-----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, Vws2f0Alk+kfhNgLe1KLonMskWycTQdYzi7spDrOP/dvoYuZl1KiqDi7Ue0nlf5/ 4wLQPxYWvgCH+/LUcQBSmw== /in/edgar/work/20000824/0001005477-00-006035/0001005477-00-006035.txt : 20000922 0001005477-00-006035.hdr.sgml : 20000922 ACCESSION NUMBER: 0001005477-00-006035 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000824 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IVP TECHNOLOGY CORP CENTRAL INDEX KEY: 0001011601 STANDARD INDUSTRIAL CLASSIFICATION: [7372 ] STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-30397 FILM NUMBER: 708871 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 0001.txt FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 2000 ------------- |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ____________________ to ________________________. Commission File Number: 000-30397 --------- IVP TECHNOLOGY CORPORATION ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Nevada 65-6998896 ------ ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 54 Village Centre, Suite 300, Mississauga, Ontario L4Z 1V9 Canada ----------------------------------------------------------------- (Address of principal executive offices) (905) 306-9343 ---------------------------------------------------- (Registrant's telephone number, including area code) -------------------------------------------------------------- (Former name, former address and former fiscal year if changed since last report) Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 37,210,848 shares of Common Stock, $.001 par value, were outstanding as of August 21, 2000. Transitional Small Business Disclosure Forms (check one): Yes |_| No |X| PART I - FINANCIAL INFORMATION: Item 1 - Financial Statements CONSOLIDATED BALANCE SHEET At June 30, 2000 unaudited and December 31, 1999. F-1 CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED F-2 For the Three Months Ended June 30, 2000 For the Three Months Ended June 30, 1999 For the Six Months Ended June 30, 2000 For the Six Months Ended June 30, 1999 Cumulative from January 1, 1998 (inception of development stage) through June 30, 2000 CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED F-3 For the Six Months Ended June 30, 2000 For the Six Months Ended June 30, 1999 Cumulative from January 1, 1998 (inception of development stage) to June 30, 2000 NOTES TO FINANCIAL STATEMENTS F-4 - F-5
1 IVP TECHNOLOGY CORPORATION CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 IVP TECHNOLOGY CORPORATION JUNE 30, 2000 CONTENTS Page FINANCIAL STATEMENTS Consolidated Balance Sheet 1 Consolidated Statement of Operations 2 Consolidated Statement of Cash Flows 3 Notes to Consolidated Financial Statements 4 - 5 IVP TECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEET
June 30 December 31 2000 1999 ---- ---- (Unaudited) ASSETS CURRENT Cash $ 126,272 $ 281 LICENSE AGREEMENT - NET -- 114,000 OTHER ASSETS 872 872 ------------ ------------ $ 127,144 $ 115,153 ============ ============ LIABILITIES CURRENT Accounts payable and accrued liabilities $ 278,806 $ 233,412 Management fees payable -- 450,000 ------------ ------------ 278,806 683,412 ------------ ------------ SHAREHOLDERS' DEFICIENCY COMMON STOCK (note 4) Common stock, $.001 par value 50,000,000 authorized, 33,340,848 and 27,490,848 issued and outstanding at June 30, 2000 and December 31, 1999 respectively 33,341 27,491 Additional paid-in capital 10,842,266 9,423,115 ------------ ------------ 10,875,607 9,450,606 ACCUMULATED DEFICIT (accumulated in development stage $10,051,103 and $8,906,349 in the six months ended June 30, 2000 and the year ended December 31, 1999 respectively) (11,027,269) (9,882,515) ------------ ------------ (151,662) (431,909) Less subscriptions receivable -- (136,350) ------------ ------------ (151,662) (568,259) ------------ ------------ $ 127,144 $ 115,153 ============ ============
SEE ACCOMPANYING NOTES 1. IVP TECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENT OF OPERATIONS
Cumulative from Three Months Ended Six Months Ended January 1, 1998 June 30 June 30 (Inception of (Unaudited) (Unaudited) development stage) to 2000 1999 2000 1999 June 30,2000 ---- ---- ---- ---- ------------ REVENUE $ -- $ -- $ -- $ -- $ -- ------------ ------------ ------------ ------------ ------------ OPERATING EXPENSES Amortization 47,816 12,858 114,000 12,858 220,000 Bad debts -- -- -- -- 25,000 Bank charges 89 304 112 304 539 Foreign exchange (gain) (25,553) (8,207) (22,971) (8,207) (26,013) Interest -- 13,126 -- 13,126 27,461 Legal and accounting 42,178 63,950 135,831 63,950 346,511 Management fees 303,000 150,000 305,000 150,000 755,000 Office and general 4,278 1,280 4,428 1,280 49,590 Development fees and software support 14,800 35,000 27,409 35,000 87,714 Consulting fees 81,122 100,000 516,122 100,000 3,737,500 Travelling and promotion 59,246 9,973 64,823 9,973 95,631 ------------ ------------ ------------ ------------ ------------ 526,976 378,284 1,144,754 378,284 5,318,933 ------------ ------------ ------------ ------------ ------------ LOSS FROM OPERATIONS (526,976) (378,284) (1,144,754) (378,284) (5,318,933) WRITE DOWN OF GOODWILL -- -- -- -- (4,000,000) ------------ ------------ ------------ ------------ ------------ LOSS BEFORE EXTRA- ORDINARY ITEM (526,976) (378,284) (1,144,754) (378,284) (9,318,933) EXTRAORDINARY ITEM: LOSS ON EXTINGUISHMENT OF DEBT -- -- -- (732,170) (732,170) ------------ ------------ ------------ ------------ ------------ NET LOSS $ (526,976) $ (378,284) $ (1,144,754) $ (1,110,454) $(10,051,103) ============ ============ ============ ============ ============ NET LOSS PER SHARE- BASIC AND DILUTED (0.02) (0.02) $ (0.04) $ (0.06) $ (0.46) ============ ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF OUTSTANDING COMMON SHARES- BASIC AND DILUTED 33,187,002 20,533,650 30,922,991 18,455,296 21,662,829 ============ ============ ============ ============ ============
SEE ACCOMPANYING NOTES 2. IVP TECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENT OF CASH FLOWS
Cumulative from Six Months Ended January 1, 1998 June 30 (Inception of (Unaudited) development stage) to 2000 1999 June 30,2000 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (1,144,754) $ (1,110,454) $(10,051,103) ------------ ------------ ------------ Adjustments to reconcile net loss to net cash (used in) operating activities: Amortization 114,000 12,858 220,000 Loss on extinguishment of debt -- 732,170 732,170 Write-off of goodwill and other costs -- -- 4,000,000 Stock issued for services 300,000 10,000 3,310,000 Changes in operating assets and liabilities: Increase (decrease) Accounts payable and accrued expenses 45,394 (4,141) 207,678 Management fees payable -- -- -- ------------ ------------ ------------ Total adjustments 459,394 750,887 8,469,848 ------------ ------------ ------------ Net cash used in operating activities (685,360) (359,567) (1,131,255) ------------ ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Minority interest -- -- 400 Other -- -- 400 ------------ ------------ ------------ Net cash used in investing activities -- -- 800 ------------ ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock and collected subscriptions 811,351 384,360 1,235,321 Proceeds from loans -- -- 14,335 Proceeds from stockholders -- -- 6,618 ------------ ------------ ------------ Net cash provided by financing activities 811,351 384,360 1,256,274 ------------ ------------ ------------ Net increase in cash 125,991 24,793 125,819 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 281 -- 453 ------------ ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 126,272 $ 24,793 $ 126,272 ============ ============ ============
SEE ACCOMPANYING NOTES 3. IVP TECHNOLOGY CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles and the rules and regulations of the securities and exchange commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position and results of operation. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. For further information, refer to the consolidated financial statements and footnotes in the Company's audited financial statements for the year ended December 31, 1999 included in the Form 8-K filed on April 17, 2000. 2. GOING CONCERN The company's consolidated financial statements have been prepared on the accounting principles applicable to a going concern, which contemplates that the company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities in the normal course of business. The company has an urgent need for equity capital and financing for working capital requirements. No agreements with lenders or investors have been reached and there is no assurance that such will take place. Because of the operating losses of the past two years and the working capital deficiency as at June 30, 2000, the company's continuance as a going concern is dependent upon its ability to obtain adequate financing and to reach profitable levels of operation. It is not possible to predict whether financing efforts will be successful or if the company will attain profitable levels of operation. 3. ACQUISITION AND CONSULTING AGREEMENT The Company entered into an agreement with the principal stockholder of Erebus Corporation whereby the principal stockholder will provide certain stipulated services with regard to the Company becoming a United States SEC reporting company. The consideration to the stockholder was $200,000. The Company acquired all of the issued and outstanding capital stock of Erebus Corporation, an inactive reporting shell for the issuance of 350,000 common shares. The transaction was accounted for as a recapitalization of the company with a par value of $350 charged to additional paid-in capital. 4. IVP TECHNOLOGY CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 4. CAPITAL STOCK The balance at the beginning of the year of the common stock account is 27,490,848 shares amounting to $9,450,606. During the 3 month period ended March 31,2000 the Company issued 4,850,000 shares for $675,000. During the 3 month period ended June 30,2000 the Company issued 600,000 common shares in satisfaction of the legal obligation of $450,000 arising out of a legal settlement reached with three former officers of the Company. Additionally 400,000 common shares were issued to two officers of the Company for past services. The stock was valued on the same basis for an aggregate management fee expense of $300,000. The balance as of June 30, 2000 is 33,340,848 shares amounting to $10,875,607. The subscription receivable at December 31, 1999 of $136,350 was collected during the first quarter. 5. SUBSEQUENT EVENT Subsequent to June 30, 2000 the Company issued 300,000 common shares under an extended consulting agreement whereby the consultant agrees to assist the Company in raising stipulated minimum equity capital and perform other consulting services. The 300,000 common shares will be valued at $ 0.175 a share based on the quoted share price at the agreement date. Subsequent to June 30, 2000 the Company entered into a consulting agreement. The consideration for these services was 70,000 common shares of the capital stock of the corporation and $8,000. The 70,000 common shares will be valued at $ 0.688 a share based on the quoted share price at the agreement date. 5. Item 2. Plan of Operation. The following is a discussion of our plan of operation and should be read together with our financial statements and notes included in this 10-QSB. The following discussion contains certain forward-looking statements that involve risks and uncertainties. Our actual future results could differ materially from those foreseen in this discussion. Overview. We were incorporated in the State of Nevada on February 11, 1994 under the name Mountain Chief, Inc. On November 16, 1994, the corporation changed its name to IVP Technology Corporation (which may be referred to herein as "we," "us," "IVP" or the "Company") for the purpose of identifying and acquiring private companies and/or their technologies in the high technology field. On March 30, 1999, we entered into a fourteen-month software distribution agreement with Orchestral Corporation whereby Orchestral granted to us the exclusive right to market and distribute Orchestral's PowerAudit software in the United States. In September 1999, the distribution agreement was amended to include the European Economic Community. In May 2000, the Software Distribution Agreement was further amended to extend the term of the agreement and expand the territory, among other things, and consists of the terms, rights and obligations described elsewhere herein (Part II, Item 5). PowerAudit is a software product designed to provide a platform for remote data collection and market survey purposes. PowerAudit operates on handheld computers that run on Microsoft's Windows CE operating system and allows field employees to collect specific data and transmit that data via the Internet to a server located at the employee's main office or other location. PowerAudit was designed for use by organizations that market and distribute many products, including entities such as consumer goods distributors and pharmaceutical and healthcare companies. PowerAudit will benefit any organization that requires immediate and qualified data from the field, including companies involved in surveying sales reporting and merchandising, retail and industrial auditing, pharmaceutical research and agriculture. The information collected in the field is available to decision makers immediately for analysis. Supervisors or other decision makers can add to or revise the survey or develop a different survey to elicit other information depending upon the information received in the initial survey, transmit the revised survey on a wireless basis to the field employee via the Internet and have the employee conduct a new survey. Current marketing strategy can be revised or new marketing strategy can be implemented based upon the results garnered from field surveys. When integrated into a client's overall strategy, accurate, relevant and timely information can provide a powerful decision-making tool. 2 Management has been advised by Orchestral that PowerAudit currently is being used by two large Canadian corporations that report that the software operates within the designed parameters. We presently are initiating marketing operations in the United States and Europe and will target HPC original equipment manufacturers, computer systems integrators, data base management and service providers and potential end-users of the software. At such time as funds become available, if ever, we intend to engage marketing personnel and implement our marketing plan. On August 17, 2000, we entered into an agreement to license one server and forty client licenses (for use on the handheld devices) to Strategic Merchandise Partners, Inc. ("SMP"). Pursuant to this agreement, SMP would pay an aggregate of $107,360 to IVP, of which $88,000 would be attributable to the license of the software and $19,360 would be attributable to maintenance of the software. The first payment of $26,840 was made on August 18, 2000, and the balance ($80,520) is payable in twelve equal installments of $6,710 on the first of each month after the effective date of the agreement. At June 30, 2000, we had not generated any revenues from operations. At June 30, 2000, we had a cumulative working capital deficiency of $152,534, a stockholder deficiency of $151,662 and a net operating loss of $1,144,754 attributable to our PowerAudit operations. We have not been profitable since inception and we expect to incur operating losses through at least the end of 2000. Except as described in the Software Distribution Agreement, we have no cash obligations at this time. Plan of Operation. We require substantial additional funds to implement our business plan, including the full range of marketing programs and plans for future growth. We require funds for the following purposes: o to implement our marketing strategy; o to develop and implement a customer service department to assist end-users of PowerAudit with problems; o to develop future products; o to take advantage of unanticipated opportunities, such as major strategic alliances or other special marketing opportunities and acquisitions of complementary businesses or assets. We will seek to obtain additional funds through sales of equity and/or debt securities, or other external financing in order to fund current operations and to achieve our business plan. We cannot give any assurances that additional capital resources will be available, or, if available, on acceptable terms. Any additional equity 3 financing will dilute the equity interests of existing security holders. If adequate funds are not available or are not available on acceptable terms, our ability to execute our business plan and out business could be materially and adversely affected. In May 2000, we paid to Orchestral the sum of $162,500, an amount equal to the minimum royalty for the first year of the agreement, and which triggered an automatic extension of the Software Distribution Agreement for a one-year period. Said agreement has been further extended, as more fully described elsewhere herein. In the event that the Software Distribution Agreement is terminated for any reason or is not renewed by Orchestral, we would be required to license a substitute remote data collection software application that runs on the Microsoft CE operating system, which could be less desirable and could be costly in terms of cash and other resources and which may not be available on terms and conditions acceptable to us, if at all. In the alternative, we could develop our own remote data collection software application, which would take considerable time, resources and expense, and would divert management's attention from day-to-day business activities. Moreover, any interruption in the service component of the distribution agreement could cause users to of PowerAudit to abandon the software and sue us for damages. Any failure to maintain the software distribution agreement with Orchestral would have a material adverse effect on our business and results of operations. Management intends to focus on the following issues for the balance of 2000: > To obtain a listing of its common stock on the Nasdaq SmallCap Market; > To complete a financing which will allow us to: o Secure the services of three additional employees, including a Chief Technology Officer, a US marketing manager and a European marketing manager; o Implement our marketing plan; and o Identify, evaluate and, where appropriate, acquire the rights additional software products. We recognize that the Windows CE operating system for HPC's is not as widely distributed as the Palm operating system for HPC's. The trend over the last two years indicates that HPC's employing the Palm operating system are increasing as a percentage of the total market for HPC's. We believe that HPC's employing the Palm operating system are being used primarily for personal use and not by businesses or in a business context. We further believe that as businesses are made aware of the utility of software such as PowerAudit that many such operations could begin to offer HPC's running on the Window CE platform to their employees in an effort to increase productivity. We will 4 seek to extol the advantages PowerAudit software offers to businesses to overcome the current trend. PART II -- OTHER INFORMATION. Item 1. Legal Proceedings. Not applicable. Item 2. Changes in Securities and Use of Proceeds. Not applicable. Item 3. Defaults Upon Senior Securities. Not applicable. Item. 4. Submission of Matters to a Vote of Security Holders. Not applicable. Item 5. Other Information. During the quarter ended June 30, 2000, IVP and Orchestral Corporation, the developer of the PowerAudit software (the "Software") that we distribute, entered into an agreement which amended the respective parties' rights under the Software Distribution Agreement dated as of May 31, 1999, as amended on September 1999. The following discussion describes each party's respective rights and obligations under the Software Distribution Agreement, as amended. The following discussion does not purport to be complete and is subject to the terms of the executed agreement, a copy of which accompanies this filing. Pursuant to the Software Distribution Agreement, IVP: o acquired the exclusive right and license to copy, distribute, market and sub-license the Software in the United States, the European Economic Community and Switzerland (the "Territory") through May 31, 2003; o has paid or will pay the following consideration to Orchestral to obtain its rights under the Software Distribution Agreement: o $50,000 to facilitate the development and delivery of the Software; 5 o 2,500,000 shares of IVP's common stock, which IVP has agreed to use its best efforts register, at its own expense, for public resale under the Securities Act of 1933 pursuant to a registration statement it has agreed to file by August 30, 2000; o $162,500 in payment of the first year's royalties under the agreement; o a royalty equal to 7.5% of the purchase price paid for each copy of the Software sold by IVP; o the sum of $4,200 per month in each month in which Orchestral provides the certain support and maintenance services described below; o has agreed to segregate 2 1/2% of gross revenues in excess of $1,000,000 attributable to sales of the Software into a Product Development Capital Pool to be used by Orchestral for development of products other than the Software provided that advances to Orchestral from the Development Pool are approved by the Board of Directors of IVP, and all or some mutually agreeable portion of the marketing rights to any product developed Orchestral. o shall use its best efforts to develop at the earliest practicable date, either internally or by contracting an independent third party, a technical support team and a marketing team; o shall exercise its best efforts to complete a financing of a minimum of $2,000,000 at the earliest practicable a portion of the net proceeds from which would be used, inter alia, to contract the services of or to develop its own internal technical support team and to contract the services of or develop an internal marketing group dedicated to the licensing of the Software; o shall use its best efforts to effect sales of the Software to a minimum of twelve (12) purchasers prior to the expiration of the twelve-month period ending June 1, 2001. Any failure of IVP to effect sales to such number of purchasers shall not affect any of IVP's rights hereunder except that IVP shall be required to compensate Orchestral for unearned royalties at the rate of $3,750 per unrealized sale up to the maximum of twelve (12) or $45,000 and IVP shall be required to pay a penalty of one hundred thousand (100,000) common shares in the event that the objective of a minimum of twelve (12) new purchasers is not met. o will have the right to use the source code materials relating to the Software pursuant to the terms of a Source Code Trust Agreement to be negotiated and executed between the parties; 6 o has the exclusive right to use Orchestral's trademarks and service marks with respect to the Software in the Territory; o must provide installation assistance, technical training and first and second level support to end-users of the Software in the Territory; o must deliver to Orchestral at the end of each calendar quarter reports relating to Software installation, problems and bugs and the entities to which demonstration copies of the Software were delivered during that quarter; and o shall indemnify and hold harmless Orchestral from any and all liability, suits, claims, losses, damages and judgments, and shall pay all costs (including reasonable attorney's fees) and damages to the extent that such liability, costs or damages arise from a claim that any software of IVP infringes any third party's patent or copyright in the sales territory. Orchsetral, in addition to granting to IVP the license to use the Software: - will provide IVP with draft marketing materials and user manuals for use in marketing, installing and operating the Software; - provide IVP with the Software's computer programs, in executable code only, in a form suitable for reproduction and distribution to customers upon their execution of an end-user license; - will use its commercially reasonable efforts to correct, at no charge, all errors, defects and malfunctions of the Software, brought to its attention by IVP or IVP's customers; - will supply training services to IVP's staff for the fees specified in a schedule to the Software Distribution Agreement; - will provide first and second level support and maintenance services, which will include resolving problems whether or not caused primarily by the Software's malfunction; - shall defend or settle any claim made or any suit or proceeding brought against IVP insofar as such claim, suit or proceeding is based on an allegation that any of the Software supplied to IVP infringes the proprietary and intellectual property rights of any third party including any copyright or any trade secret rights and shall indemnify and hold IVP harmless from and against any and all such claims and shall pay all damages and costs finally agreed to be paid in settlement of such claim, suit or proceeding. 7 In the event Orchestral breaches any material term of the Software Distribution Agreement, IVP shall be deemed to have satisfied all of its obligations under said agreement and IVP shall receive a perpetual non-revocable license to use the Software for the purposes of maintaining IVP's client base and not for resale of new licenses. In the case of material breach by Orchestral, (i) all source code to the Software shall be released to IVP in accordance with the terms of the license provided for in the Source Code Escrow Agreement (not yet executed) and (ii) in the event that that IVP sells additional new licenses of the Software after such time, IVP shall pay Orchestral royalties as described herein. Either party may terminate the Software Distribution Agreement with sixty (60) days' prior written notice of any of the following: - Orchestral's failure to comply with any material term of the Software Distribution Agreement within sixty (60) days after written notification thereof or Orchestral 's insolvency or the filing of any proceeding by or against that party seeking relief from creditors; - IVP's failure to comply with any material term of the Software Distribution Agreement within sixty (60) days after written notification thereof or IVP's insolvency or the filing of any proceeding by or against that party seeking relief from creditors; and - upon mutual agreement by the parties. To date, IVP has paid an aggregate of $229,300 to Orchestral, including $50,000 as required pursuant to the Software Distribution Agreement, $162,500 for the first year's royalties under the Software Distribution Agreement and $16,800 in payment of the first four months for which Orchestral has provided support services in connection with PowerAudit. On August 17, 200, IVP entered into an agreement to license one server and forty client licenses (for use on the handheld devices) to Strategic Merchandise Partners, Inc. ("SMP"). Pursuant to this agreement, SMP would pay an aggregate of $107,360 to IVP, of which $88,000 would be attributable to the license of the software and $19,360 would be attributable to maintenance of the software. The first payment of $26,840 was made on August 18, 2000, and the balance ($80,520) is payable in twelve equal installments of $6,710 on the first of each month after the effective date of the agreement. 8 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Second Amending Agreement to Software Distribution Agreement dated as of May 31, 2000. License Agreement between IVP Technology Corporation and Strategic Merchandising Partners, Inc. relating to the license of software. (b) Reports on Form 8-K. None Item 27. Financial Data Schedule Attached. 9 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: August 23, 2000 IVP TECHNOLOGY CORPORATION -------------------------- (Registrant) /s/ John Maxwell -------------------------- President 10 EX-10.4 2 0002.txt SECOND AMENDMENT TO SOFTWARE DISTRI. AGREEMENT EXHIBIT 10.4 SECOND AMENDING AGREEMEN TO SOFTWARE DISTRIBUTION AGREEMENT SECOND AMENDMENT TO SOFTWARE DISTRIBUTION AGREEMENT AGREEMENT made as of the 31st day of May, 2000. B E T W E E N: ORCHESTRAL CORPORATION, a private corporation incorporated pursuant to the laws of the Province of Ontario, in Canada (the "Software Owner") OF THE FIRST PART - and - IVP TECHNOLOGY CORPORATION, a public corporation incorporated pursuant to the laws of the State of Nevada, in the United States of America (the "Distributor") OF THE SECOND PART WHEREAS: 1. The parties have entered into a certain software distribution agreement (the "Initial Software Distribution Agreement") made as of the 30th day of March, 1999 whereby the Software Owner granted to the Distributor the exclusive right and license to copy, distribute, market and sub-license throughout the United States of America the Software listed in Schedule A to the Software Distribution Agreement upon the terms and conditions set out therein; and 2. The parties amended the Initial Software Distribution Agreement as of September 1, 1999 (the Initial Software Agreement as amended is herein referred to as the "Distribution Agreement") to (i) amend the definition of "Territory" in the Software Distribution Agreement to mean the United States of America and the European Economic Community, (ii) amend the provisions of Section 3(b) of the Software Distribution Agreement to make first and second level support the obligation of the Software Owner instead of the Distributor, and (iii) obligate the Software Owner to provide certain support an maintenance relating to the Software; and 3. The parties now desire to amend the Distribution Agreement to (i) extend the term of said agreement through May 31, 2003, subject to the satisfaction of certain conditions by the Distributor, (ii) expand the Territory to include the Country of Switzerland, (iii) provide for the payment of additional consideration by the Distributor, (iv) to provide the registration under the Securities Act of 1933 of the capital stock issued to the Software Developer, and (v) provide that the Distributor will use its best efforts to develop a minimum of twelve (12) clients prior to May 31, 2001. 2 NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual covenants and agreements contained in the Distribution Agreement and in consideration of the further mutual covenants and agreements herein contained and the sum of $2.00 now paid by each of the parties hereto to the other (the receipt and sufficiency of which is hereby acknowledged), it is hereby agreed by and between the parties hereto as follows: 1. All capitalized terms used herein shall have the same meanings as ascribed thereto in the Distribution Agreement, except as expressly stated herein to the contrary. 2. The Distribution Agreement is hereby amended as follows: (a) in the first sentence of subsection (a) of Section 1, titled "Grant of Rights," the words "(i) the United States of America during the period from the Effective Date to and including August 31, 1999, and (2) the United States of America and the European Economic Community during the period from September 1, 1999 until the termination of this Agreement (in either case, the "Territory")" shall be deleted therefrom and the following words shall be substituted therefor: "(1) the United States of America during the period from the Effective Date to and including August 31, 1999, and (2) the United States of America, the European Economic Community and the Country of Switzerland during the period from September 1, 1999 until the termination of this Agreement (in either case, the "Territory")"; (b) add the following subsection to Section 5(a): "(v) during the month of June, 2000, deliver one million (1,000,000) common shares in the capital stock of the Distributor to the Software Owner." (c) Add the following as the last subsection to Section 3: "(d) Marketing and Technical Support. The Distributor shall use its best efforts to develop at the earliest practicable date, either internally or by contracting an independent third party, a technical support team and a marketing team. 3 (e) Financing. The Distributor shall exercise its best efforts to complete a financing of a minimum of $2,000,000 at the earliest practicable a portion of the net proceeds from which would be used, inter alia, to contract the services of or to develop its own internal technical support team and to contract the services of or develop an internal marketing group dedicated to the licensing of the Software. (f) Registration of Shares. Distributor undertakes to use its reasonable best efforts to prepare and file with the United States Securities and Exchange Commission ("SEC"), by August 30, 2000, a registration statement ("Registration Statement") under the Securities Act of 1933 (the "Act") which includes all of the shares of capital stock issued to the Software Owner hereby (the "Shares") and, subject to its right to withdraw such filing, shall use its best efforts to effect registration of such Shares under the Act. Distributor shall use its best efforts to keep such Registration Statement continuously effective under the Act until the date which is two years after the date that such Registration Statement is declared effective by the Commission or such earlier date when all Shares covered by such Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Act, as determined by the counsel to the Distributor pursuant to a written opinion letter to such effect addressed and acceptable to the Distributor's transfer agent (the "Effectiveness Period"). Distributor will be entitled to postpone or interrupt the effective date of any Registration Statement filed in connection with such registration (and the use of the prospectus contained therein) if the Distributor determines, in its best judgment, after consultation with counsel, that such Registration Statement would require the premature announcement of any material financing, acquisition, corporate reorganization or other material corporate transaction or development involving the Distributor which, in the Distributor's reasonable determination, would be materially detrimental to the interests of the Distributor and its stockholders. Any such postponement or interruption will be for a minimum period reasonably required to avoid such premature disclosure. The Distributor promptly will give the Software Owner written notice of such postponement or interruption. 4 Distributor shall use its best efforts to register or qualify the Shares covered by each Registration Statement under such state securities or blue sky laws of such jurisdictions as the Software Owner may reasonably request; provided, that the Distributor shall not be required to execute any general consent to service of process or to qualify to do business as a foreign corporation in any jurisdiction where it is not so qualified. All expenses other than underwriting discounts and commissions incident to the Distributor's performance of or compliance with the undertaking made hereby, including without limitation all registration and filing fees (other than registration and filing fees in excess of $2,500 imposed by the state securities or blue sky laws of any single jurisdiction), printing expenses, messenger and delivery expenses, and fees and disbursements of counsel for the Distributor and all independent certified public accountants, underwriters (excluding discounts and commissions) and other persons retained by the Distributor (all such expenses being herein called "Registration Expenses"), will be borne by the Distributor. The Distributor will, in all events, pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the expense of any liability insurance." (f) Minimum Sales Requirements. Distributor agrees to use its best efforts to effect sales of the Software to a minimum of twelve (12) purchasers prior to the expiration of the twelve-month period ending June 1, 2001. Any failure of the Distributor to effect sales to such number of purchasers shall not affect any of the Distributor's rights hereunder except that the Distributor shall be required to compensate the Software Owner for unearned royalties at the rate of $3,750 per unrealized sale up to the maximum of twelve (12) or $45,000 and the Distributor shall be required to pay a penalty of one hundred thousand (100,000) common shares in the event that the objective of a minimum of twelve (12) new purchasers is not met. 5 (d) add the following language to the end of Section 5(a): - ; provided, however, that the Distributor's obligation to make such payments shall terminate three (3) months after the receipt by the Software Owner of written notice from the Distributor to the effect that it has either contracted for the provision of such support services by an independent third party or develops an internal technical support team." (e) amend subsection 5(b) by deleting said section in its entirety and replacing said subsection with the following" "Price Schedule. Distributor and Software Owner agree that Schedule F attached hereto represents the applicable list price and price discount schedules for the Software in the Territory. Software Owner may amend Schedule F no more than once each year, except with the prior consent of Distributor. (f) in the first sentence of Section 9, titled "Term and Termination," the words "(i) "Except as otherwise provided herein, this Agreement commences on the Effective Date and shall remain in effect for a term of fourteen (14) months." shall be deleted therefrom and the following words shall be substituted therefor: "Except as otherwise provided herein, this Agreement commences on the Effective Date and shall remain in effect until May 31, 2003." (g) amend item 3 of Schedule H by deleting the words "Five percent (5%)" and adding the following language: "- Seven and one half percent (7 1/2%)..." 3. The Software Distribution Agreement, as changed, altered, amended or supplemented by this amending agreement, shall continue in full force and effect and is hereby confirmed by the parties hereto and, for greater certainty, time shall continue to be of the essence in all respects. 6 4. The Software Distribution Agreement shall henceforth be read in conjunction with this amending agreement and the Software Distribution Agreement and this amending agreement shall henceforth have effect so far as practicable as if all the provisions of the Software Distribution Agreement and of this amending agreement were contained in one instrument. 5. This amending agreement may be executed by the parties in counterparts and may be delivered by telecopier, each of which when so executed and delivered shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. Notwithstanding the date of execution and delivery of such counterparts, their date of execution and delivery shall be deemed to be the date first written above. IN WITNESS WHEREOF the parties hereto have duly executed and delivered this amending agreement as of the date first written above. ORCHESTRAL CORPORATION By: --------------------------------- Jeremy Rasmussen, President IVP TECHNOLOGY CORPORATION By: --------------------------------- John Maxwell, President EX-27 3 0003.txt FDS
5 This schedule contains summary financial information extracted from IVP Technology Corporation's unaudited balance sheet as of June 30, 2000 and unaudited statements of operations for the six months ended June 30, 2000, and is qualified in its entirety by reference to such financial statements. 6-MOS Dec-31-2000 Jan-01-2000 Jun-30-2000 126,212 0 0 0 0 127,144 0 0 127,144 278,806 0 0 0 33,341 (185,003) 127,144 0 0 0 1,144,754 0 0 0 (1,144,754) 0 (1,144,754) 0 0 0 (1,144,754) (0.04) (0.04)
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