institute of Chartered Accountants in
1976 from which he received his qualification as a Chartered Accountant in
Australia.
Michael Bromley has been a Vice President of the Company and Chief
Operating Officer for Asia Pacific since September 2003. From 1993 to 1995
he was Vice President and Branch Manager of Coburn and Meredith, Inc. From
1995 to 1997 he was Vice President and Branch Manager of H.J. Meyers and
Company, Inc. In 1997 to 1998 Mr. Bromley was Executive Vice President for
New Business Development for World Research Advisory. From 1998 to 1999 Mr.
Bromley was Vice President of Business Development for Crossover
Technologies. During 1999 Mr. Bromley was Vice President for Marketing and
Business Development for TV on the Web. From 1999 until 2001 Mr. Bromley was
the Executive Director of AOL Devices (AOL Anywhere), America On Line, Inc.
From 2001 until 2003 Mr. Bromley was Group Director, Strategic Business
Development, Research In Motion, Ltd.
Executive Compensation
The following information represents compensation paid to or agreed to
be paid by Vision Nv or its subsidiaries. There are at present no employment
agreements in effect between the employees of Vision Nv and the Company;
although, it is expected that initially the agreements described here will be
adopted by the Company.
Also, at this time, the Company has no profit sharing, bonus or stock
option or bonus plans in effect.
The Company's Chief Executive Officer and the four most highly
compensated executive officers and other persons deemed significant in terms
of compensation, are listed below.
Chairman - Andrew Brett Wotton
No Compensation has been paid to or accrued for Andrew Brett Wotton. To
date Mr. Wotton has been the owner of Aspen which in turn has a Management
Contract for the provision of services to Vision Nv. He is also a Director
of Aspen and Aspen is the major shareholder of Vision. Aspen has two
contracts with Vision Nv in relation to the provision of services:
* A management services contract with a Management Fee of
(Australian)$100,000 per annum to be paid quarterly. Minimal
payments have been made against this contract. Most payments
have related to payment or reimbursement of relevant expenses for
travel, technology and communication costs.
* Agent agreement in relation to consulting services for sales of
Vision Nv products and payment of commissions. No payments have
been made against this agreement to date.
President - Martin Wotton
Martin Wotton has not received any direct compensation from Vision Nv
over the last two years. To date Mr. Wotton has been an employee of Aspen
which in turn has a Management Contract for the provision of his services to
vision Nv. He is also a Director of Aspen and Aspen is the major shareholder
of Vision. Aspen has two contracts with Vision Nv in relation to the
provision of services:
* A management services contract with a Management Fee of
(Australian)$100,000 per annum to be paid quarterly. Minimal
payments have been made against this contract. Most payments
have related to payment or reimbursement of relevant expenses for
travel, technology and communication costs.
* Agent agreement in relation to consulting services for sales of
Vision Nv products and payment of commissions. No payments have
been made against this agreement to date.
Chief Executive Officer - Michael Emerson
Michael Emerson has an agreement with the Company in relation to the
provision of his services as Chief Executive Officer and Director of the
Company and its subsidiaries.
Reporting directly to the Board of Directors, Mr. Emerson is and always
has been the full time Chief Executive Officer of Vision Nv. During his time
with Vision Nv, Mr. Emerson has been the key member of the team responsible
for developing Vision Nv and its global opportunities. Mr. Emerson is highly
qualified for this position, based on his extensive professional experience,
as well as his role with Vision Nv as a founding member of the executive
team. As the Company expands into the U.S. market, he will build a U.S.-
based management team that is thoroughly familiar with its proprietary
product, global expansion strategies, corporate goals, and methodologies for
achieving those goals. Furthermore, as the Company expands internationally,
it is essential to have senior managerial staff in place who can ensure that
its services and systems remain consistent from country to country. Finally,
Mr. Emerson has been the Chief Executive Officer of Vision Nv since its
corporate restructuring in April 2002, and now he will perform these duties
in the United States for the Company, rather than from afar in Australia. As
Mr. Emerson is already the Chief Executive Officer, and has been a critical
decision-maker who has been instrumental in the development of Vision Nv's
global corporate goals, policies, and strategic initiatives, he is uniquely
qualified to continue in the role as the Company's Chief Executive Officer.
Mr. Emerson will be paid an initial annual salary of (US)$120,000,
reviewable quarterly, plus expenses, and will also receive Company shares,
benefits and other performance incentives such as profit sharing, when
established by the Company.
To date the main components of Mr. Emerson's remuneration have been :
* Salary - base component of (Australian)$10,000 for the period
when Mr. Emerson is working out of Australia, and (US)$10,000 for
the period when he is working out of the USA or other regions
outside Australia.
* Expenses - all reasonable business expenses covering travel, etc
and other expenses paid on behalf of the business would be
payable by the company based on the submission of monthly expense
claims. This would include all core expenses (including
accommodation and provision of a motor vehicle) related to Mr.
Emerson, with his family, operating from the USA or other region
outside Australia, as well as relocation expenses.
* Incentives -
o Profit sharing - by July 2004 or earlier if established,
this contractual arrangement re the services of Mr. Emerson
will enable inclusion in the company/staff profit sharing
facility that is expected to be instigated.
o Shareholding - as a direct result of the role, performance
and loyalty by Mr. Emerson, plus the hardships endured
through delayed payment of remuneration and expenses, the
company agreed in April 2003 to allocate him additional
shares of Common Stock in the Company Of these shares there
remains 500,000 to be allocated in April 2004 and the same
amount in January 2005. This is separate from any stock
that has been previously allocated by way of investment or
the Reorganization of visionGATEWAY Pty Ltd. (Australia)
into Vision Nv.
o Options - Mr. Emerson has been allocated 300,000 options
Issued / Exercisable at (US)$0.50 (10 yr) (subject to
Contract & fixed Vestment dates).
Through MICEL Pty Ltd, a company of which Mr. Emerson is a director and
shareholder, there is an agent agreement in relation to consulting services
for sales of Vision Nv products and payment of commissions. No payments have
been made against this agreement to date.
Vice President Strategic Business Development & COO Asia Pacific - Michael
Bromley
Key elements of Mr. Bromley's remuneration package are as follows :
* Annual Base gross salary - (US)$107,000.
* Annual Incentives based on performance - amount is relative to
percentage of preset goals achieved up to maximum of :
* (US)$50,000 in cash
* equity in the form of warrants for 100,000 shares of
Company stock
* 1% of Net Revenue (defined as Sales less all Commissions)
from the Regions for which he has direct responsibility.
The amount would be payable quarterly based on Revenue
receipts, i.e. related to annual contract payments.
* Payment of Australian Health Insurance premiums through the fund
of his choice to a maximum of (Australian)$5,500 per annum,
indexed according to health fund rate changes.
* Sign-on incentive of 150,000 shares of Company stock which were
allocated on the successful completion of three months
employment.
* Living Away From Home Allowance expatriate arrangement while
based in Australia covering apartment rental.
The following table summarizes the compensation previously paid to the
new officers and directors of the Company by Vision Nv. For information
relating to the compensation paid to the previous officers and directors by
the Company, reference is made to Item 10 "Executive Compensation" in the
Company's Form 10-KSB filed for the year ended April30, 2003, which is hereby
incorporated by this reference.
SUMMARY COMPENSATION TABLE
Secur-
Other ities All
Name and Annual Under- Other
Principal Compen- Restricted lying LTIP Comp-
Position Year Salary Bonus sation tock Options Payouts ensation
M.F.Emerson 2003 A$152,500(1)-0- -0- Nil Nil Nil (2)
M. Bromley 2003 A$ 38,000(3)-0- A$1,400 Nil Nil Nil (2)
________________________
(1) These amounts have been accrued but not yet paid
(2) See "Executive Compensation" above.
(3) Commenced on September 29, 2003
No other payments have been made except for other officers and directors as
per information above.
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to management during the fiscal years ending
April 30th 2003, 2002, 2001 or the year ending 2004.
Certain Relationships and Related Transactions
There are no related transactions except for employment arrangements
between officers and Vision Nv. For information relating to employment
agreements please refer to "Executive Compensation" above.
Aspen Capital Partners Limited and Andrew Brett Wotton may be deemed
parents of the Company due to their ability, directly or indirectly, to
control the Company by virtue of their holdings of Common Stock. As has been
stated in this report, Andrew Brett Wotton is the brother of Martin G. Wotton,
President and a Director. For additional information see "Security Ownership
of Certain Beneficial Holders and Management" above.
Description of Securities
The aggregate number of shares of common stock and the total authorized
capital consists of 75,000,000 shares of $.004 par value per share plus
10,000,000 shares of $.10 par value preferred stock.
The holders of common stock have traditional rights as to voting,
dividends and liquidation. All shares of common stock are entitled to one
vote per share on all matters and there are no preemptive rights or
cumulative voting rights. The common stock is not subject to redemption and
carries no subscription or conversion rights. In the event of liquidation of
the Company, the holders of common stock are entitled to share ratably in
corporate assets after satisfaction of all liabilities, as fixed by the Board
of Directors of the Company.
PART II
Market Price of and Dividends on the Registrant's Common Equity and Related
Stockholder Matters.
The Company's common stock is traded on the OTC Bulletin Board under the
symbol "VGWA." Trading has only very recently commenced and there is no
meaningful history of transactions to date. Currently the Company's Common
Stock was quoted at $2.85 per share.
The number of record holders of the Company's common stock as of March 4,
2004 is approximately 2161 shareholders, which gives effect to the new holders
acquired in the exchange of stock with Vision Nv.
The Company has not declared any cash dividends with respect to its
common stock and does not intend to declare dividends in the foreseeable
future. The future dividend policy of the Company cannot be ascertained with
any certainty at this time. There are no material restrictions limiting, or
that are likely to limit, the Company's ability to pay dividends on its
common stock.
Legal Proceedings.
There are no material legal proceedings pending against the Company and
to the knowledge of management, no federal, state or local governmental agency
is presently contemplating any proceedings against the Company or Vision Nv or
any of their affiliates.
No director, executive officer or affiliates of the Company or any owner
of five percent (5%) or more of the Company's common stock is an adverse party
to any action against the Company or its affiliates or otherwise has a
material interest adverse to the Company or any of its affiliates.
Changes in and Disagreements with Accountants
Mantyla McReynolds & Associates have acted as auditors for the Company
for the past five years. During that period there were no disagreements
between the Company and its auditors.
Watkins, Coffey & Martin (Sydney, Australia) have acted as accountants
and auditors for Vision Nv since 2001. During that period there were no
disagreements between Vision Nv and its auditors.
The firm of Mantyla McReynolds & Associates, who have acted in
the past for the Company, is likely to be appointed as the Company's new
auditors and a report on Form 8-K will be filed as soon as that change is
officially made.
Recent Sales of Unregistered Stock
On March 4, 2004, pursuant to the provisions of the Reorganization
Agreement entered into between the Company (then known as "Chiropractic 21
International, Inc.") and visionGATEWAY, Inc. ("Vision Nv") a Nevada
corporation, the Company issued a total of 36,040,500 shares of its common
stock to all of the shareholders of Vision Nv in exchange for all of the
outstanding common stock in Vision Nv, in a transaction deemed exempt from
registration by virtue of Regulation S of the Rules and Regulations
promulgated under the Securities Act of 1933, as amended, (the "Act").
The shares were issued as restricted stock, subject to restrictions on
further sale and each share bore a legend to the effect that the shares could
not be further transferred without (i) being registered under the Act and
subject to an effective registration statement; or (ii) a valid opinion of
counsel declaring that the proposed sale is further exempt from the
registration provisions of the Act.
Substantially all of the recipients of the shares were residents of
Australia or New Zealand.
For information with respect to additional issues of Restricted Stock see
Item 5 of the Company's Form 10-KSB for the fiscal year ended April 30, 2003,
"Sales of Unregistered and Restricted Securities Over The Past Three Years"
which is hereby incorporated by this reference.
Indemnification of Directors and Officers
Section 78.751(1) of the Nevada Revised Statutes ("NRS") authorizes a
Nevada corporation to indemnify any director, officer, employee or corporate
agent "who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, either civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation" due to his or her corporate role.
Section 78.751(1) also extends this protection "against expenses,
including attorney's fees, judgements, fines and amounts paid on settlement
actually and reasonably incurred by him in connection with the action, suit
or proceeding if he acted in good faith and in a manner which he reasonably
believed to be not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful."
Section 78.751(2) of the NRS also authorizes indemnification of the
reasonable defense or settlement expenses of a corporate director or officer,
employee or agent who is sued, or is threatened with suit, by or in the right
of the corporation. The party must have been acting in good faith and with
the reasonable belief that his or her actions were not opposed to the
corporation's best interest.
Unless the court rules that the party is reasonably entitled to
indemnification, the party seeking indemnification must not have been found
liable to the corporation. To the extent that a corporate director, officer,
employee or agent is successful on the merits or otherwise in defending any
action or proceeding referred to in Section 78.751(1) or Section 78.751(2),
Section 78.751(3) of the NRS requires that he or she be indemnified against
expenses, including attorney's "fees actually and reasonably incurred by him
in connection with the defense."
Section 78.751(4) of the NRS limits indemnification under Section
78.751(1) and 78.751(2) to situations in which either (i) the stockholders;
(ii) the majority of a disinterested quorum of directors; or (iii)
independent legal counsel determine that indemnification is proper under the
circumstances. Pursuant to Section 78.751(5) of the NRS, the corporation may
advance an officer's or director's expenses incurred in defending any action
or proceeding upon receipt of an undertaking.
Section 78.751(6)(a) provides that the rights to indemnification
and advancement of expenses shall not be deemed exclusive of any other rights
of any bylaw, agreement, stockholder vote or vote of disinterested directors.
Section 78.751(6) extends the rights to indemnification and advancement of
expenses to former directors, officers, employees or agents as well as their
heirs, executors and administrators. Regardless of whether a director,
officer, employee or agent has the right to indemnity, Section 78.752 allows
the corporation to purchase and maintain insurance on his or her behalf
against liability resulting from his or her corporate role.
Article VIII of the Company's bylaws provides for the mandatory
indemnification and reimbursement of any director or executive officer for
actions or omissions in such capacity, except for claims or liabilities
arising out of his or her own negligence or willful misconduct.
PART F/S
The audited financial statements of the Company will be provided
as soon as they become available, in any event, within 75 days from the date
of this report on Form 8-K.
PART III
Item 3 Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events and Regulation FD Disclosure
None
Item 6. Resignations of Registrant's Directors
Pursuant to the terms of the Reorganization Agreement the Company's
officers and directors prior to March 4, 2004 resigned and appointed officers
and directors of Vision Nv to serve in their place. The newly appointed
officers and directors will serve until the next annual meeting and until
their successors are elected and qualified.
See Item 1. "Changes in Control" and "Officers and Directors" in Item 2
for additional information
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
The Financial Statements for the business acquired (i.e. Vision
Nv) will be provided as soon as they become are available, but,
in any event, within 75 days of this Current Report on Form 8-K.
(b) Pro Forma Financial Statements
The pro forma financial statements will be provided as soon as
they are available, but, in any event, within 75 days of this
Current Report on Form 8-K.
(c) Exhibits:
Exhibits attached with this Report are as follows:
Exhibit
Number Description
2.1 Reorganization Agreement entered into between
Chiropractic and Vision Nv together with
Exhibits and Schedules
2.2 Addendum to the Agreement and Plan of Reorganization
Item 8. Changes in Fiscal Year
Not Applicable
Item 9. Regulation FD Disclosure
Reference is made to the Form 8-K current report filed by the Company on
March 4, 2004. The press release attached to such Form as an exhibit is
specifically incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, as amended, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned hereunto duly authorized.
visionGATEWAY, Inc.
Date: April 4, 2004
By/s/Martin G. Wotton
President