-----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, A6d7Vyr+XQvWYcfp3Uxioj5eppHQ6Keq5pAnJ2i89jcd55OM5MPCGH7UUqHFPUnq PH2qRp6xpkUwgATQAQDI1w== 0001128778-01-500025.txt : 20010607 0001128778-01-500025.hdr.sgml : 20010607 ACCESSION NUMBER: 0001128778-01-500025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010605 ITEM INFORMATION: FILED AS OF DATE: 20010606 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUCTION ANYTHING COM INC CENTRAL INDEX KEY: 0001097718 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-27865 FILM NUMBER: 1655318 BUSINESS ADDRESS: STREET 1: 35 W. PINE ST STREET 2: SUITE 211 CITY: ORLANDO STATE: FL ZIP: 32801 MAIL ADDRESS: STREET 1: 35 W PINE ST STREET 2: SUITE 211 CITY: ORLANDO STATE: FL ZIP: 32801 8-K 1 june52001-8k.txt 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 23, 2001 -------------------------------- AuctionAnything.com, Inc. ------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-27865 13-264091 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission File (IRS Employer or incorporation) Number) Identification No.) 35 W. Pine Street, Suite 211, Orlando, Florida 32801 ------------------------------------------------------------ (Address of principal executive offices, including zip code) Registrant's telephone number, including area code (407) 481-2140 ----------------------------- (Former name or former address, if changed since last report) ITEM 1 and ITEM 2. CHANGES IN CONTROL OF REGISTRANT and ------------------------------------ ACQUISITION OR DISPOSITION OF ASSETS On May 23, 2001, AuctionAnything.com, Inc. executed an Agreement and Plan of Reorganization and Stock Purchase Agreement (the "Disease SI Agreement") with Disease S.I., Inc., a Florida corporation ("Disease SI") and its shareholders Dr. Wayne Goldstein and Mr. Brian S. John. Under the terms of the Disease SI Agreement, we acquired 100% of the issued and outstanding stock of Disease SI in exchange for 60,000,000 shares of our Common Stock. We issued Dr. Goldstein and Mr. John a total of 21,209,384 shares at the closing, and agreed that the balance of 38,790,616 shares will be delivered to them as soon as we amend our Certificate of Incorporation to increase our authorized Common Stock in order to permit such issuance as described herein. Giving effect to the recapitalization, we will have a total of 80,768,922 shares of our Common Stock issued and outstanding, of which 74.3% will be owned by Dr. Goldstein and Mr. John. Concurrent with the closing of the Disease SI Agreement, Messrs Martin Meads and John Hotaling, who had been our executive officers, resigned their positions as officers but have remained directors of AuctionAnything.com and officers of North Orlando Sports Promotions, Inc., our wholly-owned subsidiary. Dr. Goldstein and Mr. John were appointed the officers and directors of AuctionAnything.com. The consummation of the transaction with Disease SI has resulted in a change in control of AuctionAnything.com. About Disease SI Introduction Disease SI is a developmental stage biopharmaceutical/clinical diagnostics company. Disease SI's long-term goal is to become a partially integrated pharmaceutical company with capabilities in research, drug development, clinical investigation, and regulatory affairs. Disease SI is planning to employ a broad array of technologies to detect, identify and quantify substances in blood or other bodily fluids and tissues. The company intends to target and develop proprietary pharmaceutical compounds and new technologies. Its primary goal will be to develop a Transmissible Spongiform Encephalopathy ("TSE") test, useful in the diagnosis of TSE diseases such as scrapie in sheep, Bovine Spongiform Encephalopathy (BSE) in cattle (commonly known as "mad-cow disease"), Chronic Wasting Disease (CWD) in wild deer and elk and Creutzfeldt-Jakob Disease (CJD) in humans. Disease SI believes these test results may be used in the diagnosis, detection, evaluation, monitoring and potential treatment of diseases and other medical conditions. Disease SI's overall plan of operation includes: * identifying, acquiring and exploiting rights to new technologies and compounds relating to BSE, CJD and other neurological disorders; 2 * enhancing the value of those assets through further research and clinical testing; * performing clinical studies towards regulatory approval and attempt to market its drugs through licensing agreements with pharmaceutical companies; and * working to develop other promising compounds in-house and in collaboration with third parties. In its implementation of its plan of operation, Disease SI's principal activities will include: * researching and developing technologies for TSE screening; * conducting clinical studies to validate its TSE screening tests; * negotiating licenses for intellectual property of others incorporated into its technologies; * developing relationships with leaders in the scientific and medical communities; * conducting market studies and analyzing potential approaches for commercializing technologies which may develop; * hiring research and clinical personnel; * hiring management and other support personnel; and * raising capital. Disease SI' s goal is to eventually offer TSE screening services to establish the market. It will then seek to license its technologies to leading clinical reference laboratories to enable them to develop tests. Disease SI may also choose to package its technologies and seek approval for diagnostic test kits with which any clinical laboratory could conduct its tests. Currently Disease SI does not maintain any research or laboratory premises, but plans to utilize such facilities on a contractual or collaborative basis at academic and research institutions, as well as contract research organizations. Considering the commercialization infrastructure necessary to effectively market its target drug products, Disease SI will seek joint ventures or collaborations with universities, pharmaceutical companies, both domestically and outside the United States. It will also seek universities as well as corporate partners, who will be responsible for at least part of the clinical development, regulatory approval, manufacturing and marketing of the drug product. Under such an arrangement, Disease SI expects to receive certain up-front and sub-licensing fees, ongoing research contracts, milestone payments, and royalties on drug product sales. Disease SI maintains a website at www.diseasesciences.com. 3 History of Disease SI Disease SI has no operating history and it has not generated any revenues to date. It was incorporated in April 2001 and has conducted limited business operations since inception as a result of its limited cash and assets. We do not expect operating revenue from Disease SI in the foreseeable future. We expect Disease SI to generate losses resulting principally from costs incurred in conjunction with its research and development initiatives. These research and development expenses will include costs related to scientific and laboratory personnel, clinical studies and reagents and supplies used in the development of its technologies. We expect that the cost of its research and development activities will increase substantially as Disease SI continues activities relating to the development of a TSE screening test, and the extension of its technologies to several other forms of TSE. Disease SI is planning clinical studies, the costs of which will be borne by it. We are unable at this time to project the costs of these clinical studies due to the early stage of Disease SI's development. We also expect general and administrative expenses for Disease SI to increase significantly as its hires additional personnel and builds its infrastructure to support future projected growth. These general and administrative expenses are expected to consist primarily of non-research personnel salaries, office expenses and professional fees. Product Research and Development Disease SI intends to conduct extensive product research and development activities, and these research and development activities are expected to play a major role in its projected future growth. In conjunction with the implementation of its plan of operation, Disease SI will hire and establish research teams. These research teams will attempt to develop new technology and new applications for existing technology. In its development and testing, Disease SI also intends to consult with scientific and medical professionals at universities, hospitals and medical schools. Despite the fact that there can be no assurance that the technologies and/or pharmaceutical compounds that Disease SI may develop will ultimately prove to be profitable, we anticipate that we will spend the necessary capital on research and development in the foreseeable future in order to enhance pharmaceutical properties, and to develop new potential products. We are unable at this time to estimate the total amount which will be spent on research and development by Disease SI. About Prions And Prion Diseases Prions (pronounced "pree-ons") are infectious proteins that are the causative agents of spongiform encephalopathies. Prions consist of a single molecule containing about 250 amino acids termed the PrP protein. Prions are unique in that they that break many rules of biology. Most life forms such as viruses, bacteria, plants and humans pass down their blueprints for all their progeny via their deoxyribonucleic acid (DNA). Generally, in nature the process for converting the blueprints into building blocks must involve replication of DNA, transcription of the message into ribonucleic acid (RNA) and translation of the RNA's message to form proteins, the building blocks of cells, tissues, organs and whole organisms. Prions differ in that they contain no DNA or RNA. With prions, we have life forms where abnormal proteins direct the refolding of normal proteins just by direct contact. The difference between the normal and abnormal proteins does not lie in their primary structure (the sequence of their amino acids), but rather in their folding. Prion infected proteins are folded 4 into abnormal shapes in a way that allows them to resist normal protease degradation which over time leads to the build up of aggregates of the abnormal protein, especially in neurons in the brain. Prions are also unique in that are not destroyed by the usual means to kill infectious agents. They are resistant to boiling at temperatures as high as 250 degrees Celsius (over 400 degrees Fahrenheit). They are also resistant to ionizing radiation. Additionally, prion related diseases are also extremely difficult to diagnose. Currently, there is no blood test for TSE, and infected animals do not mount any immune response to the infection and signs of diseases like BSE, are often only possible to diagnose at autopsy. Prion diseases are progressive degenerative disorders of the central nervous system. In cattle, the latency (incubation period) for mad cow disease is roughly five years, meaning that cows have the disease for five years before symptoms begin to appear. No one knows the latency period for CJD in humans, but it is estimated at 10 years. Because of this uncertainty, as was with AIDS, no one is sure how many people in England already have contracted the disease but are not yet showing symptoms. History Of Transmissible Spongiform Encephalopathies (TSE) and Scrapie The history of Transmissible Spongiform Encephalopies (TSE) can be traced back to England in the mid-1700s in the form of a disorder called "scrapie" found mostly in sheep and goats. Originally thought to be a genetic disease, scrapie was believed to be inherent in poorly breed animals. This belief continued through the 1930s when French researchers proved that it was not transferred genetically, but in fact was infectious. American scientists later discovered that they were able to transmit scrapie from sheep to cows by injecting infectious material into their brains. In England, at times scrapie had become quite prevalent. Over the past couple of centuries it was believed that at one time or another as many as one-third of British sheep had been infected with the disease. The disease secured its first known foothold in the United States in 1947, when an outbreak, traced to an import of purebred Suffolk sheep, was reported in Michigan. In 1952, when scrapie outbreaks were reported in California and Ohio, the United States Department of Agriculture (USDA) launched the first of two eradication programs, requiring the slaughter of entire herds infected with even a single case of scrapie. Farmers and sheep herders concerned with protecting their financial interests became reluctant to report suspected cases, and scrapie was "driven underground." From the mid-1950s through the mid-1970s a few flocks yearly in the U.S. were reported infected, numbers that the USDA felt were too small to be credible. To combat scrapie secrecy, in 1978 the USDA instituted the Scrapie-Eradication Program, a program of reimbursing farmers two thirds of the appraised value, up to $300 per animal, of the sheep sacrificed in their entire flocks suspected of carrying scrapie. In 1983 it was decided that the revised USDA policy for farmers would be to kill (and would be reimbursed for) only infected sheep and their immediate relatives not their entire flocks. Upon revision of the USDA policy, reports of scrapie increased. In 1992, for a combination of scientific and budgetary reasons, the Scrapie-Eradication Program was dismantled. In 1992, farmers were given six months to report sick sheep for reimbursement, and then the program officially closed. In the U.S. today, a 5 voluntary system is in place under which farmers can apply to have their sheep certified "scrapie-free". Scrapie is important because it is believed that it is the origin of Bovine Spongiform Encephalopathy (BSE), or mad-cow disease. It is widely believed that scrapie jumped species when farmers began feeding infected sheep to cattle as a means of providing the cattle with a cheap form of protein. Bovine Spongiform Encephalopathy (BSE) Bovine Spongiform Encephalopathy (BSE), a prion disease also known as mad-cow disease, is a progressive, lethal central nervous system disease which targets cattle. BSE is characterized by the appearance of vacuoles, or clear holes, in neurons in the brains of affected cattle that give the brain the appearance of a sponge or spongiform. BSE was initially recognized in cattle in the United Kingdom in 1986. After its discovery, research led scientists to the conclusion that the bovine agent had originated from a scrapie agent, which has been present within sheep in the United Kingdom for over 200 years. It is presumed that the scrapie agent jumped species and moved into cattle when sheep offal (the leftover parts of butchered animals) were ground down and included as a protein supplement in cattle feed. As cattle that had ingested the diseased scrapie began to die, cattle carcasses and offal were then themselves ground down and used as a protein supplement for future cattle feed. In essence, the epidemic of mad-cow disease was caused by an innovation of feeding dead cows to live cows. Cows and sheep are, by nature, herbivores (vegetarians). Further research has concluded that mad-cow disease was transmitted through such feed, and especially through certain tissues of the offal including the brain, spinal cord, eyes, spleen and certain nerve tissues. BSE in cattle in Europe had reached epidemic proportions by 1992 more than 1,000 cases were being reported. Between 1987 and 2000 over 180,000 cattle were identified as having BSE with countries including UK, Ireland, Portugal, France and Switzerland. Chronic Wasting Disease (CWD) Chronic wasting disease, another TSE, was diagnosed more than a decade ago in mule deer and elk in Colorado and Wyoming. Since 1981, CWD has been spreading slowly among wild deer and elk herds in the Rocky Mountains, and now afflicts between 4% and 8% of 62,000 deer in the region between Fort Collins, Colorado and Cheyenne, Wyoming. During 1999, CWD erupted among a herd of elk on a farm near Philipsburg, Montana which raised elk commercially. A few of the elk which had been shipped by the farm to other destinations in the United States were subsequently discovered to be infected with CWD. Montana health authorities slaughtered 81 elk on the farm, and initially announced plans to incinerate the carcasses. Upon determination that incineration would be too expensive, the animals, together with the equipment used to feed, water and care for the animals, were buried at a landfill. Montana authorities announced that the fence line at the elk farm would be decontaminated, but they did not say what procedure they would use, nor did they announce what would become of the 6 contaminated land. The disease agent that causes CWD - a prion protein - is very hardy and resists destruction by traditional sterilization techniques like alcohol and heat. In northeastern Colorado and southeastern Wyoming, state officials are urging hunters to protect themselves when dressing wild deer and elk which they have shot. Hunters should wear rubber gloves, minimize contact with brain and spinal cord tissues, discard the brain, spinal cord, eyes, spleen and lymph nodes and refrain from eating any of these organs. Although there is no evidence that CWD can cross over from deer and elk to humans, because there was previously no firm evidence that mad cow disease could afflict humans until 1999, wildlife officials in the Rocky Mountains states believe caution is warranted. Creutzfeldt-Jakob Disease (CJD) BSE in humans is referred to Creutzfeldt-Jakob Disease. In its natural form, CJD was first described in the 1920s by German physicians Has Gerhard Creutzfeldt and Alfons Jakob. Symptoms vary, but may include loss of coordination, personality changes, mania and dementia. In the United States, approximately 250 cases are diagnosed each year. Confirming a diagnosis of CJD has historically been difficult as traditional laboratory tests have been ineffective in detecting CJD. The disease does not induce a fever or other systemic manifestations. Accordingly, a definitive diagnosis of CJD has traditionally required a brain biopsy or autopsy which can detect the characteristic changes in the brain tissue caused by the disease. Moreover, a brain biopsy may sometimes produce a false-negative result if the biopsied area was unaffected by the disease. The difficulties involved in diagnosing CJD may have prevented the identification of the disease in some cases. Because brain biopsy for diagnosing CJD is invasive, costly and risky, it is often not performed. Additionally, some physicians may not consider the possibility of a CJD diagnosis since the disease is deemed to be rare and the clinical symptoms of CJD can often be attributed to other ailments. Consequently, CJD may be mistaken for a variety of psychological illnesses and other neurological disorders including Alzheimer's disease, Huntington's Disease and vascular irregularities. The extent to which such misdiagnosis may have occurred is presently unknown. Currently, fewer than 10% of all deaths are investigated with an autopsy, and even a smaller percentage of victims of dementia. The disease is inevitably fatal as at the present time there is no known effective treatment or cure for CJD. The Disease SI Solution Many non-invasive TSE screening methods are not effective early detection methods. Disease SI intends to develop screening tests that it believes will allow for the direct early detection of several types of TSE diseases. The first application of its technologies will be to undertake TSE screening. Disease SI believes veterinarians will order tests to screen for the presence of TSE every one to two years. Through regular screening, Disease SI believes that tests using its developed technology will enable the detection of TSE earlier, so that the animals may be properly destroyed and avoid these diseased animals from entering the food chain. 7 Disease SI believes TSE screening tests using its technologies could become a widely accepted and regularly used screening tool as a result of certain features and benefits including earlier detection, higher sensitivity, higher compliance and scalability. Disease SI's goal is to become a contender in the early detection of TSE. The key components of its strategy include: - Developing TSE screening technologies. Disease SI selected TSE as the first technology because the target market is large and not well served. Once developed, Disease SI intends to license its proprietary technologies and sell reagents to leading clinical reference laboratories to enable them to develop tests. Disease SI may also package its technologies and seek approval for diagnostic test kits with which any clinical laboratory could conduct its tests. - Extend its screening technologies to other neurological disorders. Disease SI believes that its current technologies will be applicable to the early detection of several other types of neurological disorders. Disease SI also believes that certain of its technologies allow for the early detection of without knowledge of the precise basis of the disorder. As a result, it may be able to develop tests for disorders before the basis of such disorders is discovered. Government Regulation Disease SI will be subject to extensive regulation by the United States Food and Drug Administration (FDA) under the Federal Food, Drug and Cosmetic Act, as well as regulations governing the development, marketing, labeling, promotion, manufacturing and export of its products. Generally medical devices, a category that will include Disease SI's to-be-developed products, require FDA approval or clearance before they may be marketed. The FDA has not, however, actively regulated laboratory tests that have been developed and used by the laboratory conducting the tests. The FDA does regulate the sale of reagents used in laboratory tests. The FDA refers to the reagents used in these tests as analyte specific reagents. Analyte specific reagents react with a biological substance to identify a specific DNA sequence or protein and generally do not require FDA approval or clearance if they are used in-house laboratories or are sold to clinical laboratories certified by the government to perform high complexity testing and are labeled in accordance with FDA requirements, including a statement that their analytical and performance characteristics have not been established. A similar statement would also be required on all advertising and promotional materials relating to analyte specific reagents such those to be developed by Disease SI. Laboratories also are subject to restrictions on the labeling and marketing of tests that have been developed using analyte specific reagents. The analyte specific reagent regulatory category is relatively new and its boundaries are not well defined, and there has been some discussion within the government of changing the analyte specific reagent regulation, although it is not certain whether any such changes would affect Disease SI plan of operation. In the event Disease SI is successful in implementing its plan of operation, Disease SI believes that its in-house 8 testing and the analyte specific reagents that it intends to sell to leading clinical reference laboratories will not require FDA approval or clearance. Disease SI cannot be sure, however, that the FDA will not assert that its tests or one or more of its reagents require premarket approval or clearance. In addition, Disease SI cannot be sure that the FDA will not treat the licensing of its intellectual property as labeling that would subject the reagent to premarket approval or clearance and other FDA regulation. In addition, Disease SI cannot be sure that the FDA will not change its position in ways that could negatively affect its operations. Any diagnostic test kits that Disease SI may sell would require FDA approval or clearance before they could be marketed. There are two review procedures by which a product may receive such approval or clearance. Some products may qualify for clearance under a premarket notification, or 510(k) procedure, in which the manufacturer provides to the FDA a premarket notification that it intends to begin marketing the product, and demonstrates to the FDA's satisfaction that the product is substantially equivalent to a legally marketed product, which means that the product has the same intended use as, is as safe and effective as, and does not raise different questions of safety and effectiveness than a legally marketed device. A 510(k) submission for an in vitro diagnostic device generally must include manufacturing and performance data, and in some cases, it must include data from human clinical studies. Marketing may commence when FDA issues a clearance letter. If a medical device does not qualify for the 510(k) procedure, the FDA must approve a premarket approval application, or PMA, before marketing can begin. PMA applications must demonstrate, among other matters, that the medical device is safe and effective. A PMA application is typically a complex submission, usually including the results of preclinical and extensive clinical studies. Before FDA will approve a PMA, the manufacturer must pass an inspection of its compliance with the requirements of the FDA's quality system regulations. Assuming that Disease SI is successful in implementing its business plan, Disease SI believes that most, if not all, of the products which it anticipates it will develop and sell in diagnostic test kit form will require PMA approval. The PMA process is lengthy and costly, and Disease SI cannot be sure that the FDA will approve PMAs for its products in a timely fashion, if at all. FDA requests for additional studies during the review period are not uncommon, and can significantly delay approvals. Even if Disease SI were able to gain approval of a product for one indication, changes to the product, its indication, or its labeling would be likely to require additional approvals. Regardless of whether a medical device requires FDA approval or clearance, a number of other FDA requirements apply to its manufacturer and to those who distribute it. Device manufacturers must be registered and their products listed with the FDA, and certain adverse events and product malfunctions must be reported to the FDA. The FDA also regulates the product labeling, promotion, and in some cases, advertising, of medical devices. Manufacturers must comply with the FDA's quality system regulation which establishes extensive requirements for quality control and manufacturing procedures. Thus, manufacturers and distributors must continue to spend time, money and effort to maintain compliance, and failure to comply can lead to enforcement action. The FDA periodically inspects facilities to ascertain compliance with these and other requirements. 9 Disease SI will also be subject to U.S. and state laws and regulations regarding the operation of clinical laboratories. The federal Clinical Laboratory Improvement Act and laws of certain other states, impose certification requirements for clinical laboratories, and establish standards for quality assurance and quality control, among other things. Clinical laboratories are subject to inspection by regulators, and the possible sanctions for failing to comply with applicable requirements. Sanctions available under the Clinical Laboratory Improvement Act include prohibiting a laboratory from running tests, requiring a laboratory to implement a corrective plan, and imposing civil money penalties. If Disease SI should fail to meet the requirements of the Clinical Laboratory Improvement Act or state law, it could cause it to incur significant expense. Any failure by Disease SI to comply with these laws, rules and regulations could lead to stringent sanctions, including withdrawal of products from the market, recalls, refusal to authorize government contracts, product seizures, civil money penalties, injunctions and criminal prosecution. Competition and General Business Risks The clinical laboratory business is intensely competitive and Disease SI believes that consolidation will continue in the clinical laboratory testing business. Competitors in this segment range in size from small private companies to large multinational corporations. Disease SI will seek to compete only in very specific market niches and will not attempt to pursue the most competitive general diagnostics markets. Disease SI believes, although there are no assurances, that it will be able to compete based on its technological ability to provide customers with very specific tests. Competitors will include Abbot Laboratories, bioMerieux, Inc., Roche Diagnostics, BioChem Pharma, Inova, diaSorin, Bayer, Bio-Rad, Paradigm and Medical Analysis Systems. In the intense competitive environment that is the pharmaceutical industry, those companies that complete clinical trials, obtain regulatory approval and commercialize their drug products first will enjoy competitive advantages. To Disease SI's knowledge, none of the large or diagnostics companies are developing tests to conduct blood, urine or feces-based TSE testing; however, companies may be working on such tests that have not yet been announced. In addition, other companies may succeed in developing or improving technologies and marketing products and services that are more effective or commercially attractive than those which may be developed or offered by Disease SI. Most of these companies may be larger than Disease SI and will be able to commit significantly greater financial and other resources to all aspects of their business, including research and development, marketing, sales and distribution. Disease SI's prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stages of development, particularly companies in new and rapidly evolving markets. Disease SI will encounter various risks in implementing and executing its business strategy and we can provide no assurance that it will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business. Our current cash forecast indicates that there will be negative cash flow from our operations for the foreseeable future. 10 Employees As of April 30, 2001, Disease SI employed a total of three employees, all of whom work full-time. Disease SI has no collective bargaining agreements with any unions and believes that the overall relations with its employees are excellent. Management Dr. Wayne Goldstein, Mr. Brian S. John and Dr. Bryant Villeponteau have recently been appointed as directors and/or officers of AuctionAnything.com. Dr. Wayne Goldstein, age 34, has been our Chief Executive Officer and a director since May 23, 2001, and is the President and co-founder of Disease SI. Prior to founding Disease S.I. in April 2001, Dr. Goldstein was an asset manager for Rockledge Capital Management from January 2000 until December 2000. From March 1999 until February 2000, he was a professional medical representative for Cytyc Corporation (Nasdaq: CYTC), a publicly-held company that designs, develops, manufactures and markets sample preparation systems for medical diagnostics. His responsibilities at Cytyc Corporation included consulting with obstetricians and gynecologists on implementing new technology into their practices. From March 1999 until December 1999, he was a sales representative with Ventiv Health. From July 1994 until December 1999, he had a podiatry practice in South Florida, where his responsibilities included managing a podiatric office consisting of two doctors and three skilled assistants, as well as treating patients. Dr. Goldstein received a B.S. in Psychology/Pre-Medicine from the University of Maryland in 1988 and a Doctorate of Podiatric Medicine (DPM) from the Temple School of Medicine in 1992. Dr. Goldstein did his residency at Frankford Hospital in Philadelphia, Pennsylvania from 1992 until1994. Brian S. John, age 33, has been our Vice President and director since May 23, 2001. Prior to co-founding Disease S.I. in April 2001, from March 1998 until December 2000, Mr. John was President of International Internet's CigarCigar.com / StogiesOnline.com division. From December 1997 until March 1998, he was a stock broker with GKN Securities Corp. and from December 1997 until December 1997, he was a stock broker with Stratton Oakmont, Inc., holding both a Series 7 and a Series 63 license at each firm. From May 1991 until April 1996, Mr. John served as Northeast Area Sales Director for Dine-A-Mate, Inc., an entertainment and dining guide that was later acquired by CUC International. Mr. John studied Biology at Kutztown State University from 1986 until 1991. Bryant Villeponteau Ph.D., age 56, has been our Chief Scientific Officer since June 2001. He brings eighteen years of administration and scientific experience to Disease S.I. Dr. Villeponteau holds B.A. in Economics, an M.S. in Biostatistics, and a Ph.D. in Molecular Biology, all from UCLA. From 1982 to 1986, Dr. Villeponteau was Assistant Research Chemist in the Department of Chemistry and Biochemistry at UCLA, and from 1986 to 1992 was Assistant Professor of Biological Chemistry at the University of Michigan Institute of Gerontology. During this period, Dr. Villeponteau was one of the first scientists to clone a human aging-related gene. From 1996 until June 1997, Dr. Villeponteau was with Geron Corporation, a start-up biotech company focused on age-related diseases, where he developed a patented technique for cataloging gene expression changes with aging. In 1994, Dr. Villeponteau was the lead 11 inventor in cloning and characterizing the RNA component of human telomerase and, along with three other colleagues, won the 1996 Distinguished Inventor Award for this seminal discovery. Dr. Villeponteau was then made the Program Director for Telomerase Therapy and led a multi-disciplinary team of 25 scientists for several years. Dr. Villeponteau later served as the head of Geron's Molecular Discovery Department before joining Health Span Sciences, Inc. in June 1997 where he initially served as Vice President of Research, heading up the research department. From March 1998 to June 2000, Dr. Villeponteau served as President, a directors and Chief Executive Office of Health Span Sciences, Inc., and from June 2000 until the present, he has served as President, a director and Chief Scientific Officer of Health Span Sciences, Inc. Since September 1996 Dr. Villeponteau has been a member of the editorial board of the Journal of Anti-aging Medicine. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements for the periods specified in Rule 3-05(b) of Regulation S-X are attached to this filing. (b) Pro Forma Financial Information required pursuant to Article 11 of Regulation S-X shall be filed by amendment within 60 days of the date of this filing. (c) Exhibits: 10.1 Agreement and Plan of Reorganization and Stock Purchase Agreement dated May 23, 2001 between AuctionAnything.com, Inc., Disease S.I., Inc. and the Shareholders of Disease S.I., Inc. 12 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, AuctionAnything.com, Inc. has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AUCTIONANYTHING.COM, INC. By: /s/ Dr. Wayne Goldstein ----------------------------------- Name: Dr. Wayne Goldstein Title: President Dated: June 5, 2001 13 EX-2 2 exhibit-june52001.txt PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION AND STOCK PURCHASE AGREEMENT by and among AUCTIONANYTHING.COM, INC. as Acquiror DISEASE S.I., INC. as Acquiree and the Shareholders of DISEASE S.I., INC. May 23, 2001 AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION and Stock Purchase Agreement (the "Agreement") is made and entered into this 23rd day of May, 2001 by and among AUCTIONANYTHING.COM, INC., a Delaware corporation (hereinafter referred to as "AAI"), DISEASE S.I., INC. , a Florida corporation (hereinafter referred to as the "Company"), and DR. WAYNE M. GOLDSTEIN AND BYRON S. JOHN, the shareholders of the Company (hereinafter referred to as the "Shareholders"). RECITALS: 1. The Shareholders own all of the issued and outstanding shares of the capital stock of the Company as set forth on Exhibit A hereto. 2. AAI is willing to acquire all of the issued and outstanding capital stock of the Company, making the Company a wholly-owned subsidiary of AAI, and the Shareholders desire to exchange all of their shares of the Company's capital stock for shares of AAI's authorized but unissued shares of Common Stock as hereinafter provided. 3. It is the intention of the parties hereto that: (i) AAI shall acquire all of the issued and outstanding capital stock of the Company in exchange solely for 60,000,000 shares of AAI 's authorized but unissued Common Stock set forth below (the "Exchange"); (ii) the Exchange shall qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended, and related sections thereunder; and (iii) the Exchange shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended, (the "Act") and under the applicable securities laws of the state or jurisdiction where the Shareholders reside. NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the parties hereto agree as follows: SECTION 1. EXCHANGE OF SHARES 1.1 Exchange of Shares. AAI and the Shareholders hereby agree that the Shareholders shall, on the Closing Date (as hereinafter defined), exchange all of their issued and outstanding shares of the capital stock of the Company (the "DSI Shares") for 60,000,000 shares of AAI Common Stock, $.001 par value (the "AAI Shares") set forth in Exhibit A hereto. The number of shares of capital stock owned by the Shareholders and the number of AAI Shares which the Shareholders will be entitled to receive in the Exchange is set forth in Exhibit A hereto. 1.2 Delivery of Shares. On the Closing Date, the Shareholders will deliver to AAI the certificates representing the DSI Shares, duly endorsed (or with executed stock powers) so as to make AAI the sole owner thereof. AAI shall deliver to the Shareholders 21,209,304 shares of the 60,000,000 AAI Shares to be delivered to the Shareholders, representing the amount of AAI Shares deliverable based on the authorized Common Stock of AAI less the amount of shares currently outstanding. The balance of the 60,000,000 AAI Shares will be delivered to the Shareholders following the Closing Date as soon as AAI amends its Certificate of Incorporation to increase the authorized capitalization in order to permit the issuance. 1.3 Tax-Free Reorganization. The Shareholders acknowledge that, in the event that capital stock of the Company representing at least 80% in interest of the Company is not exchanged for shares of AAI voting capital stock pursuant hereto, the Exchange will not qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. 1.4 Investment Intent. The AAI Shares have not been registered under the Securities Act of 1933, as Amended, and may not be resold unless the AAI Shares are registered under the Act or an exemption from such registration is available. The Shareholders represent and warrant that they are acquiring the AAI Shares for their own account, for investment, and not with a view to the sale or distribution of such Shares. Each certificate representing the AAI Shares will have a legend thereon incorporating language as follows: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"). The shares have been acquired for investment and may not be sold or transferred in the absence of an effective Registration Statement for the shares under the Act unless in the opinion of counsel satisfactory to the Company, registration is not required under the Act." SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS The Company and the Shareholders hereby represent and warrant as follows: 2.1 Organization and Good Standing; Ownership of Shares. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida, and is entitled to own or lease its properties and to carry on its business as and in the places where such properties are now owned, leased or operated and such business is now conducted. The Company is duly licensed or qualified and in good standing as a foreign corporation where the character of the properties owned by it or the nature of the business transacted by it make such licenses or qualifications necessary. The Company does not have any subsidiaries. There are no outstanding subscriptions, rights, options, warrants or other agreements obligating either the Company or the Shareholders to issue, sell or transfer any stock or other securities of the Company. 2.2 Ownership of Shares. The Shareholders are the owners of record and beneficially of all of the shares of capital stock of the Company, all of which Shares are free and clear of all rights, claims, liens and encumbrances, and have not been sold, pledged, assigned or otherwise transferred except pursuant to this Agreement. 2.3 Financial Statements, Books and Records. There has been previously delivered to AAI the unaudited balance sheet of the Company as at April 30, 2001 (the "Balance Sheet"). The Balance Sheet is true and accurate and fairly represents the financial position of the Company as at such date, and has been prepared in accordance with generally accepted accounting principles consistently applied. 2.4 No Material Adverse Changes. Since the date of the Balance Sheet there has not been: (i) any material adverse change in the assets, operations, condition (financial or otherwise) or prospective business of the Company; (ii) any damage, destruction or loss materially affecting the assets, prospective business, operations or condition (financial or otherwise) of the Company, whether or not covered by insurance; (iii) any declaration, setting aside or payment of any dividend or distribution with respect to any redemption or repurchase of the Company's capital stock; (iv) any sale of an asset (other than in the ordinary course of business) or any mortgage or pledge by the Company of any properties or assets; or (v) adoption of any pension, profit sharing, retirement, stock bonus, stock option or similar plan or arrangement. 2.5 Taxes. The Company has prepared and filed all appropriate federal, state and local tax returns for all periods prior to and through the date hereof for which any such returns have been required to be filed by it and has paid all taxes shown to be due by said returns or on any assessments received by it or has made adequate provision for the payment thereof. 2.6 Compliance with Laws. The Company has complied with all federal, state, county and local laws, ordinances, regulations, inspections, orders, judgments, injunctions, awards or decrees applicable to it or its business which, if not complied with, would materially and adversely affect the business of the Company. 2.7 No Breach. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not: (i) violate any provision of the Articles of Incorporation or By-Laws of the Company; (ii) violate, conflict with or result in the breach of any of the terms of, result in a material modification of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both constitute) a default under, any contract or other agreement to which the Company is a party or by or to which it or any of its assets or properties may be bound or subject; (iii) violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, the Company, or upon the properties or business of the Company; or (iv) violate any statute, law or regulation of any jurisdiction applicable to the transactions contemplated herein which could have a materially adverse effect on the business or operations of the Company. 2.8 Actions and Proceedings. There is no outstanding order, judgment, injunction, award or decree of any court, governmental or regulatory body or arbitration tribunal against or involving the Company. There is no action, suit or claim or legal, administrative or arbitral proceeding or (whether or not the defense thereof or liabilities in respect thereof are covered by insurance) pending or threatened against or involving the Company or any of its properties or assets. There is no fact, event or circumstances that may give rise to any suit, action, claim, investigation or proceeding. 2.9 Brokers or Finders. No broker's or finder's fee will be payable by the Company in connection with the transactions contemplated by this Agreement, nor will any such fee be incurred as a result of any actions by the Company or the Shareholders. 2.10 Real Estate. The Company neither owns real property nor is a party to any leasehold agreement. 2.11 Tangible Assets. The Company has full title and interest in all machinery, equipment, furniture, leasehold improvements, fixtures, vehicles, structures, owned or leased by the Company, any related capitalized items or other tangible property material to the business of the Company (the "Tangible Assets"). The Company holds all rights, title and interest in all the Tangible Assets owned by it on the Balance Sheet or acquired by it after the date of the Balance Sheet, free and clear of all liens, pledges, mortgages, security interests, conditional sales contracts or any other encumbrances. All of the Tangible Assets are in good operating condition and repair and are usable in the ordinary course of business of the Company and conform to all applicable laws, ordinances and governmental orders, rules and regulations relating to their construction and operation. 2.12 Liabilities. The Company does not have any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured, accrued or absolute, contingent or otherwise, including, without limitation, any liability on account of taxes, any other governmental charge or lawsuit (all of the foregoing collectively defined to as "Liabilities"), which were not fully, fairly and adequately reflected on the Balance Sheet. As of the Closing Date, the Company will not have any Liabilities, other than Liabilities fully and adequately reflected on the Balance Sheet, except for Liabilities incurred in the ordinary course of business. 2.13 Operations of the Company. From the date of the Balance Sheet and through the Closing Date hereof the Company has not and will not have: (i) incurred any indebtedness for borrowed money; (ii) declared or paid any dividend or declared or made any distribution of any kind to any shareholder, or made any direct or indirect redemption, retirement, purchase or other acquisition of any shares in its capital stock; (iii) made any loan or advance to any shareholder, officer, director, employee, consultant, agent or other representative or made any other loan or advance otherwise than in the ordinary course of business; (iv) except in the ordinary course of business, incurred or assumed any indebtedness or liability (whether or not currently due and payable); (v) disposed of any assets of the Company except in the ordinary course of business; or (vi) materially increased the annual rate of compensation of any executive employee of the Company; (vii) increased, terminated, amended or otherwise modified any plan for the benefit of employees of the Company; (viii) issued any equity securities or rights to acquire such equity securities; or (ix) except in the ordinary course of business, entered into or modified any contract, agreement or transaction. 2.14 Capitalization. The authorized capital stock of the Company consists of 100,000,000 shares of common stock, $.001 par value, of which 60,000,000 shares are presently issued and outstanding. Neither the Company nor the Shareholders has granted, issued or agreed to grant, issue or make available any warrants, options, subscription rights or any other commitments of any character relating to the issued or unissued shares of capital stock of the Company. 2.15 Full Disclosure. No representation or warranty by the Company or the Shareholders in this Agreement or in any document or schedule to be delivered by them pursuant hereto, and no written statement, certificate or instrument furnished or to be furnished to AAI pursuant hereto or in connection with the negotiation, execution or performance of this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any fact necessary to make any statement herein or therein not materially misleading or necessary to a complete and correct presentation of all material aspects of the businesses of the Company. 2.16 Representations and Warranties on Closing Date. The representations and warranties contained in this Section 2 shall be true and complete on the Closing Date with the same force and effect as though such representations and warranties had been made on and as of the Closing Date. SECTION 3. REPRESENTATIONS AND WARRANTIES OF AAI AAI hereby represents and warrants to the Company and the Shareholders as follows: 3.1 Organization and Good Standing. AAI is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is entitled to own or lease its properties and to carry on its business as and in the places where such properties are now owned, leased, or operated and such business is now conducted. The authorized capital stock of AAI consists of 50,000,000 shares of Common Stock, of which 28,790,696 shares are presently issued and outstanding. AAI is duly licensed or qualified and in good standing as a foreign corporation where the character of the properties owned by AAI or the nature of the business transacted by it make such license or qualification necessary. AAI does not have any subsidiaries other than North Orlando Sports Promotions, Inc. 3.2 The AAI Shares. The AAI Shares to be issued to the Shareholders have been or will have been duly authorized by all necessary corporate and stockholder actions and, when so issued in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable. 3.3 Financial Statements; Books and Records. There has been previously delivered to the Company, the audited balance sheet of AAI as at January 31,2000 and the unaudited balance sheet as at October 31, 2000 (the "AAI Balance Sheet") and the related audited statements of operations for the periods then ended (the "Financial Statements"). The Financial Statements are true and accurate and fairly represent the financial position of the Company as at such dates and the results of its operations for the periods then ended, and have been prepared in accordance with generally accepted accounting principles consistently applied. 3.4 No Material Adverse Changes. Since the date of the AAI Balance Sheet and except as otherwise disclosed in AAI's reports or filings made under the Securities Exchange Act of 1934, there has not been: (i) any material adverse change in the assets, operations, condition (financial or otherwise) or prospective business of AAI; (ii) any damage, destruction or loss materially affecting the assets, prospective business, operations or condition (financial or otherwise) of AAI, whether or not covered by insurance; (iii) any declaration, setting aside or payment of any dividend or distribution with respect to any redemption or repurchase of AAI's capital stock; (iv) any sale of an asset (other than in the ordinary course of business) or any mortgage or pledge by AAI of any properties or assets; or (v) adoption of any pension, profit sharing, retirement, stock bonus, stock option or similar plan or arrangement. The parties acknowledge that at the Closing, AAI will have delivered to the Company its audited balance sheet dated January 31, 2001 and its unaudited balance sheet dated April 30, 2001. 3.5 Taxes. AAI has prepared and filed all appropriate federal, state and local tax returns of every kind and category (including, without limitation, income taxes, estimated taxes, excise taxes, sales taxes, inventory taxes, use taxes, gross receipt taxes, franchise taxes and property taxes) for all periods prior to and through the date hereof for which any such returns have been required to be filed by it or the failure to make such filings and resulting liability would not be material relative to the results of operations of AAI. AAI has paid all taxes shown to be due by said returns or on any assessments received by it or has made adequate provision for the payment thereof. 3.6 Compliance with Laws. AAI has complied with all federal, state, county and local laws, ordinances, regulations, inspections, orders, judgments, injunctions, awards or decrees applicable to their businesses, including Federal and State securities laws, which, if not complied with, would materially and adversely affect the business of AAI or the trading market for the shares of AAI's Common Stock. 3.7 No Breach. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not: (i) violate any provision of the Certificate of Incorporation or By-Laws of AAI ; (ii) violate, conflict with or result in the breach of any of the terms of, result in a material modification of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both constitute) a default under, any contract or other agreement to which AAI is a party or by or to which it or any of its assets or properties may be bound or subject; (iii) violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, AAI or upon the properties or business of AAI; or (iv) violate any statute, law or regulation of any jurisdiction applicable to the transactions contemplated herein which could have a material adverse effect on the business or operations of AAI. 3.8 Actions and Proceedings. There is no outstanding order, judgment, injunction, award or decree of any court, governmental or regulatory body or arbitration tribunal against or involving AAI. There is no action, suit or claim or legal, administrative or arbitral proceeding or (whether or not the defense thereof or liabilities in respect thereof are covered by insurance) pending or threatened against or involving AAI or any of its properties or assets. Except as set forth on Schedule 3.8, there is no fact, event or circumstances that may give rise to any suit, action, claim, investigation or proceeding. 3.9 Brokers or Finders. No broker's or finder's fee will be payable by AAI in connection with the transactions contemplated by this Agreement, nor will any such fee be incurred as a result of any actions by AAI. 3.10 Liabilities. AAI does not have any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured, accrued or absolute, contingent or otherwise, including, without limitation, any liability on account of taxes, any other governmental charge or lawsuit (all of the foregoing collectively defined to as "Liabilities"), which were not fully, fairly and adequately reflected on the Balance Sheet. As of the Closing Date, AAI will not have any Liabilities, other than Liabilities fully and adequately reflected on the AAI Balance Sheet or AAI's balance sheet dated December 31, 2000, except for Liabilities incurred in the ordinary course of business. All Liabilities and agreements of AAI are assumable by third parties. The parties acknowledge that at the Closing, AAI will have delivered to the Company its audited balance sheet dated January 31, 2001 and its unaudited balance sheet dated April 30, 2001. 3.11 Operations of AAI. Except as set forth on Schedule 3.11 or in AAI's reports or filings made under the Securities Exchange Act of 1934, since the date of the AAI Balance Sheet and through the Closing Date hereof, AAI has not and will not have: (i) incurred any indebtedness for borrowed money; (ii) declared or paid any dividend or declared or made any distribution of any kind to any shareholder, or made any direct or indirect redemption, retirement, purchase or other acquisition of any shares in its capital stock; (iii) made any loan or advance to any shareholder, officer, director, employee, consultant, agent or other representative or made any other loan or advance otherwise than in the ordinary course of business; (iv) except in the ordinary course of business, incurred or assumed any indebtedness or liability (whether or not currently due and payable); (v) disposed of any assets of AAI except in the ordinary course of business; or (vi) materially increased the annual level of compensation of any executive employee of AAI; (vii) increased, terminated amended or otherwise modified any plan for the benefit of employees of AAI ; (viii) issued any equity securities or rights to acquire such equity securities; or (ix) except in the ordinary course of business, entered into or modified any contract, agreement or transaction. 3.12 Authority to Execute and Perform Agreements. AAI has the full legal right and power and all authority and approval required to enter into, execute and deliver this Agreement and to perform fully their obligations hereunder. This Agreement has been duly executed and delivered and is the valid and binding obligation of AAI, enforceable in accordance with its terms, except as may be limited by bankruptcy, moratorium, insolvency or other similar laws generally affecting the enforcement of creditors' rights. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and the performance by AAI of this Agreement, in accordance with its respective terms and conditions will not: (i) require the approval or consent of any governmental or regulatory body, the Stockholders of AAI, or the approval or consent of any other person; (ii) conflict with or result in any breach or violation of any of the terms and conditions of, or constitute (or with any notice or lapse of time or both would constitute) a default under, any order, judgment or decree applicable to AAI, or any instrument, contract or other agreement to which AAI is a party or by or to which AAI is bound or subject; or (iii) result in the creation of any lien or other encumbrance on the assets or properties of AAI. 3.13 Delivery of Periodic Reports; Compliance with 1934 Act. AAI has provided the Company and to Shareholders with all of its Periodic Reports filed with the Securities and Exchange Commission since January 1, 1998. AAI has filed all required Periodic Reports and is in compliance with its reporting obligations under the Securities Exchange Act of 1934. All reports filed pursuant to such Act are complete and correct in all material respects. All material contracts relative to AAI are included in the Periodic Reports. All material contracts and commitments for the provision or receipt of services or involving any obligation on the part of AAI are included as exhibits to such periodic reports or are listed on Schedule 3.13 hereto. 3.14 Capitalization. The authorized capital stock of AAI consists of 50,000,000 shares of common stock, $.001 par value, of which 28,790,696 shares are presently issued and outstanding. Except as indicated in Schedule 3.14 hereto, AAI has not granted, issued or agreed to grant, issue or make available any warrants, options, subscription rights or any other commitments of any character relating to the issued or unissued shares of capital stock of AAI. 3.15 Full Disclosure. No representation or warranty by AAI in this Agreement or in any document or schedule to be delivered by it pursuant hereto, and no written statement, certificate or instrument furnished or to be furnished to the Company or the Shareholders pursuant hereto or in connection with the execution or performance of this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state any fact necessary to make any statement herein or therein not materially misleading or necessary to a complete and correct presentation of all material aspects of the business of AAI. 3.16 Representations and Warranties on Closing Date. The representations and warranties contained in this Section 3 shall be true and complete on the Closing Date with the same force and effect as through such representations and warranties had been made on and as of the Closing Date. SECTION 4. COVENANTS OF COMPANY AND SHAREHOLDERS The Company and the Shareholders covenant to AAI as follows: 4.1 Conduct of Business. From the date hereof through the Closing Date, the Shareholders and The Company shall cause the Company to conduct its business in the ordinary course and, without the prior written consent of AAI , shall ensure that the Company does not undertake any of the actions specified in Section 2.13 hereof. 4.2 Preservation of Business. From the date hereof through the Closing Date, the Shareholders and the Company shall cause the Company to use its best efforts to preserve its business organization intact, keep available the services of its present employees, consultants and agents, maintain its present suppliers and customers and preserve its goodwill. 4.3 Litigation. The Company shall promptly notify AAI of any lawsuits, claims, proceedings or investigations which after the date hereof are threatened or commenced against the Company or against any officer, director, employee, consultant, agent, shareholder or other representative with respect to the affairs of the Company. 4.4 Continued Effectiveness of Representations and Warranties. From the date hereof through the Closing Date, the Shareholders and the Company shall cause the Company to conduct its business in such a manner so that the representations and warranties contained in Section 2 shall continue to be true and correct on and as of the Closing Date and as if made on and as of the Closing Date, and shall: (i) promptly give notice to the Company or any event, condition or circumstance occurring from the date hereof through the Closing Date which would render any of the representations or warranties materially untrue, incomplete, insufficient or constitute a violation or breach of this Agreement; and (ii) supplement the information contained herein in order that the information contained herein is kept current, complete and accurate in all material respects. SECTION 5. COVENANTS OF AAI AAI covenants to the Company and the Shareholders as follows: 5.1 Conduct of Business. From the date hereof through the Closing Date, AAI shall conduct its business in the ordinary course and, without the prior written consent of the Company, shall ensure that AAI does not undertake any of the actions specified in Section 3.10 hereof. 5.2 Preservation of Business. From the date hereof through the Closing Date, AAI shall preserve its business organization intact and use its best efforts to preserve AAI's goodwill. 5.3 Litigation. AAI shall promptly notify the Company of any lawsuits, claims, proceedings or investigations which after the date hereof are threatened or commenced against AAI or against any officer, director, employee, consultant, agent, or stockholder with respect to the affairs of AAI. 5.4 Continued Effectiveness of Representations and Warranties. From the date hereof through the Closing Date, AAI shall conduct its business in such a manner so that the representations and warranties contained in Section 3 shall continue to be true and correct on and as of the Closing Date and as if made on and as of the Closing Date, and shall: (i) promptly give notice to the Company of any event, condition or circumstance occurring from the date hereof through the Closing Date which would render any of the representations or warranties materially untrue, incomplete, insufficient or constitute a violation or breach of this Agreement; and (ii) supplement the information contained herein in order that the information contained herein is kept current, complete and accurate in all material respects. 5.5 Filing of Form 10-KSB Annual Report. Prior to the Closing, AAI will have filed its Annual Report on Form 10-KSB and the Company and the Shareholders will have the benefit of the representations and warranties contained in Section 3 with respect thereto. 5.6 No Other Negotiations. From the date hereof until the earlier of the termination of this Agreement or consummation of this Agreement, AAI will not permit and will not authorize any officer or director of AAI or any other person on its behalf to, directly or indirectly, solicit, encourage, negotiate or accept any offer from any party concerning the possible disposition of all or any substantial portion of the capital stock by merger, sale or any other means or any other transaction that would involve a change in control of AAI, or any transaction in which AAI contemplates issuing equity or debt securities. SECTION 6. COVENANTS 6.1 Corporate Examinations and Investigations. Prior to the Closing Date, the parties acknowledge that they have been entitled, through their employees and representatives, to make such investigation of the assets, properties, business and operations, books, records and financial condition of the other as they each may reasonably require. No investigation by a party hereto shall, however, diminish or waive in any way any of the representations, warranties, covenants or agreements of the other party under this Agreement. 6.2 Expenses. Each party hereto agrees to pay its own costs and expenses incurred in negotiating this Agreement and consummating the transactions described herein, except the Company will advance to AAI immediately following the execution hereof, $30,000 to be used by AAI solely to complete the audit for its 2000 fiscal year and to complete the related filing of AAI's Annual Report on Form 10-KSB. Such loan will be evidenced by a demand promissory note in the form of Exhibit B hereto. 6.3 Further Assurances. The parties shall execute such documents and other papers and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby. Each such party shall use its best efforts to fulfill or obtain the fulfillment of the conditions to the Closing, including, without limitation, the execution and delivery of any documents or other papers, the execution and delivery of which are necessary or appropriate to the Closing. 6.4 Confidentiality. In the event the transactions contemplated by this Agreement are not consummated, each of the parties hereto agree to keep confidential any information disclosed to each other in connection therewith for a period of one (1) year from the date hereof; provided, however, such obligation shall not apply to information which: (i) at the time of disclosure was public knowledge; (ii) after the time of disclosure becomes public knowledge (except due to the action of the receiving party); or (iii) the receiving party had within its possession at the time of disclosure. SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATION OF AAI TO CLOSE The obligation of AAI to enter into and complete the Closing is subject, at the option of AAI, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by AAI in writing. 7.1 Representations and Covenants. The representations and warranties of the Company and the Shareholders contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. The Company and the Shareholders shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Company and the Shareholders on or prior to the Closing Date. The Company and the Shareholders shall have delivered to AAI, if requested, a certificate, dated the Closing Date, to the foregoing effect. 7.2 Governmental Permits and Approvals; Corporate Resolutions. Any and all permits and approvals from any governmental or regulatory body required for the lawful consummation of the Closing shall have been obtained. The Board of Directors of the Company shall have approved the transactions contemplated by this Agreement and the Company shall have delivered to AAI, if requested by AAI, resolutions by its Board of Directors, certified by the Secretary of the Company, authorizing the transactions contemplated by this Agreement. 7.3 Third Party Consents. All consents, permits and approvals from parties to any contracts, loan agreements or other agreements with the Company which may be required in connection with the performance by the Company of its obligations under such contracts or other agreements after the Closing shall have been obtained. 7.4 Satisfactory Business Review. AAI shall have satisfied itself, after AAI and its representatives have completed the review of the business of the Company contemplated by this Agreement, that none of the information revealed thereby or in the Balance Sheet has resulted in, or in the reasonable opinion of AAI may result in, a material adverse change in the assets, properties, business, operations or condition (financial or otherwise) of the Company. 7.5 Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the transactions contemplated hereby or to seek damages or a discovery order in connection with such transactions, or which has or may have, in the reasonable opinion of AAI , a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Company. 7.6 Certificate of Good Standing. AAI shall have received a certificate of good standing dated at or about the Closing Date to the effect that the Company is in good standing under the laws of its jurisdictions of incorporation. 7.7 Stock Certificates: At the Closing, the Shareholders shall have delivered the certificates representing the DSI Shares, duly endorsed (or with executed stock powers) so as to make AAI the sole owner thereof. 7.8 Other Documents. The Company and the Shareholders shall have delivered such other documents, instruments and certificates, if any, as are required to be delivered pursuant to the provisions of this Agreement or which may be reasonably requested in furtherance of the provisions of this Agreement. SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AND SHAREHOLDERS TO CLOSE The obligation of the Company and the Shareholders to enter into and complete the Closing is subject, at the option of the Company and the Shareholders, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived in writing by the Company. 8.1 Representations and Covenants. The representations and warranties of AAI contained in this Agreement shall be true in all material respects on the Closing Date with the same force and effect as though made on and as of the Closing Date. AAI shall have performed and complied with all covenants and agreements required by the Agreement to be performed or complied with by AAI on or prior to the Closing Date. AAI shall have delivered to the Company and the Shareholders, if requested, a certificate, dated the Closing Date and signed by an executive officer of AAI, to the foregoing effect. 8.2 Governmental Permits and Approvals; Corporate Resolutions. Any and all permits and approvals from any governmental or regulatory body required for the lawful consummation of the Closing shall have been obtained. The Board of Directors of AAI shall have approved the transactions contemplated by this Agreement, and AAI shall have delivered to the Company and the Shareholders, if requested, resolutions by their Board of Directors certified by the Secretary of AAI authorizing the transactions contemplated by this Agreement. 8.3 Third Party Consents. All consents, permits and approvals from parties to any contracts, loan agreements or other agreements with AAI which may be required in connection with the performance by AAI of their obligations under such contracts or other agreements after the Closing shall have been obtained. 8.4 Satisfactory Business Review. The Company and the Shareholders shall have satisfied themselves, after review of the information provided hereby or in connection herewith, or following any discussions with management or representatives of AAI that none of the information revealed thereby has resulted in or in the reasonable opinion of the Company may result in a material adverse change in the assets, properties, business, operations or condition (financial or otherwise) of AAI. 8.5 Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the transactions contemplated hereby or to seek damages or a discovery order in connection with such transactions, or which has or may in the reasonable opinion of the Company, have a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of AAI. 8.6 Stock Certificates. At the Closing, the Shareholders shall receive certificates representing the AAI Shares to be received pursuant hereto and subject to the conditions previously described. 8.7 Other Documents. AAI shall have delivered such other instruments, documents and certificates, if any, as are required to be delivered pursuant to the provisions of this Agreement or which may be reasonably requested in furtherance of the provisions of this Agreement. 8.8 Filing of Form 10-KSB. AAI shall have filed its Annual Report on Form 10-KSB with the Securities and Exchange Commission. SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF AAI Notwithstanding any right of the Company and the Shareholders fully to investigate the affairs of AAI, the former shall have the right to rely fully upon the representations, warranties, covenants and agreements of AAI contained in this Agreement or in any document delivered by AAI or any of its representatives, in connection with the transactions contemplated by this Agreement. All such representations, warranties, covenants and agreements shall survive the execution and delivery hereof and the Closing Date hereunder for twelve (12) months following the Closing. SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS Notwithstanding any right of AAI fully to investigate the affairs of the Company, AAI have the right to rely fully upon the representations, warranties, covenants and agreements of the Company and the Shareholders contained in this Agreement or in any document delivered to AAI by the latter or any of their representatives in connection with the transactions contemplated by this Agreement. All such representations, warranties, covenants and agreements shall survive the execution and delivery hereof and the Closing Date hereunder for twelve (12) months following the Closing. SECTION 11. INDEMNIFICATION 11.1 Obligation of AAI to Indemnify. Subject to the limitations on the survival of representations and warranties contained in Section 9, AAI hereby agrees to indemnify, defend and hold harmless the Company and the Shareholders from and against any losses, liabilities, damages, deficiencies, costs or expenses (including interest, penalties and reasonable attorneys' fees and disbursements) (a "Loss") based upon, arising out of or otherwise due to any inaccuracy in or any breach of any representation, warranty, covenant or agreement of AAI contained in this Agreement or in any document or other writing delivered pursuant to this Agreement. 11.2 Obligation of the Company and the Shareholders to Indemnify. Subject to the limitations on the survival of representations and warranties contained in Section 10, the Company and the Shareholders agree to indemnify, defend and hold harmless AAI from and against any Loss, based upon, arising out of or otherwise due to any inaccuracy in or any breach of any representation, warranty, covenant or agreement made by any of them and contained in this Agreement or in any document or other writing delivered pursuant to this Agreement. SECTION 12. THE CLOSING The Closing shall take place not later than May 21, 2001. At the Closing, the parties shall provide each other with such documents as may be necessary or appropriate in order to consummate the transactions contemplated hereby including evidence of due authorization of the Agreement and the transactions contemplated hereby. SECTION 13. MISCELLANEOUS 13.1 Waivers. The waiver of a breach of this Agreement or the failure of any party hereto to exercise any right under this Agreement shall in no event constitute waiver as to any future breach whether similar or dissimilar in nature or as to the exercise of any further right under this Agreement. 13.2 Amendment. This Agreement may be amended or modified only by an instrument of equal formality signed by the parties or the duly authorized representatives of the respective parties. 13.3 Assignment. This Agreement is not assignable except by operation of law. 13.4 Notices. Until otherwise specified in writing, the mailing addresses of both parties of this Agreement shall be as follows: The Company or Shareholders: DISEASE S.I., INC. 12356 Rockledge Circle Boca Raton, FL 33428 AAI : AUCTIONANYTHING.COM, INC. 35 West Pine Street, Suite 227 Orlando, FL 32801 Any notice or statement given under this Agreement shall be deemed to have been given if sent by registered mail addressed to the other party at the address indicated above or at such other address which shall have been furnished in writing to the addressor. 13.5 Governing Law. This Agreement shall be construed, and the legal relations be the parties determined, in accordance with the laws of the State of Florida, thereby precluding any choice of law rules which may direct the applicable of the laws of any other jurisdiction. 13.6 Publicity. No publicity release or announcement concerning this Agreement or the transactions contemplated hereby shall be issued by either party hereto at any time from the signing hereof without advance approval in writing of the form and substance thereof by the other party except as required to stay in compliance with the AAI's reporting obligations under the Securities Exchange Act of 1934. 13.7 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) and the collateral agreements executed in connection with the consummation of the transactions contemplated herein contain the entire agreement among the parties with respect to the purchase and issuance of the Shares and the AAI Shares and related transactions, and supersede all prior agreements, written or oral, with respect thereto. 13.8 Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 13.9 Severability of Provisions. The invalidity or unenforceability of any term, phrase, clause, paragraph, restriction, covenant, agreement or other provision of this Agreement shall in no way affect the validity or enforcement of any other provision or any part thereof. 13.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed, shall constitute an original copy hereof, but all of which together shall consider but one and the same document. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. AUCTIONANYTHING.COM, INC. By: /s/Martin M. Meads ------------------------------ Name: Martin M. Meads Its: CEO By: /s/Raymond J. Hotalling ------------------------------ Name: Raymond J. Hotalling Its: President DISEASE S.I., INC. By: /s/Wayne Goldstein ------------------------------ Name: Wayne M. Goldstein Its: President SHAREHOLDERS: /s/Wayne Goldstein Dr. Wayne M. Goldstein /s/Brian S. John Brian S. John
Exhibit A EXCHANGE WITH DISEASE S.I., INC. Shares of AAI Shares to Total AAI Name of the Company to be Received Shares to be Shareholders be Exchanged At Closing Received Dr. Wayne M. Goldstein 35,000,000 12,372,087 35,000,000* Byron S. John 25,000,000 8,837,297 25,000,000* - -------------------
*The balance of the 60,000,000 shares not delivered at the Closing, and to be delivered following the increase in AAI's authorized capitalization, will be issued in the same proportions. Exhibit B DEMAND PROMISSORY NOTE $30,000.00 May ___, 2001 FOR VALUE RECEIVED, AUCTIONANYTHING.COM, INC. (a Delaware corporation ("Maker"), promises to pay upon demand to the order of DISEASE S.I., INC., a Florida corporation ("Payee"), the principal sum of THIRTY THOUSAND DOLLARS ($30,000) together with interest thereon at the rate of five percent (5%) per annum commencing with the date hereof. Both principal and interest are payable in lawful money of the United States upon written demand for payment at a location or address designated by Payee in writing. Maker agrees to waive demand, notice of non-payment and protest, and in the event suit shall be brought for the collection hereof, or the same has to be collected upon demand of an attorney, to pay reasonable attorney's fees for making such collection. Any proceeding relating to the enforcement of this Note shall be brought in Circuit Court for Palm Beach County. This Note is to be construed and enforced according to the laws of the State of Florida. In the event of non-payment of this Note following demand and , commencing May 31, 2001, interest on this Note shall be payable at the rate of 1 1/2% per month, but in any event not in excess of the legally permissible rate of interest. IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its duly authorized officer as of the day first above written. AUCTIONANYTHING.COM, INC. By: ---------------------------- Name: ---------------------------- Its: ---------------------------- -----END PRIVACY-ENHANCED MESSAGE-----