UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OF 15(d)OF THE SECURITIES EXCHANGE ACT
OF
1934
For the quarterly period ended September 30, 2000
------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
--------- ------
Commission file number 000-28335
----------------
Web4Boats.com, Inc.
- - -----------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 84-1080043
- - ---------------------------------- ------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
P.O. BOX 1028
LA JOLLA, CALIFORNIA 92038
- - -----------------------------------------------------------------------------
(Address of principal executive office)
(858) 459-2628
- - -----------------------------------------------------------------------------
(Issuer's telephone number)
- - -----------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report)
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: 10,341,793
Transitional Small Business Format (Check one): Yes [ ] No [x]
WEB4BOATS.COM, INC.
FORM 10-QSB
TABLE OF CONTENTS
Page
PART I--FINANCIAL INFORMATION---------------------------------------- 3
Item 1. Financial Statements---------------------------------------- 3
Independent Accountant's Review Report-------------------------- 3
Balance Sheets-------------------------------------------------- 4
Statements of Operations---------------------------------------- 6
Statements of Cash Flows---------------------------------------- 8
Notes to Financial Statements----------------------------------- 9
Item 2. Management's Discussion and Analysis or Plan of Operation--- 13
PART II--OTHER INFORMATION------------------------------------------- 19
Item 1. Legal Proceedings------------------------------------------- 19
Item 2. Changes in Securities--------------------------------------- 19
Item 3. Defaults Upon Senior Securities----------------------------- 21
Item 4. Submission of Matters to a Vote of Security Holders--------- 21
Item 5. Other Information------------------------------------------- 21
Item 6. Exhibits and Reports on Form 8-K---------------------------- 21
10(1) Consulting Agreement Stock Exposure, Inc. 7/31/2000---- 21
10(2) Agreement for Landers' Services 9/1/00----------------- 21
27 Financial Data Schedule-------------------------------- 21
Signatures----------------------------------------------------------- 22
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements.
Independent Accountant's Review Report
October 26, 2000
To the Board of Directors and Shareholders
of Web4Boats.com, Inc.:
I have reviewed the accompanying balance sheets of Web4Boats.com, Inc. as of
September 30, 2000 and 1999, and the related statements of operations for
each of the three months and six months then ended, and the related
statements of cash flows for each of the six months then ended, in accordance
with Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. All information included
in these financial statements is the representation of the management of
Web4Boats.com, Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than
an audit in accordance with generally accepted accounting standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Web4Boats.com, Inc. will continue as a going concern. As discussed in Note 7
to the financial statements, the Company has suffered recurring losses from
operations and has a net capital deficiency that raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
Carl S. Sanko
Topanga, California
Web4Boats.com, Inc.
Balance Sheets
September 30, 2000 and 1999
September 30, September 30,
2000 1999
Assets
Current assets
Cash $ 247 $ 41,349
Prepaid consulting fees 52,000 0
Prepaid advertising 140,083 0
Total current assets 192,330 41,349
Property and equipment
Equipment 2,444 31,160
Accumulated depreciation ( 488) ( 1,243)
Property and equipment, net 1,956 29,917
Other assets
Trademarks, net 8,565 12,144
Total other assets 8,565 12,144
Total assets $ 202,851 $ 83,410
See accompanying notes to financial statements
- Unaudited -
Web4Boats.com, Inc.
Balance Sheets
September 30, 2000 and 1999
September 30, September 30,
2000 1999
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 338,991 $ 56,088
Accrued expenses 6,643 2,378
Accrued litigation settlement 42,500 42,500
Short-term borrowings 167,100 36,000
Total current liabilities 555,234 136,966
Shareholders' equity (deficit)
Preferred stock, par value $.001,
20,000,000 shares authorized,
0 and 10,000 issued and
outstanding at September 30, 2000
and 1999, respectively 0 10
Common stock, par value $.001,
100,000,000 shares authorized,
10,341,793 and 4,683,460 issued
and outstanding at September 30, 2000
and 1999, respectively 10,342 4,683
Paid in capital 2,916,072 2,020,151
Accumulated deficit (3,278,797) (2,078,400)
Total shareholders' equity ( 352,383) ( 53,556)
Total liabilities and shareholders' equity $ 202,851 $ 83,410
See accompanying notes to financial statements
- Unaudited -
Web4Boats.com, Inc.
Statements of Operations
For the Six Months Ended September 30, 2000 and 1999
6 Months Ended 6 Months Ended
September 30, September 30,
2000 1999
Revenues $ 1,848 $ 72
Operating expenses:
Salaries 31,250 31,250
General and administrative 903,841 121,084
Total operating expenses 935,091 152,334
Loss from operations (933,243) (152,262)
Other income:
Gain on disposed operations 0 72,551
Net loss $ (933,243) $ (79,711)
Basic and dilutive loss per share $ (.13) $ (.02)
See accompanying notes to financial statements
- Unaudited -
Web4Boats.com, Inc.
Statements of Operations
For the Three Months Ended September 30, 2000 and 1999
3 Months Ended 3 Months Ended
September 30, September 30,
2000 1999
Revenues $ 1,658 $ 72
Operating expenses:
Salaries 15,625 15,625
General and administrative 681,447 81,454
Total operating expenses 697,072 97,079
Net loss $ (695,414) $ ( 97,007)
Basic and dilutive loss per share $ (.08) $ (.02)
See accompanying notes to financial statements
- Unaudited -
Web4Boats.com, Inc.
Statements of Cash Flows
For the Six Months Ended September 30, 2000 and 1999
6 Months Ended 6 Months Ended
September 30, September 30,
2000 1999
Cash flows from operating activities
Net loss $ (933,243) $ (79,711)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation and amortization 1,334 1,449
Common stock issued for services 482,245 31,250
Gain on disposal of segment 0 (72,551)
Changes in operating assets and
liabilities
Inventory 0 5,340
Accounts payable 182,335 (8,982)
Accrued expenses 4,237 (11,457)
Short-term borrowings 120,100 (14,000)
Net cash provided by (used in) operating
activities (142,992) (125,748)
Cash flows from investing activities
Sale of business operations 0 103,308
Purchases of fixed assets 0 (31,160)
Sale of fixed assets 26,187 (31,160)
Purchases of trademarks 0 (12,350)
Deposits refunded 0 6,316
Net cash provided by (used in) investing
activities 26,187 66,114
Cash flows from financing activities
Proceeds from issuance of preferred stock 0 100,000
Issuance of common stock in payment of
interest payable 95,992 0
Net cash provided by (used in) financing
activities 95,992 100,000
Net increase (decrease) in cash (20,813) 40,366
Cash, beginning of period 21,060 983
Cash, end of period $ 247 $ 41,349
See accompanying notes to financial statements
- Unaudited -
NOTES TO FINANCIAL STATEMENTS
NOTE 1 Summary of significant accounting policies
Organization and business
Web4boats.com, Inc. ("the Company"), a Delaware Corporation, was
incorporated on February 4, 1994 as New York Bagel Exchange, Inc. Commencing
September 26, 1995, the Company has operated in the business of wholesale and
retail sales of bagels, sandwiches, baked goods, specialty coffees and related
items. On August 22, 1997, the Company acquired the assets and liabilities of
Windom, Inc., a non-operating public shell, resulting in the retirement of all
the common and preferred shares of both companies, and the reissuance, by the
Company, of 2,594,560 shares of common stock. The merger was accounted for,
in substance, as an issuance of stock for the net monetary asets of Windom,
Inc. on August 22, 1997, and the financial statements presented are those of
New York Bagel Exchange, Inc. since the date of its formation. Subsequent to
the merger, the Company continued its wholesale and retail operations. On
January 26, 1999, New York Bagel Exchange, Inc. changed its name to
Webboat.com, Inc., on April 2, 1999, Webboat.com, Inc. changed its name to
Windom.com, Inc., and on April 20, 1999, Windom.com, Inc. changed its name to
Web4boats.com, Inc.
On March 22, 1999, the Board of Directors approved sale of the Company's
inventory and fixed assets for $120,000. The Company ceased its business
operations on March 25, 1999. The actual disposal date of assets subject to
the sale was on April 19, 1999. A gain of approximately $72,000 resulted upon
the disposition. Per Accounting Principles Board opinion No. 30, since the
disposal date occurred subsequent to fiscal year 1999, the gain is to be
recognized when realized, which was in the quarter ended June 30, 1999.
During fiscal year 1998, the Company began making plans to develop a
commercial internet site in which boat builders, manufacturers, dealers,
marinas, individual buyers and sellers would come to advertise sales and
services related to the boating industry. In fiscal 1998, the Company
incurred $259,375 of expense for marketing, consulting and other services
related to development of the Company's new business operations. In April,
1999, the Company issued 1,010,000 shares of its common stock as full payment
for these services. Subsequently, for the year ended March 31, 2000 and
through the six months ended September 30, 2000, the Company has continued to
invest substantially in website development and related costs. The Company
expects, as a going concern, to realize future benefits from these costs.
However, all such development costs are expensed as incurred.
The Company had no revenues from its internet site for the six months
ended September 30, 1999 and only minimal revenues for the six months ended
September 30, 2000. The Company expects, as a going concern, to derive
substantial revenues from the sale of advertisements in the remaining
quarters of fiscal year 2000.
Property and equipment
Equipment is recorded at cost and depreciated over estimated useful lives
of five years using the straight-line method. Trademarks are recorded at cost
and amortized over estimated useful lives of five years using the straight-
line method.
Sale of operating assets
In April, 2000, the Company paid $5,000 and returned $31,160 in computer
equipment it had purchased in July, 1999, from a vendor involved in the
development of the Company's e-commerce website in settlement of $15,500 in
payables to the vendor, of which $11,750 was accrued as of March 31, 2000.
The sale resulted in a loss of $15,687 for the quarter ended September 30,
2000.
Income taxes
The Company has net operating loss carryforwards from fiscal years 2000
and earlier of approximately $2,198,000 and $2,195,000 for federal and
California state tax purposes, respectively. With additional loss for the
six months ended September 30, 2000, the Company has total net operating
loss carryforwards at September 30, 2000 of approximately $3,133,000 and
$3,129,000 for federal and California state tax purposes, respectively. A
deferred asset for these amounts has not been accrued due to the uncertain
nature of its being realized. Net operating loss carryforwards begin to
expire in fiscal year 2011 and 2004 for federal and California state tax
purposes, respectively.
Earnings per share
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding during each three month period.
NOTE 2 Shareholders' equity
Compensatory stock issuance
During the six months ended September 30, 1999 and 2000, the Company
received salary compensation valued at $31,250 in exchange for common stock.
Stock options
During fiscal year 1998, the Company recorded a charge to operations of
$687,500 for marketing and other services in exchange for issuance of stock
options. The value for such services was computed as the difference between
the quoted market price at the option's measurement date and the option price.
All options were exercisable at time of grant and no options have been
exercised as of September 30, 2000. The number of shares represented by
stock options outstanding at September 30, 2000 are 3,607,667 shares with an
option price of $.15 to $1.00 per share, and $1,507,698 in total, and with a
market price at date of grant of $.16 to $2.00 per share, and $2,046,370 in
total. Outstanding options expire on various dates from June, 2001 to
March, 2003. Included in stock options outstanding at September 30, 2000,
are 1,500,000 shares which were determined to have a fair value per option
of $.073 as of the date of grant using the Black-Scholes option pricing
model with the following assumptions: expected price volatility of 57.7%,
expected option lives of three years, risk free interest rate of 6.0%.
Stock redeemed and issued
In April, 1999, the Company contractually redeemed, at par value,
1,215,000 shares of common stock, representing all the outstanding stock held
by a former officer of the Company. The Company then issued 500,000 shares of
restricted common stock and stock options representing 500,000 shares of
common stock to a new officer as consideration for future services to be
rendered.
Preferred stock
In June, 1999, the Company authorized the issuance of 20,000,000 shares of
$.001 par value, preferred stock. In August, 1999, 10,000 shares of preferred
stock was designated as Series A preferred stock with conversion rights of one
share of Series A preferred to 100 shares of common stock. Subsequently, the
10,000 shares of Series A preferred was sold for $100,000 to a related party.
A beneficial conversion feature of $100,000 was present in the transaction and
is reflected in stockholders' equity at September 30, 2000.
In August, 2000, the outstanding 10,000 shares of Series A preferred stock
were converted to 1,000,000 shares of common stock. The Series A preferred
shares were then cancelled and returned to the status of authorized and
unissued.
NOTE 3 Related parties
Short term borrowings
At March 31, 1999, the Company had unsecured promissory notes, inclusive
of accrued interest, of $57,713, payable to two shareholders. The notes bear
annual interest at rates of 10% to prime plus two percent. The notes were
exchanged for 150,000 shares of stock in April, 1999.
During the six months ended September 30, 2000, the Company received
$140,000 from eight lenders, two of which were related parties, in exchange
for promissory notes with interest at 12% per year and terms ranging from
seven days to six months. As inducement to obtain the unsecured loans, the
Company issued a total of 560,000 shares of common stock, valued at $123,800,
of which $95,992 was recorded as interest expense during September 30, 2000.
At September 30, 2000, the Company had unsecured promissory notes, inclusive
of accrued interest, of $173,743, payable to eight shareholders, and that bear
annual interest at rates of 10% to 12%.
Stock options
Represented in outstanding stock options are 3,320,000 shares at September
30, 2000, to related parties.
NOTE 4 Statements of Cash Flows
Financial instruments
The Company considers all liquid interest-earning investments with a
maturity of three months or less at the date of purchase to be cash
equivalents.
Noncash transactions
During the six months ended September 30, 1999, the Company issued
1,010,000 shares of its common stock to third parties as compensation for
$259,375 in services accrued as of March 31, 1999, and 150,000 shares to
related parties in cancellation of $57,713 in short term borrowings and
accrued interest.
During the six months ended September 30, 2000, the Company issued
3,748,333 shares of its common stock, of which 1,983,333 shares were to
related parties. The shares were compensation in exchange for $406,806 in
services, of which $124,828 had been accrued at March 31, 2000 and $192,083 is
a prepaid expense at September 30, 2000.
Interest paid
During the six months ended September 30, 1999, the Company charged to
operations interest expense of $778 and paid no interest.
During the six months ended September 30, 2000, the Company charged to
operations interest expense of $102,157 and paid $250 of interest in cash.
NOTE 5 Commitments and Contingencies
Contract commitments
On April 15, 1999, the Company entered into a one year consulting
agreement, with a related party, under which the Company agreed to pay $10,000
per month, payable in cash or stock, for management and advisory services.
The contract was renewed through March 31, 2001. In July, 2000, 333,333
shares of common stock, valued at $50,000 was issued as payment of services
received from April through August, 2000.
On April 10, 2000, the Company entered into a three month service
agreement, with a third party, under which the Company agreed to pay $6,000
per month for website hosting services. The contract has automatic six month
renewal terms that can extend the contract through March, 2005. The Company's
contractual commitment at September 30, 2000 is $18,000.
During the six months ended September 30, 2000, the Company entered into
contracts with eight vendors of marketing, consulting, and public relations
services, in which the Company will issue 2,060,000 shares of its common stock
in exchange for full payment of services to be received over periods ranging
from three months to one year. As of September 30, 2000, 1,620,000 of the
shares had been issued, having a market value of $261,000.
In July, 2000, the Company entered into contract with a third party ad
agency, under which terms the Company will receive $3,000,000 in advertising
placed in various media in exchange for $150,000 in cash and $2,850,000 in
Company stock. The Company estimates that costs under the contract will be
incurred in increments of $250,000 every six months with a contract completion
date of June, 2006. At September 30, 2000, $203,500 had been billed and
accrued as a current liability under the contract.
Litigation
During fiscal 1999, a lawsuit was filed against the Company in which the
plaintiff, a former officer, claimed breach of employment contract related to
fiscal year 1998. In May, 1999, the dispute was settled for $42,500. The
unpaid settlement amount is accrued as of September 30, 2000 and 1999.
NOTE 6 Subsequent events
Stock issued
In October, 2000, the Company issued 500,000 shares of common stock to a
related party in payment of $80,000 in management services accrued at
September 30, 2000.
NOTE 7 Going concern
The Company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability to continue
as a going concern. During fiscal year ended March 31, 1999, as a result of
not being able to meet its obligations as they became due, the Company saw no
alternative but to sell its operating assets, as described in Note 1 above.
Note 1 also describes management's plans in regard to perpetuating its
existence through new operations related to internet marketing and the
boating industry. The Company has the ability to raise funds through the
public equity market and, as stated in Notes 2, 3 and 4, has paid significant
liabilities to related and other parties with common stock and raised
substantial funds from a related party in the private sector as well.
While such plans and fundraising ability seem to mitigate the effect of
prior years' losses and deficits, the Company is essentially only beginning
to market in a new industry. The inability to assess the likelihood of the
effective implementation of management's plans in this new environment also
raises substantial doubt about its ability to continue as a going concern.
Item 2. Management's Discussion and Analysis or Plan of Operation.
You should read the following discussion of our results of operations
and financial condition in conjunction with our consolidated financial
statements and related notes included elsewhere in this Form 10-QSB. Unless
specified otherwise as used herein, the terms "we," "us" or "our" refers to
Web4Boats.com, Inc.
The following Management's Discussion and Analysis or Plan of Operation
contains certain forward-looking statements regarding future financial
condition and results of operations and the company's business operations.
We have based these statements on our expectations about future events. The
words "may," "intend," "will," "expect," "anticipate," "objective,"
"projection," "forecast," "position" or negatives of those terms or other
variations of them or comparable terminology are intended to identify
forward-looking statements. We have based these statements on our current
expectations about future events. Although we believe that our expectations
reflected in or suggested by our forward-looking statements are reasonable,
we cannot assure you that these expectations will be achieved. Our actual
results may differ materially from what we currently expect. Important
factors which could cause our actual results to differ materially from the
forward-looking statements include, without limitation: (1) general economic
and business conditions, (2) effect of future competition, and (3) failure to
raise needed capital.
OVERVIEW
Prior to entering into the Internet market and boating industry, the
Company, as a non-operating entity, merged with a business known as New York
Bagel Exchange, Inc. in September 1997. (For accounting purposes, the merger
resulted in a continuation of the bagel company's operations.) The Company
engaged in the business of wholesale and retail sales of bagels, sandwiches,
baked goods, specialty coffee and related items at a single store. The
Company's Board of Directors approved the sale of the Company's inventory and
fixed assets and ceased the bagel related operations on March 25, 1999. The
actual sale of assets was on April 19, 1999. All management of New York
Bagel Exchange, Inc. resigned and new management was subsequently appointed.
On April 20, 1999, the Company changed its name (and direction of its
business) to Web4Boats.com, Inc. and commenced developing a commercial
Internet site in which boat dealers, marinas, individual buyers and sellers
would come to advertise sales and services related to the professional and
recreational boating industry.
To date, the Company has had almost no revenue from any of its website
or related operations. The Company's two revenue streams are: (1) affiliate
programs and (2) advertising, particularly classified advertising of boats
for sale.
We are currently set up to derive revenue from fees and commissions from
affiliate programs, such as Amazon.com, Hoosie Boat Transport, Voyager
Insurance Services, Inc., West Marine, and Marine Express. We expect to add
to these revenue generating opportunities with future revenues from fees paid
by banner advertisement placements and links to other websites. It is
anticipated that the enhancement of the website would include Boat
Dealers/Brokers, Boat Builders/Manufacturers, Marinas, and other recreational
suppliers having access to our program and services by paying initial
placement fees, as well as ongoing monthly fees based upon, among other
things, the size of territory, demographics and the transmittal of purchase
requests to them.
We anticipate that we will derive direct revenue from the volume of
purchases made as a result of visiting our website. We also believe our
ability to attract subscribing dealers/brokers and other affiliates for our
website, is directly related to the volume of visits and subsequent purchases
we expect to occur as a result of a visit to our website. As of November 4,
2000, we have had an historic average of approximately 5,715 impressions per
day with an historic average of approximately 142 user sessions per day. The
Company believes this is a fair approximation of the use of the site by the
boating public at this time because most of the development work by website
designers visiting the site has been completed.
It is anticipated that sales and marketing costs will consist primarily
of promotion and advertising to build brand awareness and encourage potential
customers to visit our website. We will use Internet advertising, as well as
traditional media, such as television, radio and print. The majority of our
Internet advertising expense is expected to be comprised of sponsorship and
banner advertising agreements with Internet portals such as Alta Vista,
Excite, and Lycos as well as advertising and marketing affiliations with
online boating and recreational information providers. The Internet portals
and online boating and recreational information providers charge a
combination of set-up, initial, annual, monthly and variable fees. Set-up
fees are incurred for the development of the link between our website and
their website. No such banner advertising is currently in place due to the
company's lack of capital.
The Company began accruing commissions from products being purchased by
Web4Boats.com viewers being linked to the company's affiliation program in
September, 1999. Revenues from that buying through September 30, 2000,
however, continues to be minimal.
The Company expects to derive substantially all of its revenues from the
sale of advertisements, particularly classified advertisements of boats for
sale. The Company's revenues are derived principally from the sale of
advertisements on short-term contracts. The Company's standard rates for
advertising currently range from $25-100 per 1,000 impressions. The Company
currently has no banner advertisers and its impressions are currently running
approximately 5,715 per day.
The Company has an extremely limited operating history as an Internet
company, and its prospects are subject to the risks, expenses and
difficulties frequently encountered by companies in the new and rapidly
evolving markets for Internet products and services. The Company's operating
results may fluctuate significantly in the future as a result of a variety of
factors, many of which are outside the Company's control. These factors
include the level of usage of the Internet, demand for Internet advertising,
seasonal trends in both Internet usage and boat advertising placements, the
advertising budgeting cycles of individual advertisers, the amount and timing
of capital expenditures and other costs relating to the expansion of the
Company's operations, the introduction of new products or services by the
Company or its competitors, pricing changes in the industry, technical
difficulties with respect to the use of Web4Boats.com, general economic
conditions and economic conditions specific to the Internet and online media.
As a strategic response to changes in the competitive environment, the
Company may from time to time make material pricing, service or marketing
decisions that effect the Company's business. Due to all of the foregoing
factors, in some future quarter the Company's operating results may fall
below the expectations.
RESULTS OF OPERATIONS
Revenues for the six months ended September 30, 2000 were $1,848.
Operating expenses consisted of salaries and general and administrative
expenses. General and administrative expense primarily consists of
executive, consulting, financial and legal expenses and related costs.
General and administrative expense was $$681,447 and $$81, 454 for the three
months ended September 30, 2000, and 1999 respectively. Virtually all of
these amounts are related to development of the website business and include
amounts owed to Internet Advisors Group, Inc. or Blair Merriam, its sole
shareholder and employee, for day-to-day management services which has
generally been met with the issuance of shares of Common Stock. The
resulting net loss for the three months ended September 30, 2000, was
$(695,414) or $(.08) per share. In April, 2000, all rights and obligations
of Internet Advisors Group, Inc. under the agreement were assigned to Blair
Merriam, its sole shareholder and employee. The parties plan to reverse this
assignment in the near future to accommodate Mr. Merriam's personal financial
interests which should have no effect on the Company. In addition, the
agreement was renewed for a period to expire March 31, 2001.
The Company does not have any non-officer employees, and no cash
salaries or wages are currently being paid. Depending on the success of the
operation and the availability of funds the Company hopes to begin to
establish an internal management team and staff. Poor business results could
delay this plan indefinitely. Under the terms of the agreement with Internet
Advisors Group, Inc. the Company is obligated to pay ten thousand dollars
($10,000) per month that "may be made in either cash, stock, or any
combination thereof." Because the fees may be paid in stock, the Company
does not believe it will have any problems meeting its payment obligations
under this agreement over the next twelve months. In April, 2000, the
Company satisfied its March 31, 2000, $115,000 obligation to Internet
Advisors Group, Inc. through the issuance of 1,150,000 shares of Common
Stock. In July, 2000, the Company issued 333,333 shares of Common Stock to
satisfy $50,000 of its obligation to Mr. Merriam. The Company currently owes
Mr. Merriam $6,000.
The prepaid consulting fees and advertising set forth in current assets
on the balance sheet are for agreements with Stock Exposure (consulting)
Securities Compliance Control (consulting), Michael Landers (advertising-
south coastal U.S.) and Hector Beltran (advertising resorts in Mexico).
The accounts payable consist mainly of accounting, legal and website
design and development and advertising ($203,500; See paragraph 4 of Note 5
to the Financial Statements).
The short-term borrowings for the six month period ended September 30,
2000, of $140,000 are for terms that expire over the next few months.
$10,000 of these amounts had been repaid as of the date hereof. These
borrowings were coupled with an issuance of Common Stock ($123,800--560,000
shares) as additional inducement to make the loans. $95,992 of the value of
these shares has been accounted for as additional interest expense.
Overall, the Company's general and administrative expense has increased
substantially. These expenses consisted mostly of payments to consultants to
develop the Company's brand name and promote its features, including
promotion in resort areas of Mexico and Argentina. (The choice of these two
countries for promotional efforts was based mostly on the availability in
those countries of persons with pre-existing business relationships to Mr.
Blair Merriam, the Company's General Manager.) Most of this expense,
however, has been paid with the issuance of the Company's Common Stock, the
value of which is determined at the market bid price on the date of the
contract for the services, or the date of the agreement by the Company and
the service provider to pay the accrued expense with the issuance of Common
Stock. A substantial portion of these shares have been registered under the
Securities Act of 1933, as amended, on Form S-8 which allows for the
registration of securities issued to employees and consultants in non-capital
raising transactions.
LIQUIDITY AND CAPITAL RESOURCES
Although the Company's auditor has issued an opinion questioning the
Company's ability to continue as a going concern, we believe our current cash
and cash equivalents are sufficient to meet our anticipated cash needs for
working capital and capital expenditures for at least the next 12 months.
The Company has been meeting a significant portion of its expenses through
the issuance of Company Common Stock--$482,245 for the six months ended
September 30, 2000--and short-term borrowings--$140,000 also for the six
months ended September 30, 2000. The Company expects to continue issuing
Common Stock and Common Stock options in exchange for services until it has
cash to meet these obligations. These transactions are described in more
detail in the notes to the Financial Statements. Over the past twelve months
the Company has issued 5,658,333 shares of Common Stock, mostly as
compensation ($901,580) to various consultants, lenders, employees and
directors of the Company.
At September 30, 2000, the Company had very little cash. Subsequent to
that date the Company has addressed that problem through short-term
borrowings coupled with shares of Common Stock offered as an inducement for
the loans.
The Company anticipates that capital expenditures in the fiscal year
ending March 31, 2001 will be approximately $250,000, primarily for additions
to the Company's website design and service, most of which has been incurred
and paid. The Company has no current plans on how to obtain additional
funding for the expected expenditures and is evaluating various alternatives.
Inability to obtain funding will substantially slow development of the
Company's operations.
With respect to fiscal years beyond March 31, 2000, we may be required
to raise additional capital to meet our long term operating requirements. If
we are unable to obtain additional financing as needed, we may be required to
reduce the scope of our operations or our anticipated expansion, which could
have a material adverse effect on our business, results of operations and
financial condition. Although our revenues have decreased since
implementation of the Web4Boats.com business, our expenses have continued to,
and in the foreseeable future are expected to, exceed our revenues.
Accordingly, we do not expect to be able to fund our operations from
internally generated funds for the foreseeable future.
Our cash requirements depend on several factors, including:
(1) the level of expenditures on marketing and advertising
(2) the rate of market acceptance
(3) the ability to expand our customer base
(4) the ability to increase the volume of sales with our
affiliates
(5) the cost of contractual arrangements with online
information providers, search engines, and other referral
sources.
PLAN OF OPERATION
The core elements of the Company's website are complete and operational.
Over the next twelve months the Company plans to devote most of its efforts
and financial resources toward increasing awareness of its website among the
boating public and professionals. In July, 2000, the Company engaged the
services of Mr. Hector Beltran to develop awareness of the Company's business
in the coastal resort areas of Mexico. On October 17, 2000, the Company
engaged the services of Carlos Jorge De Baisieux in Argentina for promotional
services similar to those commenced in Mexico's resort areas. Mr. De
Baisieux has had a pre-existing business relationship with Blair Merriam, the
Company's General Manager.
The volume of classified advertisements has reached the point that
management believes it is sufficient, because of its size, to attract boat
buyers and others to the website. In addition, management also believes that
the website traffic will now justify fees for all new ads placed on the
website. Finally, with respect to the classified ads, in July and August the
Company commenced a telemarketing campaign with three independent
telemarketing firms to contact all current classified advertisers with the
proposal of a fee for continued display of their advertisements and all
potential customers on a telephone list of 20,000 registered boat-owners
purchased from a list broker. All three telemarketers will be contracted to
sell advertisements to this list and other lists that will be purchased and
collected as needed to advance the telemarketers. In this way all non-paying
advertisers are expected to be dropped from the displayed data base over the
next 120 days, which is longer than originally anticipated.
Concurrent with the telemarketing campaign directed at classified
advertisers will be the initial concerted efforts at increasing awareness of
the website among the boating public and professionals. The Company plans to
initially arrange most of its links from other websites and magazines through
a barter arrangement under which the other website or magazine will receive a
reciprocal link to its website or services thereby reducing cash outlays.
The Company has begun to seek a significant infusion of capital, $1 - 5
million, to increase awareness of the website among the boating public and
professionals and to continue development of the website. There can be no
assurance that such funding will be available to the Company. In the event
that such funding is not available to the Company, then Web4Boats.com would
be forced to use whatever cash is generated, mostly by its classified
advertisement sector, for enhancement of the website and its promotion. Such
a process of development would likely be much slower than what could be
achieved with the infusion of substantial new investments. Management
believes, however, that the Company's business is relatively easily scalable.
The core elements of the website are in place, and the website is now able to
achieve its purpose. Thereafter, additional funds are devoted mostly to
promotion of the website and enhancement of the core elements. The
availability of funds determines the speed with which promotion and
enhancements are pursued.
Depending upon the ability of the Company to arrange additional
financing, the Company expects to add full time management and staff by the
Spring of 2001, which is later than initially anticipated. Development of
the Company's business could significantly alter the timing of the need for
staff and current plans are tentative. In addition, competition for
qualified internet technology and sales personnel is intense, which is
expected to make it difficult to add personnel on short notice and at the
optimal time for the Company.
KNOWN RISKS AND TRENDS
SEASONALITY
We expect our business to experience the seasonality of the boating and
warm weather recreational equipment industry as it matures.
LIABILITY FOR THE COMPANY'S SERVICES
Web4Boats.com hosts a wide variety of information, community,
communications and commerce services that enable individuals to exchange
information, generate content, conduct business and engage in various online
activities. The laws relating to the liability of providers of these online
services for activities of their users is currently unsettled. Claims could
be made against Web4Boats.com for defamation, negligence, copyright or
trademark infringement, personal injury or other theories based on the nature
and content of information that may be posted online by its users. Such
claims have been brought, and sometimes successfully pressed, against online
service providers in the past. In addition, Web4Boats.com could be exposed
to liability with respect to the selection of listings that may be accessible
through its Web4Boats.com-branded products and media properties, or through
content and materials that may be posted by users in classifieds, message
boards, clubs, chat rooms, or other interactive community-building services.
Any such finding of liability against Web4Boats.com could have a material
adverse effect on the Company's business.
RELIANCE ON ADVERTISING REVENUES AND UNCERTAIN ADOPTION OF THE
INTERNET AS AN ADVERTISING MEDIUM
Web4Boats.com expects to derive a majority of its revenues from the sale
of advertisements on its website pages under short-term contracts. Most of
its advertising customers have limited experience with the Internet as an
advertising medium. Web4Boats.com's continuing ability to generate
significant advertising revenues will depend upon, among other things:
advertisers' acceptance of the Internet as an effective and sustainable
advertising medium; the development of a large base of users of its services
possessing demographic characteristics attractive to advertisers; and its
ability to continue to develop and update effective advertising delivery and
measurement systems. No standards have yet been widely accepted for the
measurement of the effectiveness of Internet-based advertising. Web4Boats.com
cannot be certain that such standards will develop sufficiently to support
Internet-based advertising as a significant advertising medium. In addition,
adverse economic conditions can significantly impact advertisers ability and
willingness to spend additional amounts on advertising generally, and on
Internet-based advertising specifically. In the past few months, investor
have expressed their worry about the viability and growth potential of
Internet companies that rely on advertising as their business model by
severely depressing the price of such company's stock from what was generally
the recent highs of March, 2000. The Company, however, remains confident
that its business model aimed at a niche (albeit large) segment of the
population of consumers (boating enthusiasts) will ultimately be successful.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
Recent Sales of Unregistered Securities
Shares of Common Stock
(1) On August 13, 2000, the Company issued 1,000,000 shares of Common Stock
to Dori Merriam under the terms of her Series A Convertible Preferred Stock.
These shares were valued at $-0- because the value was recorded earlier. See
Articles of Incorporation filed with Form 10SB 11/24/99.
(2) On June 26, 2000, the Company authorized the issuance of 400,000
restricted shares of Common Stock as an inducement to potential lenders of
$100,000 to the Company. These shares were valued at $72,000.
(3) On July 26, 2000 the Company authorized the issuance of 400,000
restricted shares of Common Stock as an inducement to potential lenders to
the Company of $100,000. August 25, 2000, the Company issued 160,000 of
these shares. These shares were valued at $24,000.
(4) On August 1, 2000, the Company registered 1,908,333 shares for issuance
to Daniel Thornton (25,000 shares--EDGAR filing services valued at $3,750),
Mark Carton (25,000 shares--legal services valued at $3,750) Jeffrey Herm
(25,000 shares--legal services valued at $3,750), Hector Beltran (1,000,000
shares--Mexican resort promotional services to be preformed valued at
$150,000), Dennis Schlagel (500,000 shares--director & officer services
1/1/00 to 6/30/00 valued at $75,000), and Blair Merriam (333,333 shares as
compensation valued at $50,000). The total value of these shares was
$282,500. See Exhibit filed with Forms S-8 filed 4/27/00 and 8/1/00.
(5) On August 11, 2000, the Company issued 120,000 restricted shares of
Common Stock to Bobby Thomas under the terms of its contract with Stock
Exposure, Inc. for public relations. These shares wee valued at $18,000.
See exhibit filed herewith.
(6) On August 25, 2000, the Company issued 400,000 shares of Common Stock
under the terms of its contract with Securities Compliance Control LLC for
services related to preparation of and filing of certain of the Company's
reports required as a reporting corporation with the Securities and Exchange
Commission to be performed over the following six months. These shares were
valued at $60,000. See exhibit filed with Form S-8 filed 8/17/00.
(7) On September 1, 2000, the Company issued 100,000 restricted shares of
Common Stock to Michael Landers under the terms of its contract for website
consulting services to be performed over the following three months. These
share were valued at $16,000. See exhibit filed herewith.
(8) On September 25, 2000, the Company issued 90,000 shares of Common Stock
under the terms of its contract with Stacy Levin for website promotional
services to be performed over the following six months. These shares were
valued at $28,800. See exhibit filed with Form S-8 filed 9/29/00.
(9) On September 25, 2000, the Company registered 250,000 shares of Common
Stock for issuance to Tammy Billington for website promotional services to be
preformed over the period until January 31, 2001. This contract was
subsequently cancelled. The Company plan to de-register these shares. See
exhibit filed with Form S-8 filed 9/29/00.
The Company believes transactions 1, 2, 3, 5 and 7 were exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as
amended, as privately negotiated, isolated, non-recurring transactions not
involving any public solicitation. The purchasers in each case represented
their intentions to acquire the securities for investment only and not with a
view to the distribution thereof. Appropriate restrictive legends are
affixed to the stock certificates issued in such transactions. Furthermore,
prior to issuance, the shares described in transactions 4, 6, 8, and 9 were
registered under the Securities Act of 1933, as amended, pursuant to Form S-
8.
Options to Purchase Common Stock
(1) The following table sets forth twelve month option issued to 540
Degrees, Inc. d/b/a/ Gateway Arts pursuant to the Company's contract. See
exhibit to Form 10-KSB 7/6/00. These options were not valued due to
immateriality.
Exercise Issue
Shares Price Date
- - -----------------------------------
12,000 $.25 7/1/00
12,000 $.20 8/1/00
12,000 $.33 9/1/00
(2) On August 1, 2000, the Company issued Blair Merriam 500,000 options with
an exercise price of $.15 and an expiration date of 9/1/01. These options
were valued at $36,667.
(3) On August 1, 2000, the Company issued Dennis Schlagel 1,000,000 options
with an exercise price of $.15 and an expiration date of 9./1/01. These
options were valued at $73,333.
The Company believes these option transactions were exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as
amended, as privately negotiated, isolated, non-recurring transactions not
involving any public solicitation. The purchasers in each case represented
their intentions to acquire the securities for investment only and not with a
view to the distribution thereof. Appropriate restrictive legends are
affixed to the stock certificates issued in such transactions.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits
10(1) Consulting Agreement Stock Exposure, Inc. 7/31/2000
10(2) Agreement for Landers' Services 9/1/00
27 Financial Data Schedule
Reports on Form 8-K
None
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed in its behalf by the undersigned, thereunto
duly authorized.
Web4Boats.com, Inc.
Date: November 13th, 2000 /s/ Dennis Schlagel
-------------------- -----------------------
Dennis Schlagel, President
EXHIBITS
Exhibit 10(1)
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into
this _31__ day of _July__, 2000, by and between Stock Exposure, Inc., whose
business address is at 1127 Foothill Blvd Suite 208, San Luis Obispo,
California 93401 (the "Company"), and __ Web4boats, Inc (OTC: EBOT__, a
corporation whose principal place of business is at __ PO Box 1028 La Jolla,
CA 92038-1028 USA (the "Client").
In consideration of the mutual promise contained herein and on the
terms and conditions hereinafter set forth, the Company and Client agree as
follows:
Consulting Services. The Client hereby retains the Company to assist in
promoting a public company on the Internet websites owned and operated by the
Company(http://www.investorinside.com/),(http://www.stockpress.com/),(http://
www.freestocknews.com/),(http://www.stockclicks.com) and the Company hereby
accepts and agrees to such retention. The Company hereby agrees to post
summarized information of the Client, as news and informational reports on
the websites owned and operated by the Company.
It is further acknowledged that the entire objective of the service performed
by the Company is to gain exposure of a public company on behalf of the
Client through Internet websites.
Duration of Profile. The Company shall post information regarding the Client
to fulfill obligations contained herein this agreement for a time period no
less than 6 months. The Company shall post this information beginning
__8/01/00_____.
Activities Not Within This Agreement. It is acknowledged and agreed by the
Client that the Company is not rendering legal advice or performing
accounting services. It is also acknowledged that the Company is not acting
in place of an investment advisor or broker-dealer within the meaning of
applicable state and federal securities laws.
Term of Agreement. The term of this Agreement shall commence on the date of
signed and delivered contract and shall terminate upon completion of
services.
Expenses. The Company shall be solely responsible for all expenses and
disbursements anticipated to be made in connection with its performance under
this Agreement.
Client Representations. The Client hereby represents that all documents,
news and other information produced or distributed by the Client, used in
conjunction with a news release on the website of the Company, or any person
or entity acting on behalf of the Client, has been factual, complete and
truthful. Further the Client represents that neither it, nor any person or
entity acting on its behalf, has knowingly, negligently or recklessly
distributed or produced information relating to the profile company that has
violates any local, state or federal law or statute. Further, the Client
represents that in the future all information provided by the Client, or any
person or entity acting on its behalf, will be factual, complete and
truthful, and neither the Client, or any person or entity acting on its
behalf, will knowingly, negligently or recklessly violate any local, state or
federal law or statute.
In the event that the Client violates the above representations then the
Company, at its option, shall have the right to cease performing services
herein this Agreement. If said circumstances were to arrive the Company
would not be obligated to return any portion of the compensation package
required from signed Agreement.
Disclaimer of Responsibility for Acts of the Client. The obligations of the
Company in this Agreement consist solely of the distribution of information
on its website. In no event shall the Company be required by this Agreement
to represent or make management decisions for the Client or the profiled
company. All final decisions with respect to acts and omissions of the Client
or any affiliates and subsidiaries, shall be those of the Client or its
affiliates, and the Company shall under no circumstances be liable for any
expenses incurred or loss suffered by the Client as a consequence of such
acts or omissions.
A Client representative will provide the Consultant with factual news on the
company to be profiled. Any news given by the Client that is deemed not true
by ANY regulatory body is the SOLE responsibility of the Client or profiled
company, and the Company is in no way liable for any misrepresentations.
Further, the Client is aware that the Company is relying on the truthfulness
and accuracy of said news and information. Client will reimburse the Company
for any and all sums expended in legal defense or judgements rendered against
Company as a result of misrepresentation to the Company by the Client. As
well, the Company agrees not to misrepresent the profiled company to the best
of its ability.
The Company will make every effort to fully disclose compensation, and
potential conflicts of interest to the public, in accordance with the
Securities Act of 1933, section 17 (b). The Company will fully disclose its
compensation and insist that all other related parties do the same.
Indemnity by the Client. The Client shall protect, defend, indemnify and
hold the Company and its assigns and attorneys, accountants, employees,
officers and directors harmless from and against all losses, liabilities,
damages, judgements, claims, counterclaims, demands, actions, proceedings,
costs and expenses of every kind and character resulting from or relating to
(a) the inaccuracy, non-fulfillment or breach of any representation,
warranty, covenant or agreement made by the Client herein; (b) any legal
action, including any counterclaim, to the extent it is based upon alleged
facts that, if true, would constitute a breach of any representation,
warranty, covenant or agreement made by the Client herein; or (c) negligent
actions or omissions of the Client or any employee or agent of the Client, or
any reckless or willful misconduct, occurring during the term hereof with
respect to any of the decisions made by the Client.
Notices. Any notices required or permitted to be given under this Agreement
shall be sufficient if in writing and delivered or sent by registered or
certified mail or overnight courier to the principal office of each party.
Applicable Law. It is the intention of the parties hereto that this
Agreement and the performance hereunder and all suits and special proceedings
hereunder be construed in accordance with and under and pursuant to the laws
of the State of California and that any action, special proceeding or other
proceedings that may be brought arising out of connections with or by reason
of this Agreement, shall be brought only in a court of competent jurisdiction
within the State of California.
Severability. All agreements and covenants contained herein are severable,
and in the event any of them shall be held to be invalid by any competent
court, the Agreement shall be severed at the option of either party.
Entire Agreement. This Agreement constitutes and embodies the entire
understanding and agreement of the parties and supersedes and replaces all
prior understandings, agreements and negotiations between the parties.
Attorney's Fees and Costs. In the event of any dispute arising out of the
subject matter of this Agreement the prevailing party shall recover, in
addition to any damages assessed, its attorneys fees and court costs incurred
in litigating or otherwise settling or resolving such dispute.
Counterparts and Facsimile Signatures. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Execution and delivery of this Agreement by exchange of
facsimile copies bearing the facsimile signature of a party hereto shall
constitute a valid and binding execution and delivery of this Agreement by
such party. Such facsimile copies shall constitute enforceable original
documents.
Compensation. In full consideration of the services contained within this
Agreement the Client agrees to compensate the Company at a total of 120,000
shares of restricted 144 Stock.
STOCK EXPOSURE, INC. Web4boats.com, Inc.
___________________________ ______________________________
PRINTED NAME, TITLE PRINTED NAME, TITLE
___________________________ ______________________________
SIGNATURE DATE SIGNATURE DATE
Exhibit 10(2)
AGREEMENT FOR LANDERS' SERVICES
THIS AGREEMENT FOR LANDERS' SERVICES ("Agreement") is made and entered
into as of the 1st of September, 2000, by and between Michael T. Landers
having a principal address at 304 Magnolia Drive, Metairie, Louisiana 70005
("Landers") and., Web4Boats.com a California Corporation having its principal
address at P.O. Box 1028 La Jolla, CA, ("Participant"). (Landers and
Participant may also be referred to as "Party" or "Parties").
WHEREAS, the parties desire that Landers shall provide the Consulting
Services ("Services") as described in Exhibit A, attached hereto and
incorporated herein by this reference, to Participant, subject to the terms
and conditions herein; and
WHEREAS, Participant desires to procure, at the rates established by
Landers, the Consulting Services of Landers, subject to the terms and
conditions herein.
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions contained herein, the Parties hereto mutually agree as follows:
LANDERS' SERVICES. (a) Landers shall furnish Participant with the Services
requested by Participant described in Exhibit A, the Service Description, and
as may be amended from time to time. Additional requested services, if
available, will be furnished to Participant under the general terms and
conditions of this Agreement and in accordance with the pricing established
by Landers and Participant for such additional Services as set forth in
Paragraph 3(b).
TERM AND TERMINATION. (a) This Agreement shall commence on the first date
written above, and shall be effective for an initial period of three (3)
months ending November 30, 2000. This Agreement may be renewed for an
additional three month period thereafter upon notice by Participant to
Landers and his subsequent agreement.
Except as otherwise provided herein, in the event that either Party hereto
fails in the performance of its obligations hereunder or breaches the terms
or conditions hereof, the other Party may; at its option, give written notice
to the Party which has failed to perform or has breached this Agreement of
its intention to terminate this Agreement unless such breach or failure in
performance is remedied within thirty (30) days of such notice. Failure to
remedy such a breach shall make this Agreement terminable, at the option of
the aggrieved Party, at the end of such thirty (30) day period unless
notification is withdrawn.
PAYMENTS AND CHARGES. (a) Charges for the Services shall be as set forth in
Exhibit B, Service Pricing Schedule, which is attached, incorporated herein
and made a part hereof, and as may be amended from time to time.
Charges for requested additional Services for which there is no published
rate shall be at a reasonable rate, as determined by Landers and agreed to by
Participant.
Participant shall be solely and completely responsible for all costs
associated with Participant's conduct of its business, including all of its
internal business operations for any Services provided by Landers, unless
otherwise written in this Agreement.
Participant agrees to indemify and hold Landers harmless in all respects
pertaining to end-user taxes, surcharges, any and all governmentally assessed
fees applicable to Participant's products or services, or any other
corporate, government, customer or any other affiliated charged fees.
PARTICIPANT SERVICE OBLIGATION (a) Participant agrees to provide Landers with
the data required to enable Landers to furnish the Services and to permit
Landers' management to be successful in this project.
(b) Further, Participant shall indemnify and hold harmless Landers from and
against any and all claims for loss, damage or expense, including reasonable
attorney's fees asserted against Landers by any third Party, including, but
not limited to Participant's customers arising out of this Agreement;
provided, however, that such indemnification shall not apply to the extent
that any such claims for loss, damage, or expense are the result of the
willful misconduct of Landers, their employees, officers or agents.
PUBLICITY AND ADVERTISING. Neither Party shall publish or use any
advertising, sales promotions, press releases or other public material which
uses the other Party's name, logo, trademarks or service marks without the
prior written approval of such Party.
USE AND PROTECTION OF INFORMATION. The Parties agree that any specifications,
drawings, models, samples, data, computer programs or documentation or other
technical or business information in written, graphic, or other tangible form
furnished or disclosed by one Party, the disclosing Party, to the other
Party, the receiving Party, which is marked with a restrictive notice, or
otherwise tangibly designated as proprietary, shall be deemed the property of
the disclosing party and shall be returned to the disclosing Party upon
request. Unless such information was previously known to the receiving Party
free of any obligation of confidentiality, has been or is subsequently made
public by the disclosing Party or a third Party, or is independently
developed by the receiving Party, then the receiving Party shall for a period
of three (3) years from the date of disclosure, use the same degree of care
as it uses with regard to its own proprietary information to prevent
disclosure, use or publication thereof.
SECRECY OF COMMUNICATIONS In rendering the Services under this Agreement,
Landers shall apply the same procedures relating to the privacy of
Participant's communications that Landers uses with respect to its own
communications.
RIGHT OF ENTRY. If Participant is required to enter Landers's premises or if
Landers is required to enter Participant's premises for any reason in
connection with the Services provided under this Agreement, the entering
party right of entry shall be limited to the other party's normal business
hours and shall be subject to applicable governmental security laws and both
parties security regulations and procedures. It is agreed herein that more
specific terms are described within Exhibit A.
EXCLUSIVE WARRANTY AND LIMITATION OF LIABILITY. (a) Landers warrants that the
Services rendered under this Agreement will be performed in a workmanlike
manner and comply with the specifications set forth in Exhibit A. Landers
shall exercise reasonable care in the provision of the Services.
Landers' liability in any and all categories and for all causes arising out
of this Agreement, whether in contract or tort, shall be limited to refunding
to Participant fees received by Landers for services performed which are not
provided or performed in accordance with this Agreement, such refund not to
exceed in the aggregate one percent (1%) of all total billing to Participant.
Landers shall not be liable in any way for delays, failure in performance,
loss or damage due to any Force Majeure conditions, including: fire, strike,
embargo, explosion, power blackout, earthquake, volcanic action, flood, war,
water, the elements, labor disputes, civil disturbances, government
requirements or military authority, acts of God or public enemy, inability to
secure products and transportation/communications facilities or acts of
ommissions of Participants.
Title to all Services, facilities, equipment and software furnished by
Landers shall remain exclusively with Landers regardless of whether such
Services, facilities, equipment and software are paid for by Participant,
unless Landers and Participant specifically agree in writing as to
alternative ownership rights in any specific services, equipment, facilities
or software which are paid for by Participant.
THIS EXCLUSIVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, AND PARTICIPANT
HEREBY WAIVES ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING,
BUT NOT LIMITED TO. ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE. LANDERS SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER ALLEGED TO RESULT FROM
TERALIGHT'S BREACH OF ITS OBLIGATIONS HEREUNDER, WHETHER BASED IN TORT,
CONTRACT OR OTHERWISE.
DISPUTES. Should there exist any error or confusion the Parties agree to
attempt to resolve the matter by bringing it to the attention of the
appropriate party, in writing, within a reasonable time after the dispute
arises and to allow a reasonable time from receipt of the notice of dispute
to respond to the matter or otherwise resolve the dispute. The Parties agree
to negotiate in good faith. In the event that a dispute cannot be resolved,
the Parties agree that the dispute will be resolved through arbitration in
accordance with the Rules of the American Arbitration Association.
WAIVER. The failure of either Party to insist upon strict performance of any
convenants, terms, condition or obligations of this Agreement shall not be
construed as a waiver or relinquishment for the future of any such covenants,
terms, conditions or obligations, but the same shall be and remain in full
force and effect.
ASSIGNMENT. This Agreement, nor any rights or duties hereunder may be
assigned or delegated by Landers or Participant without prior written consent
of the other Party, such consent not to be unreasonably withheld or delayed,
provided, however, that either Party may assign its rights and obligations
hereunder to a parent, subsidiary, affiliate or successor in interest,
provided the assignor continues to be fully responsible for the obligations
hereunder and the assignee agrees in writing to be bound by the terms and
conditions of this Agreement.
NOTICES. Any notice required or permitted to be given by either Party to the
other shall be in writing and shall be delivered by hand, facsimile,
overnight express delivery or by certified or registered mail to the address
stated above (or such other address as may from time to time be designated in
writing). Any such notice shall be deemed to have been given (i) if delivered
by hand, facsimile or by overnight delivery, upon receipt and (ii) if by
mail, three (3) days after deposit in the United States mail with postage
prepaid to the respective Parties at the addresses set forth in the Preamble
to this Agreement.
AMENDMENT. The terms and conditions of this Agreement shall not be amended or
modified except in writing signed by both Parties. No oral statement of any
person whosoever shall in any manner or degree modify or otherwise affect the
terms and conditions of this Agreement.
SEVERABILITY. In the event that any of the provisions of this Agreement
shall for any reason be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not invalidate or render
unenforceable the entire Agreement, but rather, the entire Agreement shall be
construed as not containing the particular invalid or unenforceable
provision(s), and the rights and obligations of each Party to the other shall
be construed and enforced accordingly.
SOLE CONTACT POINT. The Parties hereby agree that the signatory below is the
sole contact point empowered to represent and bind its respective Party
concerning the implementation of this Agreement, however, Landers' receipt of
an order, invoice or contract for services, on Participant's stationary or
business form, signed by an employee or representative of the Participant
shall be deemed an authorized order for services from the Participant.
GOVERNING LAW. This Agreement is executed in the State of Louisiana, and all
matters pertaining to the validity, construction, interpretation and effect
of this Agreement shall be governed by the laws of the State of Louisiana.
CAPTIONS. The captions in this Agreement are for convenience only and shall
not be construed to define or limit any terms herein.
LEGAL FEES. If any action is necessary in order to enforce the terms of this
Agreement, the prevailing Party shall be entitled to recover its attorney's
fees and costs incurred in addition to any other relief to which it may be
entitled.
ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement between
the Parties and supersedes all prior understandings with respect to the
subject matter of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers.
Michael T. Landers Web4Boats.com
Authorized Officer Authorized Officer
______________________________ ______________________________
By: Michael T. Landers By: Dennis Schlagel
Title: __________
Date: Date: __________
Exhibit A
To that
AGREEMENT FOR
LANDERS' SERVICES
SERVICE DESCRIPTION
Landers will assist Web4Boats.com in identification, evaluation and selection
of a web hosting, web site development/design and strategic marketing
company. The evaluation process will include the existing company providing
services to Web4Boats.com. The intent is to determine whether another
company based in the San Diego metropolitan area can provide better services
than the existing company.
An initial list of companies will be identified, then an Request for
Qualifications will be developed and submitted to the companies. Upon
evaluation of the responses to the RFQ and short list of candidate companies
will be interviewed and evaluated. Landers will provide guidance and
direction throughout the entire process includig the final selection and
subsequent negotiation for services provided by the company to Web4Boats.com
Upon execution of the Agreement an addendum will be developed by
Web4Boats.com management and Landers establishing the desired schedule of
activities for this engagement.
Exhibit B
To That
AGREEMENT FOR Landers' SERVICES
SERVICE PRICING SCHEDULE
Upon execution of the agreement, Web4Boats.com will issue to Landers 100,000
shares of 144 restricted common stock of Web4Boats.com in the name of Michael
T. Landers. Upon completion of the initial ninety day term of this Agreement
and after satisfactory completion of the tasks outlined in Exhibit A,
Web4Boats.com will issue to Landers an additional 100,000 shares of 144
restricted common stock of Web4Boats.com in the name of Michael T. Landers.
Other forms of compensation will be considered by Web4Boats.com if the
circumstances warrant, including Landers' incurring out of pocket expenses.