U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CLIXTIX, INC.
(Name of Small Business Issuer in Its Charter)
New York 7990 13-3526402
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code) Identification Number)
SUITE 1807 - 1501 BROADWAY
NEW YORK, NY 10036 (212) 768-2990
(Address, Including Zip Code, and Telephone Number, including Area Code, of
Registrant's Executive Offices)
PHYLLIS MAXWELL
C/O CLIXTIX, INC.
SUITE 1807 - 1501 BROADWAY
NEW YORK, NY 10036 (212) 768-2990
(Name, Address, Including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
Copies of all correspondence to:
JOSEPH SIERCHIO, ESQ.
EISEMAN LEVINE LEHRHAUPT & KAKOYIANNIS, P.C.
845 THIRD AVENUE
NEW YORK, NEW YORK 10022
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APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective.
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If this Form is filed to register additional securities for an offering pursuant
to Rule 426(b) under the Securities Act of 1933, check the following box and
list the Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities
Act Registration Statement number of the earlier Registration Statement for the
same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the
Securities Act Registration Statement number of the earlier Registration
Statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
- ----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
Title Of Each Class Of Securities Number of Shares To Be Proposed Maximum Proposed Maximum Amount of
To Be Registered Registered Offering Price Per Aggregate Offering Registration
Share Price Fee (1)
- ----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
Common Stock, $.0001 par 1,341,200 $0.02 $26,824 $2.47
value
- ----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
<FN>
(1) Calculated in accordance with Rule 457(o) under the Securities Act of 1933.
</FN>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
2
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and it is not soliciting an offer to buy these
securities, in any state where the offer or sale is not permitted.
CLIXTIX, INC.
1,341,200 SHARES
COMMON STOCK
--------------------------
We have prepared this prospectus to allow Phyllis Maxwell, our
President, director and stockholder (the "Selling Shareholder") to use a "shelf"
registration process to sell up to 1,341,200 shares of our common stock which
were previously acquired in a private transaction. We will receive no proceeds
from the sale of these shares.
The minimum number of shares that an investor may purchase is 1000.
There is no trading market for our common stock; it is not listed on any
national securities exchange, the Nasdaq stock market, or the over the counter
market. Since we do not qualify for a listing on the Nasdaq stock market or
other national exchange, following the offering, if a trading market were to
develop for our common stock, it would most likely be on the NASD's Over the
Counter Bulletin Board market.
The Selling Shareholder is offering the shares on a no minimum basis.
This means that a minimum number of shares do not need to be sold before the
Selling Shareholder has access to the proceeds.
--------------------
See "Risk Factors" beginning on page 6 for a discussion of
risks to consider before purchasing our common stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
- ------------------------------------------------------------------------------------------------------
Price to the Public(1) Maximum Proceeds to the Selling
Commissions Shareholder
- ------------------------------------------------------------------------------------------------------
Per Share $0.02 -0- $0.02
- ------------------------------------------------------------------------------------------------------
Total 1,341,200 Shares $26,824.00 -0- $26,824
- ------------------------------------------------------------------------------------------------------
(1) The Selling Shareholder is offering the shares on a no minimum basis.
The date of this prospectus is ________________, 2002.
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TABLE OF CONTENTS
Prospectus Summary.....................................................5
Risk Factors...........................................................6
Cautionary Note Regarding Forward-Looking Statements ..................8
Use of Proceeds........................................................9
Determination of Offering Price........................................9
Dilution..............................................................10
Plan of Distribution .................................................10
Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................13
Business .............................................................18
Legal Proceedings.....................................................22
Management............................................................22
Executive Compensation................................................22
Principal Shareholders................................................23
Selling Shareholders..................................................24
Description of Capital Stock..........................................25
Limitation of Liability and indemnification matters ..................26
Interest of Named Experts and Counsel.................................27
Legal Matters.........................................................27
Experts...............................................................27
Where You Can Find Additional Information.............................27
Index to Financial Statements.........................................29
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PROSPECTUS SUMMARY
This summary contains significant information about us and the
offering. You should read the entire prospectus, including the section titled
"Risk Factors" and our financial statements and the related notes, before
deciding to invest in our common stock.
Clixtix, Inc.
Our company through our wholly owned subsidiary, Maxwell Group
Entertainment, Inc., purchases tickets for Broadway and Off-Broadway productions
for groups of 20 or more in New York. We offer tickets for those productions
which meet certain criteria such as critical acclaim, wide audience appeal and
significant content and entertainment.
We also provide our customers with general information and
recommendations on the various productions and theatre events based upon
suitability for each client, critical reviews and word of mouth.
Our offices are located at 1501 Broadway, New York, New York 10036. Our
telephone number at our corporate offices is (212) 768-2990.
The Offering
Common stock offered by 1,341,200 shares
Selling Shareholder
Common stock to be outstanding 10,228,000 shares
after this offering
Use of proceeds None of the proceeds from the sale of
the common stock offered by
this prospectus will be
received by us.
Term of Offering The Selling Shareholder may commence
offering shares for sale in
accordance with this prospectus
following the effective date of the
Prospectus and may continue to offer
for a period of 12 months thereafter.
5
RISK FACTORS
You should consider carefully the following risks before you decide to
buy our common stock. Our business, financial condition or results of operations
could be materially and adversely affected by any of the following risks.
Our past revenue growth may not continue in the future which would materially
and adversely affect our profit levels.
Although we experienced revenue growth in recent years, for the year
ended December 31, 2001, our revenues declined by 15% compared to the year ended
December 31, 2000. The prediction of our future results is difficult and,
therefore, our past revenue growth should not be taken as an indication of any
growth that can be expected in the future.
To the extent that revenues do not grow at anticipated rates, or that
we are unable to secure or retain large contracts similar to those obtained in
prior periods, our business, results of operations and financial condition would
be materially and adversely affected because our profit levels will decline.
Our sales will not increase as anticipated if acceptance of the internet does
not occur.
Currently, only a small portion of our customers are solicited by
internet. Our company is listed as a source for group tickets on 5 web sites.
Our growth strategy is based in part on the premise that a significant portion
of the theatre-going public will seek to obtain tickets via the Internet. As
such, our success in expanding our business depends upon the widespread
acceptance of the internet as a key source for additional customers. If
acceptance of the internet does not occur, or if it occurs more slowly than
expected, our sales will not increase at the levels anticipated or may not
increase at all.
Internet access problems and failures could decrease the rate of our future
growth.
We currently solicit only a small portion of our sales via the
internet. Our services are currently listed on 5 web sites and approximately 400
search engines. Any persistent problems, failures or disruptions on those web
sites or on Internet access provided by third parties in general could prevent
the execution and success of our growth strategy.
Our long term liquidity and capital resources are uncertain which may adversely
affect our ability to continue our operations in the future.
In the event that our cash reserves are depleted, we may need to seek
additional capital. If we do, there can be no assurance that we will be
successful in raising a sufficient amount of additional capital or in internally
generating a sufficient amount of capital to meet our long term requirements. If
we are unable to generate the required amount of additional capital, our ability
to meet our obligations and to continue our operations may be adversely
affected.
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We may not be able to compete successfully against current and future
competitors.
We, through our wholly owned subsidiary, currently compete with at
least 17 companies in the New York City area, who provide services similar to
ours. Many of these, such as TDI, now a division of Broadway.com, and the
Shubert and Nederlander Theatres, may have significantly greater financial
resources, name recognition, and technical and marketing resources, and
virtually all of them are seeking to improve their technology, products and
services. We can not provide assurance that we will have the financial resources
or the technological expertise to successfully meet this competition.
Subscribers to the offering will have little or no influence on matters
requiring shareholder approval because we are controlled by our officers,
directors and entities affiliated with them who will be able to control all
matters requiring shareholder approval.
Phyllis Maxwell, our President, currently owns 73% of our issued and
outstanding shares of common stock. Following this offering, if all of the
shares offered are sold, Mrs. Maxwell will own 60% of our issued and outstanding
shares of common stock. Mrs. Maxwell will still be able to significantly
influence all matters requiring approval by our shareholders, including the
election of directors and the approval of mergers or other business combinations
transactions.
Our future performance is dependent on our ability to retain key personnel, the
loss of which would adversely affect our success and growth.
Our performance is substantially dependent on the performance of our
senior management and sales personnel. In particular, our success depends on the
continued efforts of our president, Phyllis Maxwell and our vice president, Mr.
Richard Kelley. Mrs. Maxwell has 23 years of experience and a strong
relationship with box office personnel and customers. Mr. Kelley has over thirty
years of experience as a company manager and theatre treasurer and he has an
extensive knowledge of theatre. Both Mrs. Maxwell's and Mr. Kelley's knowledge
of theatre and reputation are sought by clients. The loss of the services of
either Mrs. Maxwell or Mr. Kelley could have a material adverse effect on our
business, results of operations and financial condition as commission revenues
would most likely dramatically decline. Neither we nor our wholly owned
subsidiary have employment agreements in place with our senior management or key
employees.
Our management is inexperienced in managing a public company.
Our current management has had only limited experience managing a
public company or a large operating company. There can be no assurance that we
will be able to effectively manage the expansion of our operations, that our
systems, procedures or controls will be adequate to support our operations or
that our management will be able to achieve the rapid execution necessary to
fully exploit the market opportunity for our products and services. Any
inability to manage growth effectively could have a material adverse effect on
our future success.
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The value and transferability of our shares may be adversely impacted by the
limited trading market for our shares and the penny stock rules.
There is no current trading market for our shares and there can be no
assurance that a trading market will develop, or, if a trading market does
develop, that it will be sustained. To the extent that a market develops for our
shares at all, they will likely appear in what is customarily known at the "pink
sheets" or on the NASD Bulletin Board, which may limit their marketability and
liquidity.
In addition, holders of our common stock may experience substantial
difficulty in selling their securities as a result of the "penny stock rules,"
which restrict the ability of brokers to sell certain securities of companies
whose assets or revenues fall below the thresholds established by those rules.
Future sales of shares by us may reduce the value of our stock.
The total amount of shares covered by this prospectus represents
approximately 13% of our outstanding shares on the date of this prospectus. If
required, we will seek to raise additional capital through the sale of our
common stock. Future sales of shares by us could cause the market price of our
common stock to decline.
The offering price of our shares was arbitrarily determined by the Selling
Shareholder and thus, is not an indication of the stock's valuation.
Prior to this offering, there has been no public trading market for our
shares. Until such time as our shares are traded on a market or securities
exchange, our Selling Shareholder will offer and sell our common stock at a
price of $.02 per share. Once traded on a market or securities exchange, the
offering price of our common stock will be determined by market factors.
The offering price of our shares in this offering has no relationship
to any established valuation criteria such as assets, book value or prospective
earnings. Among the factors considered by the Selling Shareholder were the
proceeds to be raised by the offering and the lack of trading market.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains statements that plan for or anticipate the
future, called "forward-looking statements." In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"could," "expects," "plans," "intends," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of those terms and other
comparable terminology.
These forward-looking statements include statements about:
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o our market opportunity;
o our strategies;
o competition;
o expected activities and expenditures as we pursue our business plan; and
o the adequacy of our available cash resources.
These statements appear in a number of places in this report and
include statements regarding our intent, belief or current expectations, those
of our directors or officers with respect to, among other things: (i) trends
affecting our financial condition or results of operations, (ii) our business
and growth strategies, (iii) the Internet and Internet commerce and (iv) our
financing plans. Although we believe that the expectations reflected in the
forward-looking statement are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
The Private Securities Litigation Reform Act of 1995, which provides a
"safe harbor" for similar statements by existing public companies, does not
apply to our offering.
The accompanying information contained in this prospectus, including
the information discussed under the headings "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
"Business" identify important factors that could adversely affect actual results
and performance. All forward-looking statements attributable to us are expressly
qualified in their entirety by the cautionary statement appearing above.
USE OF PROCEEDS
The shares are being offered by this Prospectus on behalf of the
Selling Shareholder on a no minimum basis. None of the proceeds from the sale of
the common stock offered by this prospectus will be received by us. The Selling
Shareholder will have access to the proceeds as they are received.
If the 1,341,200 shares offered are sold, the gross proceeds of this
offering will be $26,824. We expect expenses of the offering, including, but not
limited to, accounting fees and legal fees, to be approximately $20,000. We
will be responsible for paying all the offering expenses. These expenses will be
paid from our working capital.
Except as described in this prospectus, no portion of the proceeds of
the offering will be paid to officers, directors and/or their affiliates or
associates.
DETERMINATION OF THE OFFERING PRICE
Our common stock is presently not traded on any market or securities
exchange. Until such time as our shares are traded on a market or securities
exchange, the Selling Shareholder must offer and sell our common stock at a
price of $.02 per share. Once traded on a market or
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securities exchange, the offering price of our common stock will be determined
by market factors.
The offering price has no relationship to any established criteria or
value, such as book value or earnings per share. The factors considered in
determining the offering price were the lack of trading market and the proceeds
to be raised by the offering.
We have not declared, and do not foresee declaring, any dividends now
or into the foreseeable future.
DILUTION
The common stock to be sold by the Selling Shareholder, which is all of
the common stock being offered pursuant to this prospectus, is common stock that
is currently issued and outstanding. Accordingly, there will be no dilution to
our existing shareholders.
PLAN OF DISTRIBUTION
The Selling Shareholder is offering 1,341,200 shares of common stock
offered through this prospectus. The shares of common stock may be offered and
sold from time to time by the Selling Shareholder or by her transferees,
pledgees, donees or their successors pursuant to this prospectus. If all of the
shares offered by the Selling Shareholder are sold in this offering, 6,136,800
shares will be held by the Selling Shareholder upon termination of any such
sales.
Until our shares of Common Stock are traded on a market or securities
exchange, the shares offered by this prospectus on behalf of the Selling
Shareholder and her pledgees, donees, transferees or other successors in
interest, may be sold from time to time directly by the Selling Shareholder at a
price of $.02 per share. Once our shares of Common Stock are traded on a market
or securities exchange, the Selling Shareholder may sell the shares in the
over-the-counter markets or otherwise, at market prices or at negotiated prices.
She may sell shares by one or a combination of the following:
o purchases by a broker or dealer as principal and resale by such broker or
dealer for its account;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o privately negotiated transactions
In effecting sales, brokers or dealers engaged by the Selling
Shareholder may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from the Selling Shareholder in
amounts to be negotiated prior to the sale. The Selling Shareholder and any
broker-dealers which participate in the distribution may be deemed to be
underwriters within the meaning of Section 2(11) of the Securities Act, and any
proceeds or commissions received by them, and any profits on the resale of
shares sold by broker-dealers, may be deemed to be underwriting discounts and
commissions.
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If the Selling Shareholder notifies us that a material arrangement has
been entered into with a broker-dealer for the sale of shares through a block
trade, special offering, exchange distribution or secondary distribution or a
purchase by a broker or dealer, we will file, a prospectus supplement, if
required pursuant to the Securities Act, setting forth:
o the name of each of the participating broker-dealer,
o the number of shares involved,
o the price at which the shares were sold,
o the commissions paid or discounts or concessions allowed to the
broker-dealers, where applicable,
o a statement to the effect that the broker-dealers did not conduct any
investigation to verify the information set out or incorporated by
reference in this prospectus, and
o any other facts material to the transaction.
The Selling Shareholder and any broker-dealers participating in the
distributions of the shares may be deemed to be underwriters within the meaning
of Section 2(11) of the Securities Act of 1933. Any profit on the sale of shares
by the Selling Shareholder and any commissions or discounts given to any such
broker-dealer may be deemed to be underwriting commissions or discounts. The
shares may also be sold pursuant to Rule 144 under the Securities Act of 1933
beginning one year after the shares were issued.
We have filed the Registration Statement, of which this prospectus
forms a part, with respect to the sale of the shares by the Selling Shareholder.
There can be no assurance that the Selling Shareholder will sell any or all of
the offered shares. We have made a commitment to the Selling Shareholder that we
will keep the Registration Statement current for up to one year following the
effective date of such Registration Statement including, but not limited to, the
filing of supplements disclosing the number of shares sold in the offering.
Under the Securities Exchange Act of 1934 and the regulations
thereunder, any person engaged in a distribution of the shares of our common
stock offered by this prospectus may not simultaneously engage in market making
activities with respect to our common stock during the applicable cooling off
periods prior to the commencement of such distribution. Also, the Selling
Shareholder is subject to applicable provisions which limit the timing of
purchases and sales of our common stock by the Selling Shareholder.
We have informed the Selling Stockholder that, during such time as she
may be engaged in a distribution of any of the shares we are registering by this
Registration Statement, she is required to comply with Regulation M. Regulation
M precludes any selling security holder, any affiliated purchasers and any
broker-dealer or other person who participates in a distribution from bidding
for or purchasing, or attempting to induce any person to bid for or purchase,
any security which is the subject of the distribution until the entire
distribution is complete. Regulation M defines a distribution as an offering of
securities that is distinguished from ordinary trading activities by the
magnitude of the offering and the presence of special selling efforts and
selling methods. Regulation M also defines a distribution participant as an
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underwriter, prospective underwriter, broker, dealer, or other person who has
agreed to participate or who is participating in a distribution.
Regulation M prohibits any bids or purchases made in order to stabilize
the price of a security in connection with the distribution of that security,
except as specifically permitted by Rule 104 of Regulation M. These stabilizing
transactions may cause the price of our common stock to be more than it would
otherwise be in the absence of these transactions. We have informed the Selling
Shareholder that stabilizing transactions permitted by Regulation M allow bids
to purchase our common stock if the stabilizing bids do not exceed a specified
maximum. Regulation M specifically prohibits stabilizing that is the result of
fraudulent, manipulative, or deceptive practices. Selling security holders and
distribution participants are required to consult with their own legal counsel
to ensure compliance with Regulation M.
Penny Stock Regulation. Shares of our common stock are subject to the rules
adopted by the Securities and Exchange Commission that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00 (other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq system, provided that current price and volume information with respect
to transactions in those securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Securities and Exchange Commission, which
contains the following:
(1) a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading;
(2) a description of the brokers or dealers duties to the customer and of
the rights and remedies available to the customer with respect to
violation to such duties or other requirements of securities laws;
(3) a brief, clear, narrative description of a dealer market, including bid
and ask prices for penny stocks and the significance of the spread
between the bid and ask price;
(4) a toll-free telephone number for inquiries on disciplinary actions;
(5) definitions of significant terms in the disclosure document or in the
conduct of trading in penny stocks; and
(6) such other information and in such form (including language, type, size
and format), as the Securities and Exchange Commission shall require by
rule or regulation.
Prior to effecting any transaction in penny stock, the broker-dealer
also must provide the customer the following:
o the bid and offer quotations for the penny stock;
o the compensation of the broker-dealer and its salesperson in the
transaction;
o the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
o monthly account statements showing the market value of each penny stock
held in the customers account
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In addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules, the broker-dealer must
make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchasers written acknowledgment
of the receipt of a risk disclosure statement, a written agreement to
transactions involving penny stocks, and a signed and dated copy of a written
suitably statement. These disclosure requirements may have the effect of
reducing the trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. Holders of shares of our common stock may have
difficulty selling those shares because our common stock will probably be
subject to the penny stock rules.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of
operations should be read in conjunction with the Consolidated Financial
Statements and Notes to those financial statements included elsewhere in this
prospectus. This discussion contains forward-looking statements that involve
risks and uncertainties. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including but not limited to, those discussed under "Risk Factors" and elsewhere
in this prospectus.
Overview
We, through our wholly-owned subsidiary, provide services for groups
who are interested in attending New York's Broadway and Off-Broadway
productions. We are licensed by the City of New York to resell tickets to
Broadway and Off-Broadway theatre performances. Typically, we buy group tickets
on behalf of a customer group (usually a minimum of 20 persons) and our fee is
paid, with limited exceptions by the theatre. These exceptions include Saturday
night tickets, certain holiday periods or if the group falls below 20 persons,
in which case the fee is paid by the customer. On occasion, as a special service
for group customers, for an additional fee, as few as two or four tickets may be
purchased.
Revenue is not recognized by us until the date an invoice is generated.
Generally, our sales and billing process is as follows:
A customer will contact us regarding the availability of theatre
tickets. We will then contact the box office by phone regarding the customer's
inquiry. If the ticket availability is satisfactory to the customer, we will
send a written confirmation to the theatre detailing the show date and number of
tickets needed. Once we receive the signed confirmation back from the theatre,
we send the customer an invoice that details the price of the tickets. The price
is fixed and determinable. Upon our receipt from the customer of the
non-refundable amount due per the invoice, we will immediately remit the funds
to the respective show's box office. At that time, we have completed our work
necessary to earn our fee from the theatre. After the funds are received by the
box office, it sends the tickets to the customer. Our fee is delivered to us by
the theatres after the date of the show's performance. Our fee is 9.45% of the
ticket price.
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Box offices tend not to pay commission or give discounted ticket prices
for holiday and weekend performances. If customers wish to purchase tickets for
these periods, we may charge a commission that is, in that case, included in the
invoice amount. As such, in those instances, we receive our commission before
the date of the performance.
Despite the events that followed September 11, 2001, including the
cancellation of all Broadway performances for 3 days and the premature closing
of certain productions, during the year ended December 31, 2001 we did not
sustain any significant losses due to cancellation of performances. Generally,
the closing of any one show will not have a material effect on our revenue
stream, since each fee is based on a specific date of performance. When
productions close after a long theatre run, they tend to announce the closing
dates well in advance of the last performance. Immediately following September
11, 2001, Broadway productions were cancelled for 3 days and many of our clients
cancelled or postponed trips to New York. However, we were successful in
minimizing any losses to us by reselling those tickets to other clients. The
ticket holders of the shows that were cancelled in the days following September
11, 2001 either received a refund or tickets for a later date.
We have been in operation since April 1988. Prior to 1989, Mrs. Maxwell
operated the same business as a sole proprietorship.
During 2001, we conducted a public offering in which we offered and
sold 1,000,000 shares of common stock at a price of $0.05 per share for total
consideration of $50,000. Such proceeds were to be utilized to substantially
expand our website, implement new marketing programs, and for the general
expansion of our business through the greater use of the internet as described
below.
We had planned to inaugurate an Internet based marketing program that
would enable American ticket buyers who plan to visit other English speaking
countries to buy their tickets before leaving the United States and make
information on these venues readily available. The plan was also to enable
global buyers of individual tickets to purchase their tickets for Broadway and
Off-Broadway by the Internet before leaving for New York. All theatre
information is currently on our web sites for groups. The same information for
present and future shows would be necessary information for theatre goers to
plan their visits to New York.
We had also been looking into the possibility of establishing an email
ticket distribution system to be organized between us, one of the ticket sellers
(eg. Ticketmaster or Telecharge) with the cooperation of specific producers of
shows to have discounts and seat availabilities. This plan was in the formative
state and development had not begun. We had not initiated any discussions with
ticket sellers or producers.
We had also been exploring the organization of a hit theatre ticket
club for individual tickets to be sold on a subscription basis that would allow
ticket buyers in the New York area to buy 2 or 4 tickets in advance of the
theatre season. This plan has been successful when sold by New York
institutional theatres, touring companies and specific markets other than New
14
York. This plan would enable buyers to select three or four shows from different
producers rather than one theatre or one subscription house.
We had initially planned to develop all of the projects described
above. However, based on the events of September 11, 2001 and the subsequent
negative effects on the business and economic condition in New York City and
specifically, on the theatre industry, we have decided to focus our efforts on
our original business practice.
We are currently on five web sites (two of our own and three others
where we are listed as a source for group Broadway ticket sales) and on
approximately 400 search engines in the category of Broadway shows/Theatre Group
Sales Agency Entertainment. It is our intention to continue to be listed on
every possible search engine.
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
RESULTS OF OPERATIONS
For the year ended December 31, 2001, we had a net loss of $5,534
compared to a net loss of $30,517 for the year ended December 31, 2000, a
decreased loss of 82%. Although our commission revenues decreased by 15% from
$268,882 for the year ended December 31, 2000 to $228,009 for the year ended
December 31, 2001, our general and administrative expenses also decreased by 22%
from $307,696 for the year ended December 31, 2000 to $241,114 for the year
ended 2001. The decrease in commission revenues for the year ended December 31,
2001 was largely attributed to the devastating effects of September 11, 2001.
The events of September 11, 2001 had severe negative effects on the
business and economic condition in New York City and specifically, on the
theatre and tourism industries.
In the months following September 11, 2001, Broadway shows, the crux of
our business activity, felt the impact severely. Several shows closed
prematurely and others played to lower capacity. As a result of the closing of
productions and the decline of tourism in New York City, we suffered
cancellations of bookings in the last two quarters of 2001.
Many tour operators who comprise a significant portion of our clients,
experienced cancellations of previously booked trips and were unable to book
additional trips to New York City for apprehensive customers. As a result, the
tour operators were hesitant to schedule additional trips for 2002 until the
anxiety and disorder dissipated. In an effort to minimize any losses resulting
from tickets assigned to clients who cancelled their trips, we resold those
tickets to other clients.
Our general and administrative expenses which decreased by 22% for the
year ended December 31, 2001 include but are not limited to officers'
compensation, salaries and wages, employee benefit programs, consulting
expenses, professional fees, travel and entertainment, rent and other office
expenses. The $66,582 decrease in our general and administrative expenses for
the year ended December 31, 2001 can in part be attributed to the $46,000
decrease in our officers' compensation expense from $98,000 for the year ended
December 31, 2000 to $52,000 for the year ended December 31, 2001. This decrease
can be attributed to the
15
fact that Mrs. Maxwell, our President, was paid a salary of $48,000 and did not
draw a bonus during this year, as compared to the year ended December 31, 2000
in which Mrs. Maxwell drew a salary of $48,000 and a bonus of $50,000. As a
result, payroll taxes decreased by 27% in 2001 from $13,949 for the year ended
December 31, 2000 to $10,238 for the year ended December 31, 2001.
Our travel and entertainment expenses for the year ended December 31,
2001 increased by approximately $7,066, or 60%, from $11,874 in the year ended
December 31, 2000 to $18,940 in the year ended December 31, 2001. The travel and
entertainment expense is a discretionary account and varies from year to year.
Until September 11, 2001, there had been an increase in show openings, which we
attend on a routine basis. In addition, we conducted additional promotion
including the entertainment of several buyers who were engaged in long term
planning. These factors contributed to the increase in our travel and
entertainment expense.
In 2000, we incurred additional costs in connection with the
preparation and filing of an initial public offering registration statement.
Total costs incurred during 2000 by us for the offering were $45,000, including
the issuance of common stock to our legal counsel. Our professional fee expenses
for the year ended December 31, 2001 decreased by $15,274 from $44,000 for the
year ended December 31, 2000 to $28,726 for the year ended December 31, 2001.
The professional fees incurred in the year ended December 31, 2001 were also in
connection with our public offering and registration statement as well as the
preparation and filing of our periodic reports.
During 2000 we retained a computer consultant to update and improve our
computer system. As such, for the year ended December 31, 2001, our consulting
expenses decreased by 79% from $12,803 in the year ended December 31, 2000 to
$2,715 for the year ended December 31, 2001.
In the year ended December 31, 2001, we had interest income of $5,219
compared to an interest income of $4,449 in 2000, an increase of $770 or 17%.
The interest is earned on our cash reserves.
Our income tax benefit for the year ended December 31, 2001 decreased
by $1,496 or 39% from $3,848 in 2000 to $2,352 in 2001. Our income taxes are
calculated based on the prescribed statutory rates based on our income before
taxes for the specific period.
LIQUIDITY AND CAPITAL RESOURCES
Despite the $50,000 in proceeds that we received from our public
offering in 2001, we ended 2001 with a cash position of $19,365. For the year
ended December 31, 2001, we had a cash flow from operating activities of
($35,919) compared to a cash flow from operating activities of $21,192 for the
year end December 31, 2000. The reduction in cash flow for the year ended
December 31, 2001 can be attributed to the reduction of $64,898 in cash received
from customers in 2001 as compared to in 2000. This is due to the reduction in
business in the months following the events of September 11, 2001. However, by
year end we felt the
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demand for theatre tickets begin to stabilize. As such, we feel that our present
cash flow is sufficient to satisfy our current requirements through the year
ended December 31, 2002.
However, we may require significant additional financial resources for
future expansion, especially if the expansion is effected through the
acquisition of related businesses. It is not possible to quantify what amount
may actually be required. Although the demand for our services seems to have
stabilized, there is no assurance that this level of business will continue
throughout 2002. If needed, we may seek to obtain the financing through
additional public or private equity offerings. If we are unable to generate the
required amount of additional capital, our ability to implement any expansion
strategies may be adversely affected. No specific plans exist for a financing at
this time.
VARIABLES AND TRENDS
We have been conducting the same type of business activities for over
12 years. Key variables in our industry are caused by the lack of popularity or
attraction of certain productions. However, as a general matter, the demand to
see Broadway and Off-Broadway productions has been constant. Successful shows
are enjoying a longer run time (i.e., Cats ran for 18 years and Miss Saigon ran
for 9 years as of December 2000) and prior to September 11, 2001, more people
had been going to see theatrical productions.
In addition, there is a current trend of large, well financed companies
such as Disney, Clear Channel, Fox Theatricals and Dadger Theatricals furnishing
productions backed by substantial promotion dollars. In fact, Disney is
currently presenting three productions on Broadway and Clear Channel has
produced two productions with more scheduled in the coming season.
Our revenue stream is affected by the influx of tourism into New York
City and is directly dependent upon attendance levels at Broadway shows. The
terrorist attacks on the World Trade Center on September 11, 2001 have had a
severe impact on the economic situation in New York City, especially with
respect to tourism and theatre. There have been several advertising campaigns
undertaken as well as promotions at many of the city's hotels and restaurants in
an effort to encourage tourism and theatre attendance in New York City, which
have been successful. However, there is no assurance that the levels of tourism
and theatre attendance will return to their normal levels in the near future.
Continued low levels of tourism and theatre attendance would have adverse
effects on our business.
New theatres and the "rebirth" of the Time Square area of New York City
as well as the subsequent tourist increase had promised more interest and
business in theatre. Assuming that the level of tourism and theatre attendance
continues to increase, all of these influences, changes and product development
taking place including the changes in Times Square, the participation of the
business giants and the promotion of all of live entertainment and the new
theatres and restoration of several elegant historic showplaces can only affect
us positively. Lion King (Disney) has been playing to 101% (standing room)
capacity for 4 years as of November. Cats and Miss Saigon closed after 17 years
and 10 years, respectively. The
17
longevity of several of the other shows (i.e., Les Miserables, Phantom of the
Opera and Chicago) have the potential to make for a solid future for Broadway
and Off-Broadway.
The trauma of September 11, 2001 affected the economic life of New York
City in many aspects. The theatre industry felt an impact as many shows closed
prematurely and others played to lower capacity. Some productions postponed
their openings until Spring 2002 and Fall 2002, cutting down the number of new
productions available for sale. By the end of 2001, the demand for theatre
tickets seemed to stabilize. However, it is unclear whether such demand will
continue given the generally unstable economic and political climate.
We currently employ a total of four employees of which are two are full
time, one is part time and one serves as a consultant. We may need to hire
additional employees during the year ending December 31, 2002 if our needs and
resources permit.
BUSINESS
Overview
We were incorporated under the name Phyllis Maxwell's Groups, Inc. in
New York on April 18, 1989. On August 31, 2001, we filed a Certificate of
Amendment changing our name to Clixtix, Inc.
Our wholly owned subsidiary, Maxwell Group Entertainment, Inc., was
incorporated under the laws of New York on August 3, 2001.
On August 31, 2001, we and our subsidiary entered into an Agreement and
Plan of Reorganization (the "Agreement"). Under the terms of the Agreement, we
sold to our subsidiary all of our tangible and intangible assets appearing on
our Balance Sheet as of June 30, 2001 and our subsidiary assumed all of the
liabilities appearing on our Balance Sheet as of June 30, 2001 in consideration
for 100 shares of our subsidiary's common stock, which constitutes all of the
issued and outstanding stock of our subsidiary.
Neither we nor any of our related companies have ever undergone
bankruptcy, receivership, or similar proceeding.
Our Services
Our company, through our wholly-owned subsidiary, provides services for
groups who are interested in attending New York's Broadway and Off-Broadway
productions. We purchase group tickets from New York City theatres for certain
Broadway and Off-Broadway productions for our clients at box office prices. We
select those shows from all of the ongoing productions, that meet certain
customer criteria, such as critical appreciation, audience appeal, significant
content and entertainment.
We also provide our customers with information and recommendations on
the various productions and theatre events. We inform our clients of what is
expected in the upcoming
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seasons, an important service for customers who must plan ahead, as much as a
year in some cases.
Our Current Sources of Revenues
With the exception of Saturday evening or some holiday performance
periods, our clients do not pay a fee for our services. All fees are paid by the
respective theatres from which the tickets are purchased. A group consists of a
minimum of 20 people. If the number in the group falls below 20 people, a fee is
charged to the customer. All fees for 20 or more tickets are paid by the
respective theatres from which the tickets were purchased. We do not maintain an
inventory of tickets. Tickets are purchased only when an order is placed by our
clients.
Our Customers
We have varied types of clients including:
(a) corporations of all sizes who utilize our services as employee
incentives and customer promotions;
(b) tour groups who bring pre-formed groups to New York and include theatre
performances in their program;
(c) schools and universities sponsoring student activities; and
(d) charities running fund raisers.
Our clients are located in all parts of the country with a
concentration in the northeast. Our clients are solicited by telephone,
recommendations from our existing clients and by the internet. We are currently
listed on five web sites (clixtix.com, pmaxtix.com, studentfriendlytravel.com,
disneycorporation.com, fordtheatre.com) as a source for group tickets.
We have a cadre of 2000 customers. However, no one customer accounts
for more than approximately 8% of our sales volume. Volume for customers vary
with seasons, popularity of certain shows or the customers' changing needs or
policies.
We are constantly soliciting new clients and servicing existing ones.
We have kept many clients throughout our 11 years of operation. However,
invariably, attrition of clients occurs due to personnel changes, mergers,
bankruptcy or policy changes at our corporate clients.
Some of our larger customers buy tickets in increments of 100, 200, or
more. Tour companies buy tickets in multiples of bus loads (i.e., 47-50
tickets). Some tour customers buy tickets for as many as three or four
performances for a group coming to New York for a three or four day visit.
Student groups come to perform with bands or as singers or choruses and include
theatre as part of their entertainment. Some participants in the Macy's
Thanksgiving Day Parade include theatres which we book. On occasion we have
arranged theatre, restaurant and other diversions in an entertainment package.
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Our Competitive Business Conditions
Our business is highly competitive with at least seventeen companies,
in the New York City area, who provide similar services. Some of our largest
competitors are heavily financed and include producers such as Cameron
MacIntosh's TDI, now a division of Broadway.com, and theatre owner groups sales
such as Shubert and Nederlander Theatres. Despite this extensive competition,
over the last five years, we have not had bookings of less than $1,500,000. We
are able to maintain that competitive position based upon the direct and
personal contact between Mrs. Maxwell and her customers. In addition, we
maintain our strong competitive position by providing our clients with current
and regular information on current and future attractions through a newsletter
issued three times a year and bi weekly faxes.
After 23 years in the group sales industry on Broadway, we believe that
Mrs. Maxwell has built a following and has a strong relationship with box office
personnel. Our relationship with other industry professionals, such as
producers, box office personnel, general managers, company managers and public
relations firms, nurtured over the years, facilitates the services we provide.
We believe that Mrs. Maxwell has built a highly regarded reputation for
quality service and a comprehensive knowledge of the theatre. Her expertise
enables her to offer opinions as to what is appropriate for each client or
group. This type of personalized attention is sought after by our customers to
enable them to sell the appropriate shows, plan into future periods and consult
with knowledgeable theatre people.
There are several positive factors developing in the live entertainment
business. As cited elsewhere, New York theatre and Times Square are entering a
new era due to the transformation of Times Square and its environs into a safe,
exciting family oriented tourist destination as well as a mecca for the "bus and
tunnel" customers from the population centered in the megalopolis (these areas
are within a day roundtrip by bus to New York). New York is the second most
sought after tourist destination after Orlando, Florida. In 1999, 36 million
tourists journeyed to New York. A second trend is the production of family
entertainment on Broadway by American predominant entertainment companies.
Disney, who has three shows on Broadway, made the first inroad on 42nd Street to
give credibility to the Times Square Reclamation Project which was assured when
Disney revived and restored an historic theatre treasure, The New Amsterdam.
Clear Channel has two shows on Broadway and owns the Ford Theatre, a restoration
and consolidation of two theatres into a 1700 seat showplace. The financial
strength of these companies has brought about a large amount of advertising and
merchandising that has created a surge of demand which can only help our company
to do additional business. These expenditures and show-specific advertising
campaigns are creating a new audience created by this new awareness.
Ticket prices have moved upward in recent years. Our fees are based on
a fixed percentage of these rising prices. In addition, with the use of the
internet, it is expected that a whole new market will develop.
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Our Suppliers
The ticket prices and information which we provide to our clients is
made available to us by the producers of the respective productions. The tickets
are offered to our customers at the prices established by the theatres. The
information and reduced group ticket prices provided by the producers are
essential to our sales of group theatre tickets. The reduced box office prices
established by the theatres are constantly changing and are determined by many
factors including projected low periods (January), weather, vacations, slow down
of long runs and certain days of the week, etc.
Regulatory Issues
The City of New York requires us to obtain an annual license and to
maintain an insurance policy against fraud. As such, we are bonded and licensed,
as per the City of New York regulations. We are also regulated by the New York
State Attorney General which regulates ticket resale prices.
Research and Development
Other than the costs associated with our search for new clients and
industries, we do not spend funds on research and development. However, as we
intend to expand the scope of our activities by placing greater reliance on the
internet, we expect that the amount of funds we spend on research and
development, in particular with respect to our web site, will slowly increase.
Telephone solicitation will continue at a modest cost to us. We maintain an 800
number as a service to clients across the country.
Employees
As of March 15, 2002, we employ a total of four employees of which two
are full time, one is part time and one serves as a consultant.
Leasehold
We operate a leased office, located at 1501 Broadway, Suite 1807,
New York, New York 10036. We have a ten year lease due to expire in April 2010.
Our annual rent for 2002 is approximately $16,500.
Equipment
We own and lease various pieces of office equipment including two
computers, a printer, a copier and a telephone system as well as additional
pieces of office furniture.
We believe that our properties are adequately covered by insurance as
we carry fire, theft and liability insurance. We also carry worker's
compensation insurance.
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LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding.
MANAGEMENT
Our director(s), executive officer(s) and other key employees, and
their ages, as of March 15, 2002 are as follows:
Name Age Positions held with the Company Since
- ---- --- ------------------------------- -----
Phyllis Maxwell 76 President and Director 1989
Richard Kelley 61 Director 1998
Allen Vershel 70 Director September 2000
The backgrounds of our directors, executive officers and significant
employees are as follows:
Phyllis Maxwell is the founder and has been president of our company
since 1989. After over 21 years of experience in theatre, we believe that Mrs.
Maxwell has built relationships with box office personnel as well as a
reputation for service and knowledge of theatre.
Richard Kelley has thirty years of experience in theatre including work
as a company manager and box office treasurer. Mr. Kelley has been with us since
September 1998. From 1988 through 1998, he served as the Director of Ticketing
Operations for the Stamford Center for the Arts. As a group theatre advisor, his
extensive knowledge of theatre (past, present and future) is an invaluable tool.
His advice and counsel is sought by clients.
Allen Vershel has been a director of our company since September 5,
2000. Dr. Vershel has degrees in dentistry, law and healthcare administration.
From 1978 to present, Dr. Vershel has been a consultant with Second Opinion
Dental Consultants where he reviews and evaluates dental malpractice cases for
attorneys and insurance companies. Dr. Vershel also serves on the Board of
Directors of two private companies.
EXECUTIVE COMPENSATION
The following summary compensation table reflects all compensation
awarded to, earned by, or paid to our Chief Executive Officer and president and
other employees for all services rendered to us in all capacities during each of
the years ended December 31, 2001, 2000 and 1999. None of our other executive
offices received salary and bonus exceeding $100,000 during those years.
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- --------------------------------------------------------------------------------
Summary Compensation Table
- --------------------------------------------------------------------------------
All Annual
Name and Principal Position Year Salary Bonus Compensation
--------------------------- ---- ------ ----- ------------
(**)
- --------------------------------------------------------------------------------
Phyllis Maxwell 2001 $48,000(1) $ 0 $ 0
President 2000 $48,000(1) $ 50,000 $ 0
1999 $48,500(1) $ 0 $ 0
- --------------------------------------------------------------------------------
Richard Kelley 2001 $55,000(2) $ 0 $ 0
Vice President 2000 $55,000(2) $ 0 $ 0
1999 $50,495(2) $ 0 $ 0
- --------------------------------------------------------------------------------
(1) Mrs. Maxwell receives health insurance and related fringe
benefits, which amounted in total to approximately $2,388 in 2001,
$2,388 in 2000 and $5,722 in 1999. As a requirement of business,
Mrs. Maxwell attends every show on Broadway and much of
Off-Broadway. (A portion of her expenses, such as meals,
transportation and entertainment of customers, are paid for by
us.)
(2) Mr. Kelley receives health insurance and other fringe benefits
which amounted in total to approximately $3,730 for 2001, $3,393
for 2000 and $3,200 for 1999. In addition, in 2001, Mr. Kelley
received $2,500 to cover his moving expenses and $2,500 to pay for
his expenses associated with show attendance including meals,
transportation and entertainment of customers.
Directors' Compensation
Directors are not compensated for their services as such.
Employment and Severance Agreement
There are no employment contracts or agreements between us and our
officers.
We do not have any employee stock option or other incentive plans.
PRINCIPAL SHAREHOLDERS
The following lists as of March 15, 2002 the beneficial ownership of
common stock of each person known to us who owns more than 5% of our issued and
outstanding common stock and of our directors, executive officers and
significant employees.
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Name and address** of Amount and Nature Percent of
Beneficial Owner of Beneficial Ownership Class
- ------------------------- ----------------------- ------
Phyllis Maxwell 7,478,000 73%
Richard Kelley 20,000 *
Allen Vershel 18,000(1) *
All directors, executive officers 7,516,000 73%
And significant employees as a
Group (3 persons)
(1) Allen Vershel does not own any shares of our common stock directly.
However, Allen Vershel owns 1,000 shares of our Common Stock as custodian for
each of Austin A. Vershel, Benjamin A. Vershel, Leo I. Vershel, Lisa R. Vershel,
Marin E. Vershel and Rachel M. Vershel, all of whom are his grandchildren. In
addition, of the 18,000 shares listed in the table above, 10,000 shares are
owned by Suzanne Vershel, Mr. Vershel's wife. Mrs. Vershel also owns 1,000
shares of Common Stock as custodian for each of Owen K. Smith and Sophia K.
Smith, her grandchildren.
* Less than 1%
**Unless otherwise referenced, the address for each of the above mentioned
parties is c/o Clixtix, Inc., 1501 Broadway, Suite 1807, New York, New York
10036.
SELLING SHAREHOLDERS
This prospectus relates to the offering by the Selling Shareholder of
shares of our common stock acquired by her in a private transaction. All of the
shares of common stock offered by this Prospectus are being offered by the
Selling Shareholder for her own account.
The Selling Shareholder, as a condition to our filing of this
registration statement, has agreed that we will only be obligated to maintain
the registration statement of which this prospectus is a part, effective for a
period of 12 months from the effective date.
Phyllis Maxwell, our President and director, currently owns an
aggregate of 7,478,000 shares, or 73% of our issued and outstanding common stock
that she purchased from us in a private transaction on April 18, 1989. Mrs.
Maxwell has sole voting and investment power over the shares of common stock
owned by her. She is offering up to 1,341,200 shares of common stock by this
Prospectus. If all 1,341,200 shares offered are sold in this offering, Mrs.
Maxwell will own 6,136,800 shares, or 60% of our issued and outstanding stock.
There is no assurance, however, that all of the shares offered by the Selling
Shareholders will be sold.
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DESCRIPTION OF CAPITAL STOCK
Common Stock
We are authorized to issue 20,000,000 shares of common stock, $0.0001
par value per share, of which 10,228,000 shares were issued and outstanding as
of the date of this prospectus. Each outstanding share of common stock entitles
the holder to one vote, either in person or by proxy, on all matters that may be
voted upon by the owners of those shares at meetings of the stockholders.
The holders of common stock (i) have equal rights to dividends from
funds legally available for the payment of dividends, when, as and if declared
by our board of directors; (ii) are entitled to share ratably in all of our
assets available for distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs; (iii) do not have preemptive,
subscription or conversion rights, and (iv) are entitled to one non-cumulative
vote per share on all matters on which stockholders may vote at all meetings of
stockholders.
All shares of common stock which are the subject of this offering, when
issued, will be fully paid for and non-assessable, with no personal liability
attaching to their ownership. The holders of shares of our common stock do not
have cumulative voting rights, which means that the holders of more than 50% of
the outstanding shares, voting for the election of directors, can elect all of
our directors if they so choose and, in that event, the holders of the remaining
shares will not be able to elect any of our directors.
Each share of common stock is entitled to share pro rata in dividends
and distributions with respect to the common stock when, as and if declared by
the board of directors from funds legally available for that purpose. No holder
of any shares of common stock has any pre-emptive right to subscribe for any of
our securities. Upon dissolution, liquidation or winding up of our company, the
assets will be divided pro rata on a share-for-share basis among holders of the
shares of common stock after any required distribution to the holders of
preferred stock, if any. All shares of common stock outstanding are fully paid
and nonassessable.
Each shareholder of common stock is entitled to one vote per share with
respect to all matters that are required by law to be submitted to shareholders.
The shareholders are not entitled to cumulative voting in the election of
directors. Accordingly, the holders of more than 50% of the shares voting in the
election of directors will be able to elect all the directors if they choose to
do so.
Dividends
We have not declared any dividends since inception, and have no present
intention of paying any cash dividends on our common stock in the foreseeable
future. The payment of dividends, if any, in the future, rests within the
discretion of our board of directors and will depend, among other things, upon
our earnings, our capital requirements and our financial condition, as well as
other relevant facts.
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Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Stocktrans,
Inc.,7 E. Lancaster Avenue, Ardmore, Pennsylvania 19003.
Market for our Common Stock
There has been no trading market for our common stock.
There are currently 68 holders of our outstanding common stock. Other
than the 1,000,000 shares sold in our initial public offering which was
terminated on May 24, 2001, our outstanding common stock was sold in reliance
upon an exemption from registration contained in Section 4(2) of the Securities
Act. There can be no assurance that a trading market will develop.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity. Of the 10,228,000 shares of our common
stock currently issued and outstanding, 9,228,000 are restricted securities as
that term is defined in the Securities Act of 1933.
As of the date of this prospectus, 1,000,000 of our shares of common
stock are immediately eligible for sale in the public market without restriction
or further registration under the Securities Act of 1933, unless purchased by or
issued to any "affiliate" of ours, as that term is defined in Rule 144
promulgated under the Securities Act of 1933, described below. All other
outstanding shares of our common stock are "restricted securities" as that term
is defined under Rule 144, in that those shares were issued in private
transactions not involving a public offering and may not be sold in the absence
of registration other than in accordance with Rule 144, 144(k) or 701
promulgated under the Securities Act of 1933 or another exemption from
registration.
Sales of substantial amounts of our common stock under Rule 144, this
prospectus or otherwise could adversely affect the prevailing market price of
our common stock and could impair our ability to raise capital through the
future sale of our securities.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
We believe that provisions of our Articles of Incorporation and bylaws
will be useful to attract and retain qualified persons as directors and
officers. Our Articles of Incorporation limit the liability of directors and
officers to the fullest extent permitted by New York law. This is intended to
allow our directors and officers the benefit of New York's corporation law which
provides that directors and officers of New York corporations may be relieved of
monetary liabilities for breach of their fiduciary duties as directors, except
under circumstances which involve acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law.
26
Insofar as indemnification for liabilities arising under the Securities
Act of 1993 may be permitted to our directors, officers and controlling persons
under the provisions mentioned above, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission that indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
In the event that a claim for indemnification against those liabilities
(other than our payment of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by a director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether the indemnification by us is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of that issue.
INTEREST OF NAMED EXPERTS AND COUNSEL
Joseph Sierchio, a member of Eiseman, Levine, Lehrhaupt & Kakoyiannis,
P.C., our legal counsel, owns 354,600 shares of our common stock.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby has
been passed upon for us by Eiseman, Levine, Lehrhaupt & Kakoyiannis, P.C., New
York, New York.
EXPERTS
The financial statements of Clixtix, Inc. at December 31, 2000 and
2001, appearing in this prospectus and in the registration statement have been
audited by Marden, Harrison & Kreuter, CPAs, P.C., independent certified public
accountants, as described in their report regarding the financial statement
appearing elsewhere in this Registration Statement, and are included in reliance
upon that report given upon the authority of that firm as experts in auditing
and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a
registration statement on Form SB-2. This prospectus, which is a part of the
registration statement, does not contain all of the information included in the
registration statement. Some information is omitted and you should refer to the
registration statement and its exhibits. With respect to references made in this
prospectus to any of our contracts, agreements or other documents, those
references are not necessarily complete and you should refer to the exhibits
attached to the registration statement for copies of the actual contract,
agreement or other document. You may review a copy of the registration
statement, including exhibits, at the Securities and Exchange Commission's
public reference room at Judiciary Plaza, 450 Fifth Street, N.W.,
27
Washington, D.C. 20549 or Seven World Trade Center, 13th Floor, New York, New
York 10048 or Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.
The public may obtain information on the operation of the public reference
room by calling the Securities and Exchange Commission at 1-800-SEC-0330.
We intend to send an annual report, including audited financial
statements, to our shareholders. We will also file annual, quarterly and current
reports, proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements or other information
on file at the public reference rooms. You can also request copies of these
documents, for a copying fee, by writing to the Securities and Exchange
Commission.
Our registration statement can be reviewed by accessing the Securities
and Exchange Commission's Internet site at http://www.sec.gov, which contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Securities and Exchange
Commission.
28
INDEX TO
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 2001
------------------------------------------
CONTENTS
-----------
Independent auditors' report 30
Financial statements:
Consolidated balance sheets 31
Consolidated statements of income 32
Consolidated statements of stockholders' equity 33
Consolidated statements of cash flows 35
Notes to consolidated financial statements 36
29
[LETTERHEAD OF MARDEN, HARRISON & KREUTER, CPAs, P.C.]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Board of Directors and Stockholders
Clixtix, Inc. and Subsidiary
1501 Broadway
Suite 1807
New York, New York 10036
We have audited the accompanying consolidated balance sheets of Clixtix, Inc.
and Subsidiary (formerly Phyllis Maxwell's Group, Inc.) as of December 31, 2001
and 2000 and the related consolidated statements of income, stockholders' equity
and cash flows for the years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Clixtix, Inc. and
Subsidiary (formerly Phyllis Maxwell's Groups, Inc.) as of December 31, 2001 and
2000, and the results of its operations and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.
/s/ Marden, Harrison & Kreuter
White Plains, New York
February 14, 2002
30
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
-----------------------------
December 31, December 31,
2001 2000
------------ ------------
ASSETS
- ------
Current assets:
Cash $ 19,365 $ 30,132
Commissions receivable 103,539 96,963
Other assets - 5,666
---------- ----------
Total current assets 122,904 132,761
Loans receivable - stockholder - 20,000
Other assets 2,654 -
---------- ----------
Total assets $ 125,558 $ 152,761
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $ 39,708 $ 62,009
Deferred income taxes payable 12,420 15,500
Loan payable - stockholder - 7,870
---------- ----------
Total liabilities 52,128 85,379
---------- ----------
Commitments
Stockholders' equity:
Common stock, .0001 par value; 20,000,000
shares authorized, 10,228,000 shares issued
and outstanding at December 31, 2001;
10,500,000 shares issued and outstanding
at December 31, 2000 20,973 20,100
Additional paid-in capital 34,058 23,349
Retained earnings 18,399 23,933
---------- ----------
Total stockholders' equity 73,430 67,382
---------- ----------
Total liabilities and stockholders' equity $ 125,558 $ 152,761
========== ==========
The accompanying notes are an integral part of these financial statements.
31
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2001 AND 2000
-------------------------------------------
Year ended Year ended
December 31, December 31,
2001 2000
----------- --------------
Commission revenue $ 228,009 $ 268,882
General and administrative expenses 241,114 307,696
---------- ----------
Loss from operations (13,105) (38,814)
Interest income 5,219 4,449
---------- ----------
Loss before income taxes (7,886) (34,365)
---------- ----------
Income taxes (benefit):
Current 728 1,270
Deferred (3,080) (5,118)
---------- ----------
(2,352) (3,848)
---------- ----------
Net loss $ (5,534) $ (30,517)
=========== ==========
Earnings (loss) per common share -
basic and diluted $ .00 $ .00
========== ==========
Weighted average common shares
outstanding - basic and dilutive 10,940,615 10,269,231
========== ==========
The accompanying notes are an integral part of these financial statements.
32
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
Common Stock Additional
------------ Paid-In Retained
Shares Amount Capital Earnings Total
------ ------ ------- -------- -----
Balances, December 31, 1999 10,000,000 $ 100 $ 23,349 $ 54,450 $ 77,899
Issuance of shares for professional
Services 500,000 20,000 - - 20,000
Net loss, year ended 2000 - - - (30,517) (30,517)
---------- -------- -------- -------- --------
Balances, December 31, 2000 10,500,000 20,100 23,349 23,933 67,382
Issuance of 1,000,000 of $.001 per value
common stock at a price of $.05 per
share, net of issuance costs totalling
$12,978 1,000,000 1,000 36,022 - 37,022
Cancellation of 1,272,000 shares of
common stock, accepted in satisfaction
of stockholder loan receivable (1,272,000) (127) (25,313) - (25,440)
Net loss, year ended 2001 - - - (5,534) (5,534)
---------- -------- -------- -------- --------
Balances, December 31, 2001 10,228,000 $ 20,973 $ 34,058 $ 18,399 $ 73,430
========== ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
33
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
Year ended Year ended
December 31, December 31,
2001 2000
------------- ------------
Cash flows provided by (used in):
Operating activities:
Cash received from customers $ 199,132 $ 264,030
Cash paid to suppliers and
employees (238,102) (246,187)
Interest received 3,779 4,449
Income tax paid (728) (1,100)
------------ ------------
Net cash provided by (used in)
operating activities (35,919) 21,192
------------ ------------
Financing activities:
Advances from stockholder - 25,000
Advances to stockholder (4,000) (20,000)
Repayment of loan payable stockholder (7,870) -
Proceeds from issuance of common stock 50,000 -
Issue costs associated with issuance of common stock (12,978) -
------------ ------------
Net cash provided by financing activities 25,152 5,000
------------ ------------
Net increase (decrease) in cash (10,767) 26,192
Cash, beginning of year 30,132 3,940
------------ ------------
Cash, end of year $ 19,365 $ 30,132
============ ============
The accompanying notes are an integral part of these financial statements.
34
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONCLUDED)
-----------------------------
Year ended Year ended
December 31, December 31,
2001 2000
------------- ------------
Reconciliation of net loss to net cash provided by
operating activities:
Net loss $ (5,534) $(30,517)
-------- --------
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Issuance of common stock for
professional services - 20,000
Deferred income taxes (3,080) (5,118)
Accrued interest (1,440) -
Changes in assets (increase)
decrease:
Commissions receivable (6,576) (4,852)
Other assets 3,012 -
Changes in liabilities increase (decrease):
Accounts payable (22,301) 41,679
-------- --------
Total adjustments (30,385) 51,709
-------- --------
Net cash provided by (used in)
operating activities $(35,919) $ 21,192
======== ========
Supplemental schedule of non-cash financing activities:
- -------------------------------------------------------
On July 1, 2000, the Board of Directors approved issuance of 500,000 shares of
common stock to its legal counsel and a consultant based on a fair value of
$20,000 for common stock issued.
On December 30, 2001, the Company accepted 1,272,000 of the Company's common
stock from the Company's President as repayment of a stockholder loan receivable
totalling $25,440. These shares were cancelled upon acceptance.
The accompanying notes are an integral part of these financial statements.
35
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
(1) Nature of operations:
Clixtix, Inc. and its wholly owned subsidiary Maxwell Group
Entertainment, Inc. (collectively the "Company") are licensed by
the City of New York to resell group tickets to Broadway and off-Broadway
performances.
(2) Basis of consolidation and nature of business:
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary, Maxwell Group
Entertainment, Inc. In August 2001, Maxwell Group Entertainment, Inc. was
formed. During August 2001, Phyllis Maxwell's Groups, Inc. transferred its
net assets to Maxwell Group Entertainment, Inc. for its issued and
outstanding common stock forming a wholly owned subsidiary. On the same day
of the transfer of assets, through a Certificate of Amendment, Phyllis
Maxwell's Groups, Inc. changed its name to Clixtix, Inc. All intercompany
accounts and transactions have been eliminated in consolidation.
(3) Summary of significant accounting policies:
(A) Revenue recognition:
Commission revenue is recognized at the date the invoice is
generated. The Company is paid directly from the theatre after
the date of the performance, which may be over a year after the
date of the invoice. The Company may have losses due to
cancellation of performances. Historically, these losses have
not been significant and losses under present obligations are
not expected to be significant. Accordingly, no provision has
been made for future losses that may result from a cancellation
of a performance. It is at least reasonably possible that the
Company's estimate will change in the near term.
(B) Income taxes:
The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Under Statement No. 109, the asset and liability method
is used in accounting for income taxes. Deferred taxes are
recognized for temporary differences between the basis of assets
and liabilities for financial statement and income tax purposes.
The temporary differences relate primarily to the bases of
revenue recognition for financial and income tax reporting
purposes. The deferred taxes represent the future tax return
consequences of those differences, which will either be taxable
or deductible when the assets and liabilities are recovered or
settled.
36
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
(3) Summary of significant accounting policies - cont'd:
(C) Use of estimates:
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from the estimates.
(D) Earnings (loss) per share:
Earnings (loss) per share-basic is computed based on the
weighted average number of shares of common stock outstanding.
Earnings (loss) per share-dilutive reflects the potential
dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock
or other contracts to issue common stock were exercised or
converted into common stock or otherwise resulted in the
issuance of common stock and is computed similarly to "fully
diluted" earnings (loss) per share that was reported under
previous accounting standards. Dilutive potential common shares
do not have a significant dilutive effect.
(4) Stockholders' equity:
(A) Common stock and per share data:
The common stock and per share data for all periods gives effect
to a stock split, declared by the Company's Board of Directors
on September 22, 2000, of 100,000 to 1 shares which occured
immediately before the date of the Company's initial public
offering.
(B) Issuance of common stock
On July 1, 2000, the Company issued 400,000 shares of its common
stock to its legal counsel and 100,000 share of its common stock
to a consultant based on fair value of the common shares issued
totalling $20,000 ($.04 per share).
37
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
(4) Stockholders' equity - cont'd:
(C) Initial public offering:
In September 2000, the Company filed an initial public offering
registration with the Securities and Exchange Commission for
purpose of issuing an additional 1,000,000 shares of common
stock at an issuance price of $.05 per share. This filing was
approved by the Securities and Exchange Commission during
February 2001. Total costs incurred during the year ended
December 31, 2000 by the Company for the offering, including the
issuance of common stock to the Company's legal counsel (see
Note 4B), were $45,000. The offering was completed during May
2001. Net proceeds from this offering were $37,022, net of
issuance costs of $12,978.
Following the issuance of the initial public offering of common
shares, the Company's current President owned 87% of the
outstanding common stock of the Company.
(D) Cancellation of common stock:
On December 30, 2001, the Company accepted 1,272,000 of the
Company's common stock from the Company's President as repayment
of an outstanding stockholder loan receivable totalling $25,440.
These common shares were cancelled upon acceptance by the
Company (Note 7(A)).
(5) Operating leases:
At December 31, 2001, the Company is obligated under operating leases for
office space and office equipment, with minimum lease payments through
April 2010 as follows:
Year ending
December 31, Amount
------------ ------
2002 $ 16,354
2003 16,354
2004 16,354
2005 16,354
2006 16,354
Thereafter 64,201
---------
$ 145,971
=========
Rent expense for the years ended December 31, 2001 and 2000 applicable to
these operating leases was $20,080 and $16,973, respectively.
38
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
(6) Concentration risk:
Financial instruments, which potentially expose the Company to
concentrations of credit risks, consist primarily of cash and
commissions receivable.
Commissions receivable are due from production companies, which
operate in theaters throughout New York City. The Company minimizes its
risks by monitoring its customer balances.
The Company at times during the year maintains its cash in accounts,
which exceed Federally insured limits for such accounts. The Company limits
its credit risk by selecting financial institutions considered to be highly
creditworthy.
The Company's revenue stream is directly dependent upon in the influx of
tourism into New York City. The World Trade Center tragedy on September
11, 2001 has had a severe impact on economic growth in New York City,
especially with respect to tourism. The possibility of fewer potential
customers for future performances may negatively impact the Company's
future results.
(7) Related party:
(A) Loans receivable - stockholder:
At December 31, 2000, the Company has advanced a stockholder
$20,000. There were additional amounts advanced and satisfied
during 2001, as more fully described in Note 4(D).
(B) Loan payable - stockholder:
At December 31, 2001 and 2000, the Company has a loan from a
stockholder totalling $-0- and $7,870, respectively. This loan
is non-interest bearing.
(8) Income taxes:
The components of income tax expense are as follows:
Year ended Year ended
December 31, December 31,
2001 2000
------------ ------------
Current
Federal $ - $ -
State and local 728 1,270
--------- --------
728 1,270
--------- --------
39
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
(8) Income taxes - cont'd:
Year ended Year ended
December 31, December 31,
2001 2000
------------ ------------
Deferred
Federal (980) (4,600)
State and local (2,100) (518)
------------ --------
(3,080) (5,118)
------------ --------
Total $ (2,352) $ (3,848)
============ =========
A reconciliation of the statutory Federal income tax rate to the provision
for income taxes is as follows:
Year ended Year ended
December 31, December 31,
2001 2000
------------ ------------
Statutory Federal income
tax rate 34% 34%
State and local taxes 18 18
Effect of net operating
loss (24) (24)
Effect of graduated
rates on statutory rate (28) (28)
---- ----
0% 0%
==== ====
40
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
(8) Income taxes - cont'd:
The details of deferred income tax assets and liabilities are as follows:
Year ended Year ended
December 31, December 31,
2001 2000
------------ ------------
Deferred income tax assets:
Net operating loss
carryforward $ 17,000 $ 13,800
Accounts payable 1,580 1,700
Deferred income tax liabilities:
Commissions receivable (31,000) (31,000)
----------- ----------
Deferred income tax
liabilities, net $ (12,420) $ (15,500)
=========== ==========
At December 31, 2001, the Company has net operating loss carryforwards for
Federal income tax purposes of approximately $50,000, which expire through
2016.
(9) Earnings (loss) per share:
Income
(Loss) Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- ------
Year ended December 31, 2001:
-----------------------------
Basic EPS
Loss available to common
stockholders $ (5,534) 10,940,615 $.00
====
Effective dilutive securities - -
--------- ----------
Diluted EPS
Loss available to common
stockholders $ (5,534) 10,940,615 $.00
========== ========== ====
41
CLIXTIX, INC. AND SUBSIDIARY
(FORMERLY PHYLLIS MAXWELL'S GROUPS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONCLUDED)
YEARS ENDED DECEMBER 31, 2001 AND 2000
------------------------------------------
(9) Earnings (loss) per share - cont'd:
Income
(Loss) Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- ------
Year ended December 31, 2000:
-----------------------------
Basic EPS
Loss available to common
stockholders $ (30,517) 10,269,231 $.00
====
Effective dilutive securities - -
---------- ----------
Diluted EPS
Loss available to common
stockholders $ (30,517) 10,269,231 $.00
=========== ========== ====
42
PHYLLIS MAXWELL'S GROUPS, INC.
1,000,000 Shares of
Common Stock
--------------------
PROSPECTUS
--------------------
_________, 2002
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemization of various expenses,
all of which we will pay, in connection with the sale and distribution of the
securities being registered. All of the amounts shown are estimates, except the
Securities and Exchange Commission registration fee.
Securities and Exchange Commission Registration Fee $ 2.47
Accounting Fees and Expenses $ 5,000.00
Legal Fees and Expenses $ 12,500.00
Miscellaneous $ 2,500.00
Total $ 20,002.47
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Except as discussed below, there is no charter provision, bylaw,
contract, arrangement or statute under which any officer or director of the
registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such.
Indemnification of Directors and Officers
Section 722 of New York Business Corporation Law, as amended, provides
for the indemnification of the company's officers, directors and corporate
employees and agents under certain circumstances as follows:
43
AUTHORIZATION FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) A corporation may indemnify any person, made, or threatened to be made,
a party to an action or proceeding other than one by or in the right of the
corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer of the
corporation served in any capacity at the request of the corporation, by reason
of the fact that he, his testator or intestate, was a director or officer of the
corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorney's fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if that director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
(b) The termination of any such civil or criminal action or proceeding by
judgment, settlement, conviction or upon a plea of nolo contendre, or its
equivalent, shall not in itself create a presumption that any such director or
officer did not act, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
not opposed to, the best interests of the corporation or that he had reasonable
cause to believe that his conduct was unlawful.
(c) A corporation may indemnify any person made, or threatened to be made,
a party to an action by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he, his testator or intestate, is or was
a director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of any other corporation of any type or
kind, domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense or settlement of such action, or
in connection with an appeal therein if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the corporation, except that no indemnification under this paragraph shall be
made in respect of (1) a threatened action, or a pending action which is settled
or otherwise disposed of, or (2) any claim issue or matter as to which such
person shall have been adjudged to be liable to the corporation, unless and only
to the extent that the court on which the action was brought, or if no action
was brought, any court of competent jurisdiction , determines upon application
that, in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for such portion of the settlement amount and
expenses as the court deems proper.
44
(d) For the purpose of this section, a corporation shall be deemed to have
requested a person to serve an employee benefit plan where the performance by
such person of his duties to the corporation also imposes duties on, or
otherwise involves services by, such person to the plan or participants or
beneficiaries of the plan; excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be considered fines; and
action taken or omitted by a person with respect to an employee benefit plan in
the performance of such person's duties for a purpose reasonably believed by
such person to be in the interest of the participants and beneficiaries of the
plan shall be deemed to be for a purpose which is not opposed to the best
interests of the corporation.
Section 723 of the New York Business Corporation Law, as amended,
provides for the payment of indemnification other than by a court award.
Notwithstanding a failure of a corporation to provide indemnification
and despite any contrary resolution of the board or of the shareholders, Section
724 of New York Business Corporation Law, as amended, provides for the
indemnification of a company's officers and directors by a court. Moreover,
Section 726 of the New York Business Corporation Law provides for the situations
in which a corporation shall have the power to purchase and maintain insurance
for indemnification of directors and officers.
The Securities and Exchange Commission's Policy on Indemnification
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to any provisions contained in its certificate of
incorporation, or by-laws, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
Our articles of incorporation provide that the corporation shall, to
the fullest extent permitted by the Business Corporation Law of the State of New
York, indemnify any and all persons whom it shall have power to indemnify under
Article 7 thereof.
The indemnification provided by our Articles of Incorporation is not
exclusive of any other rights to which those indemnified may be entitled under
the bylaws, any agreement, vote of shareholders or disinterested directors or
otherwise, and any procedure provided for by any of the foregoing, both as to
action in his or her official capacity and as to action in another while holding
such office, and shall continue as to a person who has ceased to be a director,
45
officer, employee or agent and shall inure to the benefit of heirs, executors
and administrators of such a person.
Our by-laws give effect to the foregoing provision's of our Articles of
Incorporation.
The Company may obtain liability insurance for its directors and
officers covering, subject to exceptions, any actual or alleged negligent act,
error, omission, misstatement, misleading statement, neglect or breach of duty
by such directors or officers, individually or collectively, in the discharge of
their duties in their capacity as directors or officers of Phyllis Maxwell's
Groups, Inc.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Set forth in chronological order is information regarding all shares of
common stock that the Company sold during the past three years without
registering the same under the Securities Act. Also included is the
consideration, if any, received by us for such shares and information relating
to the section of the Securities Act of 1933 (the "Securities Act"), or rule of
the Securities and Exchange Commission under which exemption from registration
was claimed.
On July 1, 2000, the company issued 400,000 shares of its Common Stock,
giving effect to a stock split of 100,000 to 1 on September 22, 2000, to
Sierchio & Albert, P.C., the company's legal counsel, in consideration for legal
services performed for the company. The company believes that such transaction
was exempt from registration under the Securities Act pursuant to Section 4(2)
and the rules and regulations promulgated thereunder as a transaction by an
issuer not involving any public offering.
On July 1, 2000, the company issued 100,000 shares of its Common Stock,
giving effect to a stock split of 100,000 to 1 on September 22, 2000, to Mr.
Tony Russo in consideration for consulting services performed for the company.
The company believes that such transaction was exempt from registration under
the Securities Act pursuant to Section 4(2) and the rules and regulations
promulgated thereunder as a transaction by an issuer not involving any public
offering.
46
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
The following Exhibits are attached hereto:
EXHIBIT DESCRIPTION OF EXHIBIT AND FILING REFERENCE
NUMBER
3.1(a) Articles of Incorporation
3.1(b) Certificate of Amendment to the Articles of Incorporation
3.1 (c) Certificate of Amendment to the Articles of Incorporation
3.2 Bylaws
5.1 Opinion of Eiseman, Levine, Lehrhaupt & Kakoyiannis, P.C.,
regarding the legality of the securities being registered
10.0 Agreement and Plan of Reorganization
21.0 Subsidiaries of the Registrant
23.1 Consent of Eiseman, Levine, Lehrhaupt & Kakoyiannis, P.C. (included
in Exhibit 5.1)
23.2 Consent of Marden, Harrison & Kreuter, CPAs, P.C.
(B) FINANCIAL STATEMENT SCHEDULES
Financial Statement Schedules have been omitted because the information
is included in the Financial Statements and Notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
47
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement; and Notwithstanding the forgoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) of the Securities Act if, in
the aggregate, the changes in the volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on the plan of
distribution.
2. For determining liability under the Securities Act of 1933, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
3. File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
4. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 14 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
48
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorizes this registration
statement to be signed on its behalf by the undersigned, in the City of New
York, State of New York, on the 26th day of March, 2002.
CLIXTIX, INC.
By: /s/ Phyllis Maxwell
Phyllis Maxwell
President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated:
SIGNATURE TITLE DATE
/s/ Phyllis Maxwell President and Director March 26, 2002
Phyllis Maxwell (principal executive officer)
/s/ Richard Kelley Vice President and Director March 26, 2002
Richard Kelley (principal financial officer, principal accounting officer)
49
EXHIBIT INDEX
The following Exhibits are attached hereto:
EXHIBIT DESCRIPTION OF EXHIBIT AND FILING REFERENCE PAGE
NUMBER
3.1(a) Articles of Incorporation 51
3.1(b) Certificate of Amendment to the Articles of Incorporation 54
3.1(c) Certificate of Amendment to the Articles of Incorporation 56
3.2 Bylaws 58
5.1 Opinion of Eiseman, Levine, Lehrhaupt & Kakoyiannis, P.C.,
regarding the legality of the securities being registered 67
10.0 Agreement and Plan of Reorganization 69
21.0 Subsidiaries of the Registrant 78
23.1 Consent of Eiseman, Levine, Lehrhaupt & Kakoyiannis, P.C.
(included in Exhibit 5.1)
23.2 Consent of Marden, Harrison & Kreuter, CPAs, P.C. 79
50
EXHIBIT 3.1(a)
- --------------
CERTIFICATE OF INCORPORATION
OF
PHYLLIS MAXWELL'S GROUPS, INC.
(Under Section 402 of the Business Corporation Law)
THE UNDERSIGNED, a natural person over the age of eighteen years, desiring
to form a corporation pursuant to Section 402 of the Business Corporation Law of
the State of New York, hereby certifies:
FIRST: The name of the Corporation is Phyllis Maxwell's Groups, Inc.,
hereinafter sometimes referred to as the "Corporation."
SECOND: The purposes for which the Corporation is formed is to engage in
any lawful activity for which corporations may be organized under the Business
Corporation Law of the State of New York; provided, however, that it is not
formed to engage in any act or activity requiring the consent or approval of any
state official, department, board, agency or other body without such consent or
approval first being obtained.
THIRD: The office of the Corporation in the State of NewYork shall be
located in the County of New York.
51
FOURTH: The aggregate number of shares which the Corporation shall have the
authority to issue shall be Two Hundred (200), all of which shares shall be
without par value.
FIFTH: The Secretary of State of the State of New York is hereby
designated as agent of the Corporation upon whom process against it may be
served. The post office address to which the Secretary of State shall mail a
copy of any process against it served upon him is: Phyllis Maxwell's Groups,
Inc., c/o Zukerman & Gore, 900 Third Avenue, New York New York 10022, Attention:
Nathaniel S. Gore, Esq.
SIXTH: The Corporation shall, to the fullest extent permitted by Article 7
of the Business Corporation Law of the State of New York, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said Article from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said Article, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which any person may be entitled under any By-Law, resolution of
shareholders, resolution of directors, agreement, or otherwise, as permitted by
said Article, as to action in any capacity in which he served at the request of
the Corporation.
52
SEVENTH: The personal liability of the directors of the Corporation is
eliminated to the fullest extent permitted by the provisions of paragraph (b) of
Section 402 of the Business Corporation Law of the State of New York, as the
same may be amended and supplemented.
IN WITNESS WHEREOF, I hereunto sign my name and affirm that the statements
made herein are true under the penalties of perjury, this 14th day of April,
1989.
/s/ Nathaniel S. Gore, Esq.
---------------------------
Nathaniel S. Gore, Esq.
Sole Incorporator
900 Third Avenue
New York, New York 10022
53
EXHIBIT 3.1(b)
- --------------
Certificate of Amendment of the Certificate of Incorporation of
Phyllis Maxwell's Groups, Inc.
Under Section 805 of the Business Corporation Law
It is hereby certified that:
1. The name of the corporation (herein referred to as the "corporation")
is:
Phyllis Maxwell's Groups, Inc.
2. The corporation's Certificate of Incorporation was filed with the
Office of the Secretary of State on April 18, 1989.
3. The Certificate of Incorporation of the corporation is hereby amended
by striking out Article FOURTH relating to the corporation's authorized shares
and by substituting in lieu of said Article the following new Article:
"FOURTH: (1) The aggregate number of shares of common stock which the
Corporation shall have authority to issue shall be 20,000,000 and the par
value of each share is $.0001 amounting in the aggregate to $2,000."
4. Upon the amendment herein certified becoming effective and without
further action on the part of the Corporation or its stockholders, each of the
currently outstanding shares of Common Stock having no par value (105 shares)
and each of the currently unissued shares of Common Stock having no par value
(95 shares) shall be automatically converted and split into 100,000 shares of
Common Stock, $0.0001 par value, with the result that the Corporation shall have
10,500,000 shares of issued and outstanding Common Stock with a par value of
$0.0001 and 9,500,000 shares of unissued Common Stock with a par value of
$0.0001. Upon the amendments herein certified becoming effective, each
certificate representing shares of Common Stock theretofore issued and
outstanding shall be deemed to represent a number of shares of Common Stock
equal to the number of shares of Common Stock formerly represented by such
certificate multiplied by 100,000 and such shares shall be deemed duly
authorized, validly issued, fully paid and non-assessable; and the holder of
record of each such certificate shall be entitled to receive a new certificate,
upon the surrender of the existing certificate, representing a number of shares
of Common Stock, $.0001 par value, equal to the number of shares of Common Stock
formerly represented by such certificate multiplied by 100,000.
54
5. The amendment of the Certificate of Incorporation herein certified
was duly authorized by unanimous written consent of the Board of Directors
followed by unanimous written consent of the shareholders in accordance with the
provisions of Section 803(a) of the New York Business Corporation Law.
IN WITNESS WHEREOF, the undersigned, being an authorized officer of the
corporation, has hereunto signed his name and affirms that the statements made
herein are true under the penalties of perjury, this 22nd day of September,
2000.
Phyllis Maxwell's Groups, Inc.
BY: /s/ Phyllis Maxwell
--------------------------
Phyllis Maxwell, President
55
EXHIBIT 3.1(c)
- --------------
Certificate of Amendment of the Certificate of Incorporation of
Phyllis Maxwell's Groups, Inc.
Under Section 805 of the Business Corporation Law
It is hereby certified that:
1. The name of the corporation (herein referred to as the "corporation")
is:
Phyllis Maxwell's Groups, Inc.
2. The corporation's Certificate of Incorporation was filed with the
Office of the Secretary of State on April 18, 1989. The corporation filed a
Certificate of Amendment of the Certificate of Incorporation on September 22,
2001.
3. The Certificate of Incorporation of the corporation is hereby
amended changing the Corporation's name by striking out Article FIRST thereof
and by substituting in lieu of said Article the following new Article:
"FIRST: The name of the Corporation is Clixtix, Inc., hereinafter
sometimes referred to as the "Corporation."
4. The Certificate of Incorporation of the corporation is hereby
amended by adding the following Article "EIGHTH" thereto:
"EIGHTH: Whenever under the provisions of the New York Business
Corporation law shareholders are required or permitted to take action by vote,
such action may be taken without a meeting on written consent, setting forth the
action so taken signed by the holders of outstanding shares having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted."
5. The amendments of the Certificate of Incorporation herein certified
were duly authorized by unanimous written consent of the Board of Directors
followed by a vote of a majority of all outstanding shares entitled to vote
thereon at a meeting of shareholders of the corporation in accordance with the
provisions of Section 803(a) of the New York Business Corporation Law.
56
IN WITNESS WHEREOF, the undersigned, being an authorized officer of the
corporation, has hereunto signed his name and affirms that the statements made
herein are true under the penalties of perjury, this 28th day of August, 2001.
Phyllis Maxwell's Groups, Inc.
BY: /s/Phyllis Maxwell
---------------------------
Phyllis Maxwell, President
57
EXHIBIT 3.2
- -----------
BY - LAWS
---------
OF
--
PHYLLIS MAXWELL'S GROUPS, INC.
------------------------------
(a New York corporation)
---------
ARTICLE I
---------
SHAREHOLDERS
------------
1. CERTIFICATES REPRESENTING SHARES. Certificates representing shares shall
--------------------------------- set forth thereon any statements
prescribed by applicable law and shall be signed by the Chairman or a
Vice-Chairman of the Board of Directors, if any, or by the President or a
Vice-President and by the Secretary or an Assistant Secretary or the Treasurer
or an Assistant Treasurer and may be sealed with the corporate seal or a
facsimile thereof. The signatures of the officers upon a certificate may be
facsimiles if the certificate is countersigned by a transfer agent or registered
by a registrar other than the corporation itself or its employee, or if the
shares are listed on a registered national security exchange. In case any
officer who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issue.
A certificate representing shares shall not be issued until the full amount
of consideration therefor has been paid except as Section 504 of the Business
Corporation Law may otherwise permit.
The corporation may issue a new certificate for shares in place of any
certificate theretofore issued by it, alleged to have been lost or destroyed,
and the Board of Directors may require the owner of any lost or destroyed
certificate, or his legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such certificate
or the issuance of any such new certificate.
2. FRACTIONAL SHARE INTERESTS. The corporation may issue certificates for
--------------------------- fractions of a share which shall entitle the
holder, in proportion to his fractional holdings, to exercise voting rights,
receive dividends, and participate in liquidating distributions; or it may pay
in cash the fair value of fractions of a share as of the time when those
entitled to receive such fractions are determined; or it may issue scrip in
registered or bearer form over the manual or facsimile signature of an officer
of the corporation or of its agent, exchangeable as therein provided for full
shares, but such scrip shall not entitle the holder to any rights of a
shareholder except as therein provided.
58
3. SHARE TRANSFERS. Upon compliance with provisions restricting the
---------------- transferability of shares, if any, transfers of shares
of the corporation shall be made only on the share record of the corporation by
the registered holder thereof, or by his attorney thereunto authorized by power
of attorney duly executed and filed with the Secretary of the corporation or
with a transfer agent or a registrar, if any, and on surrender of the
certificate or certificates for such shares properly endorsed and the payment of
all taxes due thereon.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of determining the
----------------------------- shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or to express
consent to or dissent from any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any dividend or the
allotment of any rights, or for the purpose of any other action, the directors
may fix, in advance, a date as the record date for any such determination of
shareholders. Such date shall not be more than sixty days nor less than ten days
before the date of such meeting, nor more than sixty days prior to any other
action. If no record date is fixed, the record date for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of the business on the day next preceding the day on which
notice is given, or, if no notice is given, the day on which the meeting is
held; the record date for determining shareholders for any purpose other than
that specified in the preceding clause shall be at the close of business on the
day on which the resolution of the directors relating thereto is adopted. When a
determination of shareholders of record entitled to notice of or to vote at any
meeting of shareholders has been made as provided in this paragraph, such
determination shall apply to any adjournment thereof, unless directors fix a new
record date under this paragraph for the adjourned meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
-------------------------- notice of a meeting of shareholders or a
waiver thereof or to participate or vote thereat or to consent or dissent in
writing in lieu of a meeting, as the case may be, the term "share" or "shares"
or "shareholder" or "shareholders" refers to an outstanding share or shares and
to a holder or holders of record of outstanding shares when the corporation is
authorized to issue only one class of shares, and said reference is also
intended to include any outstanding share or shares and any holder or holders of
record of outstanding shares of any class upon which or upon whom the
Certificate of Incorporation confers such rights where there are two or more
classes or series of shares or upon which or upon whom the Business Corporation
Law confers such rights notwithstanding that the Certificate of Incorporation
may provide for more than one class or series of shares, one or more of which
are limited or denied such rights thereunder.
6. SHAREHOLDER MEETINGS.
---------------------
- TIME. The annual meeting shall be held on the date fixed, from time to
---- time, by the directors, provided, that the first annual meeting
shall be held on a date within thirteen months after the formation of the
corporation, and each successive annual meeting shall be held on a date within
thirteen months after the date of the preceding annual meeting. A
59
special meeting shall be held on the date fixed by the directors except when the
Business Corporation Law confers the right to fix the date upon shareholders.
- PLACE. Annual meetings and special meetings shall be held at such place,
------ within or without the State of New York, as the directors may,
from time to time, fix. Whenever the directors shall fail to fix such place, or,
whenever shareholders entitled to call a special meeting shall call the same,
the meeting shall be held at the office of the corporation in the State of New
York.
- CALL. Annual meetings may be called by the directors or by any officer
----- instructed by the directors to call the meeting. Special meetings
may be called in like manner except when the directors are required by the
Business Corporation Law to call a meeting, or except when the shareholders are
entitled by said Law to demand the call of a meeting.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written notice of all
-------------------------------------------------- meetings shall be
given, stating the place, date, and hour of the meeting, and, unless it is an
annual meeting, indicating that it is being issued by or at the direction of the
person or persons calling the meeting. The notice of an annual meeting shall
state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall (if any other action which could be taken at a special meeting is to be
taken at such annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes for which
the meeting is called; and, at any such meeting, only such business may be
transacted which is related to the purpose or purposes set forth in the notice.
If the directors shall adopt, amend, or repeal a By-Law regulating an impending
election of directors, the notice of the next meeting for election of directors
shall contain the statements prescribed by Section 601(b) of the Business
Corporation Law. If any action is proposed to be taken which would, if taken,
entitle shareholders to receive payment for their shares, the notice shall
include a statement of that purpose and to that effect and shall be accompanied
by a copy of Section 623 of the Business Corporation Law or an outline of its
material terms. A copy of the notice of any meeting shall be given, personally
or by first class mail, not fewer than ten days nor more than sixty days before
the date of the meeting, unless the lapse of the prescribed period of time shall
have been waived, to each shareholder at his record address or at such other
address which he may have furnished by request in writing to the Secretary of
the corporation. In lieu of giving a copy of such notice personally or by first
class mail as aforesaid, a copy of such notice may be given by third class mail
not fewer than twenty-four nor more than sixty days before the date of the
meeting. Notice by mail shall be deemed to be given when deposited, with postage
thereon prepaid, in a post office or official depository under the exclusive
care and custody of the United States post office department. If a meeting is
adjourned to another time or place, and, if any announcement of the adjourned
time or place is made at the meeting, it shall not be necessary to give notice
of the adjourned meeting unless the directors, after adjournment, fix a new
record date for the adjourned meeting. Notice of a meeting need not be given to
any shareholder who submits a signed waiver of notice before or after the
meeting. The attendance of a shareholder at a meeting without protesting prior
to the
60
conclusion of the meeting the lack of notice of such meeting shall
constitute a waiver of notice by him.
- SHAREHOLDER LIST AND CHALLENGE. A list of shareholders as of the record
------------------------------- date, certified by the Secretary or other
officer responsible for its preparation or by the transfer agent, if any, shall
be produced at any meeting of shareholders upon the request thereat or prior
thereto of any shareholder. If the right to vote at any meeting is challenged,
the inspectors of election, if any, or the person presiding thereat, shall
require such list of shareholders to be produced as evidence of the right of the
persons challenged to vote at such meeting, and all persons who appear from such
list to be shareholders entitled to vote thereat may vote at such meeting.
- CONDUCT OF MEETING. Meetings of the shareholders shall be presided over
------------------- by one of the following officers in the order of
seniority and if present and acting - the Chairman of the Board, if any, the
Vice-Chairman of the Board, if any, the President, a Vice-President, or, if none
of the foregoing is in office and present and acting, by a chairman to be chosen
by the shareholders. The Secretary of the corporation, or in his absence, an
Assistant Secretary, shall act as secretary of every meeting, but if neither the
Secretary nor an Assistant Secretary is present, the chairman of the meeting
shall appoint a secretary of the meeting.
- PROXY REPRESENTATION. Every shareholder may authorize another person or
--------------------- persons to act for him by proxy in all matters in
which a shareholder is entitled to participate, whether by waiving notice of any
meeting, voting or participating at a meeting, or expressing consent or dissent
without a meeting. No proxy shall be valid after the expiration of eleven months
from the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the shareholder executing it, except as
otherwise provided by the Business Corporation Law.
- INSPECTORS - APPOINTMENT. Inspectors may be appointed in the manner
---------- ------------ prescribed by the provisions of Section 610 of
the Business Corporation Law, but need not be appointed except as otherwise
required by those provisions.
- QUORUM. Except for a special election of directors pursuant to Section
------- 603(b) of the Business Corporation Law, and except as herein
otherwise provided, the holders of a majority of the votes of outstanding shares
shall constitute a quorum at a meeting of shareholders for the transaction of
any business. When a quorum is once present to organize a meeting, it is not
broken by the subsequent withdrawal of any shareholders. The shareholders
present may adjourn the meeting despite the absence of a quorum.
- VOTING. Each share shall entitle the holder thereof to one vote. In the
------- election of directors, a plurality of the votes cast shall elect.
Any other action shall be authorized by a majority of the votes cast in favor of
or against such action except where the Business Corporation Law provides
otherwise.
61
7. SHAREHOLDER ACTION WITHOUT MEETINGS. Whenever under the provisions of
------------------------------------ the Business Corporation Law
shareholders are required or permitted to take any action by vote, such action
may be taken without a meeting on written consent, signed by the holders of
outstanding shares having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, in accordance with the
provisions of Section 615 of the Business Corporation Law.
ARTICLE II
----------
GOVERNING BOARD
---------------
1. FUNCTIONS AND DEFINITIONS. The business of the corporation shall be
-------------------------- managed under the direction of a governing
board, which is herein referred to as the "Board of Directors" or "directors"
notwithstanding that the members thereof may otherwise bear the titles of
trustees, managers, or governors or any other designated title, and
notwithstanding that only one director legally constitutes the Board. The word
"director" or "directors" likewise herein refers to a member or to members of
the governing board notwithstanding the designation of a different official
title or titles. The use of the phrase "entire board" herein refers to the total
number of directors which the corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be at least eighteen
-------------------------- years of age. A director need not be a
shareholder, a citizen of the United States, or a resident of the State of New
York. The initial Board of Directors shall consist of three persons. Thereafter,
the number of directors constituting the board shall be at least one. Subject to
the foregoing limitation and except for the first Board of Directors, such
number may be fixed from time to time by action of the shareholders or of the
directors, or, if the number is not so fixed, the number shall be one. The
number of directors may be increased or decreased by action of shareholders or
of the directors, provided that any action of the directors to effect such
increase or decrease shall require the vote of a majority of the entire Board.
No decrease shall shorten the term of any incumbent director.
3. ELECTION AND TERM. The first Board of Directors shall be elected by the
----------------- incorporator or incorporators and shall hold office
until the first annual meeting of shareholders and until their successors have
been elected and qualified. Thereafter, directors who are elected at an annual
meeting of shareholders, and directors who are elected in the interim by the
shareholders to fill vacancies and newly created directorships, shall hold
office until the next annual meeting of shareholders and until their successors
have been elected and qualified; and directors who are elected in the interim by
the directors to fill vacancies and newly created directorships shall hold
office until the next meeting of shareholders at which the election of directors
is in the regular order of business and until their successors have been elected
and qualified. In the interim between annual meetings of shareholders or of
special meetings of shareholders called for the election of directors, newly
created directorships and any vacancies in the Board of Directors, including
vacancies resulting from the removal of
62
directors for cause or without cause, may be filled by the vote of the remaining
directors then in office, although less than a quorum exists.
4. MEETINGS.
---------
- TIME. Meetings shall be held at such time as the Board shall fix, except
----- that the first meeting of a newly elected Board shall be held as
soon after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the State
------ of New York as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the time
----- and place have been fixed. Special meetings may be called by or at
the direction of the Chairman of the Board, if any, of the President, or of a
majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for
---------------------------------------- regular meetings for which the
time and place have been fixed. Written, oral, or any other mode of notice of
the time and place shall be given for special meetings in sufficient time for
the convenient assembly of the directors thereat. The notice of any meeting need
not specify the purpose of the meeting. Any requirement of furnishing a notice
shall be waived by any director who signs a waiver of notice before or after the
meeting, or who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to him.
- QUORUM AND ACTION. A majority of the entire Board shall constitute a
------------------ quorum except when a vacancy or vacancies prevents
such majority, whereupon a majority of the directors in office shall constitute
a quorum, provided such majority shall constitute at least one-third of the
entire Board. A majority of the directors present, whether or not a quorum is
present, may adjourn a meeting to another time and place. Except as herein
otherwise provided, the act of the Board shall be the act, at a meeting duly
assembled, by vote of a majority of the directors present at the time of the
vote, a quorum being present at such time.
Any one or more members of the Board of Directors or of any committee
thereof may participate in a meeting of said Board or of any such committee by
means of a conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time, and
participation by such means shall constitute presence in person at the meeting.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if present
------------------------ and acting, shall preside at all meetings.
Otherwise, the President, if present and acting, or any other director chosen
by the Board, shall preside.
63
5. REMOVAL OF DIRECTORS. Any or all of the directors may be removed for
-------------------- cause or without cause by the shareholders. One
or more of the directors may be removed for cause by the Board of Directors.
6. COMMITTEES. The Board of Directors, by resolution adopted by a majority
----------- of the entire Board of Directors, may designate from their
number one or more directors to constitute an Executive Committee and other
committees, each of which, to the extent provided in the resolution designating
it, shall have the authority of the Board of Directors with the exception of any
authority the delegation of which is prohibited by Section 712 of the Business
Corporation Law.
7. WRITTEN ACTION. Any action required or permitted to be taken by the
--------------- Board of Directors or by any committee thereof may be
taken without a meeting if all of the members of the Board of Directors or of
any committee thereof consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the Board of Directors or of any such committee shall be filed with
the minutes of the proceedings of the Board of Directors or of any such
committee.
ARTICLE III
-----------
OFFICERS
--------
The directors may elect or appoint a Chairman of the Board of Directors, a
President, one or more Vice-Presidents, a Secretary, one or more Assistant
Secretaries, a Treasurer, one or more Assistant Treasurers, and such other
officers as they may determine. The President may but need not be a director.
Any two or more offices may be held by the same.
Unless otherwise provided in the resolution of election or appointment,
each officer shall hold office until the meeting of the Board of Directors
following the next annual meeting of shareholders and until his successor has
been elected or appointed and qualified.
Officers shall have the powers and duties defined in the resolutions
appointing them.
The Board of Directors may remove any officer for cause or without cause.
ARTICLE IV
----------
STATUTORY NOTICES TO SHAREHOLDERS
---------------------------------
The directors may appoint the Treasurer or other fiscal officer and/or the
Secretary or any other officer to cause to be prepared and furnished to
shareholders entitled thereto any special financial notice and/or any financial
statement, as the case may be, which may be required by any provision of law.
64
ARTICLE V
---------
BOOKS AND RECORDS
-----------------
The corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of the shareholders, of the
Board of Directors, and of any committee which the directors may appoint, and
shall keep at the office of the corporation in the State of New York or at the
office of the transfer agent or registrar, if any, in said State, a record
containing the names and addresses of all shareholders, the number and class of
shares held by each, and the dates when they respectively became the owners of
record thereof. Any of the foregoing books, minutes, or records may be in
written form or in any other form capable of being converted into written form
within a reasonable time.
ARTICLE VI
----------
CORPORATE SEAL
--------------
The corporate seal, if any, shall be in such form as the Board of Directors
shall prescribe.
ARTICLE VII
-----------
FISCAL YEAR
-----------
The fiscal year of the corporation shall be fixed, and shall be subject to
change from time to time, by the Board of Directors.
ARTICLE VIII
------------
CONTROL OVER BY-LAWS
--------------------
The shareholders entitled to vote in the election of directors or the
directors upon compliance with any statutory requisite may amend or repeal the
By-Laws and may adopt new By-Laws, except that the directors may not amend or
repeal any By-Law or adopt any new By-Law, the statutory control over which is
vested exclusively in the said shareholders or in the incorporators. By-Laws
adopted by the incorporators or directors may be amended or repealed by the said
shareholders.
********************
65
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy
of the By-Laws of Phyllis Maxwell's Groups, Inc., a New York corporation, as in
effect on the date hereof.
WITNESS my hand and the seal of the corporation.
Dated:
-----------------------------------
Secretary of
(SEAL) Phyllis Maxwells Groups, Inc.
66
EXHIBIT 5.1
- -----------
EISEMAN LEVINE
LEHRHAUPT & KAKOYIANNIS
A PROFESSIONAL CORPORATION
845 THIRD AVENUE
NEW YORK, NEW YORK 10022
------
TELEPHONE (212) 752-1000
FACSIMILE (212) 355-4608
March 26, 2002
Clixtix, Inc.
1501 Broadway, Suite 1807
New York, New York 10036
Re: Clixtix, Inc.
Registration Statement on Form SB-2
Dear Sir or Madam:
We have acted as counsel for Clixtix, Inc., a corporation existing
under the laws of the State of New York (the "Company") in connection with the
preparation and filing of a registration statement on Form SB-2 (the
"Registration Statement") relating to the registration by the Company and the
offer and sale by a Selling Shareholder of 1,341,200 shares of the Company's
common stock, $0.0001 par value (the "Common Shares").
In this connection, we have examined such documents, corporate records,
officers' certificates and other instruments as we have deemed necessary or
appropriate for purposes of this opinion, including, but not limited to, (i) the
Company's Certificate of Incorporation and Bylaws, (ii) the Company's
Certificates of Amendment of the Certificate of Incorporation, and (iii) the
Registration Statement. We have assumed the legal capacity to sign and the
genuineness of all signatures of all persons executing instruments or documents
examined or relied upon by us and have assumed the conformity with the original
documents of all documents examined by us as copies of such documents.
Based upon and subject to the foregoing, we are of the opinion that
when offered and sold as described in the Registration Statement, the Common
Shares will be validly issued, fully paid and non-assessable.
67
EISEMAN LEVINE
LEHRHAUPT & KAKOYIANNIS
We hereby consent to the reference to this firm under the caption
"Interests of Named Experts and Counsel" in the Prospectus and to the filing of
this opinion as an exhibit to the Registration Statement. In giving this
consent, we do not thereby concede that we are within the category of persons
whose consent is required under the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours
Eiseman Levine Lehrhaupt & Kakoyiannis, P.C.
By: /s/ Joseph Sierchio
------------------------
Joseph Sierchio
68
EXHIBIT 10.0
- ------------
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
Maxwell Group Entertainment Inc., a New York corporation, having its
principal place of business located at 1501 Broadway, Suite 1807, New York, NY
10036 ("Buyer,") and Clixtix, Inc., a New York corporation, having its principal
place of business located at 1501 Broadway, Suite 1807, New York, NY 10036
("Seller,") hereby agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF ASSETS.
----------------------------
1.01. Assets Being Purchased. Seller shall sell to Buyer and Buyer
---------------------- shall purchase from Seller on the
terms specified in this Agreement, all the business, properties and assets of
the Seller of every kind and description, wherever located, real, personal or
mixed, tangible or intangible, (collectively, the "Assets") as reflected on the
June 30, 2001 Balance Sheet (the "Balance Sheet"), a copy of which is attached
hereto as Exhibit 1.01. In connection with the sale of the Assets, and at the
Closing (as hereinafter defined), the Seller shall execute and deliver to and in
favor of the Buyer, an Assignment and Bill of Sale and such other instruments as
may be required in order to transfer of record all right, title and interest of
the Assets to the Buyer except as otherwise herein expressly provided.
1.02. Liabilities Assumed. The buyer shall, simultaneously with the
------------------- sale of the Assets, assume all debts,
obligations, contracts and liabilities of the Seller as reflected on the Balance
Sheet (collectively, the "Assumed Liabilities").
1.03. Purchase Price. The purchase price to the Buyer for the Assets
--------------- shall be 100 shares of its common stock, $.001
par value per share (the "Buyer Shares"), which shares will constitute all of
the then issued and outstanding stock of the Buyer. At the Closing (as
hereinafter defined), Buyer will issue and deliver the Buyer Shares to the
Seller, and Seller will purchase the Buyer Shares from the Buyer.
1.04. Closing. The sale and purchase described in this Agreement shall
-------- be consummated on or before August 31, 2001 ("Closing"
or "Closing Date"), or such other date as shall be mutually agreed by the
parties, at the offices of Sierchio & Company, LLP, located at 150 East 58th
Street, 25th Floor, New York, NY 10155 or at such other time and place as the
parties hereto may agree to in writing.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES BY SELLER.
-----------------------------------------
2.01. Title to Assets. Seller has good and marketable title to
---------------- all Assets covered by this Agreement, free
and clear of any liens, encumbrances, or other defects.
69
2.02. Authority to Sell. Seller has complied with all of the
------------------ requirements of any applicable law of the
State of New York relative to the sale of assets described in this Agreement and
prior to Closing, all of the consents, approvals and notices that may be
required by law or by agreements to which Seller may be a party will be obtained
and given, respectively.
2.03. Liabilities. Except as set forth on the Balance Sheet,
----------- there are no liabilities to which the Seller's
assets are subject. The Assumed Liabilities all arose in the ordinary course of
Seller's business.
2.04. Defaults and Violations. Seller is not in default or in material
------------------------ violation of any contracts, agreements,
leases, or other instruments or obligations relating to the Assets to be sold
and transferred to Buyer pursuant to this Agreement, and this Agreement and the
purchase and sale to be consummated pursuant to this Agreement will not create
or cause a default or material violation of any contract, agreement, lease or
other instrument to which Seller may be a party.
2.05. Taxes. All federal, state and local tax returns and payments
------ relating to the Assets that have become due from Seller
to the date of this Agreement have been timely filed and timely paid by it
including any returns or taxes due for: (1) state or federal income or franchise
tax, (2) personal or real property tax levied on any of the assets, (3) sales
tax, or (4) other tax. All tax returns and payments for the above taxes relating
to the Assets which become due between the date of this Agreement through the
Closing Date shall be timely filed and paid by Seller.
2.06. Litigation. There is no litigation threatened or pending against
----------- Seller of which it or its officers are aware that
will, might, or could affect consummation of the purchase and sale described in
this Agreement or transfer of title of any of the Assets as required by this
Agreement.
2.07. Investment Intent; Evaluation. (a)The Seller has conducted its
------------------------------ own due-diligence investigation
respecting the Buyer, its business, plans and financial condition relating to
Seller's willingness to accept the Buyer Shares as consideration for the sale of
the Assets; the Seller has received all materials which have been requested by
the Seller; has had a reasonable opportunity to ask questions of the Buyer and
its representatives; and the Buyer has answered all inquiries that the Seller or
the Seller's representatives have put to it. The Seller has had access to all
information necessary to verify the accuracy of the information provided to it,
and has taken all the steps necessary to evaluate the merits and risks of an
investment in the Buyer Shares.
(b) The Seller has such knowledge and experience in finance,
securities, investments and other business matters so as to be able to protect
the interests of the Seller concerning this transaction, and the Seller's
resulting investment in the Buyer hereunder is not material when compared to the
Seller's total capacity. The Seller understands an investment in the Buyer is of
a speculative nature involving a high degree of risk.
(c) The Seller understands the various risks of an investment in the
Buyer as proposed herein and can afford to bear such risks, including, without
limitation, the risk of losing its entire investment in the Buyer Shares.
70
(d) The Seller acknowledges that no market for the Buyer Shares
exists and it is unlikely that one will develop in the future, and that the
Seller may find it impossible to liquidate the investment in the Buyer Shares
at a time when the Seller may desire to do so, or at any other time.
(e) The Seller is aware that the Buyer Shares have not been
registered under the Act, that the Buyer Shares will be issued on the basis of
the statutory exemption provided by Section 4(2) of the Act promulgated
thereunder, relating to transactions by an issuer not involving any public
offering and under similar exemptions under certain state securities laws, that
this transaction has not been reviewed, passed on or approved by any federal or
state agency or self-regulatory organization where an exemption is being relied
upon, and that the Buyer's reliance thereon is based in part upon the
representations made by the Seller in this Agreement. The Seller acknowledges
that it has been informed by the Buyer, or is otherwise familiar with, the
nature of the limitations imposed by the Act and the rules and regulations
thereunder on the transfer of securities. In particular, the Seller agrees that
no sale, assignment or transfer of any of the Buyer Shares will be valid or
effective, and the Buyer shall not be required to give any effect to such sale,
assignment or transfer, unless (i) such sale, assignment or transfer is
registered under the Act, it being understood that the Buyer Shares are not
currently registered for sale and that the Buyer has no obligation or intention
to so register the Buyer Shares, or (ii) the Buyer Shares are sold, assigned or
transferred in accordance with all the requirements and limitations of Rule 144
under the Act, it being understood that Rule 144 is not available at the present
time for the sale of the Buyer Shares, or (iii) such sale, assignment or
transfer is otherwise exempt from the registration requirements under the Act.
The Seller further understands that an opinion of counsel and other documents
may be required to transfer the Buyer Shares. The Seller acknowledges that the
certificate evidencing the Buyer Shares will bear the following, or a
substantially similar legend, and such other legends as may be required by state
blue sky laws:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act"), or any
state securities laws and neither such securities nor any interest
therein may be offered, sold, pledged, assigned or otherwise
transferred unless: (1) a registration statement with respect
thereto is effective under the Act and any applicable state
securities laws, or (2) the Buyer receives an opinion of counsel to
the holder of such securities, which counsel and opinion are
reasonably satisfactory to the Buyer, that such securities may be
offered, sold, pledged, assigned or transferred in the manner
contemplated without an effective registration statement under the
Act or applicable state securities laws."
(f) The Seller is acquiring the Buyer Shares for the Seller's own
account for investment and not with a view to the sale or distribution thereof
or the granting of any participation interest therein, and has no present
intention of distributing or selling to others any of such interest or granting
participations therein.
2.08 Intellectual Property. To the best of Seller's knowledge,
--------------------- none of the Assets to be purchased
hereunder, including, but not limited to, any trademarks and tradenames included
in Exhibit 1.01, violate or infringe any patents, trademark, service mark,
copyrights, trade secrets or other intellectual property rights of any third
person.
71
2.09. Due Organization. Seller is a corporation duly organized and
----------------- existing under the General Corporation Law
of the State of New York.
2.10 Survival of Warranties. Seller agrees that all warranties made
---------------------- by it in this Agreement shall
survive the Closing.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY BUYER.
----------------------------------------
3.01. Consents, Approvals and Notices. Buyer has complied with all of
------------------------------- the requirements of any
applicable law of the State of New York, its state of organization, relative to
its purchase of the Assets described in this Agreement and that prior to
Closing, all of the consents, approvals and notices that may be required by law
or by agreements to which Buyer may be a party will be obtained and given,
respectively.
3.02. Authorized and Issued Stock. The authorized capital stock of
---------------------------- Buyer consists of 1,000 shares of
Common Stock. The Buyer presently has no shares of Common Stock issued and
outstanding. When issued, the Buyer Shares to be sold to the Seller will
represent 100% of Buyer's issued and outstanding shares of Common Stock.
3.03 Litigation. There is now no litigation pending against Buyer of
----------- which it or its officers are aware that will, might,
or could affect consummation of the purchase and sale described in this
Agreement and Buyer is not aware of any threatened litigation which may affect
the consummation of the purchase and sale described in this Agreement.
3.04. Due Organization. Buyer is a corporation duly organized and
---------------- existing under the General Corporation Law of
the State of New York and its power as a Corporation has never been and is not
now suspended.
3.05. Authority to Buy. This Agreement has been approved by
----------------- Buyer's Board of Directors and Buyer has
full power and authority to both execute and perform this Agreement.
3.06. Survival of Warranties. Buyer agrees that all warranties made
---------------------- by it in this Agreement shall survive
the Closing.
72
ARTICLE 4.
OPERATION OF ASSETS.
--------------------
4.01. Seller to Continue Business Prior to Closing. Seller shall
-------------------------------------------- continue to conduct
its business as it is currently being operated until the Closing. Any and all
risk of loss or damages to the Assets during such period from any and all causes
shall be borne by the Seller.
4.02. Buyer to Operate Business After Closing. Buyer shall conduct
---------------------------------------- the business of group
theatre ticket sales previously conducted by Seller following the Closing in
such manner as it, in its sole discretion may determine advisable.
ARTICLE 5.
CONDITIONS TO BUYER'S PERFORMANCE.
----------------------------------
Absent a waiver in writing, all obligations of the Buyer under this
Agreement are subject to satisfaction of the following conditions on or before
the Closing Date:
5.01. Performance by Seller. Seller shall have performed, satisfied
---------------------- and complied with all covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by them, or any of them, on or before the Closing Date.
5.02. Representations and Warranties True as of the Closing Date.
-----------------------------------------------------------
Except as otherwise permitted by this Agreement, all representations and
warranties by Seller in this Agreement shall be true on and as of the Closing
Date as though made at that time.
5.03. Third Party Consents. All consents and approvals required to be
-------------------- given by third parties shall have been
obtained and Buyer shall have been furnished with appropriate evidence
reasonably satisfactory to it and its counsel of the granting of such consents
and approvals.
5.04. No Material Adverse Change. During the period from the date of
-------------------------- the most recent financial statement
to the Closing Date the Seller has not sustained any material loss or damage to
its assets, whether or not insured, that materially affect its ability to
conduct a material part of its business.
5.05. Absence of Litigation. No action, suit, or proceeding before any
--------------------- court or any governmental body or
authority, pertaining to the transaction contemplated by this Agreement, or to
its consummation, shall have been instituted or threatened against the Seller on
or before the Closing Date.
5.06. Corporate Approvals. The board of directors of Seller and to the
-------------------- extent required, the shareholders of
Seller, shall have duly authorized and approved the execution and delivery of
this Agreement and all corporate action necessary or proper to fulfill Seller's
obligations hereunder on or before the Closing Date.
73
ARTICLE 6.
CONDITIONS OF SELLER'S PERFORMANCE.
-----------------------------------
Absent a waiver in writing, all obligations of Seller hereunder are
subject to the satisfaction of the following conditions on or before the Closing
Date:
6.01. Representations and Warranties True as of the Closing Date.
-----------------------------------------------------------
All representations and warranties of Buyer contained in this Agreement shall be
true on and as of the Closing Date as though such representations and warranties
were made on and as of that date.
6.02. Performance By Buyer. Buyer shall have performed and complied
--------------------- with all covenants and agreements and
satisfied all conditions required by this Agreement to be performed by Buyer on
or before the Closing Date.
6.03. Corporate Approvals. The board of directors of Buyer shall have
-------------------- duly authorized and approved the
execution and delivery of this Agreement and all corporate action necessary
or proper to fulfill Buyer's obligations hereunder on or before the
Closing Date.
6.04. No Material Adverse Change. During the period from the date of
-------------------------- this Agreement to the Closing Date,
the Buyer will not have sustained any material loss or damage to its assets,
whether or not insured, that materially affect its ability to conduct a material
part of its business.
6.05. Absence of Litigation. No action, suit, or proceeding before any
--------------------- court or any governmental body or
authority, pertaining to the transaction contemplated by this Agreement, or to
its consummation, shall have been instituted or threatened against the Buyer on
or before the Closing Date.
ARTICLE 7.
SELLER'S AND BUYER'S COVENANTS.
-------------------------------
7.01. Conduct of Business. From the date of this Agreement to the
-------------------- Closing, Seller shall operate the business
as it is currently being conducted without causing detriment thereto, shall
maintain in effect all governmental permits and approvals necessary for the
operation of the business as it is now being conducted, and shall maintain the
relationships with all persons and entities with whom Seller currently is doing
business. After the Closing, the Seller's business shall be conducted by Buyer.
7.02. Buyer's Investigation. Seller shall make available to Buyer at
--------------------- all reasonable times all books and
records of the business and such other items as may be from time to time
requested by Buyer.
74
ARTICLE 8.
MISCELLANEOUS.
--------------
8.01. Entire Agreement. This instrument with its attachments
---------------- constitutes the entire agreement between Buyer
and Seller respecting the Assets or the sale of the Assets to Buyer by Seller,
and any agreement or representation respecting the Assets or their sale by
Seller to Buyer not expressly set forth in this instrument is null and void.
8.02. Notices. Any and all notices or other communications or
------- deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section 8.02 prior to 5:30 p.m. on a business day, (ii) the business day
following the date of mailing, if sent by nationally recognized overnight
courier service, or (iii) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and communications shall
be as follows:
If to Buyer, to:
Maxwell Group Entertainment, Inc.
1501 Broadway, Suite 1807
New York, New York 10036
Fax: (212) 768-3036
If to Seller, to:
Clixtix, Inc.
1501 Broadway, Suite 1807
New York, New York 10036
Fax: (212) 768-3036
8.03. Assignment. This Agreement may not be assigned by either
---------- party to any other person or corporation without
the express written consent of the other party to this Agreement.
8.04. Governing Law. This Agreement shall be governed and all
-------------- rights and liabilities under it determined in
accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof.
8.05. Counterparts. This Agreement may be executed in two or more
------------ counterparts, each of which shall be an original,
but all of which shall constitute but one Agreement.
8.06. Expenses. Each party shall pay all costs and expenses
-------- incurred by it in negotiating and preparing this
Agreement and in closing and carrying out the transactions contemplated herein
and hereby.
75
8.07. Further Assurances. The parties agree that at any time and from
------------------ time to time after the Closing Date, they
will execute and deliver to any other party such further instruments or
documents as may be reasonably required to give effect to the transactions
contemplated hereunder.
[Remainder of this page intentionally left blank]
76
IN WITNESS WHEREOF, the Buyer and the Seller have through their
respective duly qualified and authorized officers, signed and delivered this
agreement and agree to be bound by the terms hereof as of this 31st day of
----
August, 2001.
- ------
Clixtix, Inc.
A New York corporation
By /s/ Phyllis Maxwell
---------------------------
Name: Phyllis Maxwell
Title: President,
A Duly Authorized Signatory
Maxwell Groups Entertainment, Inc.
By /s/ Phyllis Maxwell
---------------------------
Name: Phyllis Maxwell
Title: President,
A Duly Authorized Signatory
77
EXHIBIT 21.0
- ------------
Subsidiaries of the Clixtix, Inc.
- ---------------------------------
Maxwell Group Entertainment, Inc. - New York corporation
78
EXHIBIT 23.2
- ------------
[LETTERHEAD OF MARDEN, HARRISON & KREUTER, CPAs, P.C.]
CONSENT OF INDEPENDENT AUDITORS
- -------------------------------
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 14, 2002, in the Registration Statement (Form
SB-2) and related Prospectus of Clixtix, Inc. and subsidiary (formerly Phyllis
Maxwell's Groups, Inc.) for the registration of 1,341,200 shares of its common
stock.
MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.
/s/ Marden, Harrison & Kreuter
White Plains, New York
March 25, 2002
79