-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cvr2+2UvWBMlI6wQHR3UO88gZVYbAKdun9pb9vlwnx6/70DmKG+9QgBDH2FoA+Yp R6cSkKbTdLxCxxx11xoabA== 0000898432-02-000369.txt : 20020520 0000898432-02-000369.hdr.sgml : 20020520 20020520163744 ACCESSION NUMBER: 0000898432-02-000369 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IVP TECHNOLOGY CORP CENTRAL INDEX KEY: 0001011601 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-30397 FILM NUMBER: 02657893 BUSINESS ADDRESS: STREET 1: 54 VILLAGE CENTRE STREET 2: MISSISSAUGA PLACE CITY: TORONTO ONTARIO M5E STATE: A6 ZIP: 0000 BUSINESS PHONE: 9053069343 MAIL ADDRESS: STREET 1: 54 VILLAGE CENTRE MISSISSAUGA PLACE STREET 2: ONTARIO CANADA 10QSB 1 a128887.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002 --------------------------------------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT IVP TECHNOLOGY CORPORATION (Exact name of small business issuer as specified in its charter) Nevada 65-6998896 ------------------------------- ---------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 2275 Lakeshore Blvd West, Suite 401, Toronto, Ontario M8V 3Y3 Canada (Address of principal executive offices) (416) 255-7578 (Issuer's telephone number) (Former name, former address and former fiscal year, if changed since last report) APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 114,776,975 shares of common stock, $.001 par value, were outstanding on May 1, 2002 Transitional Small Business Disclosure Format (Check one): Yes [ ] No [x] PART I -- FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets as of March 31, 2002 (Unaudited) and December 31, 2001 (Audited) Consolidated Statement of Operations for the Three Months Ended March 31, 2002 and March 31, 2001 Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2002 and March 31, 2001 Notes to Consolidated Financial Statements ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II-OTHER INFORMATION ITEM 1. LEGAL MATTERS ITEM 2. CHANGES IN SECURITIES ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ITEM 6. SUBSEQUENT EVENTS, EXHIBITS AND REPORTS ON FORM 8-K 2 IVP TECHNOLOGY CORPORATION AND SUBSIDIARIES (A Development Stage Company) CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2002 March 31, December 2002 31, 2001 (Unaudited) (Audited) ------------ ------------- ASSETS - ------ CURRENT ASSETS Cash $ 22,268 $ 232 ------------ ------------- Total Current Assets 22,268 232 ------------ ------------- OTHER ASSETS Miscellaneous receivable 872 872 Deferred licensing fee, net of amortization 3,147,897 3,600,431 ------------ ------------- Total Other Assets 3,148,769 3,601,303 ------------ ------------- TOTAL ASSETS $ 3,171,037 $ 3,601,535 ============ ============= LIABILITIES AND STOCKHOLDERS' DEFICIENCY - ---------------------------------------- CURRENT LIABILITIES Accounts payable and accrued liabilities $ 57,201 $ 479,571 Accounts payable - license agreement 3,261,918 3,620,268 Notes payable 1,056,334 200,000 Interest payable 41,750 34,841 ------------ ------------- Total Current Liabilities 4,417,203 4,334,680 ------------ ------------- NOTE PAYABLE - LONG-TERM 129,020 129,020 ------------ ------------- STOCKHOLDERS' DEFICIENCY Preferred stock, $.001 par value, 50,000,000 - - shares authorized, none issued and outstanding Common stock, $.001 par value 150,000,000 shares authorized, 53,278,448 and 48,752,848 shares issued and outstanding, respectively 53,278 48,753 Common stock to be issued 2,500 50,000 Additional paid-in capital 13,466,608 13,238,354 Accumulated deficit (accumulated in development stage $12,883,106 in 2001) (14,617,572) (13,859,272) ------------ ------------- (1,095,186) (522,165) Less deferred compensation and licensing fee (280,000) (340,000) ------------ ------------- TOTAL STOCKHOLDERS' DEFICIENCY (1,375,186) (862,165) ------------ ------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 3,171,037 $ 3,601,535 - ---------------------------------------------- ============ ============= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 3 IVP TECHNOLOGY CORPORATION AND SUBSIDIARIES (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS For the Three For the Three Cumulative From Months Ended Months Ended January 1, 1998 (inception) March 31, 2002 March 31, 2001 to March 31, 2002 ----------------- ---------------- --------------------------- REVENUE $ -- $ 27,060 $ 107,360 ----------------- ---------------- --------------- EXPENSES Amortization 512,534 -- 752,371 Interest -- -- 62,303 Legal and accounting 46,097 4,000 598,061 Infrastructure 112,794 2,756 112,794 Management fees 36,956 3,500 795,797 Development and licensing fees 16,234 12,600 671,648 Consulting fees 19,000 366,463 5,440,351 Travel & Entertainment 4,386 17,923 4,386 Other (1,628) 119 566,958 ----------------- ---------------- --------------- TOTAL OPERATING EXPENSES 746,373 407,361 9,004,669 ----------------- ---------------- --------------- LOSS FROM OPERATIONS (746,373) (380,301) (8,897,309) ----------------- ---------------- --------------- OTHER EXPENSE Write-off of goodwill and other costs - - (4,000,000) Interest expense (11,927) - (11,927) ----------------- --------------- ---------------- LOSS BEFORE EXTRAORDINARY ITEM (758,300) (380,301) (12,909,236) EXTRAORDINARY ITEM Loss on extinguishment of debt - - (732,170) ----------------- ---------------- --------------- NET LOSS $ (758,300) $ (380,301) $ (13,641,406) ----------------- ---------------- --------------- LOSS PER SHARE $ (0.02) $ (0.01) $ (0.59) ================= ================ ================ WEIGHTED AVERAGE NUMBER OF OUTSTANDING COMMON SHARES 49,055,055 33,449,427 23,042,356 ================= ================ ================ See Accompany Notes To Financial Statements 4
IVP TECHNOLOGY CORPORATION AND SUBSIDIARIES (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended Cumulative From March 31, March 31, January 1, 1998 (inception) 2002 2001 to March 31, 2002 ------------- ------------- --------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (758,300) $ (380,301) $(13,641,406) Adjustments to reconcile net loss to net cash used in operating activities: Loss on extinguishment of debt 732,170 Write off of goodwill and other costs 4,000,000 Stock issued for services 232,779 323,715 5,284,280 Stock issued for licensing fee 380,000 Amortization 512,534 - 752,371 Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable - (220) - Increase (decrease) in: Accounts payable and accrued expenses (422,370) 62,635 (13,928) Management fee payable (405,850) - 44,150 Interest payable 6,909 - 41,750 ------------- ------------- ------------- Net Cash Used In Operating Activities (834,298) 5,829 (2,420,613) ------------- ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Minority interest - - 400 Other - - 400 ------------- ------------- ------------- Net Cash Provided By Investing Activities - - 800 ------------- ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock, net of subscriptions - - 1,235,321 Proceeds from loans and notes 856,334 - 1,199,689 Proceeds from stockholders - - 6,618 ------------- ------------- ------------- Net Cash Provided By Financing Activities 856,334 - 2,441,628 ------------- ------------- ------------- NET INCREASE (DECREASE) IN CASH 22,036 5,829 21,815 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 232 1,424 453 ------------- ------------- ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,268 $ 7,253 22,268 - -------------------------------------------- ============= ============= ============= SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: Issuance of 600,000 shares of common stock to settle management fee payable $ - $ 450,000 $ 450,000 ============= ============= ============= See Accompanying Notes To Financial Statements
5 IVP TECHNOLOGY CORPORATION AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2002 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION - ------ ----------------------------------------------------------- (A) ORGANIZATION ---------------- Mountain Chief, Inc. was incorporated in the State of Nevada on February 11, 1994. This name was subsequently changed by Articles of Amendment dated November 16, 1994 to IVP Technology Corporation (the "Company"). The Company was granted an extra-provincial license by the Province of Ontario on June 20, 1995 to carry on business in Ontario, Canada. Prior to 1998, the Company was involved with various unsuccessful activities relating to the sale of technology products before becoming inactive by the end of 1997. The Company began negotiations with a third party in 1998 to become an exclusive distributor of software and therefore is considered to have re-entered the development stage on January 1, 1998. Activities from inception of development stage included raising of capital and negotiations and acquisition of software distribution licenses (See Note 5). (B) ACQUISITION --------------- Effective March 2000, the Company acquired all the outstanding shares of common stock of Erebus Corporation, an inactive reporting shell company with no assets or liabilities, from the stockholders thereof in an exchange for an aggregate of 350,000 shares of the Company's common stock and paid $200,000 of consulting expenses in connection with the acquisition. Pursuant to Rule 12-g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission, the Company elected to become the successor issuer to Erebus Corporation for reporting purposes under the Securities Exchange Act of 1934. For financial reporting purposes, the acquisition was treated as a recapitalization of the Company with the par value of the common stock charged to additional-paid-in capital. (C) BASIS OF PRESENTATION ------------------------- The Company maintains its original records in United States dollars. The consolidated financial statements are expressed in United States dollars and have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States. (D) PRINCIPLES OF CONSOLIDATION ------------------------------- The consolidated financial statements include the accounts of the Company and its inactive subsidiaries, Lanvoice Corporation and Erebus Corporation. All significant inter-company transactions and balances have been eliminated. (E) FOREIGN CURRENCY TRANSACTIONS --------------------------------- Transactions conducted in Canadian dollars have been translated into United States dollars using the average exchange rate for the month in which the transactions occurred. Gains or losses are recognized in the statement of operations. (F) USE OF ESTIMATES -------------------- In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. (G) CASH AND CASH EQUIVALENTS ----------------------------- For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. 6 IVP TECHNOLOGY CORPORATION AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2002 (H) FAIR VALUE OF FINANCIAL INSTRUMENTS --------------------------------------- Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments", requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate the value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation. The carrying amounts of the Company's accounts receivable, accounts payable and accrued liabilities, and note and interest payable thereon approximates fair value due to the relatively short period to maturity for these instruments. (I) INCOME TAXES The Company accounts for income taxes under the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" ("Statement 109"). Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. (J) CONCENTRATION OF CREDIT RISK -------------------------------- The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. (K) LOSS PER SHARE ------------------ Basic and diluted net loss per common share for all periods presented is computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards No. 128, "Earnings Per Share". There were no common stock equivalents at December 31, 2001 and March 31, 2002. (L) BUSINESS SEGMENTS --------------------- The Company applies Statement of Financial Accounting Standards No. 131 "Disclosures about Segments of an Enterprise and Related Information". The Company operates in one segment and therefore segment information is not presented. (M) REVENUE RECOGNITION ----------------------- The Company records revenue associated with the sale of software licenses on a pro-rata basis over the license term. (N) NEW ACCOUNTING PRONOUNCEMENTS --------------------------------- The Financial Accounting Standards Board has recently issued several new Statements of Financial Accounting Standards. Statement No. 141, "Business Combinations" supersedes APB Opinion 16 and various related pronouncements. Pursuant to the new guidance in Statement No. 141, all business combinations must be accounted for under the purchase method of accounting; the pooling-of-interests method is no longer permitted. SFAS 141 also establishes new rules concerning the recognition of goodwill and other intangible assets arising in a purchase business combination and requires disclosure of more information concerning a business combination in the 7 IVP TECHNOLOGY CORPORATION AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2002 period in which it is completed. This statement is generally effective for business combinations initiated on or after July 1, 2001. Statement No. 142, "Goodwill and Other Intangible Assets" supersedes APB Opinion 17 and related interpretations. Statement No. 142 establishes new rules on accounting for the acquisition of intangible assets not acquired in a business combination and the manner in which goodwill and all other intangibles should be accounted for subsequent to their initial recognition in a business combination accounted for under SFAS No. 141. Under SFAS No. 142, intangible assets should be recorded at fair value. Intangible assets with finite useful lives should be amortized over such period and those with indefinite lives should not be amortized. All intangible assets being amortized, as well as those that are not, are both subject to review for potential impairment under SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of". SFAS No. 142 also requires that goodwill arising in a business combination should not be amortized but is subject to impairment testing at the reporting unit level to which the goodwill was assigned at the date of the business combination. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 and must be applied as of the beginning of such year to all goodwill and other intangible assets that have already been recorded in the balance sheet as of the first day in which SFAS No. 142 is initially applied, regardless of when such assets were acquired. Goodwill acquired in a business combination whose acquisition date is on or after July 1, 2001, should not be amortized, but should be reviewed for impairment pursuant to SFAS No. 121, even though SFAS No. 142 has not yet been adopted. However, previously acquired goodwill should continue to be amortized until SFAS No. 142 is first adopted. Statement No. 143 "Accounting for Asset Retirement Obligations" establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment, or other type of disposal of long-lived tangible assets arising from the acquisition, construction, or development and/or normal operation of such assets. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged. The adoption of these pronouncements will not have a material effect on the Company's financial position or results of operations. NOTE 2 NOTES PAYABLE - ----- ------------- (A) NOTES PAYABLE - SHORT-TERM ------------------------------ The Company has a convertible note payable with Rainbow Investments International Limited ("RII") for $200,000 which is outstanding at March 31, 2002 and December 31, 2001. The note bears interest at 10% per annum and was due May 2001. As of December 31, 2001, accrued interest on the note amounted to $34,841. The debt and accrued interest is convertible to common stock at a conversion price equal to 80% of the average closing bid price per share during the ten trading days immediately prior to any such conversion. On July 16, 2001, the Company received notice from RII of their intent to convert the note and accrued interest to common stock. The Company intends to convert such note payable; however, as of March 31, 2002 the conversion has not taken place. DCD HOLDINGS, LTD. NOTE PAYABLE ------------------------------- On February 16, 2002, the Company entered into a short-term loan agreement for (pound)600,000 (US $856,334) with DCD Holdings, Ltd. that calls for repayment on April 30, 2002. The loan carries an interest rate of 4% above HSBC Bank base rate. Interest is payable monthly. On May 1, 2002, the Company agreed to repay this loan via the issuance of 4,000,000 shares of its restricted common stock at $.19 per share. 8 (B) NOTES PAYABLE - LONG-TERM ----------------------------- On July 30, 2001, the Company entered into a two-year note with Berra Holdings, Ltd. to borrow up to $187,500 at 6% interest. As of March 31, 2002 and December 31, 2001 the Company has borrowed $129,020. The note is collateralized by 2,500,000 shares of common stock held in the name of Clarino Investment International, Ltd. NOTE 3 STOCKHOLDERS' DEFICIENCY - ------ ------------------------ During 1998 the Company issued 8,363,000 common shares for cash of $39,610 and a related subscription receivable of $359,000 which was satisfied in 1999 with cash of $327,700 and an offset of $31,300 to due to stockholder. During 1998 the Company issued 2,000,000 common shares for past services. For financial reporting purposes, the stock was valued at its quoted trading price on the grant date resulting in an aggregate consulting expense of $3,000,000 recorded in 1998. During 1999 the Company issued 3,650,000 common shares for cash of $56,660 and a related subscription receivable of $136,350 which was collected in March 2000. During 1999 the Company issued 200,000 common shares for services. For financial reporting purposes the stock was valued at its quoted trading price on the grant dates resulting in expense of $10,000. During 1999 the Company issued 5,787,000 common shares valued at $1,215,270 in exchange for $483,100 of debt, customer deposits and accounts payable to unrelated parties. For financial reporting purposes the stock was valued at its quoted trading price on the settlement date. The Company recognized a $732,170 loss on extinguishment. During 1999 the Company issued 1,500,000 common shares for the extension of a licensing agreement. For financial statement purposes the stock was valued at its quoted trading price. During 2000, the Company issued 4,500,000 common shares for cash of $675,000 and 3,500,000 common shares for costs in connection with the offering, which were valued at $350,000. The value of the 3,500,000 shares of common stock is a direct offering cost and accordingly has been charged to equity in 2000. During 2000, 2,670,000 common shares were issued for services in the amount of $1,614,661. These shares were valued at the quoted trading price on the grant date. Deferred compensation in the amount of $316,286 was recorded during the year for unearned consulting services. In March 2000, the Company acquired all the outstanding shares of common stock of Erebus Corporation from the stockholders thereof in exchange for an aggregate of 350,000 shares of the Company's common stock at par value. During 2000, the Company issued 600,000 common shares valued at its quoted trading price. The stock was issued for payment of debt. In May 2000, the Company amended and extended its software distribution agreement. The agreement was extended to May 31, 2003 and the territory expanded to Switzerland. In consideration of the above the Company issued 1,000,000 common shares in August 2001 and increased the royalty fee from 5% to 7.5%. The shares were valued at $0.72 based upon the closing pricing at May 31, 2000. The $720,000 was originally recorded as common stock to be issued in the equity section of the balance sheet at December 31, 2000 and the cost of the agreement is being amortized over the remaining term of the agreement. 9 IVP TECHNOLOGY CORPORATION AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2002 As of December 31, 2000, the Company recognized $140,000 as licensing fee expense and recorded $580,000 for unearned licensing fee. The balance is deferred licensing fee and will be amortized on a pro-rata basis over the remaining life of the agreement. During 2001, the Company issued 9,512,000 common shares for services valued at the quoted trading price at the time of issuance. The total value of such issuances amounted to $893,000. The Company also incurred and recorded $50,000 of expenses for services rendered in 2001 for which it will issue 1,000,000 shares in 2002. During 2001, the Company rescinded 870,000 shares previously issued to consultants for non-performance of services. Such shares were valued at the original issued value which reflected market prices at the time of issuance. During the three months ended March 31, 2002, the Company issued 50,000,000 shares of its restricted common stock to Messrs. MacDonald, Hamilton, Birch, Villella and Bullock in accordance with the Stock Purchase Agreement dated as of September 17, 2001 with International Technology Marketing. All shares are held in safekeeping pending completion of the escrow agreement. During the three months ended March 31, 2002, the Company issued 4,525,600 shares of its restricted common stock valued at $232,780 to various professionals and consultants for services rendered. During the three months ended March 31, 2002, the Company issued 1,000,000 shares each to Messrs. Smith, Sidrow and King for services as directors for the two year period 2001-2003. The 3,000,000 shares are held in escrow. Subsequent to the quarter ended March 31, 2002, Messrs. Sidrow and King resigned from the board of directors for personal reasons and as a result, their entitlement to shares terminated. The shares have been rescinded. NOTE 4 INCOME TAXES - ------ ------------ Income tax expense (benefit) for the three-month periods ended March 31, 2002 and 2001 is summarized as follows: 2002 2001 ------------ ------------- Current: Federal $ - $ - State - - Deferred-Federal and State - - ------------ ------------- Income tax expense (benefit) $ - $ - ============ ============= The Company's tax expense differs from the "expected" tax expense for the three-month periods ended March 31, 2002 and 2001 as follows: 2002 2001 ------------ ------------- U.S. Federal income tax provision (benefit) $(237,422) $ (129,302) Effect of net operating loss carryforward 237,422 129,302 ------------ ------------- $ - $ - ============ ============= At March 31, 2002 the Company had net operating loss carryforwards of approximately $14,557,600, for U.S. federal income tax purposes available to offset future taxable income expiring on various dates beginning in 2016 through 2021. 10 IVP TECHNOLOGY CORPORATION AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2002 NOTE 5 AGREEMENTS - ------ ------------- (A) SOFTWARE DISTRIBUTION AGREEMENTS ------------------------------------ On March 30, 1999, the Company entered into a software distributing agreement granting the Company an exclusive right to distribute a software product known as "Power Audit" throughout the United States of America. (See below for subsequent amendments and extensions.) The significant terms and conditions governing the agreement are as follows: >> Payment by the Company of $50,000 in development funds. >> Issuance of 500,000 in common shares of the Company to the owners and developers of the software upon its delivery, which was in October 1999. >> Royalty payments of 20% on the first $500,000 of sales, 12.5% on sales between $500,000 and $1,000,000 and 5% on sales over $1,000,000. The agreement has a term of fourteen (14) months and could be terminated on six-month notice by either party. It can be extended on a year-to-year basis, provided the gross annual sales exceed $1,000,000 and all other terms are observed by the parties. In September 1999, for a consideration of the Company's issuance of an additional 1,000,000 common shares, the agreement was amended to include the European Economic Community in its distribution territory and payment of $4,200 per month for software support and services. The 1,500,000 common shares were issued in 1999 and were valued on the dates of the agreement and amendment based on the quoted trading prices. The resulting $220,000 value was presented as license fees, net of $106,000 accumulated amortization, as of December 31, 1999. During the year ended December 31, 2000, the remaining license fees of $114,000 were charged to operations as amortization expense. In May 2000, the parties agreed to amend and extend the software agreement for three years to May 31, 2003. The amended agreement expanded the territory to include the Country of Switzerland, required the Company to issue 1,000,000 common shares (See Note 3) and complete a financing of a minimum of $2,000,000 with a portion of the proceeds to be used to contract services of or to develop its own technical support and internal marketing group. In connection with the issuance of the common shares, the Company may be obligated to absorb costs relating to the registration of those shares. As of March 31, 2002, the cost to register those shares has not been determined. In addition, the Company is required to complete a minimum of twelve sales or licensing agreements of the software product prior to the expiration of the twelve-month period ending June 1, 2001. In the event that the minimum sales requirement is not met, the Company is required to compensate the Software Owner for unpaid royalties at the rate of $3,750 per sale shortfall up to the maximum of twelve, or $45,000, and issue 100,000 common shares. Lastly, the royalty fee for sales over $1,000,000 has been changed from 5% to 7.5%. (B) CONSULTING AGREEMENTS ------------------------- On November 1, 1999 (the "Agreement Date") the Company entered into a consulting agreement whereby the consultant agreed to assist the Company in raising stipulated minimum equity capital and perform other consulting services. Payment of 3,500,000 common shares was placed in escrow with the issuance thereof contingent on raising the equity capital. In accordance with generally accepted accounting principles, the escrowed shares were not considered outstanding until released and therefore no value had been assigned to them. In 2000 these shares were released and were valued at the quoted trading price on the Agreement Date and charged to equity as an offering cost (See Note 3). On March 17, 2000, the Company entered into a consulting agreement with the former stockholder of the acquired inactive reporting shell company (See Note 1(B)). The consulting agreement states that one year after the execution of the agreement ("reset date"), the 350,000 common shares issued by the Company to the former stockholder shall be increased or decreased based upon the average closing price of the Company's stock 30 days prior to the reset date, so the value of the 350,000 shares will equal $500,000. The average closing price of the stock was $0.1487 per share. The Company 11 is obligated to issue an additional 3,012,475 common shares to the consultant as an additional fee. As of March 31, 2002, the Company has not received a request for the additional shares. (C) LICENSING AGREEMENT ----------------------- On December 28, 2001, the Company entered into a two-year licensing agreement to distribute software used by the insurance industry, which agreement includes a non-exclusive right to sell such software to clients in North America, Mexico, Canada, and their overseas territories. The cost of such agreement was (pound)2,500,000 (US $3,620,268) and is being amortized over the two-year period of the agreement. Amortization expense for the three-month period ended March 31, 2002 was $452,534. Pursuant to the terms of this agreement, the Company is obligated to purchase from the Innovation Group, PLC $3,620,268 worth of Classifier Software by December 31, 2002. The Company paid the Innovation Group, PLC approximately $418,000 in connection with the License. The Company is obligated to pay the balance by December 31, 2002. (D) MARKETING AGREEMENT ----------------------- In May 2002, the Company entered into an agreement with Vanessa Land for marketing and advisory services connected with product marketing in the European Economic Community and North America. In relation with this agreement, the Company issued 5,000,000 shares of common stock to Ms. Vanessa Land. These shares were registered on a Form S-8 filed on May 3, 2002. These shares were valued at $0.05 per share, or an aggregate of $250,000, on the date of issuance. (E) STOCK PURCHASE AGREEMENT ---------------------------- On September 17, 2001, the Company entered into a stock purchase agreement to acquire 100% of the outstanding stock of International Technology Marketing, Inc. ("ITM"). The agreement calls for the Company to issue 50,000,000 shares, which will be held in escrow subject to the Company reaching certain sales milestones. The agreement also calls for the Company to reimburse the shareholders of ITM in their efforts to meet the sales milestones. The sales milestones reached after the closing are as follows: >> Upon achieving revenues of $500,000 the escrow agent will release 10,000,000 shares. >> Upon achieving an additional $500,000 of revenues the escrow agent will release another 10,000,000 shares. >> Upon achieving $2,000,000 in cumulative revenues the escrow agent will release another 10,000,000 shares. >> Upon achieving $6,000,000 in cumulative revenues the escrow agent will release another 10,000,000 shares. >> Upon reaching $16,200,000 in cumulative revenues the final 10,000,000 shares will be released. As of March 31, 2002, the Company has not closed the escrow agreement. NOTE 6 GOING CONCERN - ------ ------------- As reflected in the accompanying financial statements, the Company's recurring losses during the development stage of $12,883,106, and its working capital deficiency of $4,334,935 and stockholders' deficiency of $1,315,186 raise substantial doubt about its ability to continue as a going 12 concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company has entered into a software distribution agreement (See Note 5(A)) and a licensing agreement (See Note 5(C)), has raised equity capital (See Note 7), and intends on raising additional equity capital in order to implement its business plan and marketing efforts. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. NOTE 7 SUBSEQUENT EVENTS - ------ ----------------- In April 2002, IVP Technology raised $200,000 of gross proceeds from the issuance of convertible debentures. These debentures accrue interest at a rate of 5% per year and mature two years from the issuance date. The debentures are convertible at the holder's option any time up to maturity at a conversion price equal to the lower of (i) 120% of the closing bid price of the common stock as of the closing date (ii) 80% of the average closing bid price of the common stock for the 4 lowest trading days of the 5 trading days immediately preceding the conversion date. At maturity, IVP Technology has the option to either pay the holder the outstanding principal balance and accrued interest or to convert the debentures into shares of common stock at a conversion price equal to the lower of (i) 120% of the closing bid price of the common stock as of the closing date or (ii) 80% of the average closing bid price of the common stock for the 4 lowest trading days of the 5 trading days immediately preceding the conversion date. IVP Technology has the right to redeem the debentures upon 30 days notice for 120% of the amount redeemed. Upon such redemption, IVP Technology will issue the investor a warrant to purchase 10,000 shares of common stock at an exercise price of $0.50 per share for every $100,000 of debentures that are redeemed. In April 2002, IVP Technology entered into an Equity Line of Credit Agreement with Cornell Capital Partners, L.P. Under this agreement, IVP Technology may issue and sell to Cornell Capital Partners common stock for a total purchase price of up to $10.0 million. Subject to certain conditions, IVP Technology will be entitled to commence drawing down on the Equity Line of Credit when the common stock under the Equity Line of Credit is registered with the Securities and Exchange Commission and the registration statement is declared effective. The purchase price for the shares will be equal to 92% of the market price, which is defined as the lowest closing bid price of the common stock during the five trading days following the notice date. The amount of each advance is subject to an aggregate maximum advance amount of $425,000 in any thirty-day period. IVP Technology paid Cornell a one-time fee equal to $340,000, payable in 3,032,000 shares of common stock. The investor also received warrants to purchase up to 265,000 shares of common stock, 250,000 shares at an exercise price equal to $0.50 per share and 15,000 shares of common stock equal to $0.099 per share. Cornell Capital Partners is entitled to retain 3.0% of each advance. In addition, IVP Technology entered into a placement agent agreement with Westrock Advisors, Inc., a registered broker-dealer. Pursuant to the placement agent agreement, IVP Technology paid a one-time placement agent fee of 100,000 shares of common stock. IVP Technology agreed to pay Danson Partners, LLC a consultant, a one-time fee of $200,000 for its work in connection with consulting the company on various matters. Of that fee, $75,000 of this fee was paid in cash with the balance payable in 1,040,000 shares of common stock. 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with the consolidated financial statements of IVP Technology and the notes thereto appearing elsewhere in this filing. Statements in this Management's Discussion and Analysis or Plan of Operation and elsewhere in this prospectus that are not statements of historical or current fact constitute "forward-looking statements." Our company was incorporated in the State of Nevada on February 11, 1994 under the name Mountain Chef, Inc. On November 16, 1994, the corporation changed its name to IVP Technology Corporation for the purpose of identifying and acquiring private companies and/or their technologies in the high technology field. Prior to 1998, IVP Technology was involved with various unsuccessful activities relating to the sale of technology products and then became inactive in 1997. On March 30, 1999, IVP Technology entered into a 14-month software distribution agreement with Orchestral Corporation for the exclusive right to market and distribute the PowerAudit software in the United States. This agreement was extended in September 1999 and again in May 2000 until May 2003. On or about March 17, 2000, IVP Technology acquired all of the outstanding shares of common stock of Erebus Corporation, an inactive reporting shell company, in exchange for 350,000 shares of common stock. As a result, Erebus is a wholly owned subsidiary of IVP Technology. Pursuant to Rule 12g-3(a) promulgated under the Securities Act of 1934, IVP Technology elected to become the successor issuer to Erebus for reporting purposes under the Securities Exchange Act of 1934, and is required to file reports with the Securities and Exchange Commission. Erebus became a reporting company on or about August 17, 1999. Erebus was incorporated on June 7, 1999 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. Erebus had been in the developmental stage since its inception and, at December 31, 1999 and at the date of the acquisition, had no operations, no operating history, no revenues or earnings from operations, nor any significant assets or financial resources, other than having issued shares to its original shareholder. Acquisition Of International Technology Marketing On September 17, 2001, IVP Technology entered into a stock purchase agreement with International Technology Marketing, Inc. Pursuant to this agreement, IVP Technology agreed to issue 50 million shares of restricted common stock to the shareholders of International Technology Marketing, who include Messrs. MacDonald, Hamilton, Birch, Villella and Ms. Bullock, the members of our current management team, in exchange for all of International Technology Marketing's common stock. On March 25, 2002, we issued the 50 million shares of common stock to the former shareholders of International Technology Marketing. Pending execution of an escrow agreement, IVP Technology is holding these shares for the benefit of the former shareholders of International Technology Marketing. These shares will be held pending satisfaction of certain performance related goals. As these goals are achieved, the shares will be disbursed from the escrow to the former shareholders of International Technology Marketing. The former shareholders are entitled to vote the shares held in escrow pending satisfaction of the performance goals. The performance goals are as follows: o 10,000,000 shares will be disbursed upon aggregate sales of $500,000. o 10,000,000 shares will be disbursed upon aggregate sales of $1,000,000. o 10,000,000 shares will be disbursed upon aggregate sales of $2,000,000. o 10,000,000 shares will be disbursed upon aggregate sales of $6,000,000. o 10,000,000 shares will be disbursed upon aggregate sales of $16,200,000. On November 16, 2001, IVP Technology held its annual stockholders' meeting. At the meeting, a majority of IVP Technology's outstanding capital stock voted in favor of the acquisition of International Technology Marketing, as well as the increase in the authorized common stock to 150 million shares. Also at the meeting, the shareholders elected two members of the new management team together with three independent board members to the Board of Directors. 14 CHANGES IN NUMBER OF EMPLOYEES We do not anticipate any significant changes in the number of employees. RESEARCH AND DEVELOPMENT We do not anticipate any significant research and development expenses over the next 12 months except to mitigate some of the technology risks indicated under the heading section entitled Risks. PLANT AND EQUIPMENT We do not anticipate significant plant and equipment expenses over the next 12 months. RESULTS OF OPERATIONS The following discussion should be read in conjunction with our financial statements and the related notes and the other financial information appearing elsewhere in this report. GOING CONCERN As reflected in the accompanying financial statements, IVP Technology's recurring losses during the development stage of $12,883,106, and its working capital deficiency of $4,334,680 and stockholders' deficiency of $862,165, raise substantial doubt about its ability to continue as a going concern. The ability of IVP Technology to continue as a going concern is dependent on IVP Technology's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if IVP Technology is unable to continue as a going concern. IVP Technology has entered into a software distribution agreement and a licensing agreement and intends on raising additional equity capital in order to implement its business plan and marketing efforts. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for IVP Technology to continue as a going concern. THREE MONTHS ENDED MARCH 31, 2002 COMPARED WITH THE THREE MONTHS ENDED MARCH 31, 2001 Results of Operations - --------------------- The following discussion should be read in conjunction with our financial statements and the related notes and the other financial information appearing elsewhere in this report. For the three months ended March 31, 2002, we incurred an overall loss of $(758,300) or $(0.02) per share, which was 99.9% more than the $(380,301) loss we incurred for the comparative three month period ended March 31, 2001. The loss per share for the three months ended March 31,2001 was $(____). REVENUES. We generated no revenue during the three months ended March 31, 2002 as compared to revenue of $27,060 for the three months ended March 31, 2001. All revenue was generated from sales of PowerAudit. OPERATING EXPENSES. Total operating expenses for the three months ended March 31, 2002 and for the three months ended March 31, 2001 were $746,373 and $407,361, respectively, and represents an 83% increase from the prior period. The increase in operating expenses resulted primarily from an increase in amortization expense of $512,534 relating solely to acquisition of the Classifier Software net of a reduction in consulting expenses from $366,463 to $19,000, or $347,463. Our infrastructure expenses increased due to the additional costs associated with the Company's new management team. Interest expense increased to $11,927 for the three months ended March 31, 2002 due principally to financing entered into with DCD Holdings, Ltd. 15 Liquidity and Capital Resources - ------------------------------- In the past we have financed our operations through a combination of convertible securities and the private placement of our stock. Our cash position continues to be uncertain. Our primary need for cash is to fund our ongoing operations until such time that the sale of our licensed products generates enough revenue to fund operations. In addition, our need for cash includes satisfying $4,417,203 in current liabilities, including software license fees of $3,261,918 due by December 31, 2002, a convertible note of $200,000, plus accrued interest of $41,750 as of March 31, 2002 and a (pound)600,000 (U.S. $856,334) loan due April 30, 2002, which on May 1, 2002 was converted into 4,000,000 shares of our common stock and extinguished. Our independent accountants have issued a going concern opinion on our financial statements that raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement our business plan to market and sell PowerAudit, Classifier, Viper and other software products. At March 31, 2002, IVP Technology's cash and cash equivalents balance was $22,268, an increase of $22,036 from the balance of $232 at December 31, 2001. During the three months ended March 31, 2002 and 2001, cash used in operations and investing activities amounted to ($846,798) and $5,829, respectively. Cash used in operating activities consisted primarily of a net loss of $(758,300), a decrease in accounts payable and accrued expenses of $422,370 and a decrease in amounts payable under the licensing agreement of $418,350. This deficit was financed by proceeds of $856,334 from a loan arrangement described below. Cash provided by financing activities in the prior year's comparable period amounted to $0. On January 31, 2002, we entered into an interim financing agreement for (pound)600,000, (U.S. $856,334) on an unsecured basis with the European based venture capital and merchant banking firm DcD Limited. The loan bears an interest rate equal to the HSBC Bank base rate, minus 5% if that figure is positive, and interest is payable monthly. The loan was due on April 30, 2002. On May 1, 2002, we converted the loan, plus accrued interest into 4,000,000 shares of our common stock. In April 2002, IVP Technology raised $200,000 of gross proceeds from the issuance of convertible debentures. These debentures accrue interest at a rate of 5% per year and mature two years from the issuance date. The debentures are convertible at the holder's option any time up to maturity at a conversion price equal to the lower of (i) 120% of the closing bid price of the common stock as of the closing date (ii) 80% of the average closing bid price of the common stock for the 4 lowest trading days of the 5 trading days immediately preceding the conversion date. At maturity, IVP Technology has the option to either pay the holder the outstanding principal balance and accrued interest or to convert the debentures into shares of common stock at a conversion price equal to the lower of (i) 120% of the closing bid price of the common stock as of the closing date or (ii) 80% of the average closing bid price of the common stock for the 4 lowest trading days of the 5 trading days immediately preceding the conversion date. IVP Technology has the right to redeem the debentures upon 30 days notice for 120% of the amount redeemed. Upon such redemption, IVP Technology will issue the investor a warrant to purchase 10,000 shares of common stock at an exercise price of $0.50 per share for every $100,000 of debentures that are redeemed. In April 2002, IVP Technology entered into an Equity Line of Credit Agreement with Cornell Capital Partners, L.P. Under this agreement, IVP Technology may issue and sell to Cornell Capital Partners common stock for a total purchase price of up to $10.0 million. Subject to certain conditions, IVP Technology will be entitled to commence drawing down on the Equity Line of Credit when the common stock under the Equity Line of Credit is registered with the Securities and Exchange Commission and the registration statement is declared effective. The purchase price for the shares will be equal to 92% of the market price, which is defined as the lowest closing bid price of the common stock during the five trading days following the notice date. The amount of each advance is subject to an aggregate maximum advance amount of $425,000 in any thirty-day period. IVP Technology paid Cornell a one-time fee equal to $340,000, payable in 3,032,000 shares of common stock. The investor also received warrants to purchase up to 265,000 shares of common stock, 250,000 shares at an exercise price equal to $0.50 per share and 15,000 shares of common stock equal to $0.099 per share. Cornell Capital Partners is entitled to retain 3.0% of each advance. In addition, IVP Technology entered into a placement agent agreement with Westrock Advisors, Inc., a registered broker-dealer. Pursuant to the placement agent agreement, IVP Technology paid a one-time placement agent fee of 100,000 shares of common stock. IVP Technology agreed to pay Danson Partners, LLC a consultant, a one-time fee of $200,000 for its work in connection with consulting the company on various matters. Of that fee, $75,000 of this fee was paid in cash with the balance payable in 1,040,000 shares of common stock. 16 Effect Of Recent Accounting Pronouncements - ------------------------------------------ The Financial Accounting Standards Board has recently issued several new Statements of Financial Accounting Standards. Statement No. 141, "Business Combinations" supersedes APB Opinion 16 and various related pronouncements. Pursuant to the new guidance in Statement No.141, all business combinations must be accounted for under the purchase method of accounting; the pooling-of-interests method is no longer permitted. SFAS 141 also establishes new rules concerning the recognition of goodwill and other intangible assets arising in a purchase business combination and requires disclosure of more information concerning a business combination in the period in which it is completed. This statement is generally effective for business combinations initiated on or after July 1, 2001. Statement No.142, "Goodwill and Other Intangible Assets" supercedes APB Opinion 17 and related interpretations. Statement No.142 establishes new rules on accounting for the acquisition of intangible assets not acquired in a business combination and the manner in which goodwill and all other intangibles should be accounted for subsequent to their initial recognition in a business combination accounted for under SFAS No. 141. Under SFAS No.142, intangible assets should be recorded at fair value. Intangible assets with finite useful lives should be amortized over such period and those with indefinite lives should not be amortized. All intangible assets being amortized as well as those that are not, are both subject to review for potential impairment under SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of'. SFAS No.142 also requires that goodwill arising in a business combination should not be amortized but is subject to impairment testing at the reporting unit level to which the goodwill was assigned to at the date of the business combination. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 and must be applied as of the beginning of such year to all goodwill and other intangible assets that have already been recorded in the balance sheet as of the first day in which SFAS No.142 is initially applied, regardless of when such assets were acquired. Goodwill acquired in a business combination whose acquisition date is on or after July 1, 2001, should not be amortized, but should be reviewed for impairment pursuant to SFAS No. 121, even though SFAS No.142 has not yet been adopted. However, previously acquired goodwill should continue to be amortized until SFAS No.142 is first adopted. Statement No.143 "Accounting for Asset Retirement Obligations" establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment, or other type of disposal of long-lived tangible assets arising from the acquisition, construction, or development and/or normal operation of such assets. SFAS No.143 is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged. The adoption of these pronouncements will not have a material effect on IVP Technology's financial position or results of operations. 17 PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. Not applicable ITEM 2. CHANGES IN SECURITIES. Recent Sales Of Unregistered Securities - --------------------------------------- On or about April 26, 2001, IVP Technology issued 1,200,000 shares of common stock to Gross Capital Associates for marketing and promotion consulting services. These shares were valued at $0.14 per share, or an aggregate of $168,000, on the date of issuance. On or about April 26, 2001, IVP Technology issued 1,000,000 shares of common stock to John Coady for financial advisory services. These shares were valued at $0.14 per share, or an aggregate of $140,000, on the date of issuance. On July 30, 2001, IVP Technology entered into a two-year note with Berra Holdings, Ltd. to borrow up to $187,500 at 6% interest. As of December 31, 2001, IVP Technology had borrowed $129,020. The note is collateralized by 2,500,000 shares of common stock held in the name of Clarino Investment International, Ltd. On or about July 30, 2001, IVP Technology rescinded the issuance of 870,000 shares of common stock previously issued to Koplan Consulting Corp. and Mr. Peter Kertes for services not performed. On or about August 17, 2001, IVP Technology issued 1,000,000 shares of common stock to Orchestral Corporation for extension of the licensing contract and to obtain market distribution to Switzerland. These shares were valued at $0.12 per share, or an aggregate of $120,000, on the date of issuance. On February 16, 2002, IVP Technology completed an interim financing agreement for a bridge loan of (pound)600,000 (U.S. $864, 180) on an unsecured basis with the European based venture capital and merchant banking firm DcD Limited. The loan is due April 30, 2002 and accrues interest at a rate of 4% per year above the HSBC Bank base rate. Interest is payable monthly. On or about March 25, 2002, IVP Technology issued 100,000 shares of common stock to Barry Gross that was earned pursuant to a consulting contract signed in 2000. These shares were valued at $0.09 per share, or an aggregate of $9,000, on the date of issuance. On or about March 25, 2002, IVP Technology issued 14,000,000 shares of common stock to Brian MacDonald to be held in escrow pending achievement of the performance clauses related to the September 17, 2001 agreement with International Technology Marketing. On or about March 25, 2002, IVP Technology issued 14,000,000 shares of common stock to Peter Hamilton to be held in escrow pending achievement of the performance clauses related to the September 17, 2001 agreement with International Technology Marketing. On or about March 25, 2002, IVP Technology issued 14,000,000 shares of common stock to Kevin Birch to be held in escrow pending achievement of the performance clauses related to the September 17, 2001 agreement with International Technology Marketing. On or about March 25, 2002, IVP Technology issued 4,000,000 shares of common stock to Geno Villella to be held in escrow pending achievement of the performance clauses related to the September 17, 2001 agreement with International Technology Marketing. On or about March 25, 2002, IVP Technology issued 4,000,000 shares of common stock to Sherry Bullock to be held in escrow pending achievement of the performance clauses related to the September 17, 2001 agreement with International Technology Marketing. On or about March 25, 2002, IVP Technology issued 500,000 shares of common stock to John Maxwell in lieu of compensation for services performed in 2001 as 18 President of IVP Technology. These shares were valued at $0.05 per share, or an aggregate of $25,000, on the date of issuance. On or about March 25, 2002, IVP Technology issued 500,000 shares of common stock to John Trainor in lieu of compensation for services performed in 2001 as Secretary of IVP Technology. These shares were valued at $0.05 per share, or an aggregate of $25,000, on the date of issuance. On or about March 25, 2002, IVP Technology issued 2,375,600 shares of common stock to Thomas Chown as conversion of debts owed by the corporation for services performed in 2001. On or about March 25, 2002, IVP Technology issued 1,000,000 shares of common stock to Buford Industries as conversion of a fee of $50,000 earned for introducing IVP to International Technology Marketing. These shares were valued at $0.05 per share, or an aggregate of $50,000, on the date of issuance. On or about March 25, 2002, IVP Technology issued 50,000 shares of common stock to Ruffa and Ruffa, P.A. for payment of interest on outstanding legal bills for the year 2001 - 2002. These shares were valued at $0.10 per share, or an aggregate of $5,000, on the date of issuance. On or about March 25, 2002, IVP Technology issued 1,000,000 shares of common stock to J. Stephen Smith to be held in escrow for services as a board member for the period from 2001 to 2003 to be accrued at the rate of 500,000 per year. On or about March 25, 2002, IVP Technology issued 1,000,000 shares of common stock to Michael Sidrow to be held in escrow for services as a board member for the period from 2001 to 2003 to be accrued at the rate of 500,000 per year. On or about March 25, 2002, IVP Technology issued 1,000,000 shares of common stock to Robert King to be held in escrow for services as a board member for the period from 2001 to 2003 to be accrued at the rate of 500,000 per year. In April 2002, IVP Technology raised $200,000 of gross proceeds from the issuance of convertible debentures. These debentures accrue interest at a rate of 5% per year and mature two years from the issuance date. The debentures are convertible at the holder's option any time up to maturity at a conversion price equal to the lower of (i) 120% of the closing bid price of the common stock as of the closing date (ii) 80% of the average closing bid price of the common stock for the 4 lowest trading days of the 5 trading days immediately preceding the conversion date. At maturity, IVP Technology has the option to either pay the holder the outstanding principal balance and accrued interest or to convert the debentures into shares of common stock at a conversion price equal to the lower of (i) 120% of the closing bid price of the common stock as of the closing date or (ii) 80% of the average closing bid price of the common stock for the 4 lowest trading days of the 5 trading days immediately preceding the conversion date. IVP Technology has the right to redeem the debentures upon 30 days notice for 120% of the amount redeemed. Upon such redemption, IVP Technology will issue the investor a warrant to purchase 10,000 shares of common stock at an exercise price of $0.50 per share for every $100,000 of debentures that are redeemed. In April 2002, IVP Technology entered into an Equity Line of Credit Agreement with Cornell Capital Partners, L.P. Under this agreement, IVP Technology may issue and sell to Cornell Capital Partners common stock for a total purchase price of up to $10.0 million. Subject to certain conditions, IVP Technology will be entitled to commence drawing down on the Equity Line of Credit when the common stock under the Equity Line of Credit is registered with the Securities and Exchange Commission and the registration statement is declared effective. The purchase price for the shares will be equal to 92% of the market price, which is defined as the lowest closing bid price of the common stock during the five trading days following the notice date. The amount of each advance is subject to an aggregate maximum advance amount of $425,000 in any thirty-day period. IVP Technology paid Cornell a one-time fee equal to $340,000, payable in 3,032,000 shares of common stock. The investor also received warrants to purchase up to 265,000 shares of common stock, 250,000 shares at an exercise price equal to $0.50 per share and 15,000 shares of common stock equal to $0.099 per share. Cornell Capital Partners is entitled to retain 3.0% of each advance. In addition, IVP Technology entered into a placement agent agreement with Westrock Advisors, Inc., a registered broker-dealer. Pursuant to the placement agent agreement, IVP Technology paid a one-time placement agent fee of 100,000 shares of common stock. IVP Technology agreed to pay Danson Partners, LLC a consultant, a one-time fee of $200,000 for its work in connection with 19 consulting the company on various matters. Of that fee, $75,000 of this fee was paid in cash with the balance payable in 1,040,000 shares of common stock. In May 2002, IVP Technology entered into an agreement with Vanessa Land for marketing and advisory services connected with product marketing in the European Economic Community and North America. In relation with this agreement, IVP Technology issued 5,000,000 shares of common stock to Ms. Land. These shares were registered on a Form S-8 filed on May 3, 2002. These shares were valued at $.05 per share, or an aggregate of $250,000, on the date of issuance. With respect to the sale of unregistered securities referenced above, all transactions were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 (the "1933 Act"), and Regulation D promulgated under the 1933 Act In each instance, the purchaser had access to sufficient information regarding IVP Technology so as to make an informed investment decision. More specifically, IVP Technology had a reasonable basis to believe that each purchaser was an "accredited investor" as defined in Regulation D of the 1933 Act and otherwise had the requisite sophistication to make an investment in IVP Technologies' securities. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. OTHER INFORMATION. Not applicable. ITEM 6. SUBSEQUENT EVENTS, EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits Exhibit No. Description Location - ------------- ------------------------------------- -------------------------------- 2.1 Agreement and Plan of Reorganization Incorporated by reference to dated March 21, 2000 between IVP Exhibit 4.1 to IVP Technology's Technology Corporation and Erebus Form 8-K filed on April 19, 2000 Corporation. 3.1 Certificate of Amendment of Articles Incorporated by reference to of Incorporation Exhibit 3.1 to IVP Technology's Form 10-KSB filed on April 15, 2002 4.4 Description of Securities Incorporated by reference to Exhibit 4.4 to IVP Technology's Form S-8 filed on July 23, 2001 10.4 Second Amending Agreement to Software Incorporated by reference to Distribution Agreement dated as of Exhibit 10.4 to IVP May 31, 2000 between the Registrant Technology's Form 10-QSB filed and Orchestral Corporation on September 24, 2000 10.5 Service Bureau Arrangement Agreement Incorporated by reference to dated September 28, 2000 between the Exhibit 10.5 to IVP Registrant and E-RESPONSES.COM Technology's Form 10-QSB filed on November 14, 2000 10.6 Stock Purchase Agreement dated Incorporated by reference to September 17, 2001 among the Exhibit 10.6 to IVP Registrant, International Technology Technology's Form 10-KSB filed Marketing, Inc., Brian MacDonald, on April 15, 2002 Peter Hamilton, Kevin Birch, Sherry Bullock, and Geno Villella 20 Exhibit No. Description Location - ------------- ------------------------------------- -------------------------------- 10.7 Agreement dated May 15, 2000 between Incorporated by reference to the Registrant and Rainbow Exhibit 10.7 to IVP Investments International Limited Technology's Form 10-KSB filed on April 15, 2002 10.8 Employment Agreement dated August 30, Incorporated by reference to 2001 between International Technology Exhibit 10.8 to IVP Marketing, Inc. and Brian J. MacDonald Technology's Form 10-KSB filed on April 15, 2002 10.9 Agreement dated February 12, 2002 Incorporated by reference to between the Registrant and SmartFOCUS Exhibit 10.9 to IVP Limited Technology's Form 10-KSB filed on April 15, 2002 10.10 Warrant Agreement dated May 15, 2000 Incorporated by reference to between the Registrant and Rainbow Exhibit 10.10 to IVP Investments International Limited Technology's Form 10-KSB filed on April 15, 2002 10.11 Convertible Promissory Note dated May Incorporated by reference to 2000 between the Registrant and Exhibit 10.11 to IVP Rainbow Investments International Technology's Form 10-KSB filed Limited on April 15, 2002 10.12 Software Distribution Agreement dated Incorporated by reference to December 28, 2001 between the Exhibit 10.12 to IVP Registrant and TIG Acquisition Technology's Form 10-KSB filed Corporation on April 15, 2002 10.13 Loan Agreement dated January 16, 2002 Incorporated by reference to between the Registrant and DCD Exhibit 10.13 to IVP Holdings Limited Technology's Form 10-KSB filed on April 15, 2002 10.14 Agreement for the Provision of Incorporated by reference to Marketing Services dated May 3, 2002 Exhibit 10.1 to IVP between the Registrant and Vanessa Technology's Form S-8 filed Land with the SEC on May 3, 2002 10.15 Reserved 10.16 Employment Agreement dated August 30, Incorporated by reference to 2001 between International Technology Exhibit 10.16 to IVP Marketing, Inc. and Geno Villella Technology's Form 10-KSB filed on April 15, 2002 10.17 Employment Agreement dated August 30, Incorporated by reference to 2001 between International Technology Exhibit 10.17 to IVP Marketing, Inc. and Kevin Birch Technology's Form 10-KSB filed on April 15, 2002 10.18 Employment Agreement dated August 30, Incorporated by reference to 2001 between International Technology Exhibit 10.18 to IVP Marketing, Inc. and Peter J. Hamilton Technology's Form 10-KSB filed on April 15, 2002 10.19 Employment Agreement dated August 30, Incorporated by reference to 2001 between International Technology Exhibit 10.19 to IVP Marketing, Inc. and Sherry Bullock Technology's Form 10-KSB filed on April 15, 2002 10.20 Loan and Security Agreement dated Incorporated by reference to July 30, 2001 among the Registrant, Exhibit 10.20 to IVP Clarino Investments International Technology's Form 10-KSB filed Ltd., and Berra Holdings Ltd. on April 15, 2002 21 Exhibit No. Description Location - ------------- ------------------------------------- -------------------------------- 10.21 Consulting and Advisory Extension Incorporated by reference to Agreement dated February 14, 2001 the Exhibit to IVP Technology's between the Registrant and Barry Form 10-QSB filed on May 21, Gross D/B/A Gross Capital Associates 2001 10.22 Letter Agreement dated June 28, 2001, Incorporated by reference to between the Registrant and Andris Exhibit 4.1 to IVP Technology's Gravitis Form S-8 filed on July 23, 2001 10.23 Letter Agreement dated June 28, 2001, Incorporated by reference to between the Registrant and Thomas Exhibit 4.2 to IVP Technology's Chown. Form S-8 filed on July 23, 2001 10.24 Letter Agreement dated May 30, 2001, Incorporated by reference to between the Registrant and Ruffa & Exhibit 4.3 to IVP Technology's Ruffa, P.C. for Modification of Form S-8 filed on July 23, 2001 Retainer Agreement 10.25 Consulting Agreement dated September Incorporated by reference to 1, 2000 between the Registrant and Exhibit 13.1 to IVP Barry Gross d/b/a Gross Capital Technology's Form 10-KSB filed Associates on July 5, 2001 10.26 Consulting and Advisory Agreement Incorporated by reference to dated September 25, 2000 between the Exhibit 13.2 to IVP Registrant and Koplan Consulting Technology's Form 10-KSB filed Corporation on July 5, 2001 10.27 Warrant Agreement dated April 3, 2002 Incorporated by reference to between the Registrant and Cornell Exhibit 10.27 to IVP Capital Partners LP Technology's Form 10-KSB filed on April 15, 2002 10.28 Equity Line of Credit Agreement dated Incorporated by reference to April 3, 2002 between the Registrant Exhibit 10.28 to IVP and Cornell Capital Partners LP Technology's Form 10-KSB filed on April 15, 2002 10.29 Registration Rights Agreement dated Incorporated by reference to April 3, 2002 between the Registrant Exhibit 10.29 to IVP and Cornell Capital Partners, LP Technology's Form 10-KSB filed on April 15, 2002 10.30 Escrow Agreement dated April 3, 2002 Incorporated by reference to among the Registrant, Cornell Capital Exhibit 10.30 to IVP Partners, LP, Butler Gonzalez, and Technology's Form 10-KSB filed First Union National Bank on April 15, 2002 10.31 Securities Purchase Agreement dated Incorporated by reference to April 3, 2002 among the Registrant Exhibit 10.31 to IVP and the Buyers Technology's Form 10-KSB filed on April 15, 2002 10.32 Escrow Agreement dated April 3, 2002 Incorporated by reference to among the Registrant, the Buyers, and Exhibit 10.32 to IVP First Union National Bank Technology's Form 10-KSB filed on April 15, 2002 10.33 Debenture Agreement Dated April 3, Incorporated by reference to 2002 between the Registrant and Exhibit 10.33 to IVP Cornell Capital Partners LP Technology's Form 10-KSB filed on April 15, 2002 10.34 Investor Registration Rights Incorporated by reference to Agreement dated April 3, 2002 between Exhibit 10.34 to IVP the Registrant and the Investors Technology's Form 10-KSB filed on April 15, 2002 22 Exhibit No. Description Location - ------------- ------------------------------------- -------------------------------- 10.35 Placement Agent Agreement dated April Incorporated by reference to 3, 2002 among the Registrant, Exhibit 10.35 to IVP Westrock Advisors, Inc. and Cornell Technology's Form 10-KSB filed Capital Partners LP on April 15, 2002 10.36 Letter Agreement dated February 20, Incorporated by reference to 2002 between the Registrant and Exhibit 10.36 to IVP Buford Industries Inc. Technology's Form 10-KSB filed on April 15, 2002 10.37 Letter Confirmation Agreement dated Incorporated by reference to July 21, 2001 between the Registrant Exhibit 10.37 to IVP and Buford Industries Inc. Technology's Form 10-KSB filed on April 15, 2002 10.38 Consulting Agreement dated March 1, Incorporated by reference to 2002 between the Registrant and Exhibit 10.38 to IVP Danson Partners LLC Technology's Form SB-2 filed on May 15, 2002 10.39 Term Sheet between the Registrant and Incorporated by reference to Cornell Capital Partners, LP Exhibit 10.39 to IVP Increasing the Commitment under the Technology's Form SB-2 filed on Equity Line of Credit to $10 million May 15, 2002 10.40 Consulting Agreement dated February Incorporated by reference to 12, 2002 between the Registrant and Exhibit 10.40 to IVP Danson Partners LLC Technology's Form SB-2 filed on May 15, 2002 10.41 Escrow Agreement dated as of May 15, Incorporated by reference to 2002 among the Registrant, Brian Exhibit 10.41 to IVP MacDonald, Peter Hamilton, Kevin Technology's Form SB-2 filed on Birch, Sherry Bullock, and Gino May 15, 2002 Villella
(B) REPORTS ON FORM 8-K. IVP Technology filed a report on Form 8-K on February 20, 2002 disclosing that on January 18, 2002, IVP Technology entered into an agreement for the provision of marketing advisory services by Vanessa Land, president of Devonshire Marketing Limited of London, UK. Additionally, IVP Technology also disclosed that it also signed a reseller distribution agreement with SmartFocus Company Limited of Bristol UK. IVP Technology filed a report on Form 8-K on January 31, 2002 disclosing that on December 28, 2001, IVP Technology executed a distribution agreement with The Innovation Group through TIG Acquisition Corporation whereby IVP Technology Corporation was grated a license on a non-exclusive basis to market TiG plc's Classifier (R) Information System software product and solution to companies in North America. IVP Technology filed a report on Form 8-K on May 6, 2002 disclosing that on May 1, 2002, IVP Technology received written notice that the lender, DCD Limited, agreed to convert the loan for $864,180 due on April 30, 2002 to 4,000,000 shares of common stock. This equates to a conversion price of approximately $0.19 per share. 23 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: May 20, 2002 IVP TECHNOLOGIES CORPORATION By: /s/ Brian MacDonald ------------------------- Brian MacDonald 24 -----END PRIVACY-ENHANCED MESSAGE-----