Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospecus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
Form SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------
InvestNet, Inc.
---------------
(Name of small business issuer in its charter)
Nevada 1041 87-0650263
------ ---- ----------
(State of jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
Ruairidh Campbell Copy to: Richard Surber, Esq.
938 Howe Street, Suite 713 268 West 400 South, Suite 300
Vancouver, B.C., Canada V6Z 1N9 Salt Lake City, Utah 84101
(604) 331-1803 (801) 575-8073
--------------------------------------------------------------------------------
(Address, including zip code and telephone number of principal
executive offices and principal place of business and name,
address and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable from
time to time after this registration statement becomes effective.
If this Form is filed to register additional securities for an Articles of
Incorporation pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]_________________________.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________________________.
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________________________.
If the delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [ ] ________________________.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of each class of Amount of Dollar Proposed Proposed
securities to be securities to be Amount to be maximum maximum
registered registered registered offering price aggregate Amount of
per share offering price registration fee
<S> <C> <C> <C> <C> <C>
Common Stock 10,000,000 shares $100,000 $0.01 $100,000 $35.00
========================= ==================== ================= ================== ================== ==================
</TABLE>
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Preliminary Prospectus dated August 3, 2000
INVESTNET, INC.
100,000 shares of Common Stock
$0.01 per share
The Offering:
Per Share Total
--------- -----
Public Price $ 0.01 $ 100,000
Underwriting(1) $ 0.00 $ 0.00
Discounts/Commissions(2) $ 0.00 $ 0.00
Proceeds to InvestNet(3) $ 0.01 $ 100,000
-------------------------
(1)InvestNet has decided not to use an underwriter for the distribution.
See "Plan of Distribution."
(2)The numbers shown do not include a legal, accounting, printing, escrow
fees, and related costs incurred in connection with the Offering, which will be
payable by InvestNet. These expected expenses are estimated to total $11,000 .
(3) The proceeds realized from this Offering will not be held in an escrow
account.
InvestNet, Inc. is a Nevada Corporation which intends to engage in the business
of mineral exploration and development. We are offering up to a total of
10,000,000 shares of common stock (the "Shares"). This is a best efforts, no
minimum basis Offering. There is no minimum number of shares which we must sell
in this Offering and we will commence the Offering on the effective date of this
Prospectus. This Offering is to be made on a continuing basis.
Proposed Trading Symbol:
OTC Bulletin Board ("OTC:BB") - "INNT"
Prior to this Offering, there has been no public market for our securities and
no assurance can be given that a more active market will develop following the
sale of Shares being offered in this Prospectus, or that any shares purchased in
this Offering can be sold at or near the offering price, or at all.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK AND THE SECURITIES
OFFERED HEREBY ARE HIGHLY SPECULATIVE. SEE "RISK FACTORS" BEGINNING ON PAGE 3 TO
READ ABOUT RISKS. YOU SHOULD CAREFULLY CONSIDER THESE RISKS BEFORE PURCHASING
OUR SHARES OF COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. WE MAY NOT SELL THESE SECURITIES NOR MAY
OFFERS TO BUY BE ACCEPTED UNTIL THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
THESE SECURITIES. THERE CAN NOT BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
INVESTNET, INC.
Offering of 10,000,000 Shares of Common Stock
Prospectus
August 3, 2000
TABLE OF CONTENTS
Page
Summary .......................................................................2
Summary of Selected Financial Information .....................................3
Risk Factors ..................................................................3
Use of Proceeds ..............................................................11
Determination of Offering Price ..............................................12
Selling Security Holders .....................................................13
Plan of Distribution .........................................................13
Legal Matters & Proceedings ..................................................13
Directors, Executive Officers, Promoters &
Control Persons .........................................................13
Security Ownership of Certain Beneficial
Owners and Managers .....................................................14
Description of Securities ....................................................15
Interest of Named Experts and Counsel ........................................15
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities ...............................16
Description of Business ......................................................16
Description of Property ......................................................22
Management's Discussion and Analysis of
Financial Condition and Results of Operations .........................23
Certain Relationships and Related Transactions ...............................25
Market of Common Equity and Related
Stockholder Matters .....................................................25
Executive Compensation .......................................................25
Changes in and Disagreements with Accounts
or Accounting and Financial Disclosure ..................................26
Financial Statements ........................................................F-1
InvestNet, Inc. intends to become a reporting company and will file all reports
and other information as required under the Securities Exchange Act of 1934 with
the Securities and Exchange Commission (the "Commission"). The public may read
and copy, at certain prescribed rates, such material at the Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20439. The Commission maintains
a website which you can access at http:www.sec.gov that contains reports, proxy,
other information statements and other information regarding issuers that file
electronically. We plan to apply for a quote of our common stock on the OTC
Bulletin Board ("OTC:BB"). Should we be successful, our reports and other
information will further be available for inspection at the OTC Bulletin Board
website address.
We do not anticipate that future annual reports will be voluntarily delivered to
our security holders; however, we will provide at no cost to each security
holder copies of our annual report which will include audited financial
statements. Also, we will provide, at no cost to each person who has received a
Prospectus, a copy of any information that is incorporated herein by reference.
To request such information, call (604) 331-1803 or write to:
Ruairidh Campbell
InvestNet, Inc.
938 Howe Street, Suite 713
Vancouver, British Columbia
V6Z 1N9 Canada
1
<PAGE>
First page of the Prospectus
SUMMARY
The following summary highlights certain information found in more detail
elsewhere in this Prospectus. As such, before you decide to buy our common
stock, in addition to the following summary, you are urged to read the entire
Prospectus carefully, especially, the risks of investing in our common stock as
discussed under "Risk Factors." (See "Risk Factors").
INVESTNET, INC.
Our Business
InvestNet, Inc. is a corporation formed under the laws of the State of Nevada on
March 16, 2000. Our executive offices are located at 938 Howe Street, Suite 713,
Vancouver, British Columbia, Canada V6Z 1N9 and our telephone number is (604)
331-1803. Our registered statutory office is located at 920 Sierra Vista Drive
in Las Vegas, Nevada 89109.
We have acquired an option to explore, identify and potentially develop a gold,
silver and other precious metals property located in the vicinity of the city of
Greenwood, British Columbia known as the Bow Mines property. The Bow Mines
property and surrounding areas have a history of producing precious metals.
Based upon information available from prior exploration of the area, we believe
that the possibility of identifying and developing precious metal deposits on
the Bow Mines property may be economically feasible relative to the terms of our
Option Agreement and current world prices for gold and other precious metals.
See "Description of Business" for a more detailed description of our business.
THE OFFERING
Securities Offered.
10,000,000 Shares. (See "Description of Securities" beginning on
page 16).
Shares of Common Stock Outstanding.
Before Offering.......................................... 500,000
After Offering ....................................... 10,500,000
Use of Proceeds by InvestNet.
We intend to use the net proceeds from this Offering to pay for
the Offering expenses, for organizational purposes and for the
preliminary exploration necessary to identify gold, silver and
other precious metals on the Bow Mines property for possible
recovery. (See "Use of Proceeds" beginning on page 11,
"Description of Business" beginning on page 16 and "Description
of Property" beginning on page 22).
Risk Factors
The securities offered hereby are speculative and involve a high
degree of risk and should not be purchased by investors who
cannot afford the complete loss of their entire investment. (See
"Risk Factors" beginning on page 3).
Trading Symbols of Securities
Proposed OTC:BB Symbol for Common Stock .....................INNT
2
<PAGE>
SUMMARY OF SELECTED FINANCIAL DATA
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
June 12, 2000 (Date of
Inception) to
June 30, 2000
----------------------
Revenue
<S> <C>
Net Sales $ 0
Cost of Sales 0
Gross Profit 0
------------------------------
Selling, General and Administrative Expense 2,046
Operating Profit (Loss) (2,046)
------------------------------
Other Income (Expense) 0
Net Profit (Loss) $ (2,046)
==============================
BALANCE SHEET DATA:
June 30, 2000
-------------
Cash and Cash Equivalents $ 2,954
Working (Deficit) 2,954
Total Assets 32,954
Total Liabilities 30,000
Shareholder Equity $ 2,954
Loss Per Common Share (0)
------------------------------
Weighted average number of common shares outstanding 500,000
==============================
</TABLE>
RISK FACTORS
You should carefully consider the possibility that your entire investment may be
lost, as such you are encouraged to evaluate the following risk factors, which
identify some of the potential and substantial risk factors which could be
involved if you decide to purchase the Shares in this Offering. Also, you should
carefully consider other information contained in this Prospectus before
purchasing the Shares. Our common stock involves a high degree of risk. Any of
the following risks could adversely affect our business, financial condition and
results of operations and could result in a complete loss of your investment.
3
<PAGE>
You should not rely on forward-looking statements in this Prospectus because
they are inherently uncertain. This Prospectus contains forward-looking
statements that involve risks and uncertainties. We use words such as
"anticipates", "believes", "plans", "expects", "future", "intends" and similar
expressions to identify these forward-looking statements. Prospective investors
should not place undue reliance on forward-looking statements, which apply only
as of the date of this Prospectus. Our actual results could differ materially
from those anticipated in these forward-looking statements for many reasons,
including the risks faced by InvestNet described in "Risk Factors" and elsewhere
in this Prospectus.
Risks Related to InvestNet's Business
InvestNet Has Incurred Losses Since Its Inception on June 12, 2000 and Expects
Losses to Continue For the Foreseeable Future
We are in the very early stages of development and could fail before
implementing our business plan. InvestNet is a "start up" venture that will
incur net losses for the foreseeable future. We have only recently acquired our
principal asset, which is an option to explore potential mining property. This
makes our business difficult to evaluate because of our limited operating
history and expectation of future losses. There is no assurance that we will
operate profitably or provide a return on investment in the future.
We Have a Limited Operating History.
We were incorporated in March, 2000 and have not yet commenced our proposed
business operations or realized any revenues. We have only a limited operating
history upon which an evaluation of our future prospects can be made. Such
prospects must be considered in light of the substantial risks, expenses and
difficulties encountered by new entrants into the competitive mining industry.
The mining business is, by nature, highly speculative. Our ability to achieve
and maintain profitability and positive cash flow is highly dependent upon a
number of factors including:
o The uncertain profitability from potential mining activity on the Bow
Mines property;
o Our ability to locate profitable mineral properties in the future;
o Our ability to generate revenues;
o Our ability to control exploration and development costs.
We expect to incur operating losses in future periods as we incur significant
expenses associated with exploration and development of our mineral property. We
cannot guarantee that we will be successful in realizing revenue or achieving or
sustaining positive cash flow in the future and any such failure could have a
material adverse effect on our business, financial condition and results of
operations. (See "Management's Discussion and Analysis of Financial Condition
and Results of Operation" and "Business").
Lack of Revenue and Need for Additional Capital
To date, we have not yet earned any revenue from operations, and accordingly
have no constant and continual flow of revenues. While our need for additional
capital can not now be precisely ascertained due to the indefiniteness of the
ultimate size and scope of mineral exploration and development activity,
management believes that we will need funds in the approximate amount of
$100,000 over the next twelve months, which amount exceeds our current financial
position.
4
<PAGE>
(See "Management's Discussion and Analysis of Financial Condition and Results of
Operation"). Further, approximately $300,000 in additional funding is expected
to be required within 24 months of this Offering in order to satisfy the
successive option payments and the initial exploration expenditures required
under the Option Agreement. (See "Description of Business"). Management can
offer no assurance that this amount can be procured within the required time
frame. We intend to fund our operations through the middle of fiscal year 2001
from the proceeds of this Offering and possibly to realize additional funding
through another placement of equity securities or joint venture arrangements
(including project financing). Additionally, we are looking for sources of
additional capital, however, there can be no assurance that such sources can be
found or that, if found, the terms of such capital will be commercially
acceptable. Due to this need for additional capital for our business plan to
succeed, the lack of consistent revenues or the inability to obtain the
necessary capital or both could prove to be detrimental factors in the
development of our business.
Lack of Mineral Extraction Experience
Mr. Campbell has had only limited direct experience in the management or
operation of any business engaged in the mineral exploration or extraction
industry. This lack of direct experience may make us more vulnerable than others
to certain risks, and it may also cause us to be more vulnerable to business
risks associated with errors in judgment that could have been prevented by more
experienced management. Mr. Campbell's lack of previous direct experience in the
mineral exploration and extraction industry could have a material adverse effect
on our future operations and prospects. For more information pertaining to
management's background. (See "Directors, Executive Officers, Promoters and
Control Persons").
Industry Conditions, Economic Factors
In general, mineral exploration and extraction (particularly for gold) is highly
speculative in nature, frequently is nonproductive, and involves many risks,
including, without limitation, unforeseen geological formations, cave-ins,
environmental concerns and personal injury. Such risks can be considerable and
may add unexpected expenditures or delays to our plans. We are in the very early
exploration stage and are dependent on the proceeds to be realized from the sale
of Shares in this Offering for funds necessary to carry out our planned
exploration and development program. We cannot guarantee that our exploration
efforts will be successful, that any production will be obtained, or that
production, if obtained, will be profitable. Moreover, an extended period of
time may be needed to develop the Bow Mines property.
Because the market prices of any minerals produced are subject to fluctuation,
the economic feasibility of production may change during this period of time of
development. We do not claim any known ore reserves are on the Bow Mines
property.
While we believe that the Bow Mines property could contain minerals, further
exploration and mineral assessments may indicate that our claims are not
sufficiently mineralized and may later be abandoned or determined to be
unfeasible because of such insufficient mineralization.
An additional factor that will have an impact, is our use of the evaluation work
of professional geologists, geophysicists, and engineers for estimates in
determining whether to commence or continue development work. These estimates
generally rely on scientific estimates and economic assumptions, which in some
instances may not be correct, and could result in the expenditure of substantial
amounts of money on a property before it can be determined whether or not the
property contains economically recoverable mineralization. We are not able to
5
<PAGE>
determine at present whether or not, or the extent to which, such risks may
adversely affect its strategy and business plans. There can be no assurance that
our mineral exploration and development activities will be successful or
profitable.
Lack of Proven or Probable Mineral Reserves
The economic viability of a mineral property cannot be determined until
extensive exploration and development has been conducted and a comprehensive
feasibility study performed. Although work by prior companies has indicated that
precious minerals exist on the Bow Mines property, we cannot confirm from that
prior exploration the extent, if any, of existing precious metal deposits.
Further, we have not completed any geological testing that would establish that
proven or probable mineral reserves exist on the Bow Mines property.
Consequently, we have been unable to ascertain whether adequate mineral reserves
sufficient for profitable operations exist. Notwithstanding the preceding,
management believes that indications evidenced by prior work on the property
attests to the existence of sufficient mineralization to warrant continued
development of the Bow Mines property. However, there can be no assurance that
proven or probable ore reserves will ultimately be identified for further
development.
Limited Number of Mineral Properties
We are to be engaged in the exploration and development of precious metals and
currently have rights, and for the foreseeable future will have rights, to
explore and develop only one mineral property. At the present, our success
depends entirely upon our ability to identify and extract minerals from this one
property on a profitable basis. This lack of diversification into other
industries or mineral properties may make the results of our operations more
volatile than they would be if we operated in more than one industry, or owned
or controlled additional mineral properties. (See "Description of Business").
No Obligated Purchaser
We have not entered into any agreements with any purchasers for any potential
production. While management believes that, due to the very nature of the market
for precious metals, we will not have significant trouble finding purchasers of
the most important portion of our production, the failure to have an obligated
purchaser may make our business riskier than if we were to have a substantial,
credit-worthy purchaser obligated to purchase all or a substantial portion of
our potential production.
Retention and Attraction of Key Personnel
Our success will depend, in a large part, on our ability to retain and attract
highly qualified personnel with experience in the exploration, development and
production of precious metals. Our success in retaining present staff and in
attracting additional qualified personnel will depend on many factors, including
our ability to provide them with competitive compensation arrangements, equity
participation and other benefits. Also, the process of acquiring employees with
the combination of skills and attributes required to carry out our business plan
is very competitive and often very time consuming. Thus, we can not be certain
that we will be able to identify and/or hire qualified personnel as and when
they are needed for our operations. Further, these same obstacles will impact
our success in retaining or attracting professional individuals to fill key
management positions.
6
<PAGE>
Reliance Upon Directors and Officers and Limited Management Resources
We are wholly dependent, at the present, upon the personal efforts and abilities
of our Officers and Directors who exercise control over the day-to-day affairs
of InvestNet. In particular, we are substantially dependent upon the efforts and
skills of Mr. Ruairidh Campbell, a Director and the President of InvestNet, and
Dr. Stewart Jackson, a Director of InvestNet. We do not have employment
agreements or non compete agreements with either Mr. Campbell or Dr. Jackson,
and as a result there is no assurance that either will continue to manage our
affairs in the future. The loss of the services of either Mr. Campbell or Dr.
Jackson, or the inability of either of them to devote sufficient attention to
the operations of InvestNet, would have a materially adverse effect on our
operations. We do not maintain "key person" life insurance on either of Mr.
Campbell or Dr. Jackson. In addition, there can be no assurance that the current
level of management is sufficient to perform all responsibilities necessary or
beneficial for management to perform, or that we would be able to hire
additional, qualified management personnel to perform such responsibilities in
view of a tight employment market and financial constraints.
Regulatory Concerns
InvestNet's exploration and development operations are subject to substantial
government regulation, including federal, provincial and local laws concerning
mine safety, land use and environmental protection. We must comply with local,
provincial and federal requirements regarding exploration operations, public
safety, employee health and safety, use of explosives, air quality, water
pollution, noxious odor, noise and dust controls, reclamation, solid waste,
hazardous waste and wildlife as well as laws protecting the rights of other
property owners and the public. (See " Description of Business"). Although we
believe that we are, or will attempt to be, in substantial compliance with such
regulations, laws and requirements with respect to our mineral property, failure
to comply could have a material adverse effect on us, including substantial
penalties, fees and expenses, significant delays in operations and the potential
shutdown of our operations. Also, we must obtain and comply with local,
provincial and federal permits, including waste discharge requirements, other
environmental permits, use permits, plans of operation and other authorizations.
Obtaining these permits can be very costly and take significant amounts of time.
Although we do not foresee material problems or delays, no assurances can be
given that we can obtain the necessary permits to commence exploration
activities, or if permits are obtained, that there will be no delay in
commencing our operations or that we will have the ability to commence economic
production in compliance with the necessary permits.
Existing, as well as future, legislation and regulations could cause additional
expense, capital expenditures, restrictions and delays in the development of our
properties. The extent to which future legislation or regulations might affect
our operations cannot be predicted. There is no assurance environmental or
safety standards more stringent than those presently in effect may not be
enacted, which could adversely affect our exploration program. Also, the
industry often finds itself in conflict with the interests of private
environmental groups which often have an adverse effect on the mining industry.
Competition
We seek to operate in an industry that is characterized by intense competition
for resources, equipment and personnel. Most of our principal competitors are
substantially larger, have substantially greater financial and other resources
and expend considerably larger sums of capital than we do for exploration and
development. This could affect our ability to successfully compete in this
industry.
7
<PAGE>
Insurance Coverage and Uninsured Losses
We have not procured insurance covering personal injury, workers' compensation
or damage to property and equipment. There can be no assurance that we will be
successful in obtaining insurance at acceptable rates or that such insurance
will prove adequate. Moreover, in view of recent trends in damage awards in
personal injury lawsuits, insurance apparently adequate at the time of its
procurement may prove insufficient to satisfy large losses or judgments that may
subsequently be obtained against InvestNet. Furthermore, certain types of
insurance coverage (generally against losses caused by natural disasters and
Acts of God) are either unattainable or prohibitively expensive. Substantial
damage awards against InvestNet or substantial damages not covered by insurance
could affect our ability to continue as a going concern and may force us to seek
protection under federal bankruptcy laws.
Volatile Market Prices for Gold
The price of gold will have a material effect on our financial operations.
Following deregulation, the market price for gold has been highly speculative
and volatile. The price of gold reached a short-lived high in 1980 of slightly
over $800 per ounce. The price of gold is currently less than $300 per ounce.
Instability in the price of gold may affect the profitability of our operations.
No assurances can be given that we have or will discover gold mineralization in
commercial quantities, or if such mineralization in commercial quantities has
been or is hereafter discovered, that such gold could be produced at a profit
given the recent market price range for gold.
No Dividends
The holders of the common stock are entitled to receive dividends, when and if
declared by the Board of Directors, out of funds legally available. To date, we
have not paid any cash dividends. The Board of Directors does not intend to
declare any dividends in the foreseeable future, but instead intends to retain
all earnings, if any, for use in our business operations. If we obtain
additional financing, it is likely that there will be restrictions on
InvestNet's ability to declare any dividends. (See "Description of Securities").
Risks from Acquisitions
While we do not expect that acquisitions will be a central part of our business
plan, we may acquire complementary tracts of land, companies, products, services
or technologies as part of our business plan. Our success in these acquisition
activities depends on our ability to identify suitable acquisition candidates,
acquire such companies on acceptable terms and integrate their operations
successfully. Any such transactions would be accompanied by the risks commonly
encountered in such transactions. Such risks include, among other things:
o the difficulty of assimilating the operations and personnel of the
acquired companies;
o the potential disruption of our ongoing business;
o the inability of management to maximize its financial and strategic
position through the successful incorporation of acquired businesses
and technologies;
o additional expenses associated with amortization of acquired
intangible assets;
8
<PAGE>
o the maintenance of uniform standards, controls, procedures and
policies;
o the impairment of relationships with employees, customers, vendors and
contractors as a result of any integration of new management
personnel; and
o the potential unknown liabilities associated with acquired businesses.
There can be no assurance that we will be successful in overcoming these risks
or any other problems encountered in connection with such acquisitions. Due to
all of the foregoing, our pursuit of any future acquisition may have a material
adverse effect on our business, results of operations, financial condition and
cash flows. To the extent we choose to use cash for acquisition consideration in
the future, we may be required to obtain additional financing, and there can be
no assurance that such financing will be available on favorable terms, if at
all.
Acquisition of or Combination with Another Company Could Dilute Stockholder
Value
Should we not be successful in developing the mineral property, management may
spend a significant portion of operational time evaluating other business
opportunities that may be available to InvestNet. In the event of a business
combination, the ownership interests of holders of existing shares of
InvestNet's common stock would be diluted. Due to our limited financial
resources, the only way we will be able to diversify our activities, should our
business plan prove to be impractical, would be to enter into a business
combination.
Any asset acquisition or business combination would likely include the issuance
of a significant amount of our common stock, which would dilute the ownership
interest of holders of existing shares, and may result in a majority of the
voting power being transferred to new investors. Depending on the nature of the
transaction, our stockholders may not have an opportunity to vote on whether to
approve it. For example, the Board of Directors may decide to issue a
significant amount of stock to effect a share exchange with another company.
Such a transaction does not require shareholder approval, but InvestNet's
Officers and Directors must exercise their powers in good faith and with a view
to the interests of the corporation.
InvestNet May Enter In To New Line of Business Which Investors Could Not
Evaluate
In the event of a business combination, acquisition, or change in shareholder
control, we may enter in to a new line of business that an investor did not
anticipate and in which that investor may not want to participate. We may make
investments in or acquire complementary products, technologies and businesses,
or businesses completely unrelated to its current business plan. Similarly, an
asset acquisition or business combination would likely include the issuance of a
significant amount of InvestNet's common stock, which may result in a majority
of the voting power being transferred to new investors. New investors may
replace existing or future management. As a result, the new management may
decide not to continue to implement our current business plan, and may decide to
enter into a business completely unrelated to the current business plan which an
investor did not anticipate and in which that investor may not want to
participate. In such case, an investor could lose its entire investment on a
business decision it did not get to evaluate at the time of investing in
InvestNet.
9
<PAGE>
InvestNet Will Need Additional Financing Which May Not Be Available, or Which
May Dilute the Ownership Interests of Investors
Our ultimate success will depend on our ability to raise additional capital. No
commitments to provide additional funds have been made by management or other
shareholders. We have not investigated the availability, source or terms that
might govern the acquisition of additional financing. When additional capital is
needed, there is no assurance that funds will be available from any source or,
if available, that they can be obtained on terms acceptable to InvestNet. If not
available, our operations will be severely limited, and we will be unable to
implement our business plan.
Investment Risks
InvestNet's Common Stock Has No Prior Market, And Prices May Decline After the
Offering
There is no public market for InvestNet's common stock and no assurance can be
given that a market will develop or that any shareholder will be able to
liquidate an investment without considerable delay, if at all. The trading
market price of InvestNet's common stock may decline below the Offering price.
If a market should develop, the price may be highly volatile. In addition, an
active public market for InvestNet's common stock may not develop or be
sustained. Factors such as those discussed in this "Risk Factors" section may
have a significant impact on the market price of InvestNet's securities. Owing
to the low price of the securities, many brokerage firms may not be willing to
effect transactions in the securities. Even if a purchaser finds a broker
willing to effect a transaction in InvestNet's common stock the combination of
brokerage commissions, state transfer taxes, if any, and other selling costs may
exceed the selling price. Further, many lending institutions will not permit the
use of these securities as collateral for loans. Thus, a purchaser may be unable
to sell or otherwise realize the value invested in InvestNet stock.
Investors May Face Significant Restrictions on the Resale of InvestNet Stock Due
to State Blue Sky Laws
Each state has its own securities laws, often called "blue sky laws", which (1)
limit sales of stock to a state's residents unless the stock is registered in
that state or qualifies for an exemption from registration and (2) govern the
reporting requirements for broker-dealers and stock brokers doing business
directly or indirectly in the state. Before a security is sold in a state, there
must be a registration in place to cover the transaction, and the broker must be
registered in that state, or otherwise be exempt from registration. We do not
know whether our stock will be registered under the laws of any states. A
determination regarding registration will be made by the broker-dealers, if any,
who agree to serve as the market-makers for InvestNet's stock. There may be
significant state blue sky law restrictions on the ability of investors to sell
and on purchasers to buy InvestNet's securities.
Accordingly, investors should consider the secondary market for InvestNet's
securities to be a limited one. Investors may be unable to resell their stock,
or may be unable to resell it without the significant expense of state
registration or qualification.
Investors May Face Significant Restrictions on the Resale of InvestNet Stock Due
To Federal Penny Stock Regulations
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." These rules include, but are not limited to,
Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the
10
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Securities and Exchange Act of 1934, as amended. Because our securities may
constitute "penny stock" within the meaning of the rules, the rules would apply
to InvestNet and its securities. The rules may further affect the ability of
owners of InvestNet's shares to sell their securities in any market that may
develop for them. There may be a limited market for penny stocks, due to the
regulatory burdens on broker-dealers. The market among dealers may not be
active. Investors in penny stock often are unable to sell stock back to the
dealer that sold them the stock. The mark ups or commissions charged by the
broker-dealers may be greater than any profit a seller may make. Because of
large dealer spreads, investors may be unable to sell the stock immediately back
to the dealer at the same price the dealer sold the stock to the investor. In
some cases, the stock may fall quickly in value. Investors may be unable to reap
any profit from any sale of the stock, if they can sell it at all.
Shareholders should be aware that, according to the Securities and Exchange
Commission Release No. 34- 29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. These patterns include:
o control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer;
o manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases;
o "boiler room" practices involving high pressure sales tactics and
unrealistic price projections by inexperienced sales persons;
o excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
o the wholesale dumping of the same securities by promoters and broker-
dealers after prices have been manipulated to a desired level, along
with the inevitable collapse of those prices with consequent investor
losses.
Year 2000 Risks
Many existing computer programs use only two digits to identify a year. These
programs were designed and developed without addressing the impact of the change
in century. If not corrected, many computer software applications could fail or
create erroneous results beyond the year 2000. We believe our software is year
2000 compliant. To date, we have not experienced any year 2000 problems and our
computer programs are fully operational. However, we use software, computer
technology and other services provided by third-party venders that may
eventually fail due to the year 2000 phenomenon.
USE OF PROCEEDS
The gross proceeds to InvestNet from the sale of the 10,000,000 shares of common
stock offered by InvestNet hereby at an assumed initial public Offering price of
$.01 per share are estimated to be $100,000.
InvestNet expects to use the net proceeds, listed in the order of priority, as
follows:
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Purpose * 50% Subscription **100% Subscription
------- ------------------ -------------------
Organizational Purpose $ 5,000 $ 5,000
Expenses associated with the Offering $ 11,000 $ 11,000
Feasibility of Mineral Property
development $ 25,000 $ 45,000
Working Capital $ 9,000 $ 9,000
Repayment of Shareholder Loan $ 0 $ 30,000
--------- --------
$ 50,000 $ 100,000
* Assumes sale of 50% of the stock being offered
** Assumes sale of 100% of the stock being offered
We continually evaluate other business opportunities that may be available,
whether in the form of asset acquisitions or business combinations. We may use a
portion of the proceeds for these purposes. Aside from the Option Agreement with
Bow Mines Ltd. and Karl Schindler and a promissory note entered into with a
major shareholder, we are not otherwise a party to any contracts, letters of
intent, commitments or agreements and are not currently engaged in active
negotiations with respect to any acquisitions. (See "Description of Business"
and "Certain Relationships and Related Transactions").
The foregoing represents our present intentions and best estimate with respect
to the allocations of the proceeds of this Offering based upon present plans and
business conditions. However, no assurances can be given that unforeseen events
or changed business or industry conditions will not result in the application of
the proceeds of this Offering in a manner other than as described herein.
Consequently, future events, including changes in our business plans, research
and development results and economic, competitive or industry conditions, may
make shifts in the allocation of funds necessary or desirable.
We believe that the proceeds of this Offering, together with projected cash
flows from operations, will be sufficient to satisfy contemplated cash
requirements for at least twelve months following the consummation of this
Offering. In the event that our plans change or our assumptions prove to be
inaccurate, or if the proceeds of this Offering prove to be insufficient to fund
operations and fully implement our business plan, we could be required to seek
additional financing from sources not currently anticipated. We have no current
commitments or arrangements with respect to, or immediate sources of, additional
financing and it is not anticipated that any existing stockholders or lenders
will provide any portion of future financing. Additionally, no assurances can be
given that any additional financing, when needed, will be available or available
on acceptable terms. Any inability to obtain additional financing when required
could have a material adverse effect on our operations, including requiring us
to curtail our exploration and development efforts.
DETERMINATION OF OFFERING PRICE
Prior to this Offering, there has been no trading market for the Shares offered.
Consequently, the initial public Offering price of the Shares was arbitrarily
determined. The factors considered in determining the Offering price were our
financial condition and prospects, our limited operating history and the general
condition of the securities market. The Offering price is not an indication of
and is not based upon the actual value of InvestNet. It bears no relationship to
the book value, assets or earnings of InvestNet or any other recognized criteria
of value. The Offering price should not be regarded as an indicator of the
future market price of the securities.
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SELLING SECURITY HOLDERS
There are no selling security holders.
PLAN OF DISTRIBUTION
We will sell a maximum of 10,000,000 shares of our common stock to the public on
a "best efforts" basis. There can be no assurance that any of these Shares will
be sold. This is not an underwritten Offering. We have not committed to keep the
registration statement effective for any set period of time. The gross proceeds
will be $100,000 if all the Shares offered are sold. No commissions or other
fees will be paid, directly or indirectly, to any person or firm in connection
with solicitation of sales of the shares. No public market currently exists for
shares of InvestNet's common stock. InvestNet intends to apply to have its
shares traded on the OTC bulletin board under the symbol "INNT".
Regulation M of the Securities and Exchange Act of 1934 (which replaced Rule
10b-6) may prohibit a broker/dealer from engaging in any market making
activities with regard to a company's securities . Under ss.242.104 of
Regulation M, stabilizing is prohibited except for the purpose of preventing or
retarding a decline in the market price of a security. We do not plan to engage
in any passive stabilizing activities.
The shares of common stock represented by the Offering are being registered
pursuant to Section 12 of the Securities Exchange Act of 1934 and Section 5 of
the Securities Act of 1933, for which an exemption from registration as provided
in Section 3 and Section 4 are not available.
LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding or litigation and the Bow
Mines property is not the subject of a pending legal proceeding. Further, our
Officers and Directors know of no legal proceedings against us or our property
contemplated by any governmental authority.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the name, age and position of each Director and
Executive Officer of InvestNet:
Name Age Position
---- --- --------
Ruairidh Campbell 37 President, Secretary, Treasurer, Director
Dr. Stewart Jackson 59 Director
Ruairidh Campbell
On March 15, 2000, Mr. Campbell was elected as an Officer and Director of
InvestNet. He will serve until the first annual meeting of InvestNet's
shareholders and his successor is elected and qualified. Thereafter, Directors
will be elected for one-year terms at the annual shareholders meeting. Officers
will hold their positions at the pleasure of the Board of Directors, absent any
employment agreement.
Mr. Campbell graduated from the University of Texas at Austin with a Bachelor of
Arts in History and then from the University of Utah College of Law with a Juris
Doctorate with an emphasis in corporate law, including securities and taxation.
Over the past five years he has been an Officer and Director of several public
companies that include: NovaMed, Inc., a manufacturer of medical devices
(President and Director from 1995 to present), Bren-Mar Minerals, Ltd.,
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a Canadian mineral resource development company (President and Director 1995 to
present), and Allied Resources Inc., a Canadian based oil and gas development
company (President and Director 1998 to present). Mr. Campbell is also the
President and a Director of Aswan Investments, Inc., Cairo Acquisitions, Inc.
and Alexandria Holdings, Inc., three shell companies that are fully reporting
and in the process of becoming effective and the President and a Director of
EnterNet, Inc., a company seeking to become a wholesale distributor of vitamins
through the Internet. EnterNet recently (July 28, 2000) filed a SB-2
Registration Statement with the Small Business Division of the Securities and
Exchange Commission.
Dr. Stewart Jackson
On June 9, 2000, Dr.Jackson was appointed as a Director of InvestNet. He will
serve until the first annual meeting of InvestNet's shareholders and his
successor is elected and qualified.
Dr. Jackson graduated from the University of Western Ontario with a Bachelor of
Science in Geology, obtained a Master of Science degree from the University of
Toronto in Stratigraphy and Mineral Deposits and earned a Ph.D. in Stratigraphy
and Economic Geology from the University of Alberta. Dr. Jackson has 34 years
experience in the mineral industry. He is actively involved in the exploration
and development of both base and precious metal deposits in a wide range of
environments for both large and small companies. Dr. Jackson is responsible for
the discovery and development of several major mineral discoveries, including
the Red Dog multi-billion dollar zinc deposit in northwestern Alaska for
Cominico Resources, Inc. and the Borealis, South McCoy and Manhattan gold
deposits in Nevada for Houston Oil & Minerals, Inc. Over the past five years he
has been a Director of several public companies involved in mineral industry
including: Monument Resources, Inc. (Director), Starfire Resources, Inc.
(Director), Continental Precious Minerals, Ltd. (Director), Little Squaw
Goldmining Company (Director), Bevedis International, Inc. (Director),Bren-Mar
Minerals Ltd. (Director), Allied Resources, Inc. (Director).
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 30, 2000, InvestNet's outstanding
common stock owned of record or beneficially by each Executive Officer and
Director and by each person who owned of record, or was known by InvestNet to
own beneficially, more than 5% of its common stock, and the shareholdings of all
Executive Officers and Directors as a group. Each person has sole voting and
investment power with respect to the shares shown.
<TABLE>
<CAPTION>
Nature of Amount of
Title of Class Name and Address Ownership Ownership Percent Of Class
-------------- ---------------- --------- --------- ----------------
<S> <C> <C> <C> <C>
Common Stock Ruairidh Campbell President, 250,000 50.00%
($0.01 par value) 3310 Werner Avenue Secretary,
Austin, Texas 77822 Treasurer, and
Director
Common Stock Dr. Stewart Jackson Director 0 0.00%
($0.01 par value) 6025 So. Eaton Lane
Littleton, Colorado 80123
Common Stock Wolf Fiedler 50% Beneficial 250,000 50.00%
($0.01 par value) 938 Howe Street, Suite 713 Holder
Vancouver, British Columbia,
Canada V6Z lN9
All Executive Officers and Directors 250,000 50.00%
as a Group (2 Individuals)
</TABLE>
14
DESCRIPTION OF SECURITIES
The following description of our capital stock is a summary of the material
terms of our capital stock. This summary is subject to and qualified in its
entirety by InvestNet's Articles of Incorporation and Bylaws, and by the
applicable provisions of Nevada law.
The authorized capital stock of InvestNet consists of 50,000,000 shares:
45,000,000 shares of common stock having a par value of $0.001 per share, of
which 500,000 are issued and outstanding, and 5,000,000 shares of Preferred
Stock having a par value of $0.001 per share, of which no shares are issued and
outstanding. The Articles of Incorporation do not permit cumulative voting for
the election of Directors, and shareholders do not have any preemptive or
subscription rights to purchase shares in any future issuance of InvestNet's
common stock. There are no options, warrants or other instruments convertible
into shares outstanding.
The holders of shares of common stock of InvestNet do not have cumulative voting
rights in connection with the election of the Board of Directors, which means
that the holders of more than 50% of such outstanding shares, voting for the
election of Directors, can elect all of the Directors to be elected, if they so
choose, and, in such event, the holders of the remaining shares will not be able
to elect any of InvestNet's Directors. Each holder of common stock is entitled
to one vote for each share owned of record on all matters voted for by security
holders.
The holders of shares of common stock are entitled to dividends, out of funds
legally available therefor, when and as declared by the Board of Directors. The
Board of Directors has never declared a dividend and does not anticipate
declaring a dividend in the future. In the event of liquidation, dissolution or
winding up of the affairs of our business holders are entitled to receive,
ratably, the net assets of InvestNet available to shareholders after payment of
all creditors.
All of the issued and outstanding shares of common stock are duly authorized,
validly issued, fully paid, and non-assessable. To the extent that additional
shares of InvestNet's common stock are issued, the relative interests of
existing shareholders may be diluted.
INTEREST OF NAMED EXPERTS AND COUNSEL
No "Expert" or "Counsel" (as defined by Item 509 of Regulation S-B promulgated
pursuant to the Securities Act of 1933) whose services were used in the
preparation of this Form SB-2 was hired on a contingent basis or will receive a
direct or indirect interest in InvestNet.
Legal Matters
The validity of the shares of Common Stock offered hereby will be passed upon
for InvestNet by Richard Surber, Esq.
Experts
The financial statements of InvestNet as of June 30, 2000 included in this
Prospectus have been audited by Tanner + Co., Certified Public Accountants, our
independent auditors, as stated in their report appearing herein and have been
so included in reliance upon the reports of such firm given upon their authority
as experts in accounting and auditing.
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<PAGE>
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
InvestNet's Articles of Incorporation provide that it will indemnify its
Officers and Directors to the full extent permitted by Nevada state law.
InvestNet's Bylaws provide that it will indemnify and hold harmless each person
who was, is or is threatened to be made a party to or is otherwise involved in
any threatened proceedings by reason of the fact that he or she is or was a
Director or Officer of InvestNet or is or was serving at the request of
InvestNet as a Director, Officer, partner, trustee, employee, or agent of
another entity, against all losses, claims, damages, liabilities and expenses
actually and reasonably incurred or suffered in connection with such proceeding.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to Directors, Officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a Director, Officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by, such
Director, Officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
DESCRIPTION OF BUSINESS
General
InvestNet was incorporated under the laws of the State of Nevada on March 16,
2000, and is in its early developmental and promotional stages. InvestNet was
formed for the purpose of engaging in efforts to identify, develop and extract
precious metals. To date, InvestNet's only activities have been organizational,
directed at acquiring its principal asset, raising its initial capital and
developing its business plan. InvestNet's principal asset consists of an option
to explore and if feasible develop a certain tract of land located in the
vicinity of Greenwood, British Columbia, Canada, known as the Bow Mines
property. The Bow Mines property is a gold- silver vein prospect with a regional
history of precious metals recovery. InvestNet has not commenced commercial
operations and has no full time employees.
Option Agreement
On June 16, 2000, InvestNet entered into an Option Agreement with Bow Mines Ltd.
and Karl Schindler. The Option Agreement grants to InvestNet the exclusive right
to acquire a 100% interest in the Bow Mines property subject to a net smelter
royalty of 4% in consideration of certain option payments and expenditures to be
satisfied over the next six years. InvestNet satisfied the initial option
payment of $30,000 on June 14, 2000 and must make seven successive option
payments by certain dates in order to maintain the Option and incur a determined
amount of exploration expenses to acquire the Bow Mines property. The successive
option payments and the determined amount of exploration expenses with the
respective performance dates are as follows:
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Option Payments Amount Due Date
--------------- ------ --------
Second Option $5,000 June 14, 2001
Third Option $5,000 December 14, 2001
Fourth Option $60,000 June 14, 2002
Fifth Option $100,000 June 14, 2003
Sixth Option $100,000 June 14, 2004
Seventh Option $100,000 June 14, 2005
Eighth Option $100,000 June 14, 2006
Exploration Expenditures Amount Date
------------------------ ------ ----
Initial Exploration $250,000 July 1, 2002
Secondary Exploration $500,000 July 1, 2004
Tertiary Exploration $1,000,000 July 1, 2006
Should InvestNet's Exploration Expenditures in any given period exceed that
minimum amount required by the Option Agreement, then that amount in excess is
to be credited to the following periods. InvestNet is to act as the Operator, in
connection with all exploration work to be carried out on the Bow Mines
property.
Description of Property
The Bow Mines property is located approximately three miles from the city of
Greenwood in southern British Columbia, Canada. The claims can be reached from
Greenwood via paved road by following Highway 3 south for three miles towards
Boundary Falls and then turning northwest onto Boltz Road for one and half mile
journey to the property. The northern portion of the Bow Mines property is
situated on a sparsely covered, moderately steep, east facing slope overlooking
Boundary Creek. The main mine workings are located just south of a prominent
diorite cliff with over 1,000 feet of vertical relief. South of the mine area,
the topography is subdued, with undulating grassy hills sloping east into the
Boundary Creek valley. Elevations range from about 2,000 feet in the Boundary
Creek valley in the south east portion of the property and to about 3,500 feet
at the top of the diorite cliffs to the northwest. Rock exposure is good in the
northern part of the Bow Mines property while a thick layer of cover subdues
much of the southern portion of the property with only minimal outcrop exposed.
The climate is typically dry, with hot summers and little rainfall. Snowfall is
light, generally less than three feet a year, being usually snow free from March
until mid November each year.
Property Title
The Bow Mines Property consists of 3 Mineral Leases (comprising 6 former crown
grants), one 4-post mineral claim, two Reverted Crown Grants and four 2-post
mineral claims, as summarized below. The claims and leases are registered in the
name of Karl Schindler, in trust for Bow Mines Limited and optioned to
InvestNet.
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The claim map does show a possible fraction existing between the south boundary
of the May Mac claim and the northern boundaries of the A No. 3 and A No. 4
claims. We intend to remedy this predicament by staking two additional 2 post
mineral claims.
Claim Name Tenure Number Units Expiration Date
---------- ------------- ----- ---------------
May Mac 214189 12 08/17/2001
A No. 1 216570 1 10/31/2001
A No. 2 216571 1 10/31/2001
A No. 3 216572 1 10/31/2001
A No. 4 216573 1 10/31/2001
Tunnel RCG (L 888) 216644 1 08/08/2001
Boundary Falls RCG (L889) 216647 1 08/16/2002
Mineral Leases Tenure Number Anniversary Date
-------------- ------------- ----------------
ML 423 216298 08/08/2000
Nonsuch L389
Republic L426
Hidden Treasure L1019
Cosmopolitan L 1680
ML 430 216301 11/15/2000
Last Chance L644
ML 431 216302 11/17/2000
Don't Know L 2374
The Mineral Leases are 30 year leases with annual payments necessary on the
anniversary date listed. The leases come up for renewal in 2023.
Regional History
The Greenwood District is a highly mineralized district that ranks as the sixth
largest gold producing region in British Columbia, with a total aggregate
production of over 1 million ounces of gold. The majority of this gold
production is from the Phoenix copper-gold property, located about 5 miles
northeast of the Bow Mines property. Approximately 25 miles to the south of
Greenwood, in excess of 2.5 million ounces of gold, at an average grade of 0.5
oz/t has been produced from epithermal veins in the Republic District of
northern Washington. Furthermore, recent exploration in the area between
Republic and the International Border with the United States has resulted in the
discovery of nine new deposits within the past 10-15 years with a total combined
gold content in excess of 4 million ounces. Deposits include:
Crown Jewel 8 million tons @ 0.18oz/t
Lamefoot 2.2 million tons @ 0.2oz/t
Golden Eagle 11 million tons @ 0.1oz/t
The total gold produced, including known reserves, in an area measuring 31 miles
by 25 miles, which includes the Greenwood and Republic Districts exceeds 7.4
million ounces of gold.
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Bow Mines Property History
The majority of the previous work done by other exploration and development
companies on the Bow Mines property has been directed at two parallel southeast
striking gold-silver vein systems, the Upper and Lower Skomac veins. Total
production from the Bow Mines property from discovery to present is reported by
prior operating companies at 3,931 tons averaging 0.15oz/t gold, 6.9oz/t silver,
1.6% lead and 1% zinc.
The Skomac veins, which are hosted in a thinly bedded carbonaceous argillite,
are emplaced along shear zones on close spaced en-echelon fractures, striking
about 310-320 degrees, and dipping from 40-60 degrees to the northeast. The
shear zones average about 10 to 13 feet in width, within which white quartz
veins occur. The veins varying from 18 inches to 10 feet in width, with an
average width of about 3 feet. Mineralization in the veins consists of wisps and
lenses of pyrite and galena, with associated gold and silver mineralization.
Lesser sphalerite, chalcopyrite, tetrahedrite and native silver also occur.
A considerable amount of underground exploration and development work was done
on the Upper Skomac vein by other exploration and development companies in the
1970's and 1980's. The Upper vein is exposed underground over a strike length of
about 700 feet with an average dip of approximately 50 degrees northeast. Four
known ore shoots occur within the exposed strike length. The shoots range from
50 to 115 feet in strike lengths and consist of thickened mineralized quartz
lenses that may reach widths of 20 feet. Drilling has also shown the presence of
a mineralized quartz vein of good grade and width, situated below Level 6, which
when projected to Level 7 appears to lie about 100 feet north of the Level 7
drift.
InvestNet has little information regarding the Lower Skomac Vein as there has
been no modern exploration or development of this prospect. The historic records
(Minister of Mines Annual Report 1904) document a small shipment of ore 38 tons
that graded 9.3oz/t gold from these workings and samples analyzed from this area
in the 1970's indicated grades of 1oz/t gold for the first 30 feet of the Lower
Skomac audit. The only sample tested of the mineralized argillite footwall found
in the Lower Skomac vein returned a very high grade gold of 2.4oz/t and 4.93oz/t
silver over a narrow width.
Two additional veins are known to occur in the southern portion of the Bow Mines
property (Boundary Falls area veins), although very little exploration or
development of these veins or the surrounding area has been done. Gold grades
and gold/silver ratios are generally higher in samples from the Boundary Falls
area veins than in those from the Skomac veins (0.42oz/t gold and 0.93oz/t
silver).
A significant gold soil anomaly was discovered about 1,500 feet southeast of the
Lower Skomac vein. The anomaly is poorly defined by the very coarse sample
spacing but appears to be in a northeast trend, exceeding 650 feet in strike
length with a maximum value of 230 parts per billion gold. No follow up was ever
done in this area. Several other geochemical and geophysical anomalies exist on
the Bow Mines property that will require exploration.
Exploration Program
InvestNet intends to embark on a two phase exploration program in an attempt to
determine the economic feasibility of developing the Bow Mines property for the
extraction of precious metals. The first phase will consist of surface
exploration, which will include geological mapping, geochemical sampling and
geophysics, as well as underground development of the Upper Skomac vein. Phase 2
of the exploration program will be contingent upon the results of Phase 1 of the
program and will include further target area definition, plus drill and trench
follow up to targets identified during Phase 1.
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Phase 1 (Total Phase 1 Budget)
Surface Exploration ($120,000)
1. Stake two 2 post claims to cover possible fraction between existing
claims.
2. Establish a detailed grid over the entire property and complete
geological mapping, rock chip sampling and ground magnetometer and
VLF-EM surveys over the entire grid.
3. Complete a multi-element soil sample survey over the entire grid, with
the exception of areas of very thick glacial till cover defined by the
mapping program.
4. Re-examine and re-sample the mineralized footwall in the Lower Skomac
vein. Similarly, re- examine and re-sample available drill core and
underground exposures to test for other areas of potentially
mineralized wall rock to the veins.
Underground Exploration and Development ($300,000)
The proposed program involves a total of 420 feet of drifting and 260 feet of
raising with accompanying detailed mapping and sampling of the vein and wall
rock of the Upper Skomac Vein on Level 7. The northern branch of the Level 7
drift would be extended for 160 feet to intersect the projected mineralized
vein. A raise would then be driven on the vein for 260 feet to break through to
Level 6. Drifting along the vein on Level 7 would also be completed for a
further 260 feet to the west.
Phase 2 (Total Phase 2 Budget) ($200,000)
A Phase 2 program is to be implemented to follow up on targets defined by Phase
1 of the exploration program. Phase 2 will be contingent on the results of Phase
1 and is expected to include follow up geophysics, possibly SP or Pulse EM
surveys, plus surface diamond drilling and trenching of veins or other targets.
Market
Precious metals have two main categories of use, product fabrication and bullion
investment. Fabricated precious metals have a wide variety of end uses,
including industrial and technology uses. Purchasers of official coins and high-
karat jewelry, frequently are motivated by investment considerations, so that
net private bullion purchases alone do not necessarily represent the total
investment activity in precious metals.
The potential profitability of InvestNet's prospective business is significantly
affected by changes in the market price of precious metals. The market prices of
precious metals can fluctuate widely and are affected by numerous factors beyond
InvestNet's control, including industrial and jewelry demand, expectations with
respect to the rate of inflation, the strength of the U.S. dollar and other
currencies, interest rates, central bank sales, forward sales by producers,
global or regional political or economic events, and production and cost levels
in major mineral producing regions. Further, the prices of precious metals
sometimes are subject to rapid short term changes because of the speculative
activities. The current demand for and supply of precious metals affect precious
metals prices, but not necessarily in the same manner as current supply and
demand affect the prices of other commodities. The supply of precious metals
consists of a combination of new mine production and existing stocks of bullion
and fabricated precious metals held by governments, public and private
individuals. As the amounts produced in any single year constitute a very small
20
<PAGE>
portion of the total potential supply of precious metals, normal variations in
current production do not necessarily have a significant impact on the supply of
precious metals or on their prices. The result being that markets for precious
metals generally are characterized by volatile prices.
Competition
The mining industry is very competitive. A high degree of competition exists to
obtain favorable mining properties and suitable mining prospects for drilling,
exploration, development and mining operations. InvestNet will encounter
significant competition from companies presently engaged in the mining industry.
Generally, all of these competitive companies are substantially larger than
InvestNet and have substantially greater resources and operating histories.
Accordingly, there can be no assurance that InvestNet will be successful in
competing with existing and emerging companies in the mining industry.
Government Regulation and Environmental Concerns
InvestNet's exploration and development operations will be subject to
substantial government regulation, including federal, provincial and local laws
concerning mine safety, land use and environmental protection. InvestNet must
comply with local, provincial and federal requirements regarding exploration
operations, public safety, employee health and safety, use of explosives, air
quality, water pollution, noxious odor, noise and dust controls, reclamation,
solid waste, hazardous waste and wildlife as well as laws protecting the rights
of other property owners and the public.
The Canadian Mineral Tenure Act sets forth rules for locating claims, posting
claims, working claims and reporting upon work performed. InvestNet is also
subject to the British Columbia Mineral Exploration Code that determines how and
where companies involved in mining activities can explore for precious metals.
Environmental concerns are protected under the Health, Safety and Reclamation
Code for Mines in British Columbia. The most significant provisions of this Code
deal with employee health and safety, mineral land reclamation, preservation of
archaeological sites, access to exploration areas and waste discharge from
mines, mills and further processing operations.
InvestNet generally will be required to mitigate long term environmental impacts
by stabilizing, contouring, reshaping and revegetating various portions of a
site once exploration, mining and processing are completed. Reclamation efforts
will be conducted in accordance with detailed plans that will have been reviewed
and approved by the appropriate regulatory agencies. InvestNet plans to reclaim
land concurrently with mining. InvestNet believes that reclamation expenses will
not be material, although there can be no certainty in this regard. Compliance
with the foregoing laws and regulations increases the costs of planning,
designing, drilling, developing, constructing, operating and closing mining
operations. It is possible that the costs and delays associated with compliance
with such laws and regulations could become such that InvestNet would not
proceed with the development of a project or decide to operate a mine.
Although InvestNet believes that its prospective exploration activities will be
conducted in compliance with all present health, safety and environmental rules
and regulations, there is always some uncertainty associated with such due to
the complexity and application of such rules and regulations. InvestNet does not
anticipate that compliance with existing environmental laws and regulations will
have a material impact on its prospective earnings in the foreseeable future,
however possible future health, safety and environmental legislation,
regulations and actions could cause additional expense, capital expenditures,
restrictions and delays in InvestNet's activities to an extent that cannot be
predicted.
21
<PAGE>
Employees
InvestNet is a development stage company and currently has no employees.
InvestNet is currently managed by Ruairidh Campbell, its sole Officer and a
Director. InvestNet looks to Mr. Campbell for his entrepreneurial skills and
talents. For a complete discussion of Mr. Campbell's experience, please see
"Directors and Executive Officers." Management plans to use consultants,
attorneys and accountants as necessary and does not plan to engage any full-
time employees in the near future. InvestNet may hire field geologists to
implement the initial exploration on a consulting basis. When the decision is
made to hire full time employees, a portion of any employee compensation likely
would include the right to acquire stock in InvestNet, which would dilute the
ownership interest of holders of existing shares of its common stock.
Available Information and Reports to Securities Holders
We have filed with the Securities and Exchange Commission a registration
statement on Form SB-2 with respect to the common stock offered by this
Prospectus. This Prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the registration
statement or the exhibits and schedules which are part of the registration
statement. For further information with respect to InvestNet and its common
stock, see the registration statement and the exhibits and schedules thereto.
Any document InvestNet files may be read and copied at the Commissions Public
Reference Room located at 450 Fifth Street N.W., Washington D.C. 20549, and the
public reference rooms in New York, New York, and Chicago, Illinois. Please call
the Commission at 1-800SEC- 0330 for further information about the public
reference rooms. InvestNet's filings with the Commission are also available to
the public from the Commission's website at http://www.sec.gov.
Upon completion of this Offering, we will become subject to the information and
periodic reporting requirements of the Securities Exchange Act and, accordingly,
we will file periodic reports, proxy statements and other information with the
Commission. Such periodic reports, proxy statements and other information will
be available for inspection and copying at the Commission's public reference
rooms, and the website of the Commission referred to above.
Board of Directors Committees
The Board of Directors has not yet established an audit committee or a
compensation committee. An audit committee typically reviews, acts on and
reports to the Board of Directors with respect to various auditing and
accounting matters, including the recommendations and performance of independent
auditors, the scope of the annual audits, fees to be paid to the independent
auditors, and internal accounting and financial control policies and procedures.
Certain stock exchanges currently require companies to adopt formal written
charter that establishes an audit committee that specifies the scope of an audit
committees responsibilities and the means by which it carries out those
responsibilities. In order to be listed on any of these exchanges, we will be
required to establish an audit committee.
The Board of Directors have not yet established a compensation committee.
Directors currently are not reimbursed for out-of-pocket costs incurred in
attending meetings and no Director receives any compensation for services
rendered as a Director. It is likely that we will adopt a provision for
compensating Directors in the future.
DESCRIPTION OF PROPERTY
We have an option to explore and, if feasible, develop a certain tract of land
located in the vicinity of Greenwood, British Columbia, Canada, known as the Bow
Mines property. (See "Description of Business - Option Agreement"). The Bow
Mines property is a gold-silver vien prospect consisting of 3 Mining Leases, two
Reverted Crown Grants, four 2-post mineral claims and one 4-post mineral claim.
The claims are registered in the name of Karl Schindler and held by him in trust
for Bow Mines Ltd. (See "Description of Business - Description of Property.")
22
<PAGE>
We currently maintain limited office space owned by a principal shareholder,
Wolf Fiedler and occupied by Ruairidh Campbell, for which we pay no rent. This
address is 938 Howe Street, Suite 713, Vancouver, British Columbia, Canada VZ2
1N9 and the phone number is (604) 331-1803. We do not believe that we will need
to obtain additional office space at any time in the foreseeable future until
our business plan is implemented.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the Financial Statements and
accompanying notes and the other financial information appearing elsewhere in
this Prospectus. Also, due to our limited operating history, the financial
information presented is for the period June 12, 2000 (date of inception) to
June 30, 2000. Our fiscal year end is December 31.
This Prospectus contains forward-looking statements, the accuracy of which
involve risks and uncertainties. Words such as "anticipates," "believes,"
"plans," "expects," "future," "intends" and similar expressions are used to
identify forward-looking statements. This Prospectus also contains
forward-looking statements attributed to certain third parties relating to the
prospect of exploring and developing an economically feasible ore body on the
Bow Mines property. Prospective investors should not place undue reliance on
these forward-looking statements, which apply only as of the date of this
Prospectus. InvestNet's actual results could differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by InvestNet described in "Risk Factors" and elsewhere in this
Prospectus. The following discussion and analysis should be read in conjunction
with InvestNet's Financial Statements and Notes thereto and other financial
information included elsewhere in this Prospectus.
Results of Operations
During the period from June 12, 2000 (date of inception) through June 30, 2000,
InvestNet has engaged in no significant operations other than organizational
activities, the execution of an Option Agreement for the purpose of exploring
and potentially developing the Bow Mines property and preparation for
registration of its securities under the Securities Act of 1933, as amended. We
did not receive revenue during this period.
For the current fiscal year, we anticipate incurring a loss as a result of
organizational expenses, expenses associated with registration under the
Securities Act of 1933, and expenses associated with setting up a company
structure to begin implementing its business plan. We anticipate that until
these procedures are completed, we will not generate revenues, and may continue
to operate at a loss thereafter, depending upon the performance of the business.
Our business plan is to explore the Bow Mines property for the purpose of
identifying economically recoverable deposits of precious metals that will cause
the development of the site for mining activities.
Profits
For the period ending June 30, 2000, we recorded an operating loss of $2,046.
This lack of profitability is largely attributable to expenses of $2,046
associated with a start up venture. We did not generate any revenues during this
period. We expect to continue to operate at a loss through fiscal 2000. Further,
there can be no assurance that we will ever achieve profitability or that a
stream of revenue can be generated and sustained in the future.
Capital Expenditures
We expended no amounts on capital expenditures for the period ending June 30,
2000.
23
<PAGE>
Liquidity and Capital Resources
At June 30, 2000, we had current assets of $2,954 and total assets of $32,954.
These assets consist of cash on hand of $2,954 and $30,000 for an option
agreement. Net stockholders' equity in InvestNet was $2,954 at June 30, 2000. We
remain in the development stage and, since inception, have experienced no
significant change in liquidity, capital resources or shareholders' equity.
Cash flow provided from the issuance of common stock was $5,000 for the period
ending June 30, 2000. On June 12, 2000, a total of 500,000 shares of common
stock were issued for cash. The shares were issued at $0.01, and we received
$5,000 as a result of the issuance. Organizational expenses of $2,046 were
funded by these shareholder payments and expensed to operations. In addition, in
June 2000 we received a loan from a major shareholder of $30,000. This amount is
unsecured, non-interest bearing and is due on June 15, 2001. This amount was
used to acquire the option rights in the Bow Mine property.
InvestNet's business plan is to explore the Bow Mines property for the purpose
of identifying economically recoverable deposits of precious metals that will
cause the development of the site for mining activities. Should InvestNet
determine that its business plan is feasible, it intends to employ geologist and
mining personnel to implement the Phase 1 of the Exploration Program. See
"Description of Business".
In order to determine the feasibility of its business plan, InvestNet plans,
during the next twelve months, to commence implementation of Phase 1 of the
Exploration Program. InvestNet believes that during its first operational
quarter, it will need a capital infusion of approximately $50,000 to commence
exploration activities. This capital infusion is intended to cover costs of
staking additional ground, hiring a geologist, testing rock chip samples, and
administrative expenses. In addition, InvestNet will need an additional $300,000
in order to maintain scheduled Option payments and satisfy the initial
Exploration Expenditures as determined by the Option Agreement. These expenses
will exceed the funds raised by this Offering, and InvestNet will have to obtain
additional financing through an Offering or capital contributions by current
shareholders.
InvestNet is conducting this Offering, in part, because it believes that an
early registration of its equity securities will minimize some of the
impediments to capital formation that otherwise exist. By having a registration
statement in place, InvestNet believes it will be in a better position, either
to conduct a future public Offering of its securities or to undertake a private
placement with registration rights, than if it were a completely private
company. Registering its shares will help minimize the liquidity discounts
InvestNet may otherwise have to take in a future private placement of its equity
securities, because investors will have a high degree of confidence that the
Rule 144(c)(1) public information requirement will be satisfied, and a public
market will exist to effect Rule 144(g) broker transactions. InvestNet believes
that the cost of registering its securities, and undertaking the affirmative
disclosure obligations that such a registration entails, will be more than
offset by avoiding deep liquidity discounts in future sales of securities. No
specific private investors have been identified, but InvestNet's management has
general knowledge of an investor class interested in investing in companies that
can demonstrate a clear path to an early liquidity event.
We believe that the proceeds of this Offering, together with projected cash
flows from operations, will be sufficient to satisfy contemplated cash
requirements for at least twelve months following the consummation of this
Offering. In the event that our plans change or our assumptions prove to be
inaccurate, or if the proceeds of this Offering prove to be insufficient to fund
operations and fully implement our business plan, we could be required to seek
additional financing from sources not currently anticipated. We have no current
commitments or arrangements with respect to, or immediate sources of, additional
financing and it is not anticipated that any existing stockholders or lenders
will provide any portion of future financing. Additionally, no assurances can be
given that any additional financing, when needed, will be available or available
on acceptable terms. Any inability to obtain additional financing when required
could have a material adverse effect on our operations, including requiring us
to curtail our exploration efforts.
24
<PAGE>
In addition, InvestNet may engage in a combination with another business.
InvestNet cannot predict the extent to which its liquidity and capital resources
will be diminished prior to the consummation of a business combination or
whether its capital will be further depleted by the operating losses (if any) of
the business entity with which InvestNet may eventually combine. InvestNet has
not yet engaged in any discussions concerning potential business combinations.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than as disclosed below, no Director, Executive Officer, nominee for
election as a Director of InvestNet, or an owner of five percent of more of
InvestNet's outstanding shares, or any member of their immediate family, has
entered into any related transaction.
On June 12, 2000, InvestNet issued 500,000 shares of common stock at $0.01 for a
total of $5,000. 250,000 shares were issued to Wolf Fiedler and 250,000 shares
were issued to Ruairidh Campbell, both of whom were either Officers or Directors
at the time of issuance.
On June 16, 2000, InvestNet executed a Promissory Note in the amount of $30,000
to be paid no later than June 15, 2001 in favor of Wolf Fiedler, a principal
shareholder. This amount is unsecured and non-interest bearing.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No established public trading market exists for InvestNet's securities.
InvestNet has no common equity subject to outstanding purchase options or
warrants. InvestNet has no securities convertible into its common equity. There
is no common equity that could be sold pursuant to Rule 144 under the Securities
Act or that InvestNet has agreed to register under the Securities Act for sale
by shareholders. Except for this Offering, there is no common equity that is
being, or has been publicly proposed to be, publicly offered by InvestNet.
As of June 30, 2000, there were 500,000 shares of common stock outstanding, held
by two (2) shareholders of record. Upon effectiveness of the registration
statement that includes this Prospectus, 10,000,000 new shares of InvestNet will
be eligible for sale.
To date InvestNet has not paid any dividends on its common stock and does not
expect to declare or pay any dividends on its common stock in the foreseeable
future. Payment of any dividends will depend upon InvestNet's future earnings,
if any, its financial condition, and other factors as deemed relevant by the
Board of Directors.
EXECUTIVE COMPENSATION
No Officer or Director has received any remuneration from us. Although there is
no current plan in existence, it is possible that we will adopt a plan to pay or
accrue compensation to our Officers and Directors for services related to the
implementation of our business plan. We have no stock option, retirement,
incentive, defined benefit, actuarial, pension or profit-sharing programs for
the benefit of Directors, Officers or other employees, but the Board of
Directors may recommend adoption of one or more such programs in the future. We
have no employment contract or compensatory plan or arrangement with any
executive Officer of InvestNet. The Director currently does not receive any cash
compensation for his service as a member of the Board of Directors. There is no
compensation committee, and no compensation policies have been adopted. See
"Certain Relationships and Related Transactions."
25
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
Financial Statements
June 30, 2000
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
Index to Financial Statements
--------------------------------------------------------------------------------
Page
Independent Auditors' Report F-2
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholders' Equity F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
See accompanying notes to financial statements.
F-2
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
INDEPENDENT AUDITORS' REPORT
To the Stockholders' and
Board of Directors of
Investnet, Inc.
We have audited the accompanying balance sheet of Investnet, Inc. (a development
stage company), as of June 30, 2000 and the related statements of operations and
stockholders' equity, and cash flows for the period from March 16, 2000 (date of
inception) to June 30, 2000. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Investnet, Inc. (a development
stage company), as of June 30, 2000 and the results of its operations and its
cash flows for the period from March 16, 2000 (date of inception) to June 30,
2000, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company's revenue generating activities are not in
place and the Company has incurred a loss. These conditions raise substantial
doubt about its ability to continue as a going concern. Management's plans
regarding those matters also are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ TANNER + CO.
---------------------
Salt Lake City, Utah
July 7, 2000
F-3
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
Balance Sheet
June 30, 2000
--------------------------------------------------------------------------------
Assets
Current assets - cash $ 2,954
Other assets - option agreement 30,000
-----------
$ 32,954
===========
-------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Long-term - Note payable $ 29,980
-----------
Stockholders' equity:
Preferred stock, $.001 par value, 5,000,000 shares
authorized, no shares issued or outstanding -
Common stock, $.001 par value, 45,000,000 shares
authorized, 500,000 shares issued and outstanding 500
Additional paid-in capital 4,500
Accumulated deficit (2,026)
-----------
Total stockholders' equity 2,954
-----------
$ 32,954
===========
See accompanying notes to financial statements.
F-4
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
Statement of Operations
March 16, 2000 (Date of Inception) to June 30, 2000
--------------------------------------------------------------------------------
Revenues $ -
General and administrative costs 2,026
------------------
Net loss before income taxes (2,026)
Provision for income taxes -
------------------
Net loss $ (2,026)
==================
Loss per common share - basic and diluted $ -
==================
Weighted average common shares - basic and diluted 500,000
==================
See accompanying notes to financial statements.
F-5
<PAGE>
INVESTNET, INC.
(A Developmental Stage Company)
Statement of Stockholders' Equity
March 16, 2000 (Date of Inception) to June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit Total
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at March 16, 2000 (date
of inception) - $ - - $ - $ - $ - $ -
Issuance of common stock for
cash - - 500,000 500 4,500 - 5,000
Net loss - - - - - (2,026) (2,026)
------ ------- ------- --------- -------- ---------- --------
Balance at June 30, 2000 - $ - 500,000 $ 500 $ 4,500 $ (2,026) $ 2,974
====== ======= ======= ========= ======== ========== ========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
Statement of Cash Flows
March 16, 2000 (Date of Inception) to June 30, 2000
--------------------------------------------------------------------------------
Cash flows from operating activities -
net loss $ (2,026)
------------------
Cash flows from investing activities -
------------------
Cash flows from financing activities-
Issuance of common stock 5,000
Proceeds from loan (net of bank fee) 29,980
------------------
Net increase in cash 2,954
Cash, beginning of period -
------------------
Cash, end of period $ 2,954
==================
See accompanying notes to financial statements.
F-7
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
--------------------------------------------------------------------------------
1. Organization and Summary of Significant Accounting Policies
Organization
The Company was organized under the laws of the State of Nevada on March 16,
2000 (date of inception). The Company has not commenced planned principal
operations. The Company proposes to seek business ventures which will allow for
long-term growth. Further, the Company is considered a development stage company
as defined in SFAS No. 7 and has not, thus far, engaged in business activities
of any kind. The Company has, at the present time, not paid any dividends and
any dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.
Income Taxes
Deferred income taxes are provided in amounts sufficient to give effect to
temporary differences between financial and tax reporting, principally related
to net operating loss carryforwards.
Earnings Per Share
The computation of basic earning per common share is based on the weighted
average number of shares outstanding during each period.
The computation of diluted earnings per common share is based on the weighted
average number of shares outstanding during the period plus the common stock
equivalents which would arise from the exercise of stock options and warrants
outstanding using the treasury stock method and the average market price per
share during the period. The Company does not have any stock options or warrants
outstanding at June 30, 2000.
Concentration of Credit Risk
The Company maintains its cash in bank deposit accounts which, at times, may
exceed federally insured limits. The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash and cash equivalents.
F-8
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
--------------------------------------------------------------------------------
1. Organization and Summary of Significant Accounting Policies (Continued)
Use of Estimates in the Preparation of Financial Statements The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
2. Going Concern
As of June 30, 2000, the Company's revenue generating activities are not in
place, and the Company has incurred a loss for the period then ended. These
factors raise substantial doubt about the Company's ability to continue as a
going concern.
Management intends to seek additional funding through business ventures. There
can be no assurance that such funds will be available to the Company, or
available on terms of acceptable to the Company.
3. Income Taxes
The difference between income taxes at statutory rates and the amount presented
in the financial statements is a result of an increase in the valuation
allowance to offset the deferred tax asset related to the net operating loss
carryforward.
The Company has net operating loss carryforwards of approximately $2,026, which
begin to expire in the year 2020. The amount of net operating loss carryforward
that can be used in any one year will be limited by significant changes in the
ownership of the Company and by the applicable tax laws which are in effect at
the time such carryforwards can be utilized.
4. Supplemental Cash Flow Information
No amounts were paid for interest or income taxes during the period ended June
30, 2000.
F-9
<PAGE>
INVESTNET, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
--------------------------------------------------------------------------------
5. Preferred Stock
The Company has authorized up to 5,000,000 shares of preferred stock with a par
value of $.001 per share. The preferred stock can be issued in various series
with varying dividend rates and preferences.
6. Recent Accounting Pronouncements
In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective date of FASB
Statements No. 133." SFAS 133 establishes accounting and reporting standards of
all derivatives as assets or liabilities in the statement of financial position
and measurement of those instruments at fair value. SFAS 133 is now effective
for fiscal years beginning after June 15, 2000. The Company believes that the
adoption of SFAS 133 will not have any material effect on the financial
statements of the Company.
F-10
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTS OF ACCOUNTING AND FINANCIAL
DISCLOSURE
Since our inception, there have been no changes in accountants nor have there
been any disagreements with our current accountants regarding any matter of
account principles or practices, financial statement disclosure, or auditing
scope or procedure.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
26
<PAGE>
PART II--INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
InvestNet's Articles of Incorporation, Article 8, filed as Exhibit 3(i), provide
that it must indemnify its directors and officers to the fullest extent
permitted under Nevada law against all liabilities incurred by reason of the
fact that the person is or was a director or officer of InvestNet or a fiduciary
of an employee benefit plan, or is or was serving at the request of InvestNet as
a director or officer, or fiduciary of an employee benefit plan, of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise.
The Bylaws, Section 6.09, of InvestNet, filed as Exhibit 3(ii), provide that it
will indemnify its Officers and Directors for costs and expenses incurred in
connection with the defense of actions, suits, or proceedings against them on
account of their being or having been Directors or Officers of InvestNet, absent
a finding of negligence or misconduct in office. The Bylaws also permit it to
maintain insurance on behalf of its Officers, Directors, employees and agents
against any liability asserted against and incurred by that person whether or
not InvestNet has the power to indemnify such person against liability for any
of those acts.
The effect of these provisions is potentially to indemnify InvestNet's Directors
and Officers from all costs and expenses of liability incurred by them in
connection with any action, suit or proceeding in which they are involved by
reason of their affiliation with InvestNet. Pursuant to Nevada law, a
corporation may indemnify a Director, provided that such indemnity shall not
apply on account of (a) acts or omissions of the Director finally adjudged to be
intentional misconduct or a knowing violation of law; (b) unlawful
distributions; or (c) any transaction with respect to which it was finally
adjudged that such Director personally received a benefit in money, property, or
services to which the Director was not legally entitled.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The securities are being registered in connection with the public Offering of
10,000,000 shares of our common stock, and all of the following expenses will be
born by InvestNet. The amounts set forth are estimates except for the SEC
registration fee:
Expense Amount to be Paid
------- -----------------
SEC registration fee $ 35
Printing and engraving expenses 0
Attorneys' fees and expenses 8,000
Accountants' fees and expenses 1,500
Transfer agent's and registrar's fees and expenses 500
Miscellaneous 965
-----------------
Total $ 11,000
=================
27
<PAGE>
RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of InvestNet
securities without registration since its formation. No such sales involved the
use of an underwriter and no commissions were paid in connection with the sale
of any securities.
On March 15, 2000 InvestNet issued a total 500,000 shares of common stock.
250,000 shares were issued to Ruairidh Campbell and 250,000 shares were issued
to Wolf Fiedler. InvestNet relied on exemptions provided by Section 4(2) of the
Securities Act of 1933, as amended. We made this Offering based on the following
factors (1) the issuance was an isolated private transaction by InvestNet which
did not involved a public offering; (2) there were only two offerees who were
Officers and Directors of InvestNet, (3) the offerees will not resell the stock
but will continue to hold it for at least one year; (4) there were no subsequent
or contemporaneous public offerings of the stock; (5) the stock was not broken
down into smaller denominations (6) the negotiations for the sale of the stock
took place directly between the offerees and InvestNet.
INDEX TO EXHIBITS
The following exhibits are filed as part of this Registration Statement.
Exhib. Page
No. No. Description
----- ---- -----------
3(i) 31 Articles of Incorporation of InvestNet, Inc., a Nevada
corporation, filed with the State of Nevada on March 16,
2000.
3(ii) 33 By-laws of the Company adopted on March 15, 2000.
4(i) 43 Specimen Stock Certificate.
4(ii) 44 Subscription Agreement between the Company and Ruairidh
Campbell dated March 16, 2000.
4(iii) 47 Subscription Agreement between the Company and Wolf Fiedler
dated March 16, 2000.
5 50 Opinion Letter dated August 3, 2000.
10(i) 53 Option Agreement between Bow Mines, InvestNet, Inc. and Karl
Schindler dated June 14, 2000.
10(ii) 67 Promissory Note between the Company and Wolf Fiedler dated
June 16, 2000.
10(iii) 69 Geological Report dated June 23, 2000. Prepared by Linda
Caron, P. Eng.
23(i) 87 Consent of Certified Public Accountant dated August 2, 2000.
23(ii) 50 Consent of Counsel (See Exhibit 5).
27 88 Financial Data Schedule "CE"
28
<PAGE>
UNDERTAKINGS
The Registrant hereby undertakes that it will:
o File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
o Include any prospectus required by section 10(a)(3) of the Securities
Act;
o Reflect in the prospects any facts or events which, individually or
together, represent a fundamental change in the information in the
Registration Statement; and
o Include any additional or changed material information on the plan of
distribution.
o File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the Offering.
o For determining liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of the
Registration Statement pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act as part of this Registration Statement as of
the time the Commission declared it effective.
o For determining liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
Registration Statement for the securities offered in the Registration
Statement, and the Offering of such securities at the time as the
initial bona fide Offering of those securities.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant,
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
In the event a claim for indemnification against such liabilities (other than
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in Salt Lake City, Utah, on August 3, 2000.
InvestNet, Inc. (Registrant)
By:/s/ Ruairidh Campbell
----------------------
Ruairidh Campbell, President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Signature Title Date
--------- ----- ----
/s/ Ruairidh Campbell President, Secretary, August 3, 2000
---------------------------- Treasurer and Director
Ruairidh Campbell, President
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