UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
December 19, 2001
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Date of Report (Date of earliest reported event)
IBX GROUP, INC.
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(Exact name of registrant as specified in its charter)
Florida
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(State or other jurisdiction of incorporation
333-36666
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(Commission File Number)
65-0810941
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(IRS Employer Identification No.)
350 Northwest 12th Avenue; Deerfield Beach, Florida 33442
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(Address of principal executive offices) (Zip Code)
(954) 426-6056
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Registrant's telephone number, including area code
(Not Applicable)
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(Former name or former address, if changed since last report)
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CAVEAT PERTAINING TO FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain of the statements contained
herein, which are not historical facts, are forward-looking statements with
respect to events, the occurrence of which involve risks and uncertainties.
These forward-looking statements may be impacted, either positively or
negatively, by various factors. Information concerning potential factors that
could affect the Registrant is detailed from time to time in the Registrant's
reports filed with the Commission. This report contains "forward looking
statements" relating to the Registrant's current expectations and beliefs. These
include statements concerning operations, performance, financial condition and
anticipated growth. For this purpose, any statements contained in this Form 8-K
and Form 10-KSB that are not statements of historical fact are forward-looking
statements. Without limiting the generality of the foregoing, words such as
"may", "will", "expect", "believe", "anticipate", "intend", "could", "estimate",
or "continue", or the negative or other variation thereof or comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties which are
beyond the Registrant's control. Should one or more of these risks or
uncertainties materialize or should the Registrant's underlying assumptions
prove incorrect, actual outcomes and results could differ materially from those
indicated in the forward looking statements.
CONTEXT
The information in this report is qualified in its entirety by
reference to the entire report; consequently, this report must be read in its
entirety. This is especially important in light of material subsequent events
disclosed. Information may not be considered or quoted out of context or without
referencing other information contained in this report necessary to make the
information considered, not misleading.
INFORMATION INCLUDED IN THE REPORT
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Settlement of Litigation
On December 19, 2001, iBX Group, Inc. ("our Company") settled
litigation involving its wholly owned subsidiary, PriMed Technologies, Inc., a
Florida corporation ("PriMed"), as a result of which, a material change in
control has occurred.
The parties to the settlement agreement were our Company, PriMed,
PriMed Technologies, L.C., a Florida limited liability company and affiliate of
PriMed, Evan R. Brovenick, our Company's president and the president of PriMed
("Mr. Brovenick"); the Yankee Companies, Inc., a Florida corporation that had
purchased PriMed convertible debt securities ("Yankees" and the "Bonds,"
respectively); the Calvo Family Spendthrift Trust, a Florida trust and affiliate
of Yankees (the "CFST"), the Tucker Family Spendthrift Trust, a Florida trust
and affiliate of Yankees (the "TFST"); and, Blue-Lake Capital Corp., a Florida
corporation and affiliate of Yankees ("Blue Lake"). Yankees, the CFST, the TFST
and Blue Lake are sometimes referred to collectively herein as the
"Bondholders." The dispute involved the failure of PriMed to pay the Bonds. A
copy of the settlement agreement is filed as exhibits to this report, see Item 7
Financial Statements and Exhibits.
Pursuant to the terms of the settlement, all of the Bondholders who
purchased $92,000 worth of the Bonds converted their Bonds into 10,062,500
shares of our Company's common stock, as follows: the CFST, 5,031,250 shares;
the TFST, 2,843,750 shares; and, Blue Lake, 2,187,500 shares. The shares were
issued pursuant to the exemption from registration under the Securities Act
provided by Sections 4(2) and 3(a)(9) thereof and the parties acknowledged the
restricted nature of the shares received.
The parties to the settlement further agreed that the three designees
of Yankees (acting on behalf of all of the Bondholders) would, be elected to
vacancies on our Company's board of directors created by the resignations of Mr.
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Adam Cohen and Mr. Mitchell Hershey. Messrs. Cohen and Hershey did not resign as
a result of any disputes or disagreements with our Company, but rather, solely
to facilitate the settlement. They further agreed to enter into a five three
year shareholders' agreement pursuant to which the Bondholders and, Mr.
Brovenick (FYI: Adelstein not a signatory) would vote all of their shares of our
Company's common stock for the election of three designees of Yankees and three
designees of Mr. Brovenick to our Company's board of directors, such designees
to serve at the pleasure of the designating persons. Yankees' initial designees
were Anthony Q. Joffe, Vanessa H. Lindsey and Kevin W. Dornan, Esquire, who were
elected as directors on the date of this agreement (see biographical data
below). The shareholder agreement will be binding on all assignees of the
signatories thereto, unless any of the shares subject to the shareholder
agreement are sold in an open-market, brokered transaction.
All proceeds used to acquire the subject securities were provided by
the CFST and TFST from internal resources.
Private Placement
On December 19, 2001, our Company concluded a private placement of
$200,000 in units comprised of an aggregate of 10,937,500 shares of common
stock, class A warrants entitling the holders to purchase up to 20,000,000
shares of our Company's common stock, at an exercise price of $0.10 per share;
and, class B warrants entitling the holders to purchase up to 20,000,000 shares
of our Company's common stock, , at an exercise price of $0.20 per share. Half
of the units were subscribed for by the CFST and half by the TFST; however, the
CFST and the TFST loaned their affiliate, Yankees, 937,500 of the shares
subscribed to for purposes of providing year end bonuses to Yankees employees
and consultants; consequently, the shares were issued to the following persons:
the CFST, 5,000,000 shares; the TFST, 5,000,000 shares; Vanessa H. Lindsey,
250,000; Coast to Coast Financial Group, Inc., 250,000 shares; Kevin W. Dornan,
250,000 shares; Sally Stroberg, 50,000 shares; Nancy Molinari, 50,000 shares;
Francine Frankel, 42,500 shares; Warren Hirt, 42,500 shares; and, Donna
Whitacre, 2,500 shares. An example copy of the class A and class B warrant
agreements are filed as exhibits to this report, see Item 7 Financial Statements
and Exhibits.
As a condition of issuing the shares to the foregoing persons, they
agreed to vote their shares, for a period of five years from the date of this
agreement, at any shareholders meeting for the purpose of electing directors, to
elect Mr. Brovenick and two additional individuals chosen by Mr. Brovenick and
to elect three designees of Yankees as directors, such obligations to be binding
upon any assignee except if the shares are sold in an open market, brokered
transaction
All proceeds used to acquire the subject securities were provided by
the CFST and TFST from internal resources.
New Directors' Biographies
Vanessa H. Lindsey, Director
Vanessa H. Lindsey, age 30, was elected as a member of our Company's
Board of Directors on December 19, 2001. Mrs. Lindsey was employed by Accell
Plumbing Systems, Inc., an Ohio corporation, as that company's office manager
and bookkeeper from 1993 to 1995. Since 1995 she has been employed as the chief
administrative officer of Diversified Corporate Consulting Group, L.L.C., a
Delaware limited liability company, engaged in providing diversified consulting
services and in filing EDGARized documents for clients with the Commission.
Since 1996 she has been employed by the Southeast Companies, Inc., a Florida
corporation, involved in the entertainment industry, in business and political
consulting and as a licensed mortgage brokerage company, as its chief
administrative officer and currently serves as its vice president and secretary.
She is also the secretary and chief administrative officer for The Yankee
Companies, Inc., which serves as a strategic consultant to our Company. Mrs.
Lindsey held the position of secretary of The Marion County Libertarian Party
and was the Campaign Treasurer for the Cyndi Calvo for State Senate, District 8
Campaign from 1998 to 2000. From November 11, 1999 to June 13, 2001, she served
as secretary for AmeriNet Group.com, Inc., a publicly held Delaware corporation,
and served as a member of its board of directors from April 6, 2000 to June 13,
2001. Since January 2001, she has served as the secretary and as a member of the
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board of directors for Explorations Group, Inc., a Delaware corporation. Since
January 1999, she has served as secretary and chief administrative officer for
Colmena Corp., a publicly held Delaware corporation, and serves as a member of
its board of directors since January 3, 2000 and was elected vice-president on
June 14, 2001.
Anthony Q. Joffe, Director
Anthony Q. Joffe, age 59, was elected as a member of our Company's
Board of Directors on December 19, 2001. Mr. Joffe holds a degree in
Aeronautical Engineering Management from Boston University, Boston,
Massachusetts. Since March 1993, Mr. Joffe has performed consulting services for
First Commodities, Inc., an Atlanta based commodities firm, and has been
involved in fundraising for the Multiple Sclerosis Foundation. He also assisted
Digital Interactive Associates and IVDS Partnership with financial affairs in
conjunction with their successful bid to the Federal Communications Commission
for licenses in the cities of Atlanta, Georgia, Minneapolis/St. Paul, Minnesota,
and Kansas City, Missouri. Mr. Joffe served as the interim president of Madison
Sports & Entertainment Group, Inc., a publicly held Utah corporation then
headquartered in Fort Lauderdale, Florida, from September 1, 1994, until
February 16, 1996, during which time he became its vice president and vice
chairman, chief operating officer, treasurer and chief financial officer until
he resigned. Since 1996, he has founded a boat financing company and joined
NorthStar Capital ("NorthStar") as Managing Director. NorthStar is an investment
banking firm with offices in Stamford, Connecticut and Boca Raton, Florida that
specializes in assisting small to mid-size private and publicly traded companies
with business and financial planning, acquisition and divestiture, financial
public relations and market position advice, and treasury services. Mr. Joffe
served as a member of the Board of Directors of AmeriNet Group.com, Inc.,
(currently Fields Technologies, Inc.), a publicly held Delaware corporation from
November 1998 to June 2001. Since January 1999, he has served as a member of the
board of directors for Colmena Corp., a publicly held Delaware corporation and
in March 1999, Mr. Joffe was elected as chairman of the board of directors. In
May 1999 he was elected as its president and chief Executive officer and on May
14, 2001 he resigned as its president and chief executive officer.
Kevin W. Dornan, Esquire, Director
Kevin W. Dornan, age 49, was elected as a member of our Company's board
of directors on December 19, 2001. He is a graduate of the Johns Hopkins
University (Bachelor of Arts, philosophy, 1973); the University of North
Carolina at Chapel Hill (Master of Arts, philosophy, 1975); the Catholic
University of America (Master of Arts, religious studies, 1979); and the
University of Maryland School of Law (Juris Doctor, 1987), where he served as
editor- in-chief of the 1986-87 Maryland Law Review. During law school, he also
served as a judicial intern for The Honorable James R. Miller, Jr., of the U.S.
District Court for the District of Maryland. After practicing from 1987- 1996 in
Washington, DC and Maryland, primarily in the areas of corporate and commercial
transactions and litigation, Mr. Dornan became the general counsel for DWA Corp.
,a telecommunications company in St. Augustine, Florida. In June 2001, he became
the general counsel for The Yankee Companies, Inc. and Colmena Corp., a publicly
held Delaware corporation. He is admitted to practice before the Court of
Appeals of Maryland (1988), the District of Columbia Court of Appeals (1993);
the Supreme Court of Florida (1996); the U.S. Courts of Appeals for the District
of Columbia (1988), Second (1988), Fourth (1988), and Eleventh (1996) Circuits;
and the U.S. District Courts for the District of Maryland (1988), the Eastern
and Western Districts of Arkansas (1992), the District of Columbia (1994), and
the Middle District of Florida (1997). Mr. Dornan has served since 1996 as an
adjunct professor of business ethics at Saint Leo University in Saint Leo and
St. Augustine, Florida, and as an adjunct professor of management and business
at Eckerd College in St. Petersburg, Florida. In 1998, he was named to Who's Who
in American Law.
Principal Stockholders Table
As of December 18, 2001, our Company's only currently outstanding
voting securities were 41,787,497 shares of common stock, $0.01 par value. The
following tables disclose information concerning ownership of our Company's
common stock by officers, directors and principal stockholders (holders of more
than 5% of our Company's common stock) as of December 18, 2001. All footnotes to
the tables follow the second table.
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Security Ownership of Certain Beneficial Owners
As of December 18, 2001, the following persons (including any "group")
are, based on information available to our Company, beneficial owners of more
than five percent of our Company's common stock (its only class of voting
securities).
Amount
and Nature Percent
Of Beneficial of
Name and Address of Beneficial Owner (1) Ownership (2) Class
- ---------------------------------------- ------------- -----
Tucker Family Spendthrift Trust (3) 7,843,750 18.771%
2500 North Military Trail, Suite 225; Boca Raton, Florida 33431.
Blue Lake Capital Corp. (3) 2,187,500 5.235%
2500 North Military Trail, Suite 225; Boca Raton, Florida 33431.
Calvo Family Spendthrift Trust (4) 10,031,250 24.005%
1941 Southeast 51st Terrace; Ocala, Florida 34471
Evan Brovenick (5) 15,262,500 36.524%
350 Northwest 12th Avenue; Deerfield Beach, Florida
David Blechman (6) 2,887,500 6.910%
350 Northwest 12th Avenue; Deerfield Beach, Florida
Security Ownership of Management
As of December 18, 2001, the following Table discloses our Company's
common stock (the only outstanding class of equity securities for our Company,
its parents or subsidiaries held by persons other than our Company) other than
directors' qualifying shares, beneficially owned by all directors and nominees,
naming them each; each of the named executive officers as defined in Item 402(a)
of Commission Regulation S-B; and all directors and executive officers of our
Company as a group, without naming them. The table shows in the second column
the total number of shares currently owned and in the third column the percent
owned.
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Name and Address of Amount Nature of Percent
Beneficial Of Equity Beneficial of
Owner (1) Owned Ownership Class
- --------- ---------- --------- -----
Evan Brovenick 15,262,500 (5) 36.524%
350 Northwest 12th Avenue; Deerfield Beach, Florida
David Blechman 2,887,500 (6) 6.910%
350 Northwest 12th Avenue; Deerfield Beach, Florida
Anthony Q. Joffe 0 (7) 0%
101 Southwest 11th Avenue; Boca Raton, Florida 33486
Kevin W. Dornan, Esquire 250,000 (8) .5%
5001 Southwest 20th Street; Ocala, Florida 34474
Vanessa H. Lindsey 250,000 (9) .5%
340 Southeast 55th Avenue; Ocala, Florida 34471
Alvin Brovenick 0 (10) 0%
350 Northwest 12th Avenue; Deerfield Beach, Florida
Steven Adlestein 200,790 (11) .5%
350 Northwest 12th Avenue; Deerfield Beach, Florida
All officers and directors as a group 18,850,790 (2) 45%
Footnotes to Tables of Principal Stockholders and Tables of Executive Officers and Directors
The following footnotes apply to the preceding two tables:
(1) This table pertains to common stock, our Company's only outstanding equity securities.
(2) Beneficial and record.
(3) The Tucker family is comprised of Michelle Tucker, Leonard Miles Tucker, her husband, Shayna and
Montana, their minor daughters . Blue Lake Capital Corp., a Florida corporation, which Michelle Tucker
serves as president and director.
(4) The Calvo family is comprised of Cyndi Calvo; William A. Calvo, III,
her husband; William, Alexander and Edward, their minor sons. All the
shares are held by the Calvo Family Spendthrift Trust.
(5) Mr. Brovenick has served as a member of our Company's board of
directors and president since September 25, 2001. Does not include a
total of 1,000,000 class D warrants exercisable at $.20 per share which
were subscribed for by Mr. Brovenick together with 1,000,000 class C
warrants exercisable at $.10 per share. These warrants were sold by the
Company as part of a unit at a total cost of $100.00 per unit.
(6) Mr. Blechman has served as a member of our Company's board of directors and secretary since September
25, 2001.
(7) Mr. Joffe has served as a member of our Company's board of directors since December 18, 2001.
(8) Mr. Dornan has served as a member of our Company's board of directors since December 18, 2001.
(9) Mrs. Lindsey has served as a member of our Company's board of directors since December 18, 2001.
(10) Mr. Brovenick has served as a member of our Company's board of directors since September 25, 2001
(11) Mr. Adlestein has served as a member of our Company's board of directors since May 1995. Does not include
1,000,000 class C warrants exercisable at $.10 per share. These warrants were transferred to Mr. Adelstein
from Mr. Brovenick.
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ITEM 5 OTHER EVENTS AND REGULATION FD DISCLOSURE
On December 19, 2001, PriMed entered into an employment agreement with
Mr. Brovenick for a period ending on December 31, 2006. Mr. Brovenick will serve
as president and chief executive officer of PriMed. Mr. Brovenick's
responsibilities involve all services, acts, or things necessary or advisable to
serve as its president and chief executive officer including but not limited to
assist in establishing PriMed's policies and strategic planning, identify
potential acquisition candidates, assist in financial planning and capital
formation, oversee day to day operations of PriMed and such other matters as may
be mutually acceptable to PriMed and Mr. Brovenick. However, Mr. Brovenick will
at all times be subject to the direction of the policies established by PriMed
and our Company. Mr. Brovenick is expected to work as much time as may be
necessary to carry out Mr. Brovenick's job responsibilities but in no event less
than 35 hours per week. Mr. Brovenick agreed that to the best of his ability and
experience, he will at all times loyally and conscientiously perform all of the
duties and obligations required either expressly or implicitly by the terms of
the agreement, and devote as much time and efforts to PriMed's business as
needed.
During the term of the agreement (or such shorter period of time
should the agreement be terminated prior to its stated termination date) and for
a period of 60 days thereafter, Mr. Brovenick will not invest in, carry on,
engage in or become involved whether as an employee, agent, officer, director,
stockholder (excluding ownership of not more than five percent of the
outstanding shares of a publicly-held corporation which ownership does not
involve managerial or operational responsibility), manager, partner, joint
venturer, participant, consultant or otherwise) in any business enterprise which
competes directly with the business of PriMed or its affiliates. The
restrictions set forth apply to any employment, work, operations or investment
in the United States.
As compensation for his services, Mr. Brovenick will receive in year
one an annual base compensation of $125,000. Subject to the continuing approval
of our Company, the annual base salary in each succeeding year will be equal to
at least 110% of the annual base salary from the prior year. Compensation will
be paid no less frequently than monthly or in such increments as are regularly
paid by PriMed to other employees.
In addition to the monthly compensation, Mr. Brovenick has been issued
6,600,000 shares of our Company's common stock, subject to the following
restrictions and contingencies: If during the term of Mr. Brovenick's
employment, PriMed has not shown a net pre-tax profit of at least one dollar as
determined by PriMed's year-end audited financial statements prepared in
accordance with generally accepted accounting principles (the "Net Pre-Tax
Profit" and "GAAP," respectively), all rights, title and interest in such shares
will be forfeited and Mr. Brovenick will be required to tender the shares to
PriMed for cancellation. Until such time as PriMed has generated a Net Pre-Tax
Profit, Mr. Brovenick will have no right to vote the shares nor may he have the
right to pledge, encumber, hypothecate or in any way transfer the shares.
Subject to the prior approval of our Company, Mr. Brovenick will also
be entitled to such other bonuses based upon PriMed's performance as determined
in the sole and absolute discretion of our Company; will be offered health
insurance coverage at no cost to Mr. Brovenick; be entitled to participate in
such employee benefit programs as are offered by PriMed to other employees; be
entitled to an annual paid vacation of three weeks per year plus five personal
days per year, and any vacation time not used may be accrued to the following
year if Mr. Brovenick remains employed with PriMed. Mr. Brovenick will also be
reimbursed for out-of-pocket expenses incurred by him in the performance of his
job responsibilities. However, any reimbursable expenses in excess of $1,000
must first be approved by our Company.
The initial term of the agreement will commence as of the date of the
agreement, and will continue until December 31, 2006. PriMed will have the right
to terminate the agreement for good cause or by reason of Mr. Brovenick's
disability on thirty days prior written notice to Mr. Brovenick. If such
termination is for good cause or by reason of Mr. Brovenick's disability, a
notice of termination specifying the nature of the good cause or disability,as
the case may be, will be given Mr. Brovenick. If Mr. Brovenick is terminated for
any other reason than good cause, PriMed will be obligated to pay Mr. Brovenick
a severance payment of the greater of $100,000 or the remaining sums due under
the agreement.
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Notwithstanding anything else to the contrary, if PriMed or all other
subsidiar(ies) of PriMed cease operations, then the agreement will terminate and
Mr. Brovenick will only be entitled to receive the compensation due as of the
termination date. As used in the agreement, disability will mean Mr. Brovenick's
inability caused by mental or physical illness to satisfactory perform his
obligations and duties hereunder for a consecutive period in excess of 120 days
during the term of the agreement or for a period of 180 out of a total of 360
work days; and, good cause will mean any breach by Mr. Brovenick of his
obligations under the agreement, habitual neglect of duties, continued
incapacity or inability to perform the obligations set forth in the agreement or
the conviction of any felony.
Our Company entered into the agreement for the limited purpose
pertaining to conditional issuance of its common stock to Mr. Brovenick and will
have no responsibilities or obligations pertaining to any other aspects of the
agreement. A copy of the employment agreements is filed as exhibits to this
report, see Item 7 Financial Statements and Exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Designation Page
of Exhibit Number
as Set Forth or Source of
in Item 601 of Incorporation
Regulation S-B By Reference Description
4. 1 __ Warrant A Agreement
2 __ Warrant B Agreement
3 __ Employee Warrant Agreement C
4 __ Employee Warrant Agreement D
10. 1 __ Settlement Agreement
2 __ Brovenick Employment Agreement
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
our Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IBX Group, Inc.
Dated: January 3, 2001 /s/ Evan Brovenick
---------------------------------
Evan Brovenick
President
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