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IPO-Initial Public Offering Subscription Agreement Information Request Form Email to: Fifth@juno.com
NET WORLD MARKETING, INC.
400 North Woodlawn, Suite 18 — Wichita, Kansas 67208-4333
Telephone: 800-992-6616 — Fax: 316-688-0998
Dear Investor:
Thank you for requesting the Prospectus and Subscription Agreement relative to our initial public stock offering (IPO).
We have established a shopping mall on the internet. Its internet web address is web.archive.org. Our objective, as a business, is to fill up our shopping mall with thousands of small stores and with individuals who have one or two truly unique products. We will charge a set up fee, charge monthly rent, and take 5% of their gross monthly sales as the "landlord." WE know there are millions of small business people and individuals who make jewelry, handbags, sell antiques and collectibles, etc. With your investment, we will be able to advertise nationally and really build a profitable business.
Enclosed you will find these documents as well as a return envelope. You need only complete and return page 6 of the Subscription Agreement. The minimum subscription is 1,000 shares or $100.00. The maximum subscription is 250,000 shares or $25,000.00. Due to certain state securities laws, we are not able to accept subscriptions from residents of Massachusetts, Kansas, Maine, Texas or Utah.
We hope you will invest with us in this offering. All of the offering proceeds go directly to the company, commission free, to use to build the business. The Offering will close when all of the shares have been sold. Immediately thereafter, your new stock certificate will be mailed directly to you. We will be asking for the trading symbol, "NWMI" when the offering closes. Please tell your friends and neighbors about us, as they might be interested in investing or joining our internet shopping mall site.
If I can answer any questions, please call me at 800-992-6616.
Very truly yours,
Georganna L. Williamson
President
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OFFERING MEMORANDUM
NET WORLD MARKETING, INC.
(A Nevada Corporation)
10,000,000 Shares of Common Stock
Offering Price $0.10 Per Share
Prior to this offering there has been no public market for the shares of Net World Marketing, Inc., (the "Company"). There can be no assurance that any trading market in these securities will develop hereafter, or that such market, if developed, will continue. The public offering price has been arbitrarily determined and bears no relationship to the assets or book value of the Company or any other recognized criteria of value.
THE SHARES MAY BE OFFERED AND SOLD ONLY IN THOSE JURISDICTIONS WHERE SUCH OFFER MAY BE MADE PURSUANT TO APPROPRIATE LAW AND MAY ONLY BE TRADED IN SUCH JURISDICTIONS AT THIS TIME. PURCHASERS OF SUCH SECURITIES EITHER IN THIS OFFERING OR IN ANY SUBSEQUENT TRADING MARKET WHICH MAY DEVELOP MUST BE RESIDENTS OF SUCH JURISDICTIONS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE DILUTION, AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE "HIGH RISK FACTORS" FOR SPECIAL RISKS CONCERNING THE COMPANY AND "DILUTION" FOR INFORMATION CONCERNING DILUTION OF THE BOOK VALUE OF THE INVESTORS' SHARES FROM THE PUBLIC OFFERING PRICE.
Price to Public Proceeds to the Company1,2
Per Share $0.10 $0.10
10,000,000 Shares $1,000,000 $1,000,000
Net World Marketing, Inc.
400 N. Woodlawn, Suite 18
Wichita, KS 67208
Tel: 800-992-6616
The Date of this Offering Memorandum is February 1, 1999
Subject to the terms and conditions of the offering the Company is offering the Shares on a "best efforts" basis. This offering will terminate promptly 120 days from the date hereof. (See "Underwriting.")
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN EXEMPTION CONTAINED IN REGULATION D, RULE 504 PROMULGATED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED.
Payment for the Shares should be made by check or money order payable to Net World Marketing, Inc. (See Footnotes from cover page.)
1. The Company reserves the right to pay a maximum commission to registered broker/dealers or finders fees, where the same can be paid, of 10% of the moneys received for sales of the Shares.
2. The proceeds to the Company set forth in the table on the cover page of the Prospectus have been computed before deduction of expenses that will be incurred in connection with this offering, including filing fees, printing, legal, accounting, transfer agent, postage and other fees estimated at $75,625.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS DOCUMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
THE SHARES ARE OFFERED BY THE COMPANY, SUBJECT TO PRIOR SALE, ACCEPTANCE OF AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFERING WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION TO REJECT ANY SUBSCRIPTION, IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SHARES OFFERED HEREBY.
The Company intends to furnish its stockholders with annual reports containing audited financial statements as soon as practicable after the end of each fiscal year. In addition, the Company may from time to time, issue unaudited interim reports and financial statements.
This offering involves: (a) high risks (See "High Risk Factors."); and (b) immediate substantial dilution in that the net tangible book value of the Common Stock upon completion of this offering will be substantially less than the public offering price. (See "Dilution.")
OFFERING SUMMARY
The following is a summary of certain information contained in this offering and is qualified in its entirety by the more detailed information and financial statements appearing elsewhere in the Offering Document.
The Company
Net World Marketing, Inc., a Nevada corporation (the "Company"), was formed October 17, 1997, to establish a shopping mall on the Internet and "rent" stores on its Internet site (http://www.networldbuy.com) to small companies and individuals who have one or two unique products to market. The Company will charge its store tenants set up fees, monthly rent, and the Company will charge a commission of 5% of the gross sales of each store on its site.
The Company presently maintains an office at 400 N. Woodlawn, Suite 18, Wichita, KS 67208. The Company's telephone number is (800) 992-6616.
THE OFFERING
Securities Offered.................... 10,000,000 shares of common stock at a price of $0.10 per share.
Common Stock Outstanding......... 1,026,686 shares
After the Offering............ 11,026,686 shares
Net proceeds to the Company
from the offering after
payment of commissions, and
expenses.......... $824,375
Use of Proceeds....................... The Company intends to apply the net proceeds of this offering as follows:
USE OF PROCEEDS
Legal & Accounting 50,000
Salaries & Wages 120,000
Rent, Office 6,000
Telephone, Fax, Fed Ex 25,000
Public Relations 90,000
Web Site Development 100,000
Advertising and Marketing 200,000
Travel 33,000
Working Capital 200,375
$824,375
THE COMPANY
Net World Marketing, Inc., a Nevada corporation (the "Company"), was formed October 17, 1997, to market products and services on the Internet.
Upon the closing of this offering, the Company plans to begin national marketing to establish its customer "tenants" and to further development of its web site on the Internet (http://www.networldbuy.com). The Company plans to secure the exclusive Internet marketing rights to certain of its customers products and services. The Company plans to secure its customer "tenants" who, for a development fee and continuing monthly fees, will pay the Company to develop and/or maintain a web site on the Internet for the purpose of selling products and/or services to the public over the Internet.
The phenomenal growth of e-commerce on the Internet has been well documented recently. It has been estimated that more than $3.0 billion of product purchases were made over the Internet during 1998 and that figure is expected to grow to more than $15 billion by the year 2003. More and more companies are establishing a web site on the Internet. It is the Company's belief that more than 500,000 small businesses and more than 1,000,000 individuals will contract with a company to establish and maintain a web site on the Internet for the purposes of selling products and/or services in the future.
While most medium-sized companies and larger have the resources in-house to develop and maintain a web site, most small businesses do not. The Company plans to aggressively pursue small businesses as clients. The Company will be able, after the completion of this offering, to "rent" Internet stores in its Internet shopping mall for several thousand customers or "tenants". The Company plans to custom design each individual client's site using a basic "internet store" complete with charge card abilities, customer service provisions, tracking capabilities, accounting and billing services, etc.
The Company plans to aggressively promote its services over the Internet and through other media, direct mail, television, radio, newspapers, etc. As with any "shopping center", success is more easily achieved as the "foot traffic" increases (i.e., as the Company's site receives more "hits", the Company's clients will, ultimately, sell more goods and services).
As with most retail stores, the Company expects that more than half of its annual sales of products and services from its client's "internet stores" will occur during the Christmas holiday season. As the "landlord" of the Company's web site, the Company will realize revenue from three sources: a) fees for site development, b) fees for site maintenance, and c) fees from a percentage of each site's sales.
HIGH RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE AND INVOLVE AN EXTREMELY HIGH DEGREE OF RISK. THEY SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. THEREFORE, EACH PROSPECTIVE INVESTOR SHOULD, PRIOR TO PURCHASE, CONSIDER VERY CAREFULLY THE FOLLOWING RISK FACTORS, AS WELL AS ALL OF THE OTHER INFORMATION SET FORTH ELSEWHERE IN THIS DOCUMENT.
Dependency on the Offering; Need for Additional Financing. Management estimates that the proceeds of this offering will be sufficient to satisfy its anticipated cash requirements for approximately 18 to 24 months following the consummation of this offering; however, there can be no assurance that the Company will not require additional financing prior to or at the expiration of such period or that, if required, such financing will be available on acceptable terms or at all. There is very little likelihood that the Company will generate cash flow during this period of time.
Dependence Upon Key Personnel. The future success of the Company will be largely dependent on the personal efforts of Georganna L. Williamson, President of the Company. Should Mrs. Williamson cease to be affiliated with the Company before a qualified replacement is found, there could be a material adverse effect on the Company's business and prospects.
Limited Organization. The Company is in the development stage. The Company was recently incorporated. It has limited resources and a limited operating history; thus, no assurance can be given that the Company will be successful.
No Assurance of Public Market. There is no public market for the Common Stock of the Company and no assurance that such a market will develop at the conclusion of this offering or, if developed, that it will continue. Purchasers of the Company's securities may, therefore, have difficulty in selling such securities if they so desire.
Immediate Substantial Dilution. This offering involves an immediate substantial dilution of $0.024 per share between the adjusted net tangible book value per share after the offering and the public offering price of $0.10 per share. In consequence, there will be an immediate increase per share attributable to the present shareholders of $0.066.
Arbitrary Offering Price. The offering price of the Shares has been arbitrarily determined by the Company based upon factors such as the Company's capital needs and the percentage of ownership to be held by investors as a result of this offering. The offering price does not necessarily bear any relationship to assets, book value, earnings history or other historical investment factors.
Lack of Underwriter; No Commitment to Purchase Shares; No Refund. The Shares are being offered by the Company through its officers and directors and, upon engagement, through participating broker-dealers on a best efforts basis. No broker-dealer has been retained as an underwriter and no broker-dealer is under any obligation to purchase any Shares. In addition, the officers and directors of the Company collectively have limited experience in the offer and sale of securities. Consequently, there is no assurance that the Company is capable of selling all or any of the Shares. In addition, no entity, including any broker-dealer or the Company, has an obligation to purchase any of the Shares offered. Subscribers will not be entitled to any refund of their subscriptions.
No Dividends. The Company has not paid any dividends on its Common Stock since inception and intends for the foreseeable future to retain any earnings to finance the development of its business. (See "Description of Company's Securities.")
Competition. The Company will be in competition with many companies which have substantially greater resources and experience than the Company.
Possible Limitations upon Trading Activities; Restrictions Imposed upon Broker-Dealers Effecting Transactions in Certain Securities. Sale of the Company's securities pursuant to this offering and trading of the Company's securities thereafter may be subject to material limitations as a consequence of recently adopted amendments to the Securities Exchange Act of 1934, which limit the activities of broker-dealers effecting transactions in "designated securities" and "penny stocks."
Rule 15c2-6 promulgated under the Securities Exchange Act of 1934 restricts the solicitation of sales of "designated securities" by brokers-dealers to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse). Pursuant to Rule 15c2-6, prior to any sale of a "designated security," the broker-dealer must have first received a written statement from the purchaser of the securities setting forth certain personal information concerning the person's financial situation, investment experience and investment objectives. Thereafter, the broker-dealer must reasonably determine, based upon the information provided, that the purchase is suitable for the person and that the person has sufficient knowledge and experience in financial matters that the person may be expected to be capable of reasonably evaluating the risks of transactions in "designated securities."
"Designated securities" are defined as any equity securities other than a security that is registered on a national exchange; included for quotation in the NASDAQ system; or whose issuer has net tangible assets in excess of $2,000,000. Securities are exempt from Rule 15c2-6 if the market price is at least $5.00.
Since the Company's securities do not presently qualify for inclusion in the NASDAQ System and for so long as the Company has net tangible assets of $2,000,000 or less, or the market price of its securities are $5.00 or less, the Company's securities will be subject to Rule 15c2-6. As a consequence, brokers-dealers may find it more difficult to effectuate sales or trading activities in the Company's securities. Thus, sales of securities in this offering and trading of the Company's securities thereafter will be more difficult than in the case of securities not defined as "designated securities." This may have the effect of reducing the volume of trading which takes place after the offering, thus possibly depressing the market for such securities, and an investor may find it difficult to dispose of such securities.
Rules 15g-2 through 15g-6, promulgated under the Securities Exchange Act of 1934, provide a series of additional rules requiring brokers-dealers engaging in transactions in low-priced over-the-counter securities defined as "penny stock" to first provide to their customers a series of disclosures and documents, including: (i) a standardized risk disclosure document identifying the risks inherent in investing in "penny stocks;" (ii) all compensation received by the broker-dealer in connection with the transaction; (iii) current quotation prices and other relevant market data; and (iv) monthly account statements reflecting the fair market value of the securities. The rule requiring provision of a risk disclosure document became effective on July 15, 1992. The other aspects of the rules are scheduled to take effect on January 1, 1993.
"Penny stocks" are defined at Rule 3a51-1 in generally the same manner as "designated securities" except the net tangible asset test is only satisfied if the issuer has net tangible assets of more than $2,000,000 and has been in continuous operation for greater than three (3) years. Issuers who have been in operation less than three (3) years must have net tangible assets of at least $5,000,000. The Company's securities presently, and will likely for the foreseeable future, constitute "penny stocks." Thus, trading activities for the Company's securities will be made more difficult for broker-dealers than in the case of securities not defined as "penny-stocks." This may have the result of depressing the market for the Company's securities and an investor may find it difficult to dispose of such securities.
DILUTION
The net tangible book value of the Company as of January 31, 1999, was approximately $10,000.00. Net tangible book value consists of the net tangible assets of the Company (total assets less total liabilities and intangible assets). As of January 31, 1999, there were 1,026,686 shares of the Company's Common Stock outstanding. Therefore, the net tangible book value of the Company's Common Stock as of the above date was approximately $0.01per share. In the event that the Shares offered hereby are sold, the net tangible book value of the Common Stock would be $834,000 or approximately $0.076 per share. These figures give effect to the deduction of all of the estimated expenses, including filing, printing, legal, accounting, transfer agent and other fees. The net tangible book value per share will have increased by approximately $0.066 per share to the present stockholders and decreased by approximately $0.024 per share to the public investors if the entire offering is sold.
Dilution represents the difference between the public offering price and the net tangible book value per share immediately after the completion of this offering. Dilution arises mainly from the arbitrary decision by the Company as to the offering price per share. Dilution of the value of the shares purchased by the public in this offering will also be due, in part, to the far lower book value of the shares presently outstanding and, in part, to expenses incurred in connection with the public offering. The following table illustrates this dilution:
ASSUMING ALL THE SHARES SOLD
Public Offering Price Per Share $0.10
Net tangible Book Value Per Share Before Offering $0.01
Increase Per Share Attributable to Payment by Public Investors $0.066
Net Tangible Book Value Per Share After Offering $0.076
Dilution Per Share to Public Investors $0.024
As of the date of this Document, the following table sets forth the percentage of equity to be purchased by public investors in this offering compared to the percentage of equity to be owned by the present stockholders, and the comparative amounts paid for the shares by the public investors as compared to the total consideration paid by the present stockholders of the Company.
Shareholders # Shares % Cost/Share Total Cost % of Total Cost
Existing 1,026,686 9.3 $0.001 $ 10,000 .01
New 10,000,000 90.7 $ 0.10 $1,000,000 .99
Totals 11,026,686 100.0% $0.009 $1,010,000 100.0%
CAPITALIZATION
The following table sets forth the capitalization of the Company as of the date of this Prospectus and as adjusted to reflect the sale of the Shares offered hereby.
Presently Outstanding To Be Outstanding
1,026,686 shares of common stock 11,026,686 shares of common stock
Employees. The Company presently has no employees. (See "Management" below.) However, the Company intends to employ Mrs. Williamson and others upon completion of this offering.
Facilities. The Company presently maintains its offices at 400 N. Woodlawn, Suite 18, Wichita, KS 67208. The office is occupied pursuant to a verbal no-charge lease. The Company believes that its present office is currently sufficient for its purposes. The Company plans to pay rent of $500 per month after the offering.
MANAGEMENT
The officers and directors and key consultants of the Company and further information concerning them as follows:
Name Age Position
Georganna L. Williamson 45 President, Secretary, Treasurer, Principal Financial Officer, Director
Georganna L. Williamson. Mrs. Williamson has been the sole officer and director of the Company since inception on October 17, 1997. Mrs. Williamson plans to devote 100% of her time to the Company after the offering for a monthly salary of $4,000. From March 1991, until the present, Mrs. Williamson has been the operations manager of Fifth Avenue Communications, a financial public relations firm. For the past two years Mrs. Williamson set up, operates and maintains the Internet site for Fifth Avenue Communications and Internet sales of gourmet coffee products for Gourmet's Choice Coffee Co., Inc. From 1985 through the present Mrs. Williamson has been an officer and/or a director of a number of public companies. Mrs. Williamson attended the University of Wisconsin where she majored in English and Communications.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial ownership of the Company's common stock as of the date of this Prospectus, and as adjusted to reflect the sale of the Securities offered hereby, based on information obtained from the persons named below, with respect to the beneficial ownership of shares of Common Stock, by (i) each person who is known by the Company to own beneficially more than 5% of the Company's outstanding Common Stock; (ii) each of the Company's directors; and (iii) all directors and officers of the Company as a group.
Name and Address Amount and Nature
Of Beneficial
Ownership Percentage of
Shares
Before Offering Outstanding
Owned
After Offering
Georganna L. Williamson
400 N. Woodlawn, Suite 18
Wichita, KS 67208 500,510 48.8 4.5
AGE Investment Co.
730 Fifth Avenue, 9th Floor
New York, NY 10019-4105 500,804 48.8 4.5
1,001,314 97.6 9.0
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* As a group 2 persons own 1,001,314 shares of the 1,026,686 total shares outstanding at January 31, 1999. AGE Investment Co. is owned by Edward Williamson, husband of Georganna L. Williamson, the Company's president.
Reports to Stockholders. The Company intends to furnish its stockholders with annual reports containing audited financial statements as soon as practicable at the end of each fiscal year. The Company's fiscal year ends on December 31. In addition, the Company may from time to time, issue unaudited interim reports and financial statements.
Dividends. The payment by the Company of dividends, if any, in the future, rests within the discretion of its Board of Directors and will depend, among other things, upon the Company's earnings, its capital requirements and its financial condition, as well as other relevant factors. The Company has not declared any cash dividends since inception, and has no present intention of paying any cash dividends on its Common Stock in the foreseeable future, as it intends to use earnings, if any, to generate growth.
DESCRIPTION OF SECURITIES
Common Stock. The Company is authorized to issue twenty-five million (25,000,000) shares of Common Stock, $.001 par value per share, of which 1,026,686 shares were issued and outstanding as of the date of this Document. Each outstanding share of Common Stock is entitled to one (1) vote, either in person or by proxy, on all matters that may be voted upon the owners thereof at meetings of the stockholders.
The holders of Common Stock (i) have equal ratable rights to dividends from funds legally available therefor, when and if declared by the Board of Directors of the Company; (ii) are entitled to share ratably in all of the assets of the Company available for distribution to holders of Common Stock upon liquidation, dissolution or winding up of the affairs of the Company; (iii) do not have preemptive, subscription or conversion rights, or redemption or sinking fund provisions applicable thereto; and (iv) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote at all meetings of stockholders.
The holders of shares of Common Stock of the Company do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding shares, voting for the election of directors, can elect all directors of the Company if they so choose and, in such event, the holders of the remaining shares will not be able to elect any of the Company's directors.
UNDERWRITING
The Shares are offered on a "best efforts" basis for the 10,000,000 shares at a purchase price of $0.10 per Share. The Company may pay to brokers/finders a fee of 10% as commission.
All funds received with respect to the Shares which may be sold will be immediately deposited with the Company (see "Use of Proceeds"). The Shares will be sold fully paid only. Stock certificates will be issued to purchasers only when the proceeds from the sale of the Shares are received by the Company. This Offering will terminate 120 days from the date hereof unless extended by the Company.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE ACT MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, THE COMPANY HAS BEEN INFORMED THAT, IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION, SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
LITIGATION
The Company is not presently a party to any litigation, nor to the knowledge of management is any litigation threatened against the Company which may materially affect the Company. |
