Company acquires Beach.org, but it’s more like a lease with option to buy.
Publicly traded Generation Zero Group, Inc. has entered into a purchase agreement for the Beach.org domain name for $95,000. But there’s a catch. The company only has to pay $50 a month until the end of 2011, at which point the balance is due. Here’s the information from the company’s 8k:
On or around June 8, 2010, Generation Zero Group, Inc. (“we,†“us,†and the “Companyâ€) entered into an agreement to acquire the Uniform Resource Locator (“URLâ€) www.beach.org (“Beach.orgâ€), which includes full and unrestricted control over the URL. The purchase price for Beach.org is $95,000, payable by us at any time prior to December 31, 2011.
Beginning on the date of the agreement, we have the right to have the Beach.org URL pointed to wherever we desire; however, the seller will retain ownership and control over the URL until the full purchase price is paid, and will have the right to terminate the agreement and take back full control of the URL if an event of default occurs under the agreement. Additionally, we agreed to pay the seller a license fee of $50 per month (beginning on July 1, 2010) for the use of Beach.org (until such time as the entire purchase price is paid in full) and to pay all costs associated with the operations of Beach.org, and the seller agreed that we would retain 100% of the revenue (if any) generated by Beach.org prior to the consummation of the purchase.
$50 a month is a very low amount compared to the purchase price. That makes this deal seem a bit fishy. Or is that oily?
To its credit, Generation Zero didn’t disclose the price in its press release. It plans to use the domain to report on the BP oil spill.
(Hat tip)
Louise says
Is it a unique business arrangement, where the seller allows the domain to be developed and paid from revenue from the developed domain, within a certain time frame? Neat!
Adam says
The way I read it, the potential buyers will be able to collect all revenue the site produces, (they have said they intend to give away 5% to charity), and pay the current owner of the site only $50 a month to do so — until the end of 2011.
Assuming the profit taking is going to be best for them while the spill is at it’s worst, they have over a year and a half to take advantage of the disaster by profiting from a strong generic domain while only paying $50 a month in overhead.
Simple math… for the next 18 months of disaster profiteering, they will only be liable for $900 in expenses. Then they can default on the agreement with no penalty if beach.org isn’t going to make the grade as a $94,100 travel and tourism domain investment.
Somebody tell me I’m wrong. Please.
Andrew Allemann says
@ Adam – that would appear to be correct.
Steve M says
When is a sale not a sale? Beach.org.
When will the purchase price never be paid? Beach.org again.
So why then would a seller agree to such silly terms?
Only because s/he knows that the exposure may very well result in a sale of at least the 95k (note it’s just under the important 100k price point); and likely to an end user at that.
Sly like a fox this seller may in fact be.
Joe says
They “leased” Beach.org for 50 bucks so they can release a press release pretending their company made a huge purchase.
Then – they paid a stock “expert” $45,000 to e-mail a huge amount of people and say their stock is about to go through the roof.
This is all so they can do a “pump and dump” on their own stock.
Andrew Allemann says
@Joe – let’s be fair. They did have a whopping $47 on the books at the end of March.