U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
AMENDMENT NO. 1 TO
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): OCTOBER 16, 2000
-----------------------------
Home.Web, Inc.
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEVADA 0-30096 77-0454933
------ ------- ----------
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
435 MARTIN STREET
BLAINE, WASHINGTON USA 98230
---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (360) 332-1350
------------------------
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Pursuant to an Agreement and Plan of Reorganization (the "Agreement")
executed on August 1, 2000 by and between Home.Web, Inc. (the "Company") and
Duro Enzyme Products Inc. ("Duro Enzyme"), the Company conducted a voluntary
share exchange (the "Exchange") with the shareholders of Duro Enzyme (a copy of
the Agreement and Plan of Reorganization is attached hereto as Exhibit 2.1).
The Exchange involved the issuance of a total of 28,800,000 shares of Common
Stock of the Company to shareholders of Duro Enzyme in exchange for their Duro
Enzyme Common Stock. Upon the close of the Exchange on October 16, 2000, the
Company controlled 100% of the issued and outstanding Common Stock of Duro
Enzyme.
Pursuant to the Agreement, the principal shareholders of the Company
surrendered 28,800,000 shares of Common Stock to the Company, which stock was
cancelled by unanimous written consent of the members of the Board of Directors
of the Company on September 29, 2000. Immediately prior to the Exchange, the
Company had 4,076,400 shares of Common Stock issued and outstanding. After the
Exchange and the issuance of 28,800,000 shares of Common Stock to the
shareholders of Duro Enzyme, the following became the share ownership of the
Company:
NAME NO. SHARES % OWNERSHIP
---------- ------------
1. Duro Enzyme Shareholders 28,800,000 87.6%
2. Existing Shareholders of the Company 4,076,400 12.4%
========== ============
TOTALS 32,876,400 100.0%
The effect of the Agreement and Exchange was to transfer control of the
Company to the former shareholders of Duro Enzyme. Duro Enzyme, along with all
of its assets, became a wholly owned subsidiary of the Company.
In anticipation of the Exchange, on September 29, 2000 the Board of
Directors of the Company accepted the resignation of its directors and executive
officers and appointed new directors and executive officers.
The following individuals resigned as directors and executive officers of
the Company:
Dennis Davis Director and President
Cornelia Davis Director, Secretary and Treasurer
Florence Roberts Director
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The following individuals were appointed directors and executive officers
of the Company:
Robert L. Jackman Director, President and Treasurer
Dean Branconnier Director and Vice President
Jolene Fuller Director and Secretary
The following summaries outline the professional backgrounds of the new
directors and executive officers over the past five years:
Robert L. Jackman
-------------------
Prior to becoming a member of the Board and President of the Company,
Robert Jackman assisted with starting and organizing Duro Enzyme. Currently,
Dr. Jackman is a research and development and management consultant to Thermo
Enzyme Products Inc. (since 1998), Earthscape Maintenance Inc. (since 1997),
Thermo Tech Technologies Inc. (since 1995), and Thermo Tech Research Systems
Inc. (since 1995). As a consultant, he has assisted in the management of
corporate research and new product and technology development, coordinated
experimental research projects, provided technical support services, assisted
with day-to-day management of operations, assisted with promotion of the
companies and their products, assisted with preparation of patent applications,
and provided quality control of facilities. In 1994 and 1995, Dr. Jackman
worked as a research associate at the University of Guelph in Guelph, Ontario,
Canada. As a research associate, he conducted research studies on food
texture-structure relationships and published his findings. Dr. Jackman is an
author of six book chapters and 20 scientific research papers. He received a
Ph.D. in Food Science in 1992 and a Masters of Science degree in 1988 from the
University of Guelph. He also has a Bachelors of Science degree from the
University of British Columbia, which he received in 1985.
Dean Branconnier
-----------------
Over the past year, Dean Branconnier has assisted with the organization and
development of Duro Enzyme. Prior to the year 2000, Mr. Branconnier was Plant
Manager for the Richmond Bio Conversion Inc. Thermo Master Plant in Richmond,
British Columbia, Canada (1998-2000) and for the Hamilton Bio Conversion Inc.
Thermo Master Plant in Hamilton, Ontario, Canada (1995-1998). As Plant Manager,
Mr. Branconnier has the following duties and responsibilities: assist with
project schedules and construction contracts; responsible for start of
operations at both plants; maintain a daily log of all plant events and manage
daily operations; oversee all office administration; manage expenditures; ensure
compliance with permits; conduct performance reviews of employees; ensure plant
safety and security; and staff the plants. From 1985 to 1995, Mr. Branconnier
worked as a management consultant for Thermo Tech Waste Systems Inc., assisting
with managing and organization the startup company.
Jolene Fuller
--------------
Over the past year, Jolene Fuller has assisted with day-to-day operations
at Duro Enzyme. She has monitored the research and development projects,
reviewed promotional materials, set up the office and hired personnel. Since
1998, Ms. Fuller was an office administrator at Thermo Enzyme Products Ltd. Her
duties and responsibilities included: hiring and training administrative staff;
monitoring research and development projects; implementing policies and
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procedures; and reviewing promotional materials. Since 1993, Ms. Fuller has been
property manager of several rental properties. As property manager, she is
responsible for collecting rents, monitoring repairs, retaining contracts, and
managing the portfolio of properties. Since 1997, Ms. Fuller has been Vice
President of Earthscape Maintenance Inc., a Langley, B.C. company. She is
responsible for office management and bookkeeping and maintaining a database of
customers. From 1988 to 1998, Ms. Fuller was Office Manager at Thermo Tech
Technologies Inc. As Office Manager she had the following duties and
responsibilities: bookkeeping; reviewing and filing documents; ordering
supplies; monitoring stock trading activities; preparing promotional materials;
preparing company database; and managing staff of ten.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The effect of the execution of the Agreement, discussed under Item 1 of
this Form 8-K, was to transfer all of the assets of Duro Enzyme to the Company.
Following the Exchange, the former shareholders of Duro Enzyme became the
majority shareholders of the Company, holding 87.6% of the outstanding Common
Stock of the Company, and the Company became the sole shareholder of Duro
Enzyme, which thereby became a wholly-owned subsidiary of the Company.
The offering of the Company's shares to Duro Enzyme shareholders was
conducted pursuant to an exemption from registration, namely Rule 506 of
Regulation D and/or Regulation S of the Securities Act of 1933, as amended (the
"Act"). As a result, the Company's shares of Common Stock held by former Duro
Enzyme shareholders are "restricted securities" subject to Rule 144 of the Act.
As part of the Exchange, the one share of Common Stock of Duro Enzyme
issued and outstanding was exchanged for 28,800,000 shares of Common Stock of
the Company. Upon the close of the Exchange on October 16, 2000, the total
issued and outstanding shares of the Company's common stock was 32,876,400 and
the principal shareholders of the Company were as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND POSITION NUMBER OF SHARES OUTSTANDING SHARES
----------------- ---------------- -------------------
<S> <C> <C>
Robert L. Jackman - President and Treasurer 1,500,000 4.6%
and Director
-----------------------------------------------------------------------------------
Dean Branconnier - Vice President and 1,600,000 4.9%
Director
-----------------------------------------------------------------------------------
Jolene Fuller - Secretary and Director 1,625,000 4.9%
-----------------------------------------------------------------------------------
ALL CURRENT DIRECTORS AND 4,725,000 14.4%
OFFICERS AS A GROUP (3 Persons)
-----------------------------------------------------------------------------------
</TABLE>
The second step in the transaction will be to merge Duro Enzyme with and
into the Company, thereby transferring the ownership of the assets from the
wholly-owned subsidiary to its parent.
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DESCRIPTION OF BUSINESS OF THE COMPANY
The Company, a Nevada corporation formed on September 15, 1995, is a
development stage company. Since May, 1997, the Company specialized in
wholesaling a variety of handmade Monterey Jack cheeses to gourmet food stores,
small grocery stores and hotels. The business has been suspended since the
beginning of the year 2000 up to the present. Following the Exchange, the
Company plans to focus all of its efforts on the business of Duro Enzyme, change
its name to Duro Enzyme Products Inc. and its trading symbol accordingly.
Further detailed information about the Company can be found in the
Home.Web, Inc. Form 10-KSB for year ended December 31, 1999 (filed with the SEC
on March 29, 2000).
DESCRIPTION OF BUSINESS OF DURO ENZYME
Summary
-------
Duro Enzyme is structured as an integrated business with several
subsidiaries dedicated to delivering distinct aspects of its overall mandate.
The following shows how Duro Enzyme is organized to serve its clients and
shareholders:
DURO ENZYMES PRODUCTS INC.
--------------------------
| |
| |
DURO ENZYME SOLUTIONS INC. DURO ENZYME SOLUTIONS INC.
----------------------------- -----------------------------
(U.S. Subsidiary) (Canadian Subsidiary)
| |
| |
DUROZYME PLANT DURO ENZYME MANAGEMENT
-------------- ----------------------
Both of the Duro Enzyme Solutions Inc. subsidiaries are wholly owned by
Duro Enzyme. The U.S. subsidiary owns 100% of the prototype DuroZyme Plant and
holds the worldwide license to utilize and distribute products based on the 3SF
Technology. The U.S. subsidiary is responsible for managing and operating Duro
Enzyme's Technology Development Center, including researching and developing new
products and the protection of intellectual property.
The Canadian subsidiary owns 100% of Duro Enzyme Management, which is
responsible for marketing, distributing, researching and siting DuroZyme plants,
products and services. The Canadian subsidiary will also provide management
and operations support services, arrange for and secure financing for the
production of plants, arrange for and secure long-term put-or-pay contracts for
selected specific input organic materials and arrange for and secure sales
contracts for DuroZyme and specialty end products.
The initial DuroZyme Plants will be wholly owned and operated by Duro
Enzyme and run as autonomous business entities. Plants will be strategically
sited in or near major urban centers. Each operating division and DuroZyme
Plant under Duro Enzyme's corporate structure will have access to a large pool
of skilled personnel, including experienced managers, business consulting
professionals, research and process technicians, plant operators and general
laborers.
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Products, Process and Market Opportunity
--------------------------------------------
DuroZyme Plants are delivered as a turnkey package. The Plants take in
specific, selected organic materials and charge a processing fee to convert them
to enzymes with unique, stable properties that have uses in environmental
restoration and preservation and processing of consumer products, such as
pharmaceutical, nutritional and health products. Specialty end products are
also manufactured as byproducts with unique growth enrichment properties for
wide agricultural use. DuroZyme Plants provide a comprehensive solution that is
unique, stable and natural.
The DuroZyme process is a 100% natural process that is provided by way of
the exclusive 3SF Technology in environmentally-friendly DuroZyme Plants. The
fermentation is carried out under aerobic conditions, at high temperatures,
using natural organic substrates and using naturally occurring heat- and
oxygen-loving microorganisms. The high temperatures pasteurize the input organic
material and destroy pathogens and other undesirable organisms, including
insects, insect eggs, larvae and worms. The aerobic conditions of the
fermentation control obnoxious odors. The full range of heat-loving
microorganisms naturally occurring on the input organic materials are provided
with their natural food sources.
The 3SF Technology is not limited by the unique growth or fermentation
conditions of a specific microorganism like other commercial fermentation
technologies used to produce enzymes. The microorganisms used in the DuroZyme
process are not modified or manipulated in any way. No microorganisms are
specifically added, and no chemical additives or synthetic media are needed.
The input materials, process and products are all natural.
The selection of specific natural raw materials and application of unique
process conditions enable stable and natural enzymes to be tailor-produced to
meet the needs of any enzyme application. Unique, stable and natural enzymes
are obtained by separating solid-liquids from the fermented organic slurry.
DuroZymes are recovered and purified from the liquid stream using specific
steps. The DuroZymes and end products are packaged, marketed and distributed to
the market from each of the strategically located plants.
The DuroZyme process and 3SF Technology have the following attributes:
- efficient - continuous production of commercial DuroZymes;
---------
- aerobic - non-odor producing;
-------
- unique - processing technologies not previously available;
------
- flexible and robust - production of virtually any enzyme type
---------------------
through specific selection of input raw material and control of
operating conditions;
- selective - one type of input raw material yields one major type of
---------
stable enzyme; and
- cost-effective - very high value DuroZyme and end products
--------------
manufactured from low-value raw materials for which a processing
fee is collected.
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Duro Enzyme has plans to build a prototype DuroZyme Plant in Langley, B.C.,
Canada, as a fully integrated manufacturing and technology development facility
capable of processing up to 60 tons per day of specific, selected organic
material. The cost of the prototype Plant is estimated at $10 million.
The DuroZyme Plant
--------------------
The DuroZyme Plant is a state-of-the-art modular-built facility that
utilizes the 3SF Technology and DuroZyme process. The highly engineered Plant
is designed to be a stand-alone production facility. Each Plant takes up very
little space, about 10,000 square feet. A Plant can be sited in or near urban
or residential areas since it is operated with zero environmental impact. This
is assured with use of an advanced air handling and water recovery system. The
spent air is passed through a scrubber system to remove particulates before it
is burnt off or thermally oxidized by the power co-generator. Operating from
its own power generator, each Plant offers a self-sustaining high-temperature,
aerobic fermentation system that is not dependent on utility power.
Duro Enzyme plans to strategically site DuroZyme Plants throughout the
world. Construction of Plants is planned to be at a rate of one per year and at
an estimated cost of $8 million using debt financing. A total of five wholly
owned DuroZyme Plants are projected within the first five years of operations.
Marketplace and the Duro Enzyme Solution
---------------------------------------------
In 1998, the global industrial enzyme market was estimated to be worth
about $2 billion. The addition of medicinal, pharmaceutical, health, dietary
product and other consumer markets in which enzymes were used has increased the
global enzyme market to just over $3 billion. The market is expected to grow to
$6 billion within the next few years.(1) Despite the large number of
applications, the global enzyme market represents a virgin market in terms of
its value. Applications have been limited to the properties of available enzyme
products. This has limited market expansion and growth. The introduction of
the 3SF Technology provides a wider range of applications for enzyme use in the
production of products and does so efficiently and naturally.
Duro Enzyme believes the DuroZyme Plants provide specific generators of
organic materials with a cost-effective and efficient way to manage these
materials and divert them from the disposal chain. Duro Enzyme will work with
generators to supply specific, high-quality single source or "pure" organic
materials of consistent composition and volume. These materials may be in the
form of liquids or solids and from sources including the following:
____________________
(1) Scientists Find Jobs Turning "Extremozymes' Into Industrial Catalysts. The
Scientist, Vol. 10, No. 19, pp. 1-8 (1996); Enzymes Usher in a New Era. Chemical
Engineering (July 1998); A Global Business Report on Enzymes (Industrial, Food
& Research). Global Industry Analysts Inc., p. 750 (1997); U.S. Commercial
---------------
Enzyme Markets. Frost & Sullivan Publishers, p. 275 (1998); Enzymes for
---------------
Industrial Applications: Products, Uses, Technologies and Economic Values.
Publications Resource Group, p. 290 (1998); M.T. and B.L. Marrs, Extremophiles.
Scientific American, p. 8 (April 1997).
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* food processors
- fish and fish process byproducts
- processed fruit and vegetable byproducts
- meat trimmings and byproducts
- cheese whey and other dairy byproducts
- grain and cereal byproducts
- fruit juices, jams and their byproducts
- brewery byproducts
- winery byproducts
* supermarkets, other food retailers and restaurants
- fresh produce
- meat trimmings and bones
- fish and fish products
- cereal products and baked goods
- fryer oils and greases
- coffee grounds and filters
* industrial processors
- pulp and paper byproducts
- tannery residuals
- oil refining byproducts
- fermentation byproducts
* miscellaneous sources
- paper and cardboard
- corn stalk, straw and other plant biomass
Duro Enzyme believes that high quality "pure" organics are plentiful and
readily available to DuroZyme Plants, especially in urban areas where management
and disposal of organic waste and associated environmental problems require
solutions such as DuroZyme processing.
The availability of unique, stable and natural enzyme products from the
DuroZyme process opens untapped markets. DuroZymes demand a premium price in
the marketplace because they expand enzyme application by being stable and
available for a wider range of uses that usually destroy other enzymes. Other
commercial enzymes range in price from $500.00 per ounce to more than
$250,000.00 per ounce.(2)
-----------------------------
(2) A Global Business Report on Enzymes (Industrial, Food & Research). Global
Industry Analysts Inc., p. 750 (1997); U.S. Commercial Enzyme Markets. Frost
-------------------------------
& Sullivan Publishers, p. 275 (1998); Enzymes for Industrial Applications:
Products, Uses, Technologies and Economic Values. Publications Resource Group,
p. 290 (1998); Biochemicals and Reagents for Life Science Research. SIGMA
-----
Product Catalog, Sigma-Aldrich Canada Ltd. (1997); Anachemia Sciences Catalog.
---------------- --------------------------
Anachemia Sciences Ltd. (1998).
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DuroZymes open up enzyme markets by providing applications not previously
available. Some of the products developed using the DuroZyme process are the
following: pharmaceuticals; health products; cosmetics; analytical tests;
diagnostic tests; home and commercial test kits; industrial processes, including
pulp and paper manufacture, leather tanning and ethanol fuel production; food
products; food production processes; animal feeds; soil remediation; water
purification; organic waste reduction; and bioconversion technologies.
DuroZymes manufactured at Duro Enzyme's prototype DuroZyme Plant will
initially target the animal feed industry. A large number of different enzymes
are used to increase feed quality, provide conversion efficiencies and increase
the value and utilization of traditionally low value feed materials. Key
enzymes are those that break down cellulose, a major component of straw, hay,
corn stalk and other plant biomass and those that breakdown specific
antinutritional and intolerance factors, including lignin, phytates and lactose.
The specialty end products manufactured by each DuroZyme Plant are the bulk
solids byproduct of the DuroZyme process. The specialty end products are
enriched with residual DuroZymes not removed in the solids-liquids separation of
the fermented organics. The end products also contain pre-digested solids and
microbial biomass, which are highly stable and available forms of organic matter
and nutrients. They are valuable as nutrients and growth enhancers for wide
agricultural uses, including the following: specialty fish feeds; specialty
animal feeds; feed enrichment additives; hydroponic growth media for greenhouse
crop production; mushroom growth media; specialty plant fertilizers; fertilizer
enrichment additives; and soil conditioners. These and other applications
provide vertical integrated business opportunities to the main business of
DuroZyme production.
Competition
-----------
Approximately 70% of the commercial enzymes are products of microbial
fermentation.(3) The microorganisms are specific bacteria, fungi or yeast,
isolated from soils, water or other sources. Isolation and purification of the
microorganisms is a time-consuming and resource intensive process, often
involving trial and error in the laboratory and significant expense. Once
obtained, the microorganism is usually modified so that it produces the desired
enzyme in high yield by using genetic techniques. The enzymes are cultured in
batches in large fermentation tanks.
----------------------------
(3) A Global Business Report on Enzymes (Industrial, Food & Research). Global
Industry Analysts Inc., p. 750 (1997); U.S. Commercial Enzyme Markets. Frost
-------------------------
& Sullivan Publishers, p. 275 (1998); Enzymes for Industrial Applications:
Products, Uses, Technologies and Economic Values. Publications Resource Group,
p. 290 (1998); Chemistry from Unknown Microbes. Science/Technology, Vol. 77,
No. 1 (1999); Stroh, W.H., Trends in Use of Industrial Bioprocessing Enzymes
for the 21st Century, Genetic Engineering News (September 15, 1994).
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Duro Enzyme believes the traditional method of batch fermentation that is
relied upon by most producers of commercial enzymes is limiting.(4) The
limitations include the following:
- The microbial fermentation method depends upon the use of mild
conditions to promote the growth ofthe enzyme producing microorganism
that often produces an inactive form of enzyme.
- The action of the enzyme products is greatest towards synthetic
materials but show poor performance in commercial use with natural
materials.
- The genetic manipulation of the microorganisms or of the enzymes they
produce results in non-natural microorganisms and/or non-natural
products.
- The expense of time, resources and money in the development and
manufacture of specific enzymes is often significant which results
in high prices for the resulting enzyme products and processes.
- The manufacture of enzymes in batches is inefficient and does not
meet the individual needs of many end-users.
While a wide range of commercial enzymes are available, there is a need for
enzymes with greater stability and unique properties. Unique and specialty
enzymes command a premium price in the marketplace. The potential for
substantial revenue has driven the formation of numerous small-scale specialty
enzyme producers, as well as the development and increased use of high-tech
genetic engineering methods to produce enzymes with desired properties. (5)
Duro Enzyme believes the development of the 3SF Technology delivered by way
of turnkey DuroZyme Plants is a major advance. The new technology avoids the
limitations faced by existing enzyme producers. The technology does not depend
on mild fermentation conditions or on a limited number of species of
microorganisms. Rather, natural food sources are used, widening the
applications for the DuroZyme process. The supply of single-source organic
materials needed by DuroZyme Plants is readily accommodated by the millions of
tons of organic waste produced each year throughout the world.
Intellectual Property Protection
----------------------------------
The DuroZyme Plant delivery system and exclusive 3SF Technology and
commercial DuroZyme and specialty products will be protected through patents and
trademarks. Duro Enzyme is in the process of filing for patent protection of
the 3SF Technology in the United States and Canada. International filings will
follow. Confidentiality policies will be internally implemented to protect Duro
Enzyme's proprietary information.
_______________________
(4) Kristjansson, J.K., Thermophilic Organisms as Sources of Thermostable
Enzymes, TIBTECH, Vol. 7, No. 12, pp. 349-353 (1989); The Enzymes from
Extreme Thermophiles: Bacterial Sources, Thermostabilities and Engineering /
Biotechnology, Vol. 45, p. 57-98 (1992); Personal Communications with Kerr
Anderson of the Dow Chemical Company.
(5) A Global Business Report on Enzymes (Industrial, Food & Research). Global
Industry Analysts Inc., p. 750 (1997); U.S. Commercial Enzyme Markets. Frost &
------------------------------
Sullivan Publishers, p. 275 (1998); Enzymes for Industrial Applications:
Products, Uses, Technologies and Economic Values. Publications Resource Group,
p. 290 (1998).
10
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Sources of Revenue
--------------------
Duro Enzyme anticipates the following revenue sources: technology
licensing fees; raw material processing fees; and end product sales, including
specific DuroZymes, bulk growth-enrichment products and DuroZyme product blends.
DuroZyme Plants are expected to be profitable within their first year of
operation. This projection is based on the following assumptions:
- A cost of $8 million to construct the Plant.
- Operating capacity of up to 60 tons per day, with the Plant operating
at 90% capacity by the end of the fist year with the remaining time
allotted for startup, commissioning optimization and maintenance.
- Capital cost to build a 60 ton per day DuroZyme Plant is projected to
be $10 million, not including site development costs. - All
Plants are wholly owned and debt financed over 10 years at 10%
interest.
- Conservative estimates project construction of one DuroZyme Plant per
year and a more aggressive estimates project two or more Plants
per year.
- Plants are staffed by 12 persons - Plant Manager, Assistant Plant
Manager, Office Clerk/Secretary, six Plant Operators and three
Control Technicians.
- Plants receive $50 per ton in processing fees, secured by long-term
put-or-pay contracts between Duro Enzyme and local generators
of specific organic materials. A 60 ton per day Plant operating at
capacity 365 days per year will generate projected gross revenues
of over $1 million per year in processing fees.
- A single-source or "pure" organics stream with eight percent total
solids will yield 4.8 tons of bulk solids byproduct per day from a
60 ton per day DuroZyme Plant operating at capacity. This specialty
DuroZyme-enriched, end product is projected to sell for $500/ton,
yielding annual gross revenues of over $875,000.
- Every ton of input organic material containing eight percent total
solids is projected to yield an ounce of DuroZyme product priced at
$1,000 per ounce. A 60 ton per day Plant running at capacity over
365 days per year will generate projected annual gross revenues
of over $20 million from sale of unique, stable and natural
DuroZymes.
The operating income depends upon the local tip fee structures, market
demand for end products and specific enzyme product pricing. Operating costs
depend on a number of factors, including local wages, utilities, taxes, finance
fees, logistics of obtaining raw materials and end product distribution.
Duro Enzyme projects completion of construction and commencement of full
operation of its prototype DuroZyme Plant and Technology Development Center
within its first year of operations. This facility will showcase Duro Enzyme's
advanced technology, delivery systems and products.
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Employees
---------
As of September 30, 2000, Duro Enzyme had seven consultants. Of the
consultants, three were classified as executive officers, two as administrative
personnel, and two sales and marketing. Duro Enzyme's employees do not belong
to a collective bargaining unit, and Duro Enzyme is not aware of any labor union
organizing activity.
Corporate Headquarters
-----------------------
Duro Enzyme's corporate offices are located at 435 Martin Street, Blaine
Washington, 98230, where it sub-leases approximately 250 square feet at a
monthly rate of US$400. Duro Enzyme also has offices at 8412 Armstrong Road,
Langley, British Columbia, V1M 3P5, CANADA. There it leases approximately 5000
square feet at a monthly lease rate of US$3000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
FINANCIAL STATEMENTS
---------------------
Accompanying this Form 8-K are the financial statements of Duro Enzyme
required by Regulation S-B, Item 310(c).
INDEX TO FINANCIAL STATEMENTS OF DURO ENZYME
Independent Auditors' Report, dated October 17, 2000 . . . . . . . . . . . .F-1
Consolidated Balance Sheet as at September 30, 2000 (audited). . . . . . . . F-2
Consolidated Statement of Loss for the ten months ended
September 30, 2000 (audited). . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Statement of Changes in Financial Position for
the ten months ended September 30, 2000 (audited). . . . . . . . . . . . . .F-4
Notes to Financial Statements for the ten months ended
September 30, 2000 (audited). . . . . . . . . . . . . . . . . . . . . . . . .F-5
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PRO FORMA FINANCIAL INFORMATION
----------------------------------
Accompanying this Form 8-K are the pro forma financial statements required
by Regulation S-B, Item 310(d).
INDEX TO PRO FORMA FINANCIAL STATEMENTS OF THE COMBINED ENTITY
Pro Forma Consolidated Balance Sheet as at
September 30, 2000 (unaudited). . . . . . . . . . . . . . . . . . . . . . . .F-7
Pro Forma Consolidated Statement of Loss
for the nine months ended September 30, 2000
(unaudited). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Pro Forma Consolidated Statement of Loss for the year ended
December 31, 1999 (unaudited). . . . . . . . . . . . . . . . . . . . . . .F-9
EXHIBITS
--------
2.1 Agreement and Plan of Reorganization, executed August 1, 2000,
by and between Home.Web, Inc. and Duro Enzyme Products Inc.
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ITEM 8. CHANGE IN FISCAL YEAR
Effective December 15, 2000, the Company has changed, by resolution of the
Board of Directors pursuant to Article VII of the Company's bylaws, its fiscal
year end from December 31st to September 30th. Hereafter, the Company will file
quarterly reports on Form 10-QSB for periods ending December 31st, March 31st
and June 30th, and an annual report on Form 10-KSB for the year ending September
30th. The Company will file a transition report on Form 10-KSB for the year
ended September 30, 2000 within the prescribed period of time.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOME.WEB, INC.
Dated: December 29, 2000 By: /s/ Bob Jackman
---------------------- ----------------------------
Name: Robert L. Jackman
Title: President
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The Raber Mattuck Group
Chartered Accountants
Suite 318, North Tower, Oakridge Centre, 650 West 41st Avenue, Vancouver B.C.,
V5Z 2M9
Telephone: (604) 435-5655 Facsimile: (604) 435-1913 E-mail:
[email protected]
================================================================================
AUDITORS' REPORT
================================================================================
To the Shareholder of Duro Enzyme Products Inc.:
We have audited the consolidated balance sheet of Duro Enzyme Products Inc. as
at September 30, 2000 and the consolidated statements of loss and deficit and
changes in financial position for the ten months then ended. 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 an audit to obtain reasonable
assurance 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 principals used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at September 30, 2000 and the
results of its operations and the changes in its financial position for the
period ended in accordance with generally accepted accounting principles.
/s/ "Raber Mattuck"
--------------------------------
CHARTERED ACCOUNTANTS
Vancouver, British Columbia
October 17, 2000
F - 1
<PAGE>
<TABLE>
<CAPTION>
DURO ENZYME PRODUCTS INC.
CONSOLIDATED BALANCE SHEET
AS AT SEPTEMBER 30, 2000
U.S. $
------------
<S> <C>
ASSETS
------
CURRENT ASSET
Accounts receivable $ 1
Prepaid expenses 23,514
------------
23,515
LICENSE (Note 2 (c) and 6 (a)) 1,000,000
------------
TOTAL ASSETS $ 1,023,515
============
LIABILITIES & SHAREHOLDER'S EQUITY
----------------------------------
CURRENT LIABILITIES
Accounts Payable (Note 3) $ 27,446
Note Payable (Note 4) 1,000,000
------------
1,027,446
------------
SHAREHOLDER'S EQUITY
--------------------
CAPITAL STOCK (Note 5) 1
DEFICIT (3,932)
------------
(3,931)
------------
$ 1,023,515
============
F - 2
<PAGE>
DURO ENZYME PRODUCTS INC.
CONSOLIDATED STATEMENT OF LOSS
FOR THE 10 MONTH PERIOD ENDED SEPTEMBER 30, 2000
U.S. $
------------
EXPENSES
Filing Fees 2,699
Interest Expense 1,233
------------
NET LOSS AND DEFICIT $ 3,932
============
F - 3
<PAGE>
DURO ENZYME PRODUCTS INC.
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE 10 MONTH PERIOD ENDED SEPTEMBER 30, 2000
U.S. $
------------
CASH RESOURCES PROVIDED BY (USED IN)
OPERATING ACTIVITES
Net Loss $ (3,932)
Cash generated from (used for) operating working capital
Accounts receivable 1
Prepaid expenses (23,514)
Accounts payable and accrued liabilities 27,446
------------
(1)
------------
CASH RESOURCES PROVIDED BY (USED IN)
FINANCING ACTIVITIES
Share capital 1
Note Payable 1,000,000
------------
1,000,001
------------
CASH RESOURCES PROVIDED BY (USED IN)
INVESTING ACTIVITIES
Acquisition of license (1,000,000)
------------
(1,000,000)
------------
INCREASE (DECREASE) IN CASH -
CASH AND TERM DEPOSITS, beginning of year -
------------
CASH AND TERM DEPOSITS, end of year $ -
============
</TABLE>
F - 4
<PAGE>
DURO ENZYME PRODUCTS INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE 10 MONTHS ENDED SEPTEMBER 30, 2000
1. NATURE OF BUSINESS AND STATUS OF ACTIVITIES
Duro Enzyme Products Inc. (the "Company") was incorporated in Nevada, USA
on November 29, 1999, and is a private company.
Duro Enzyme Products Inc. has the license to utilize and exploit the
DuroZyme Plant and 3SF Technology anywhere in the world. Through
application of the technology, the Company can manufacture unique, stable
and natural enzymes and specialty end products.
The Company has investments in two subsidiary, as follows:
COMPANY NATURE OF BUSINESS
Duro Enzyme Solutions Inc. (100% owned) - Licensor of Technology
Nevada Corporation
Duro Enzyme Solutions Inc. (100% owned) - Canadian Subsidiary
B.C. Corporation
2. SIGNIFICANT ACCOUNTING POLICIES
<TABLE>
<CAPTION>
<S> <C>
(a) PRINCIPLES OF ACCOUNTING These consolidated financial statements have been prepared
in accordance with accounting principles generally accepted
in Canada applicable to a going concern, which assumes that
the Company will continue operation for a reasonable period
of time and will be able to realize its assets and discharge
its liabilities and commitments in the normal course of
operations.
These principles can differ in certain material respects
from those accounting principles generally accepted in the
United States but no material differences exist in these
statements.
(b) BASIS OF CONSOLIDATION These financial statements have been prepared using the
purchase method of consolidation. The assets and liabilities
of acquired companies are initially recorded at their cost.
The results of operations of the acquired companies are
included from the dates of acquisition. All significant
intercompany transactions and balances have been eliminated
on consolidation.
</TABLE>
F - 5
<PAGE>
DURO ENZYME PRODUCTS INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE 10 MONTHS ENDED SEPTEMBER 30, 2000
2. SIGNIFICANT ACCOUNTING POLICIES - CONT.
(c) LICENSES License rights are recorded at cost and are amortized on a
straight-line basis over the license period (10 years) which
is the Company's estimated period of benefit for these
costs.
3. ACCOUNTS PAYABLE
Included in accounts payable is $25,213 US owing to the President, Director
and Sole Shareholder of the Company.
4. NOTE PAYABLE
The Company, in connection with its acquisition of the license agreement
(Note 6 (a)) is indebted by way of a $1,000,000 US note payable, due on
demand at five percent (5%) rate of interest payable both before and after
maturity. Interest of $1,233 US has been accrued but unpaid to September
30, 2000.
5. CAPITAL STOCK
The Company has authorized share capital of 25,000,000 common shares par
value of $0.01US. Only 1 share has been issued.
6. SIGNIFICANT AGREEMENTS
The Company has entered into several significant agreements during the
operating period as follows:
a) License and Distribution Agreement. The Company, through its
subsidiary entered into a License and Distribution Agreement on
September 21, 2000 to utilize and exploit the DuroZyme plants and the
advanced 3SF Technology anywhere in the world. The License is
$1,000,000 US and was satisfied by a Note payable (Note 4).
Amortization has not been recorded during the period (Note 2 (e)). The
License Agreement also calls for an additional payment of two and
one-half percent (2.5%) of gross revenue.
b) Research and Development Service Agreement. The Company has entered
two separate agreements (one for the United States and one for Canada)
on September 21, 2000 to retain the services of a Consultant to be the
Company's prime supplier, to provide research, development and related
consulting services. These services are provided at a cost plus 15%
rate. This contract is for five (5) years and renewable automatically
if not terminated.
F - 6
<PAGE>
<TABLE>
<CAPTION>
HOME.WEB, INC.
PROFORMA - CONSOLIDATED BALANCE SHEET
As At September 30, 2000 (Unaudited)
U.S. $
------------
<S> <C>
ASSETS
------
CURRENT ASSET
Accounts receivable $ 1,451
Prepaid expenses 23,514
------------
23,515
CAPITAL ASSETS 40,861
LICENSE 1,000,000
TRADE NAME 11,000
------------
TOTAL ASSETS $ 1,076,826
============
LIABILITIES & SHAREHOLDER'S EQUITY
----------------------------------
CURRENT LIABILITIES
Accounts Payable $ 28,872
Note Payable 1,000,000
Loan from affiliate 25,962
------------
1,054,834
------------
SHAREHOLDER'S EQUITY
---------------------
CAPITAL STOCK 27,508
PAID IN CAPITAL 1,347,493
DEFICIT (1,353,009)
------------
21,992
$ 1,076,826
============
F - 7
<PAGE>
HOME.WEB, INC.
PROFORMA - CONSOLIDATED STATEMENT OF LOSS
For the 9 Month Period Ended September 30, 2000
U.S. $
------------
EXPENSES
Consulting Fees 2,929
Filling Fees 2,699
Interest Expense 1,233
Office supplies 70
------------
NET LOSS $ 6,931
============
F - 8
<PAGE>
HOME.WEB, INC.
PROFORMA - CONSOLIDATED STATEMENT OF LOSS
For the 12 Month Period Ended December 31, 1999 (Unaudited)
U.S. $
------------
REVENUE 528
COST OF SALES 523
------------
GROSS MARGIN 5
EXPENSES
Advertising 7
Consulting Fees 5,500
Depreciation 4,003
Filling Fees 1,000
License and Taxes 145
Office help 1,591
Office supplies 588
Travel 54
Rent 248
Business start up costs 15,318
------------
TOTAL EXPENSES 28,454
------------
LOSS FROM OPERATION (28,449)
OTHER INCOME (EXPENSES)
Nondeductible penalties (716)
State tax expense (1,600)
------------
Total other expense (2,316)
NET LOSS (30,765)
============
NET LOSS PER COMMON STOCK $ (0.0011)
------------
WEIGHTED AVERAGE OF SHARES OUTSTANDING 27,157,000
------------
</TABLE>
F - 9
<PAGE>
EXHIBIT INDEX
2.1 Agreement and Plan of Reorganization, executed August 1, 2000,
by and between Home.Web, Inc. and Duro Enzyme Products Inc.
<PAGE>
