Edgar Filing: BRAINWORKS VENTURES INC

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
(AMENDMENT NO. 1)

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934

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Brainworks Ventures, Inc.
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

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BRAINWORKS VENTURES, INC.
101 MARIETTA STREET, SUITE 3450
ATLANTA, GEORGIA 30303

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 8, 2001

To the Stockholders of Brainworks Ventures, Inc.:

Notice is hereby given that the Annual Meeting of Stockholders
(together with any adjournments or postponements thereof, the "Meeting") of
Brainworks Ventures, Inc., a Nevada corporation (the "Company"), will be held at
14999 Taylor Road, Alpharetta, Georgia on Saturday, September 8, 2001 at 5:00
p.m., local time, for the purpose of considering and voting upon the following
matters:

(1) To elect a board of five directors, each to serve until the next annual
meeting of stockholders of the Company; and

(2) To transact such other business as may properly come before the
Meeting.

These items are more fully described in the accompanying Proxy
Statement, which is hereby made a part of this Notice of Annual Meeting of
Stockholders.

The Board of Directors of the Company has fixed the close of business
on July 26, 2001 as the record date for the determination of stockholders
entitled to notice of, and to vote at, the Meeting.

A copy of the Company's Annual Report for the fiscal year ended March
31, 2001, is enclosed. The Annual Report is not a part of the proxy soliciting
material enclosed with this Notice.

By Order of the Board of Directors,

/s/ Marc J. Schwartz
-------------------------------------
Marc J. Schwartz
Secretary
Atlanta, Georgia
August 22, 2001

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ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE-PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST BRING TO THE MEETING A
LETTER FROM THE BROKER, BANK OR OTHER NOMINEE CONFIRMING YOUR BENEFICIAL
OWNERSHIP OF THE SHARES. ADDITIONALLY, IN ORDER TO VOTE AT THE MEETING, YOU MUST
OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
================================================================================

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS OF
BRAINWORKS VENTURES, INC.

SEPTEMBER 8, 2001

INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

This Proxy Statement (the "Proxy Statement") and the accompanying form
of proxy are being furnished to the stockholders of Brainworks Ventures, Inc.
(the "Company") in connection with the solicitation of proxies by the Board of
Directors of the Company (the "Board") from holders of the Company's outstanding
common stock, par value $.01 per share (the "Common Stock"), for use at the
Annual Meeting of Stockholders of the Company (together with any adjournments or
postponements thereof, the "Meeting") to be held at 14999 Taylor Road,
Alpharetta, Georgia on Saturday, September 8, 2001 at 5:00 p.m., local time.
This Proxy Statement, the accompanying form of proxy and the Annual Report to
Stockholders are expected to be mailed to stockholders of the Company on or
about August 24, 2001.

SOLICITATION

The expense of this solicitation will be borne by the Company.
Solicitation will be primarily by use of the mails. Executive officers and other
employees of the Company may solicit proxies, without additional compensation,
personally and by telephone and other means of communication. The Company will
also reimburse brokers and other persons holding Common Stock in their names or
in the names of their nominees for their reasonable expenses in forwarding
proxies and proxy materials to beneficial owners.

VOTING RIGHTS AND OUTSTANDING SHARES

Stockholders of record as of the close of business on July 26, 2001
(the "Record Date") will be entitled to vote at the Meeting. Each share of
outstanding Common Stock is entitled to one vote. As of the Record Date, there
were 2,457,934 shares of Common Stock outstanding and entitled to vote.

The presence at the Meeting, in person or by proxy, of a majority of
the outstanding shares of Common Stock as of the Record Date will constitute a
quorum for transacting business at the Meeting. Abstentions and broker non-votes
are counted towards a quorum. Provided a quorum is present at the Meeting,
directors will be elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the Meeting.

The Company has been advised that certain beneficial owners, directors
and executive officers of the Company, who hold in the aggregate approximately
51% of the outstanding Common Stock, intend to vote their shares in favor of the
nominees and the other proposal, and in accordance with the recommendations of
the Board.

All votes will be tabulated by the inspector of elections appointed for
the Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted for purposes of
determining both the presence or absence of a quorum for the transaction of
business and the total number of votes cast with respect to a particular matter.
Broker non-votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business but will not be counted for
or against the particular proposal on which the broker has expressly not voted.

REVOCABILITY OF PROXIES

The shares of Common Stock represented by proxy will be voted as
instructed if received in time for the Meeting. If no instructions are
indicated, such shares will be voted in favor of (FOR) (i) each nominee for
election as a director and (ii) in the discretion of the proxy holder as to any
other matter that may properly come before the Meeting. Any person signing and
mailing the proxy may, nevertheless, revoke it at any time before it is
exercised by written notice to the Company (Attention: Marc J. Schwartz, Vice
President, Chief Financial Officer, Treasurer and Secretary) at its headquarters
located at 101 Marietta Street, Suite 3450, Atlanta, Georgia, 30303, or by
attending in person and voting at the Meeting. Attendance at the Meeting,
however, will not itself constitute the revocation of a proxy.

PROPOSAL 1 -- ELECTION OF DIRECTORS

The Company's Bylaws, as amended, provide that the Board shall consist
of a minimum of two and a maximum of nine members. Five directors, constituting
the entire Board, are to be elected at the Meeting and, if elected, will serve
until the next Annual Meeting of Stockholders and until their successors have
been elected and qualified.

The nominees of the Board are set forth below under "Nominees for
Election as Directors." All of the current members of the Board have been
nominated to continue to serve as directors of the Company. In the event any
nominee is unable or declines to serve as a director at the time of the Meeting,
the proxies will be voted for any nominee who shall be designated by the present
Board to fill the vacancy. If additional persons are nominated for election as
directors, then the proxy holders intend to vote all proxies received by them
for the nominees listed below unless instructed otherwise. As of the date of
this Proxy Statement, the Company is unaware of a nominee who is unable to serve
as a director or who will decline to serve as a director, if elected.

NOMINEES FOR ELECTION AS DIRECTORS

Set forth below are the names, ages (at July 26, 2001), positions and
offices held and a brief description of the business experience during the past
five years of each person nominated to serve as a director of the Company.

John P. Cayce, age 56, has served as President of the Company since
November 2000. Since February 2001, Mr. Cayce has also served as a director of
the Company. From May 1977 to July 2000, Mr. Cayce was employed by United Parcel
Service, Inc. where he served in various positions in financial management and
most recently as the Managing Director of the Strategic Enterprise Fund.

Donald Ratajczak, age 58, has served as the Chairman of the Board and
Chief Executive Officer of the Company since May 2000. From May 2000 to November
2000, Dr. Ratajczak also served as the Company's President. From July 1973 to
June 2000, he served as a professor and Director of Economic Forecasting Center
at the J. Mack Robinson College of Business Administration at Georgia State
University. Dr. Ratajczak also currently serves on the Board of Directors of the
following organizations: Morgan, Keegan & Co., a broker/dealer company; T.B.C.
Corporation, a tire distribution company; Ruby Tuesday, Inc., a food service
company; and C.I.M. High Yield, a bond fund company.

Kirk K. Reiss, age 43, has served as director of the Company since
February 2001. From June 1995 to the present, Mr. Reiss has served as Senior
Vice President for the META Group, Inc., an information technology consulting
and advising firm.

Marc J. Schwartz, age 37, has served as Vice-President, Chief Financial
Officer, Secretary and Treasurer of the Company since May 2000. Since April
1998, he has served as a registered financial advisor and Vice President of
Investments for Dunwoody Brokerage Services, Inc. From February 1995 to April
1998, he served as a financial consultant with Smith Barney, Inc.

Cole F. Walker, age 35, has served as Chief Operating Officer and
director of the Company since February 2001. Since June 1995, Mr. Walker has
served as President and Chairman of the Board of the Atlanta New Century School,
a private school for grades kindergarten through eighth.

There are no family relationships among any of the executive officers
or directors of the Company. The Company does not have any executive officers
who are not also directors of the Company. Subject to the terms of the
employment agreements described herein under "Certain Relationships and Related
Transactions," executive officers are elected or appointed by the Board and hold
office until their successors are elected or until their death, resignation or
removal.

Directors of the Company must be elected by a plurality of the votes
cast at the election. A nominee will be elected if the votes cast for such
nominee exceed the votes cast against such nominee.

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE NOMINEES FOR
ELECTION AS DIRECTORS.

CERTAIN INFORMATION CONCERNING THE BOARD

The Board is comprised of Donald Ratajczak, Marc J. Schwartz, John P.
Cayce, Cole F. Walker and Kirk K. Reiss. During the fiscal year ended March 31,
2001, the Board held two meetings, and took action by unanimous

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written consent on two occasions. No Board member attended fewer than 75% of the
total number of meetings of the Board which such director was eligible to attend
during the fiscal year ended March 31, 2001.

The Company does not presently have a standing audit, nominating or
compensation committee of the Board, or any committees performing similar
functions.

BENEFICIAL OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of the Record Date by (i)
each person who is currently a director of the Company, (ii) each executive
officer of the Company, (iii) all current directors and executive officers of
the Company as a group, and (iv) each person known by the Company to own more
than 5% of the outstanding Common Stock. Except as otherwise indicated, the
person named in the table below has sole voting and investment power over the
shares indicated.

COMMON STOCK
BENEFICIALLY OWNED(1)
--------------------------
NUMBER PERCENTAGE
NAME OF BENEFICIAL OWNER(2) OF SHARES OF CLASS(3)
--------------------------- ------------ -----------

Marc J. Schwartz++ +........................................................ 335,000(4) 13.1%
Donald Ratajczak++ +........................................................ 261,000(5) 10.1
John P. Cayce++ +........................................................... 228,589(6) 8.9
Cole F. Walker++ +.......................................................... 226,646(7) 9.2
Dean W. Andersen(8)......................................................... 213,242 8.7
Kirk K. Reiss+.............................................................. 173,076 7.0
Robert H. Cawly............................................................. 151,846 6.2
All officers and directors as a group (5 persons)........................... 1,224,311(9) 44.0

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++ Executive Officer of the Company.
+ Director and director nominee of the Company.

(1) Information as to the beneficial ownership of Common Stock has either
been furnished to the Company by or on behalf of the indicated persons
or is taken from reports on file with the Securities and Exchange
Commission ("SEC").

(2) Unless otherwise indicated, the principal business address of each
beneficial owner is 101 Marietta Street, Suite 3450, Atlanta, Georgia
30303.

(3) In accordance with the regulations of the SEC, the percentage
calculations for each individual or group listed are based on 2,457,934
shares of Common Stock issued and outstanding as of July 26, 2001, plus
shares of Common Stock which may be acquired within 60 days of July 26,
2001.

(4) Includes an option to acquire 100,000 shares of Common Stock
exercisable within 60 days of July 26, 2001.

(5) Includes options to acquire 127,500 shares of Common Stock exercisable
within 60 days of July 26, 2001.

(6) Includes an option to acquire 100,000 shares of Common Stock
exercisable within 60 days of July 26, 2001.

(7) Includes 13,538 shares of Common Stock held by TANCS, Inc., of which
Mr. Walker is an officer, director and sole stockholder and over which
Mr. Walker may be deemed to have sole investment and voting power with
respect to such shares.

(8) Mr. Andersen's address is 3530 Piedmont Road (10-F) Atlanta, Georgia
30305.

(9) Includes options to acquire 327,500 shares of Common Stock exercisable
within 60 days of July 26, 2001.

CHANGE IN CONTROL OF THE REGISTRANT

On April 11, 2000, prior to Mr. Schwartz's election as an officer and
director of the Company, the Company entered into a Consulting Agreement (the
"Consulting Agreement") pursuant to which Mr. Schwartz was retained to explore
the possibility of the Company changing its business direction from the
exploration, acquisition and development of natural resource properties to
providing funding and business consulting services to early-stage

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technology companies. Pursuant to the terms of the Consulting Agreement, the
Company paid Mr. Schwartz $120,000 and granted him options to acquire an
aggregate of 300,000 shares of Common Stock. Of the shares subject to these
options: (a) 100,000 shares were immediately exercisable at an exercise price of
$1.125 per share (the "Exercise Price"); (b) 100,000 shares became exercisable
at the Exercise Price when the trading price of the Common Stock reached and
maintained a trading price of $3.00 per share for a period of ten days; and (c)
100,000 shares became exercisable at the Exercise Price when the trading price
of the Common Stock reached and maintained a trading price of $5.00 per share
for a period of five days. All shares subject to the foregoing option are
currently exercisable or have already been exercised. In April 2000, in
anticipation of the change in the Company's business direction and management,
the Board granted to Dr. Ratajczak an option to purchase 150,000 shares of
Common Stock at an exercise price of $3.00 per share.

In April 2000, prior to becoming officers and directors of the Company,
Mr. Schwartz and Dr. Ratajczak, along with a number of other individuals,
acquired shares of Common Stock in private transactions, as reflected on a
Schedule 13D filed with the SEC on April 17, 2000. In these private
transactions, Mr. Schwartz and Dr. Ratajczak acquired a total of 35,000 and
33,500 shares of Common Stock, respectively.

In May 2000, the Company determined that it would change its business
direction as previously considered, and, as a result, the Company effected a
change in management in order to acquire the necessary management experience and
expertise to implement the Company's proposed new business endeavors. The Board,
then comprised of James Fouts, Elizabeth White and Dan Ligino, resigned, and Mr.
Schwartz and Dr. Ratajczak were elected as the new members of the Board. In
addition, Mr. Fouts resigned as the Company's President, Chief Executive Officer
and Chairman of the Board, and Elizabeth Fouts resigned as the Company's
Secretary and Treasurer. Dr. Ratajczak was appointed as the Company's President,
Chief Executive Officer and Chairman of the Board, and Mr. Schwartz was
appointed as the Company's Vice President, Secretary and Treasurer.

In May 2000, Dunwoody Brokerage Services, Inc. ("Dunwoody"), a
broker-dealer firm with which Mr. Schwartz is affiliated, agreed to assist Mr.
Fouts and members of his family, in selling, in private transactions, shares of
Common Stock held by them in exchange for which the sellers agreed to pay a fee
of $0.07 per share to Dunwoody. At such time, James Fouts and his family, Alan
Fouts, Donovan Fouts, Ms. Fouts, and Elizabeth White, were majority stockholders
of the Company. Dunwoody has earned a fee of approximately $24,500 in connection
with the sale of a total of 350,000 shares of Common Stock held by such
individuals through this arrangement. This stock was purchased from these
individuals subject to existing restrictions on the Common Stock.

The percentage of voting securities of the Company now beneficially
held by Mr. Schwartz and Dr. Ratajczak is stated in the table above.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

COMPENSATION OF DIRECTORS

For the fiscal year ended March 31, 2001, the Company compensated
directors for their service on the Board with options to purchase Common Stock
granted pursuant to the Company's 2000 Stock Option Plan. For the fiscal years
ended March 31, 1999 and 2000, directors of the Company were paid $500 per year
for Board membership and $100 for each meeting of the Board attended, plus
reimbursement for reasonable expenses of attending such meetings.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth the cash and non-cash compensation
awarded or paid by the Company for services rendered during each of the years in
the three year period ended March 31, 2001, to its Chief Executive Officer and
to its four most highly compensated executive officers other than the Chief
Executive Officer whose annual compensation exceeded $100,000 (the "Named
Executive Officers").

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SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
AWARDS
YEAR SECURITIES
ENDED UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION MARCH 31, SALARY BONUS OPTIONS(1) COMPENSATION
--------------------------- --------- ------ -------- ------------ ------------

Donald Ratajczak(2)................. 2001 ___ $ ___ 260,000(3) $ ___
Chief Executive Officer 2000 ___ ___ ___ ___
1999 ___ ___ ___ ___

Marc J. Schwartz(4)................. 2001 ___ 350,000 410,000(5) 120,000(6)
Chief Financial Officer, Vice 2000 ___ ___ ___ ___
President, Secretary and 1999 ___ ___ ___ ___
Treasurer

James F. Fouts(7)................... 2000 ___ ___ ___ 15,000(8)
President and Chief Executive 1999 ___ ___ ___ 9,000(8)
Officer

--------------------------

(1) Unless otherwise noted, represents options granted under the Company's
2000 Stock Option Plan.

(2) Dr. Ratajczak began serving as Chief Executive Officer of the Company
in May 2000. Dr. Ratajczak also served as President of the Company from
May 2000 to November 2000.

(3) Includes options to purchase 150,000 shares of Common Stock granted to
Dr. Ratajczak prior to his election as director and officer of the
Company. See "Beneficial Ownership of Management and Certain Beneficial
Owners - Change in Control of the Registrant." Such option was not
granted pursuant to the Company's 2000 Stock Option Plan.

(4) Mr. Schwartz joined the Company as an executive officer in May 2000.

(5) Includes options to purchase 300,000 shares of Common Stock granted to
Mr. Schwartz pursuant to the terms of the Consulting Agreement. See
"Beneficial Ownership of Management and Certain Beneficial Owners -
Change of Control of the Registrant." Such options were not granted
pursuant to the Company's 2000 Stock Option Plan.

(6) Represents compensation paid to Mr. Schwartz pursuant to the terms of
the Consulting Agreement. See "Beneficial Ownership of Management and
Certain Beneficial Owners - Change of Control of the Registrant."

(7) Mr. Fouts resigned as the President and Chief Executive Officer of the
Company in May 2000.

(8) Represents amounts paid to Fremont Corporation, a corporation with
which Mr. Fouts is affiliated, for office and clerical services
provided to the Company.

OPTIONS/SAR GRANTS TABLE
The following table sets forth the individual grants of stock options
made during the fiscal year ended March 31, 2001, to each of the Named Executive
Officers.

INDIVIDUAL GRANTS
----------------------------------------------------------------------------
NUMBER OF PERCENTAGE
SECURITIES OF TOTAL OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE PRICE EXPIRATION
NAME GRANTED (1) IN FISCAL YEAR (2) PER SHARE (3) DATE
---- ----------- ------------------ ------------- ----------

Donald Ratajczak............... 110,000(4) 7.7% $5.250 12/29/05
150,000(5) 10.6 3.000 04/17/05
Marc J. Schwartz............... 110,000(6) 7.7 5.250 12/29/05
100,000(7) 7.0 1.125 04/11/05
100,000(7) 7.0 1.125 05/02/05
100,000(7) 7.0 1.125 05/10/05

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(1) Unless otherwise noted, options set forth in this table were granted
under the Company's 2000 Stock Option Plan and are currently
exercisable.

(2) Based on options for a total of 1,420,000 shares granted to all
directors, officers and employees.

(3) The exercise price is equal to the fair market value on the date of
grant.

(4) Option vests and first becomes exercisable as to 27,500 shares of
Common Stock on date of grant, 55,000 of such shares on December 29,
2001, and 27,500 of such shares on December 29, 2002.

(5) Option vests and first becomes exercisable as to 50,000 shares of
Common Stock on October 18, 2001. Option was granted to Dr. Ratajczak
prior to his election as a director and executive officer of the
Company. See "Beneficial Ownership of Management and Certain Beneficial
Owners - Change of Control of the Registrant." Such option was not
granted under the Company's 2000 Stock Option Plan.

(6) Option vests and first becomes exercisable as to 55,000 shares of
Common Stock on December 29, 2001, and as to 55,000 of such shares on
December 29, 2002.

(7) Granted to Mr. Schwartz pursuant to the terms of the Consulting
Agreement entered into prior to his election as director and executive
officer of the Company. See "Beneficial Ownership of Management and
Certain Beneficial Owners - Change of Control of the Registrant." Such
options were not granted under the Company's 2000 Stock Option Plan.

AGGREGATED OPTION EXERCISES IN THE YEAR ENDED
MARCH 31, 2001 AND YEAR-END OPTION VALUES

The following table sets forth information concerning the value of
options exercised by the Named Executive Officers during the fiscal year ended
March 31, 2001, and the value at March 31, 2001, of unexercised options held by
such officer.

VALUE OF
NUMBER OF NUMBER OF SECURITIES UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT 3/31/01 OPTIONS AT
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE 3/31/01(1)
---- ----------- -------------- ------------------------- ------------

Donald Ratajczak............. -- -- 127,500/132,500 $187,500

Marc J. Schwartz.............. 200,000 $625,000 100,000/110,000 312,500

--------------

(1) Value of the Company's unexercised, in-the-money options based on the
average of the high and low price of the Common Stock as of March 30,
2001, which was $4.25.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to the Employment Agreement between the Company and Mr. Cayce
dated November 22, 2000 (the "Employment Agreement"), Mr. Cayce shall serve as
the Company's President in exchange for a base salary at an annual rate of
$60,000 per year and an option to purchase 250,000 shares of Common Stock, of
which 40% of the shares underlying such option is currently exercisable, 40% of
such shares vests and first becomes exercisable on November 22, 2001 and the
remaining 20% of such shares vests and first becomes exercisable on November 22,
2002. The Employment Agreement has an initial term of three years and shall
automatically renew for an additional three-year period unless the Company or
Mr. Cayce provides thirty (30) days written notice electing not to extend the
Employment Agreement.

On February 14, 2001, the Company acquired all the outstanding common
stock (the "EBL Common Stock") of eBusinessLabs, Inc., a Georgia corporation now
known as Brainworks Ventures Labs, Inc. ("EBL"), pursuant to an Agreement and
Plan of Merger (the "EBL Merger Agreement") dated as of December 29, 2000, by
and among the Company, a wholly-owned subsidiary of the Company, EBL and certain
stockholders of EBL, whereby EBL became a wholly-owned subsidiary of the Company
(the "EBL Merger"). Pursuant to the EBL Merger Agreement, all the issued and
outstanding shares of EBL Common Stock were converted into the right to receive
approximately 800,000 shares of Common Stock. Mr. Cayce, President of the
Company, owned

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approximately 3.4% of the issued and outstanding shares of EBL Common Stock
immediately prior to the EBL Merger and, at the effective time of the EBL
Merger, such shares were converted into the right to receive 27,446 shares of
Common Stock. Mr. Andersen, a beneficial owner of greater than 5% of the
outstanding Common Stock, owned approximately 18.5% of the outstanding shares of
EBL Common Stock immediately prior to the EBL Merger and, at the effective time
of the EBL Merger, such shares were converted into the right to receive 147,692
shares of Common Stock.

On May 8, 2001, the Company acquired all the outstanding common stock
(the "EVP Common Stock") of Executive Venture Partners, LTD., a Massachusetts
corporation ("EVP"), pursuant to an Agreement and Plan of Merger (the "EVP
Merger Agreement") dated as of May 8, 2001, by and among the Company, a
wholly-owned subsidiary of the Company, EVP and all the stockholders of EVP,
whereby EVP became a wholly-owned subsidiary of the Company (the "EVP Merger").
Pursuant to the EVP Merger Agreement, all the outstanding shares of EVP Common
Stock were converted into the right to receive 500,000 shares of Common Stock.

The holders of approximately 78% of the outstanding EVP Common Stock
immediately prior to the EVP Merger are officers or directors of the Company or
are beneficial owners of greater than 5% of the outstanding Common Stock.
Specifically, Dr. Ratajczak and Messrs. Cayce and Reiss, who are each directors
and director nominees of the Company and the Chief Executive Officer, President
and a senior advisor to the Company, respectively, owned approximately 20%, 20%
and 2%, respectively, of the outstanding EVP Common Stock immediately prior to
the EVP Merger. At the effective time of the EVP Merger, Dr. Ratajczak and
Messrs. Cayce and Reiss became entitled to receive 100,000, 100,000 and 10,000
shares of Common Stock, respectively. Mr. Andersen, a beneficial owner of
greater than 5% of the Company's outstanding Common Stock, owned approximately
8% of the outstanding EVP Common Stock immediately prior to the EVP Merger and,
at the effective time of the EVP Merger, Mr. Andersen became entitled to receive
40,000 shares of Common Stock.

See also the information under the caption "Change in Control of the
Registrant" above.

INDEPENDENT AUDITORS

In early July 2000, the Company's accountant, Andersen, Andersen &
Strong, L.L.C. ("AAS"), notified the Company that it would be unable to audit
the Company's financial statements for the fiscal year ended March 31, 2000. AAS
served as the Company's auditor for the fiscal years ended March 31, 1999 and
1998. AAS indicated that they are unable to complete the audit for the year
ended March 31, 2000 because one of the two partners of the firm, who would be
the concurring partner, took a leave of absence from the firm for health reasons
and would not return for a lengthy period.

During the years ended March 31, 1999 and 1998, and up to and including
the present, there have been no disagreements between the Company and AAS on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures. Furthermore, AAS's report on the financial
statements for the years ended March 31, 1999 and 1998, did not contain an
adverse opinion or disclaimer of opinion, nor were such reports qualified or
modified as to uncertainty, audit scope, or accounting principles. AAS's report
on the financial statements of the Company for the fiscal years ended March 31,
1999 and 1998, indicated that the Company was able to continue as a going
concern.

In July 2000, the Company engaged Richard A. Eisner & Company, LLP
("Eisner") as the Company's auditor for the fiscal year ended March 31, 2000.
Prior to the engagement of Eisner, neither the Company nor anyone on its behalf,
has consulted with Eisner on any financial issue. Eisner has examined the
Company's financial statements since July 2000, and has no relationship with the
Company other than that rising from its appointment as independent auditor.

For the fiscal year ended March 31, 2001, Eisner served as the
Company's independent auditors. The Company has not yet engaged independent
auditors for the Company for the fiscal year ending March 31, 2002.
Representatives of Eisner are not expected to be present at the Meeting.

AUDIT FEES

For the year ended March 31, 2001, Eisner billed the Company an
aggregate of approximately $64,000 for professional services rendered for the
audit of the Company's financial statements for such period and the reviews of
the financial statements included in the Company's Quarterly Reports on Form
10-QSB during such period.

7
10

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

Eisner rendered no services for financial information systems design
and implementation, as described in Rule 2-01(c)(4)(ii) of Regulation S-X
promulgated by the SEC under the Exchange Act, and accordingly billed no fees
for such services.

ALL OTHER FEES

For the fiscal year-end March 31, 2001, Eisner billed approximately
$71,000 to the Company for services other than those described above. These fees
primarily relate to services provided in connection with the EBL Merger.

COMPATIBILITY OF AUDIT FEES

The Board has considered the provision of services provided by Eisner
described in "All Other Fees" above and the fees paid to Eisner for such
services, and believes that the provision of such services and such fees are
compatible with maintaining the independence of Eisner.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and persons who own
beneficially more than 10% of a registered class of the Company's equity
securities to file with the SEC initial reports of ownership and reports of
changes in ownership of such securities of the Company. Directors, executive
officers and greater than 10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) reports they file.

To the Company's knowledge, the Section 16(a) filing requirements
applicable to its directors, executive officers and greater than 10% beneficial
owners were complied with during the fiscal year ended March 31, 2001, except
that Mr. Reiss did not report that he had been granted on option in March 2001
to purchase 70,000 shares of Common Stock.

ANNUAL REPORT

The Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2001, as filed with the SEC, exclusive of documents filed as exhibits
or incorporated by reference (the "2001 Annual Report on Form 10-KSB"), is
enclosed with this Proxy Statement. The 2001 Annual Report on Form 10-KSB is not
a part of the proxy soliciting material. Additional copies of the 2001 Annual
Report on Form 10-KSB are available to stockholders without charge upon written
request to Brainworks Ventures, Inc., 101 Marietta Street, Suite 3450, Atlanta,
Georgia 30303.

OTHER MATTERS

The Board does not know of any other matters that may come before the
Meeting. If any other matters are properly presented to the Meeting, it is the
intention of the persons named in the accompanying proxy to vote, or otherwise
to act, in accordance with their best judgment on such matters.

8
11

STOCKHOLDER PROPOSALS

Proposals of stockholders intended to be presented at the Company's
Meeting of Stockholders for the fiscal year ending March 31, 2002, must be
received by the Company no later than April 23, 2002, in order to be included in
the proxy statement and proxy relating to that annual meeting.

Whether or not you plan to attend, you are urged to complete, sign and
return the enclosed proxy in the accompanying envelope. A prompt response will
greatly facilitate arrangements for the Meeting, and your cooperation will be
appreciated. Stockholders who attend the Meeting may vote their shares
personally even though they have sent in their proxies.

By Order of the Board of Directors,

/s/ Marc J. Schwartz
----------------------------------
Marc J. Schwartz
Secretary
Atlanta, Georgia
August 22, 2001

9
12

[PROXY]

BRAINWORKS VENTURES, INC.
101 MARIETTA STREET, SUITE 3450
ATLANTA, GEORGIA 30303

PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 8, 2001

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF BRAINWORKS VENTURES, INC.

The undersigned holder of shares of Common Stock of BRAINWORKS
VENTURES, INC., a Nevada corporation, (the "Company"), hereby appoints Marc J.
Schwartz and Donald Ratajczak, and each of them, with full power of
substitution, the proxies and attorneys of the undersigned, to vote as specified
hereon at the Annual Meeting of Stockholders (the "Annual Meeting") of the
Company to be held at 14999 Taylor Road, Alpharetta, Georgia 30004 on September
8, 2001 at 5:00 p.m., local time, and at any adjournments or postponements
thereof, with all powers (other than the power to revoke the proxy or vote the
proxy in a manner not authorized by the executed form of proxy on the reverse
side hereof) that the undersigned would have if personally present at the Annual
Meeting, to act in their discretion upon any other matter or matters that may
properly be brought before the Annual Meeting and to appear and vote all the
shares of Common Stock of the Company that the undersigned may be entitled to
vote. The undersigned hereby acknowledges receipt of the accompanying Proxy
Statement and Annual Report to Stockholders, and hereby revokes any proxy or
proxies heretofore given by the undersigned relating to the Annual Meeting.

This proxy may be revoked at any time prior to the voting thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH PROPOSAL.

(Continued and to be signed on the other side)

The Board of Directors recommends a vote FOR the following proposals:

1. To elect the five nominees listed below to the Board of Directors of
the Company.

___FOR all nominees (except as marked below) ___WITHHOLD authority to
vote for all nominees

NOMINEES: John P. Cayce
Donald Ratajczak
Kirk K. Reiss
Marc J. Schwartz
Cole F. Walker

INSTRUCTIONS: To withhold authority to vote for any nominee, enter
the name of such nominee in the space provided below:

2. To transact such other business as may properly come before the
meeting.

___FOR ___AGAINST ___ABSTAIN

UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED AS IF MARKED FOR THE
PROPOSALS ABOVE.

Signature
-------------------------------

Signature if
jointly held
-------------------------------

Dated: , 2001
-------------------------

PLEASE DATE AND SIGN AS NAME APPEARS HEREON.
WHEN SIGNING AS EXECUTOR, ADMINISTRATOR,
TRUSTEE, GUARDIAN OR ATTORNEY, PLEASE GIVE
FULL TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED CORPORATE OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME
BY AUTHORIZED PERSON. JOINT OWNERS SHOULD
EACH SIGN.