UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange Act
of 1934
THEINTERNETCORP.NET, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0424430
(State of organization) (I.R.S. Employer Identification No.)
3158 Redhill Ave., Ste. 240, Costa Mesa, CA 92626
(Address of principal executive offices)
Registrant's telephone number, including area code (714) 428-0632
Registrant's Attorney: Shawn F. Hackman, Esq.
3360 W. Sahara Ave., Suite 200
Las Vegas, NV 89102
(702) 732-2253
Securities to be registered pursuant to Section 12(b)
of the Act: None
Securities to be registered pursuant to Section 12(g)
of the Act: Common
ITEM 1. DESCRIPTION OF BUSINESS
Background
THEINTERNETCOPR.NET, INC. (the "Company") is a Nevada corporation
formed on April 29, 1999. Its principal place of business is located
at 3158 Redhill Ave., Ste 240, Costa Mesa, CA 92626. The Company
was organized to engage in any lawful corporate business, including
but not limited to, participating in mergers with and acquisitions
of other companies. The Company has been in the developmental stage
since inception and has no operating history other than
organizational matters. The company currently has no operations and,
in accordance with SFAS #7, is considered a development stage
company.
The Company was incorporated by Shawn F. Hackman, Esq. He no longer
holds any position with the Company, and holds none of the Company's
stock. The Company has never had any operations.
Initially, founders shares were issued to Vincent Van Den Brink, the
company's sole officer and director. All such transactions took
place prior to or during April 29, 1999. All shareholders have held
their stock since that time.
The primary activity of the Company currently involves seeking a
company or companies that it can acquire or with whom it can merge.
The Company has not selected any company as an acquisition target or
merger partner and does not intend to limit potential candidates to
any particular field or industry, but does retain the right to limit
candidates, if it so chooses, to a particular field or industry. The
Company's plans are in the conceptual stage only.
The Board of Directors has elected to begin implementing the
Company's principal business purpose, described below under "Item 2,
Plan of Operation". As such, the Company can be defined as a "shell"
company, whose sole purpose at this time is to locate and consummate
a merger or acquisition with a private entity.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules, and regulations limiting the sale of securities of
"blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the
Company has successfully implemented its business plan.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act of
1934 (the "Exchange Act"), in order to ensure that public
information is readily accessible to all shareholders and potential
investors, and to increase the Company's access to financial
markets. In the event the Company's obligation to file periodic
reports is suspended pursuant to the Exchange Act, the Company
anticipates that it will continue to voluntarily file such reports.
Risk Factors
The Company's business is subject to numerous risk factors,
including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has
had no operating history and has received no revenues or earnings
from operations. The Company has no significant assets or financial
resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until it completes
a business combination. This may result in the Company incurring a
net operating loss which will increase continuously until the
Company completes a business combination with a profitable business
opportunity. There is no assurance that the Company will identify a
business opportunity or complete a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success of
the Company's proposed plan of operation will depend to a great
extent on the operations, financial condition, and management of the
identified business opportunity. While management intends to seek
business combinations with entities having established operating
histories, it cannot assure that the Company will successfully
locate candidates meeting such criteria. In the event the Company
completes a business combination, the success of the Company's
operations may be dependent upon management of the successor firm or
venture partner firm together with numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is, and will continue to be, an
insignificant participant in the business of seeking mergers and
joint ventures with, and acquisitions of small private entities. A
large number of established and well-financed entities, including
venture capital firms, are active in mergers and acquisitions of
companies which may also be desirable target candidates for the
Company. Nearly all such entities have significantly greater
financial resources, technical expertise, and managerial
capabilities than the Company. The Company is, consequently, at a
competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination.
Moreover, the Company will also compete with numerous other small
public companies in seeking merger or acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no arrangement,
agreement, or understanding with respect to engaging in a business
combination with any private entity. There can be no assurance the
Company will successfully identify and evaluate suitable business
opportunities or conclude a business combination. Management has not
identified any particular industry or specific business within an
industry for evaluations. The Company has been in the developmental
stage since inception and has no operations to date. Other than
issuing shares to its original shareholders, the Company never
commenced any operational activities. There is no assurance the
Company will be able to negotiate a business combination on terms
favorable to the Company. The Company has not established a specific
length of operating history or a specified level of earnings,
assets, net worth or other criteria which it will require a target
business opportunity to have achieved, and without which the Company
would not consider a business combination in any form with such
business opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no
significant operating history, losses, limited or no potential for
earnings, limited assets, negative net worth, or other negative
characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting up
to twenty hours per month to the business of the Company. The
Company's officers have not entered into written employment
agreements with the Company and are not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the combined
limited experience and time commitment of management, loss of the
services of any of these individuals would adversely affect
development of the Company's business and its likelihood of
continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest and non
"arms-length" transactions may also arise in the event the Company's
officers or directors are involved in the management of any firm
with which the Company transacts business. The Company's Board of
Directors has adopted a resolution which prohibits the Company from
completing a combination with any entity in which management serve
as officers, directors or partners, or in which they or their family
members own or hold any ownership interest. Management is not aware
of any circumstances under which this policy could be changed while
current management is in control of the Company. See "ITEM 5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS -
CONFLICTS OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Companies
subject to Section 13 of the Securities Exchange Act of 1934 (the
"Exchange Act") must provide certain information about significant
acquisitions, including certified financial statements for the
company acquired, covering one or two years, depending on the
relative size of the acquisition. The time and additional costs that
may be incurred by some target entities to prepare such statements
may significantly delay or even preclude the Company from completing
an otherwise desirable acquisition. Acquisition prospects that do
not have or are unable to obtain the required audited statements may
not be appropriate for acquisition so long as the reporting
requirements of the 1934 Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has
not conducted or received results of market research indicating that
market demand exists for the transactions contemplated by the
Company. Moreover, the Company does not have, and does not plan to
establish, a marketing organization. If there is demand for a
business combination as contemplated by the Company, there is no
assurance the Company will successfully complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, the Company's proposed
operations, even if successful, will result in a business
combination with only one entity. Consequently, the resulting
activities will be limited to that entity's business. The Company's
inability to diversify its activities into a number of areas may
subject the Company to economic fluctuations within a particular
business or industry, thereby increasing the risks associated with
the Company's operations.
REGULATION. Although the Company will be subject to regulation under
the Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company Act
of 1940, insofar as the Company will not be engaged in the business
of investing or trading in securities. In the event the Company
engages in business combinations which result in the Company holding
passive investment interests in a number of entities, the Company
could be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as an
investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as
to the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject the
Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a private company obtaining a
controlling interest in the Company. Any such business combination
may require management of the Company to sell or transfer all or a
portion of the Company's common stock held by them, or resign as
members of the Board of Directors of the Company. The resulting
change in control of the Company could result in removal of one or
more present officers and directors of the Company and a
corresponding reduction in or elimination of their participation in
the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based upon a
business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of such private company. Issuing previously authorized
and unissued common stock of the Company will reduce the percentage
of shares owned by present and prospective shareholders, and a
change in the Company's control and/or management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into a
business combination with an entity that desires to establish a
public trading market for its shares. A target company may attempt
to avoid what it deems to be adverse consequences of undertaking its
own public offering by seeking a business combination with the
Company. The perceived adverse consequences may include, but are not
limited to, time delays of the registration process, significant
expenses to be incurred in such an offering, loss of voting control
to public shareholders, and the inability or unwillingness to comply
with various federal and state securities laws enacted for the
protection of investors. These securities laws primarily relate to
registering securities and full disclosure of the Company's
business, management, and financial statements.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Typically, these transactions may be
structured to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the
target entity. Management cannot assure that a business combination
will meet the statutory requirements for a tax-free reorganization,
or that the parties will obtain the intended tax-free treatment upon
a transfer of stock or assets. A non-qualifying reorganization could
result in the imposition of both federal and state taxes, which may
have an adverse effect on both parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management believes that any potential target company
must provide audited financial statements for review, and for the
protection of all parties to the business combination. One or more
attractive business opportunities may forego a business combination
with the Company, rather than incur the expenses associated with
preparing audited financial statements.
BLUE SKY CONSIDERATIONS. Because the securities registered hereunder
have not been registered for resale under the blue sky laws of any
state, and the Company has no current plans to register or qualify
its shares in any state, holders of these shares and persons who
desire to purchase them in any trading market that might develop in
the future, should be aware that there may be significant state blue
sky restrictions upon the ability of new investors to purchase the
securities. These restrictions could reduce the size of any
potential market. As a result of recent changes in federal law, non-
issuer trading or resale of the Company's securities is exempt from
state registration or qualification requirements in most states.
However, some states may continue to restrict the trading or resale
of blind-pool or "blank-check" securities. Accordingly, investors
should consider any potential secondary market for the Company's
securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and "forward-
looking statements" as that term is defined in Section 27A of the
Securities Act of 1933 as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934 as amended (the
"Exchange Act"). All statements that are included in this
Registration Statement, other than statements of historical fact,
are forward-looking statements. Although Management believes that
the expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause
actual results to differ materially from the expectations are
disclosed in this Statement, including, without limitation, in
conjunction with those forward-looking statements contained in this
Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more business
opportunities presented to it by persons or firms desiring the
perceived advantages of a publicly held corporation. At this time,
the Company has no plan, proposal, agreement, understanding, or
arrangement to acquire or merge with any specific business or
company, and the Company has not identified any specific business or
company for investigation and evaluation. No member of Management or
any promoter of the Company, or an affiliate of either, has had any
material discussions with any other company with respect to any
acquisition of that company. The Company will not restrict its
search to any specific business, industry, or geographical location,
and may participate in business ventures of virtually any kind or
nature. Discussion of the proposed business under this caption and
throughout this Registration Statement is purposefully general and
is not meant to be restrictive of the Company's virtually unlimited
discretion to search for and enter into potential business
opportunities.
The Company's potential success is heavily dependant on the
Company's management, which will have virtually unlimited discretion
in searching for and entering into a business opportunity. None of
the officers and directors of the Company has had any experience in
the proposed business of the Company.
Management anticipates that it will only participate in one
potential business venture. This lack of diversification should be
considered a substantial risk in investing in the Company because it
will not permit the Company to offset potential losses from one
venture against gains from another.
The Company may seek a business combination with a firm which only
recently commenced operations, or a developing company in need of
additional funds to expand into new products or markets or seeking
to develop a new product or service, or an established business
which may be experiencing financial or operating difficulties and
needs additional capital which is perceived to be easier to raise by
a public company. In some instances, a business opportunity may
involve acquiring or merging with a corporation which does not need
substantial additional cash but which desires to establish a public
trading market for its common stock. The Company may purchase assets
and establish wholly-owned subsidiaries in various businesses or
purchase existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity
in which to participate will be complex and extremely risky.
Because of general economic conditions, rapid technological advances
being made in some industries, and shortages of available capital,
management believes that there are numerous firms seeking the
benefits of a publicly-traded corporation. Such perceived benefits
of a publicly traded corporation may include facilitating or
improving the terms on which additional equity financing may be
sought, providing liquidity for the principals of a business,
creating a means for providing incentive stock options or similar
benefits to key employees, providing liquidity (subject to
restrictions of applicable statues) for all shareholders, and other
items. Potentially available business opportunities may occur in
many different industries and at various stages of development, all
of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
Management believes that the Company may be able to benefit from the
use of "leverage" to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the Company
would be required to use less of its available funds to acquire a
target company and, therefore, could commit those funds to the
operations of the business, to combinations with other target
companies, or to other activities. The borrowing involved in a
leveraged transaction will ordinarily be secured by the assets of
the acquired business. If that business is not able to generate
sufficient revenues to make payments on the debt incurred by the
Company to acquire that business, the lender would be able to
exercise the remedies provided by law or by contract. These
leveraging techniques, while reducing the amount of funds that the
Company must commit to acquire a business, may correspondingly
increase the risk of loss to the Company. No assurance can be given
as to the terms or availability of financing for any acquisition by
the Company. During periods when interest rates are relatively high,
the benefits of leveraging are not as great as during periods of
lower interest rates, because the investment in the business held on
a leveraged basis will only be profitable if it generates sufficient
revenues to cover the related debt and other costs of the financing.
Lenders from which the Company may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the future borrowing,
distribution, and operating policies of the Company. It is not
possible at this time to predict the restrictions, if any, which
lenders may impose, or the impact thereof on the Company.
As part of any transactions, the acquired company may require that
Management or other stockholders of the Company sell all or a
portion of their shares to the acquired Company or the principles of
the acquired company. It is anticipated that the sales price of
such shares will be lower than the current market price or
anticipated market price of the Company's Common Stock. The
Company's funds are not expected to be used for any stock purchase
from insiders. The Company'' shareholders will not be provided the
opportunity to approve or consent to such sale. The opportunity to
sell all or a portion of their shares in connection with an
acquisition may influence management's decision to enter into a
specific transaction. However, management believes that since the
anticipated sales price will be less than the market value, the
potential of a stock sale by management will be a material factor in
their decision to enter a specific transaction.
The above description of potential sales of management stock is not
based upon any corporate bylaw, shareholder or board resolution, or
contract or agreement. No other payment of cash or property are
expected to be received by Management in connection with any
acquisition.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management
believes the Company will offer owners of businesses the opportunity
to acquire a controlling ownership interest in a public company at
substantially less cost than is required to conduct an initial
public offering. The owners of the businesses will, however, incur
significant post-merger or acquisition registration costs in the
event they wish to register a portion of their shares for subsequent
sale. The Company will also incur significant legal and accounting
costs in connection with the acquisition of a business opportunity,
including the costs of preparing post-effective amendments, Forms 8-
K, agreements, and related reports and documents. Nevertheless, the
officers and directors of the Company have not conducted market
research and are not aware of statistical data which would support
the perceived benefits of a merger or acquisition transaction for
the owners of a businesses. The Company does not intend to make any
loans to any prospective merger or acquisition candidates or to
unaffiliated third parties.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in essentially
any stage of its corporate life. It is impossible to predict at this
time the status of any business in which the Company may become
engaged, in that such business may need to seek additional capital,
may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer. However, the
Company does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business
opportunity until such time as the Company has successfully
consummated such a merger or acquisition. The Company also has no
plans to conduct any offerings under Regulation S.
Sources of Opportunities
The Company anticipates that business for possible acquisition will
be referred by various sources, including its officers and
directors, professional advisors, securities broker-dealers, venture
capitalists, members of the financial community, and others who may
present unsolicited proposals.
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of its
officers and directors as well as indirect associations between them
and other business and professional people. It is not presently
anticipated that the Company will engage professional firms
specializing in business acquisitions or reorganizations.
The officers and directors of the Company are currently employed in
other positions and will devote only a portion of their time (not
more than one hour per week) to the business affairs of the Company,
until such time as an acquisition has been determined to be highly
favorable, at which time they expect to spend full-time
investigating and closing any acquisition for a period of two weeks.
In addition, in the face of competing demands for their time, the
officers and directors may grant priority to their full-time
position rather than to the Company.
Management, while not especially experienced in matters relating to
the new business of the Company, will rely upon their own efforts
and, to a much lesser extent, the efforts of the Company's
shareholders, in accomplishing the business purposes of the Company.
It is not anticipated that any outside consultants or advisors,
other than the Company's legal counsel and accountants, will be
utilized by the Company to effectuate its business purposes
described herein. However, if the Company does retain such an
outside consultant or advisor, any cash fee earned by such party
will need to be paid by the prospective merger/acquisition
candidate, as the Company has no cash assets with which to pay such
obligation. There have been no discussions, understandings,
contracts or agreements with any outside consultants and none are
anticipated in the future. In the past, the Company's management has
never used outside consultants or advisors in connection with a
merger or acquisition.
As is customary in the industry, the Company may pay a finder's fee
for locating an acquisition prospect. If any such fee is paid, it
will be approved by the Company's Board of Directors and will be in
accordance with the industry standards. Such fees are customarily
between 1% and 5% of the size of the transaction, based upon a
sliding scale of the amount involved. Such fees are typically in the
range of 5% on a $1,000,000 transaction ratably down to 1% in a
$4,000,000 transaction. Management has adopted a policy that such a
finder's fee or real estate brokerage fee could, in certain
circumstances, be paid to any employee, officer, director or 5%
shareholder of the Company, if such person plays a material role in
bringing a transaction to the Company.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any
products which may be acquired. Accordingly, if it acquires the
rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product. There
is no assurance that the Company will be able either to obtain
additional financing or to interest third parties in providing
funding for the further development, marketing and manufacturing of
any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or
under the supervision of the officers and directors of the Company
(see "Management"). Management intends to concentrate on identifying
prospective business opportunities which may be brought to its
attention through present associations with management. In analyzing
prospective business opportunities, management will consider, among
other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may
be available and the depth of that management
7. the potential for further research, development or
exploration
8. specific risk factors not now foreseeable but which then
may be anticipated to impact the proposed activities of the
Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of
products, services or trades
12. name identification
Management will meet personally with management and key personnel of
the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate the
above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be obtained.
It may be anticipated that any opportunity in which the Company
participates will present certain risks. Many of these risks cannot
be adequately identified prior to selection of the specific
opportunity, and the Company's shareholders must, therefore, depend
on the ability of management to identify and evaluate such risk. In
the case of some of the opportunities available to the company, it
may be anticipated that the promoters thereof have been unable to
develop a going concern or that such business is in its development
state in that it has not generated significant revenues from its
principal business activities prior to the Company's participation.
There is a risk, even after the Company's participation in the
activity and the related expenditure of the Company's funds, that
the combined enterprises will still be able to become a going
concern or advance beyond the development stage. Many of the
opportunities may involve new and untested product, processes, or
market strategies which may not succeed. Such risks will be assumed
by the Company and, therefore, its shareholders.
The Company will not restrict its search for any specific kind of
business, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in essentially
any stage of its corporate life. It is currently impossible to
predict the status of any business in which the Company may become
engaged, in that such business may need additional capital, may
merely desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer.
The Company will not have sufficient funds to undertake any
significant development, marketing and manufacturing of any products
which may be acquired. Accordingly, following the acquisition of
any such product, the Company will, in all likelihood, be required
to either seek debt or equity financing or obtain funding from third
parties, in exchange for which the
Company would probably be required to give up a substantial portion
of its interest in any acquired product. There is no assurance that
the Company will be able either to obtain additional financing or
interest third parties in providing funding for the further
development, marketing and manufacturing of any products acquired.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of
relevant agreements, disclosure documents and other instruments will
require substantial management time and attention and substantial
costs for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity the cost
therefore incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss of the Company of
the related costs incurred. Opportunities in which the Company
participates will present certain risks, many of which cannot be
identified adequately prior to selecting a specific opportunity. The
Company's shareholders must, therefore, depend on Management to
identify and evaluate such risks. Promoters of some opportunities
may have been unable to develop a going concern or may present a
business in its development stage (in that it has not generated
significant revenues from its principal business activities prior to
the Company's participation.) Even after the Company's
participation, there is a risk that the combined enterprise may not
become a going concern or advance beyond the development stage.
Other opportunities may involve new and untested products,
processes, or market strategies which may not succeed. Such risks
will be assumed by the Company and, therefore, its shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require substantial
management time and attention as well as substantial costs for
accountants, attorneys, and others. If a decision is made not to
participate in a specific business opportunity the costs incurred in
the related investigation would not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific
business opportunity, the failure to consummate that transaction may
result in the loss by the Company of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction with a
suitable target company. If no such target is found, therefore, no
return on an investment in the Company will be realized, and there
will not, most likely, be a market for the Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition,
the Company may become a party to a merger, consolidation,
reorganization, joint venture, franchise, or licensing agreement
with another corporation or entity. It may also purchase stock or
assets of an existing business. Once a transaction is complete, it
is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a
majority or all of the Company's officers and directors may, as part
of the terms of the transaction, resign and be replaced by new
officers and directors without a vote of the Company's shareholders.
It is anticipated that securities issued in any such reorganization
would be issued in reliance on exemptions from registration under
applicable Federal and state securities laws. In some circumstances,
however, as a negotiated element of this transaction, the Company
may agree to register such securities either at the time the
transaction is consummated, under certain conditions, or at
specified time thereafter. The issuance of substantial additional
securities and their potential sale into any trading market which
may develop in the Company's Common Stock may have a depressive
effect on such market.
While the actual terms of a transaction to which the Company may be
a party cannot be predicted, it may be expected that the parties to
the business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the acquisition in
a so called "tax free" reorganization under Sections 368(a)(1) or
351 of the Internal Revenue Code of 1986, as amended (the "Code").
In order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more
of the voting stock of the surviving entity. In such event, the
shareholders of the Company, including investors in this offering,
would retain less than 20% of the issued and outstanding shares of
the surviving entity, which could result in significant dilution in
the equity of such shareholders.
As part of the Company's investigation, officers and directors of
the Company will meet personally with management and key personnel,
may visit and inspect material facilities, obtain independent
analysis or verification of certain information provided, check
references of management and key personnel, and take other
reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.
The manner in which the Company participates in an opportunity with
a target company will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the
management of the opportunity, and the relative negotiating strength
of the Company and such other management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's shareholders
would acquire in exchange for their shareholdings in the target
company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all
likelihood, hold a lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage
ownership may be subject to significant reduction in the event the
Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to
have a significant dilutive effect on the percentage of shares held
by the Company's then shareholders, including purchasers in this
offering.
Management has advanced, and will continue to advance, funds which
shall be used by the Company in identifying and pursuing agreements
with target companies. Management anticipates that these funds will
be repaid from the proceeds of any agreement with the target
company, and that any such agreement may, in fact, be contingent
upon the repayment of those funds.
Competition
The Company is an insignificant participant among firms which engage
in business combinations with, or financing of, development-stage
enterprises. There are many established management and financial
consulting companies and venture capital firms which have
significantly greater financial and personal resources, technical
expertise and experience than the Company. In view of the Company's
limited financial resources and management availability, the Company
will continue to be at significant competitive disadvantage vis-a-
vis the Company's competitors.
Year 2000 Compliance
The Company is aware of the issues associated with the programming
code in existing computer systems as the year 2000 approaches. The
Company has assessed these issues as they relate to the Company, and
since the Company currently has no operating business and does not
use any computers, and since it has no customers, suppliers or other
constituents, it does not believe that there are any material year
2000 issues to disclose in this Form 10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment company"
as an issuer which is or holds itself out as being engaged primarily
in the business of investing, reinvesting or trading securities.
While the Company does not intend to engage in such activities, the
Company may, through business combinations, obtain and hold a
minority interest in a number of development stage enterprises. The
Company could be expected to incur significant registration and
compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to review
the Company's activities from time to time with a view toward
reducing the likelihood the Company could be classified as an
"investment company".
The Company intends to structure a merger or acquisition in such
manner as to minimize Federal and state tax consequences to the
Company and to any target company.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company. (See "Management").
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company. (See "Management").
ITEM 3. DESCRIPTION OF PROPERTY.
The Company at present has no interest in any real property. The
Company neither owns nor leases any real property. Office services
are provided without charge by a director. Such costs are
immaterial to the financial statements, and accordingly, have not
been reflected therein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the Company, as
of April 29, 1999, to be a beneficial owner of five percent (5%) or
more of the Company's common stock, by the Company's directors
individually, and by all of the Company's directors and executive
officers as a group. Except as noted, each person has sole voting
and investment power with respect to the shares shown. (Note: the
only such beneficial holder is also a member of management.
Therefore, only one table is included.)
Title of
Class
Name/Address
of Owner
Shares
Beneficially
Owned
Percentage
Ownership
Common
Vincent Van Den Brink
3158 Redhill Ave., Ste. 240
Costa Mesa, CA 92626
1,000,000
100%
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until the
next annual meeting of the stockholders, or until their successors
have been elected. The officers serve at the pleasure of the Board
of Directors.
There are no agreements for any officer or director to resign at the
request of any other person, and none of the officers or directors
named below are acting on behalf of, or at the direction of, any
other person.
The Company's officers and directors will devote their time to the
business on an "as-needed" basis, which is expected to require 5-10
hours per month.
Information as to the directors and executive officers of the
Company is as follows:
Name/Address
Age
Position
Vincent Van Den Brink
3158 Redhill Ave., Ste. 240
Costa Mesa, CA 92626
President/Secretary/Director
Vincent Van Den Brink; President, Secretary, Director
Mr. Vincent Van Den Brink has been President, Secretary and Director
of the Issuer since April 29, 1999. Since October 1997 to present,
he has been a Financial Consultant with Airway Capital, Costa Mesa,
California, providing asset based lending, factoring, equipment
leasing, and export financing for various businesses. From June
1985 until May 1997, he was a Business Consultant writing business
plans and business development plans for companies across the
country. Since 1978 to present, in addition to working for the
above companies, he has been operating an export business providing
export consulting, export products and sourcing products for
international for international clients. He holds degrees in
automotive engineering, business administration, and small business
management. He is fluent in English, Dutch, German and Afrikaans.
Blank Check Experience
None of the above officers and directors has had any previous blank
check experience.
There is no family relationship between any of the officers and
directors of the Company. The Company's Board of Directors has not
established any committees.
Conflicts of Interest
Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor
amount of time to the Company's affairs. The officers and directors
of the Company may in the future become shareholders, officers or
directors of other companies which may be formed for the purpose of
engaging in business activities similar to those conducted by the
Company. The Company does not currently have a right of first
refusal pertaining to opportunities that come to management's
attention insofar as such opportunities may relate to the Company's
proposed business operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation which
come to their attention, either in the performance of their duties
or in any other manner, will be considered opportunities of, and be
made available to the Company and the companies that they are
affiliated with on an equal basis. A breach of this requirement will
be a breach of the fiduciary duties of the officer or director.
Subject to the next paragraph, if a situation arises in which more
than one company desires to merge with or acquire that target
company and the principals of the proposed target company have no
preference as to which company will merge or acquire such target
company, the company of which the President first became an officer
and director will be entitled to proceed with the transaction.
Except as set forth above, the Company has not adopted any other
conflict of interest policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company will
not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive investment
interests in a number of entities, the Company could be subject to
regulation under the Investment Company Act of 1940. In such event,
the Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940 and, consequently,
any violation of such Act would subject the Company to material
adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors receive any
compensation for their respective services rendered to the Company,
nor have they received such compensation in the past. They both have
agreed to act without compensation until authorized by the Board of
Directors, which is not expected to occur until the Registrant has
generated revenues from operations after consummating a merger or
acquisition. As of the date of this registration statement, the
Company has no funds available to pay directors. Further, none of
the directors are accruing any compensation pursuant to any
agreement with the Company.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity may
desire to employ or retain one or more members of the Company's
management for the purposes of providing services to the surviving
entity, or otherwise provide other compensation to such persons.
However, the Company has adopted a policy whereby the offer of any
post-transaction remuneration to members of management will not be a
consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the
Company's Board of Directors any discussions concerning possible
compensation to be paid to them by any entity which proposes to
undertake a transaction with the Company and further, to abstain
from voting on such transaction. Therefore, as a practical matter,
if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition
candidate, the proposed transaction will not be approved by the
Company's Board of Directors as a result of the inability of the
Board to affirmatively approve such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the
event the Company consummates a transaction with any entity referred
by associates of management, it is possible that such an associate
will be compensated for their referral in the form of a finder's
fee. It is anticipated that this fee will be either in the form of
restricted common stock issued by the Company as part of the terms
of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash,
such payment will be tendered by the acquisition or merger
candidate, because the Company has insufficient cash available. The
amount of such finder's fee cannot be determined as of the date of
this registration statement, but is expected to be comparable to
consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either
directly or indirectly, as a result of their respective efforts to
implement the Company's business plan outlined herein. Persons
"associated" with management is meant to refer to persons with whom
management may have had other business dealings, but who are not
affiliated with or relatives of management.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger with
any entity in which any of the Company's Officers, Directors,
principal shareholders or their affiliates or associates serve as
officer or director or hold any ownership interest. Management is
not aware of any circumstances under which this policy may be
changed through their own initiative.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities of
"blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the
Company has successfully implemented its business plan described
herein.
There are no relationships or transaction to be reported.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings
and, to the best of its knowledge, no such action by or against the
Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is not quoted on the over-the-counter
market in the United States. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market
maker concerning the participation of such market maker in the
after-market for the Company's securities and management does not
intend to initiate any such discussions until such time as the
Company has consummated a merger or acquisition. There is no
assurance that a trading market will ever develop or, if such a
market does develop, that it will continue.
After a merger or acquisition has been completed, one or both of the
Company's officers and directors will most likely be the persons to
contact prospective market makers. It is also possible that persons
associated with the entity that merges with or is acquired by the
Company will contact prospective market makers. The Company does not
intend to use consultants to contact market makers.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity security
that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless
exempt, the rules require: (i) that a broker or dealer approve a
person's account for transactions in penny stocks; and (ii) the
broker or dealer receive from the investor a written agreement to
the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account
for transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and
objectives of the person; and (ii) make a reasonable determination
that the transactions in penny stocks are suitable for that person
and that person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any
transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight
form, (i) sets forth the basis on which the broker or dealer made
the suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks of
investing in penny stocks in both public offerings and in secondary
trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities
and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have
to be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the "NASD"),
which administers NASDAQ, has recently made changes in the criteria
for initial listing on the NASDAQ Small Cap market and for continued
listing. For initial listing, a company must have net tangible
assets of $4 million, market capitalization of $50 million or net
income of $750,000 in the most recently completed fiscal year or in
two of the last three fiscal years. For initial listing, the common
stock must also have a minimum bid price of $4 per share. In order
to continue to be included on NASDAQ, a company must maintain
$2,000,000 in net tangible assets and a $1,000,000 market value of
its publicly-traded securities. In addition, continued inclusion
requires two market-makers and a minimum bid price of $1.00 per
share.
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the
Company's securities to be traded without the aforesaid limitations.
However, there can be no assurances that, upon a successful merger
or acquisition, the Company will qualify its securities for listing
on NASDAQ or some other national exchange, or be able to maintain
the maintenance criteria necessary to insure continued listing. The
failure of the Company to qualify its securities or to meet the
relevant maintenance criteria after such qualification in the future
may result in the discontinuance of the inclusion of the Company's
securities on a national exchange. In such events, trading, if any,
in the Company's securities may then continue in the non-NASDAQ
over-the-counter market. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to the
market value of, the Company's securities.
Holders
There is one shareholder of the Company's Common Stock. All shares
were issued initially to the founder of the Company. All of the
issued and outstanding shares of the Company's Common Stock were
issued in accordance with the exemption from registration afforded
by Section 4(2) of the Securities Act of 1933.
Dividends
The Registrant has not paid any dividends to date, and has no plans
to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
There are no recent sales of unregistartd securities to be reported.
With respect to the sales made, the Registrant relied on Section
4(2) of the Securities Act of 1933, as amended. No transfers of
stock have occurred since April 29, 1999. No advertising or general
solicitation was employed in offering the shares. The securities
were offered for investment only and not for the purpose of resale
or distribution, and the transfer thereof was appropriately
restricted.
Upon closing of a business combination, certain of the shareholders
will be restricted from selling their shares. Of the 1,000,000
shares currently issued and outstanding, the shares held by
management, totaling 1,000,000 shares, are restricted and may be
sold in accordance with Rule 144. In general, under Rule 144, a
person (or persons whose shares are aggregated) who has satisfied a
one year holding period, under certain circumstances, may sell
within any three-month period a number of shares which does not
exceed the greater of one percent of the then outstanding Common
Stock or the average weekly trading volume during the four calendar
weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation by
a person who has satisfied a two-year holding period and who is not,
and has not been for the preceding three months, an affiliate of the
Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorized the issuance of
Sixty Million (60,000,000) shares, consisting of 50,000,000 (fifty
million) shares of Common Stock, $0.001 par value and Ten Million
(10,000,000) Preferred Stock, $0.001, of which 1,000,000 Common
Shares were issued and are now outstanding. The shares are non-
assessable, without pre-emptive rights, and do not carry cumulative
voting rights. Holders of common shares are entitled to one vote for
each share on all matters to be voted on by the stockholders. The
shares are fully paid, non-assessable, without pre-emptive rights,
and do not carry cumulative voting rights. Holders of common shares
are entitled to share ratably in dividends, if any, as may be
declared by the Company from time-to-time, from funds legally
available. In the event of a liquidation, dissolution, or winding up
of the Company, the holders of shares of common stock are entitled
to share on a pro-rata basis all assets remaining after payment in
full of all liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be issued
to management or promoters, or affiliates or associates of either.
Preferred Stock
The Company's Articles of Incorporation authorizes the issuance of
10,000,000 shares of preferred stock, $0.001 par value per share,
none of which have been issued. The Company currently has no plans
to issue any preferred stock. The Company's Board of Directors has
the authority, without action by the shareholders, to issue all or
any portion of the authorized but unissued preferred stock in one or
more series and to determine the voting rights, preferences as to
dividends and liquidation, conversion rights, and other rights of
such series. The preferred stock, if and when issued, may carry
rights superior to those of common stock; however no preferred stock
may be issued with rights equal or senior to the preferred stock
without the consent of a majority of the holders of then-outstanding
preferred stock.
The Company considers it desirable to have preferred stock available
to provide increased flexibility in structuring possible future
acquisitions and financings, and in meeting corporate needs which
may arise. If opportunities arise that would make the issuance of
preferred stock desirable, either through public offering or private
placements, the provisions for preferred stock in the Company's
Certificate of Incorporation would avoid the possible delay and
expense of a shareholder's meeting, except as may be required by law
or regulatory authorities. Issuance of the preferred stock could
result, however, in a series of securities outstanding that will
have certain preferences with respect to dividends and liquidation
over the common stock which would result in dilution of the income
per share and net book value of the common stock. Issuance of
additional common stock pursuant to any conversion right which may
be attached to the terms of any series of preferred stock may also
result in dilution of the net income per share and the net book
value of the common stock. The specific terms of any series of
preferred stock will depend primarily on market conditions, terms of
a proposed acquisition or financing, and other factor existing at
the time of issuance. Therefore it is not possible at this time to
determine in what respect a particular series of preferred stock
will be superior to the Company's common stock or any other series
of preferred stock which the Company may issue. The Board of
Directors does not have any specific plan for the issuance of
preferred stock at the present time, and does not intend to issue
any preferred stock at any time except on terms which it deems to be
in the best interest of the Company and its shareholders.
The issuance of preferred stock could have the effect of making it
more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company. Further, certain provisions
of Nevada law could delay or make more difficult a merger, tender
offer, or proxy contest involving the Company. While such provisions
are intended to enable the Board of Directors to maximize
shareholder value, they may have the effect of discouraging
takeovers which could be in the best interests of certain
shareholders. There is no assurance that such provisions will not
have an adverse effect on the market value of the Company's stock in
the future.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its shareholders
for errors in judgment or other acts or omissions not amounting to
intentional misconduct, fraud, or a knowing violation of the law,
since provisions have been made in the Articles of incorporation and
By-laws limiting such liability. The Articles of Incorporation and
By-laws also provide for indemnification of the officers and
directors of the Company in most cases for any liability suffered by
them or arising from their activities as officers and directors of
the Company if they were not engaged in intentional misconduct,
fraud, or a knowing violation of the law. Therefore, purchasers of
these securities may have a more limited right of action than they
would have except for this limitation in the Articles of
Incorporation and By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors are
required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure, be
able to bring a class action or derivative suit to enforce their
rights, including rights under certain federal and state securities
laws and regulations. Shareholders who have suffered losses in
connection with the purchase or sale of their interest in the
Company in connection with such sale or purchase, including the
misapplication by any such officer or director of the proceeds from
the sale of these securities, may be able to recover such losses
from the Company.
Insofar as indemnification for liabilities arising under the federal
securities laws may be permitted to directors and controlling
persons of the Company, the Company has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the law and
is, therefor, unenforceable. In the event a demand for
indemnification is made, the Company 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 law and will be governed by the final adjudication of such
issue.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this Item
13 follow the index of financial statements appearing at Item 15 of
this Form 10-SB.ITEM 14. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its formation, and
Management has had no disagreements with the findings of its
accountants.
ITEM 14. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS. Report of Independent Auditors, Kurt D.
Saliger, dated May 1, 1999. Balance Sheet as of April 30, 1999.
Statement of Operation for the period ended April 30, 1999.
Statement of Stockholders Equity. Statement of Cash Flows for the
period ended April 30, 1999 Notes to Financial Statements
THEINTERNETCORP.NET, INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
BALANCE SHEET 2
STATEMENT OF OPERATIONS 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-7
KURT D. SALIGER
Certified Public Accountant
INDEPENDENT AUDITORS' REPORT
Board of Directors
TheInternetCorp.net, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of
TheInternetCorp.net, Inc. (a development stage company), as of April
30, 1999; and the related statements of operations, stockholders'
equity and cash flows for the period from April 29, 1999 (date of
inception) to April 30, 1999. These financial statements are the
responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
TheInternetCorp.net, Inc. (a development stage company) at April 30,
1999 and the results of its operations and its cash flows for the
period from April 29, 1999 (date of inception) to April 30, 1999 in
conformity with generally accepted accounting principles.
Kurt D. Saliger C.P.A.
May 03, 1999
/
BALANCE SHEET
April 30,
1998
ASSETS
CURRENT ASSETS:
Cash
$0
Stock Subscription Receivable
$765
TOTAL CURRENT ASSETS
$765
ORGANIZATIONAL COSTS, NET
$235
TOTAL ASSETS
$1,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable
$0
TOTAL CURRENT LIABILITIES
$0
LONG-TERM DEBT
$0
STOCKHOLDERS' EQUITY:
Common Stock, $.001 par value authorized
50,000,000 shares issued and outstanding
at April 30, 1999, 1,000,000 shares
$1,000
Additional paid in Capital
0
Deficit Accumulated During Development
Stage
$0
TOTAL STOCKHOLDERS' EQUITY
$1,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$1,000
See accompanying notes to financial statements & audit report
THEINTERNETCORP.NET, INC.
(A Development Stage Company)
April 29, 1999 (Inception) to April 30, 1999
STATEMENT OF OPERATIONS
INCOME:
Revenue
$0
TOTAL INCOME
$0
EXPENSES:
General, Selling and
Administrative
$0
Total Expenses
$0
Net Profit/Loss(-) From
Operations
$0
Interest Income
$0
INCOME (LOSS) BEFORE
INCOME TAXES
$0
Provision for income tax
$0
NET INCOME (LOSS)
$0
NET INCOME (LOSS)
PER SHARE-BASIC AND
DILUTED
$0.0000
AVERAGE NUMBER OF SHARES
OF COMMON STOCK
OUTSTANDING
1,000,000
See accompanying notes to financial statements & audit report
THEINTERNETCORP.NET, INC.
(A Development Stage Company)
April 30, 1999
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Common
Shares
Stock
Amount
Additiona
l paid-in
capital
(Deficit)
Accumulated
During
Development
Stage
Issued for
cash and organizational
costs
April 29, 1999
1,000,000
$1,000
$0
Net Income April 29,
1999(Inception) to April 30,
1999
$0
Balance April 30, 1999
1,000,000
$1,000
$0
$0
See accompanying notes to financial statements & audit report
THEINTERNETCOPR.NET, INC.
(A Development Stage Company)
April 29, 1999 (Inception) to April 30, 1999
STATEMENT OF CASH FLOWS
Cash Flows from Operating
Activities:
Net Income
$0
(Increase) in stock subscription
receivable
($765)
Net Cash (Used) In Operating
Activities
($765)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of organizational
costs
$0
($765)
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of Common Stock for
cash
$765
Net Increase in Cash
$0
Cash, April 29, 1999
$0
Cash, April 30, 1999
$0
See accompanying notes to financial statements & audit report
THEINTERNETCORP.NET, INC.
(A Development Stage Company)
April 29, 1999 (inception) to April 30, 1999
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on April 29, 1999 under the laws of the
State of Nevada. The company was organized to engage in any lawful
activity. The Company currently has no operations and, in
accordance with SFAS #7, is considered a development stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
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
revenue and expenses during the reporting period. Actual results
could differ from those estimates.
Organizational Costs
Organizational costs are stated at cost. Amortization is recorded
using the straight-line method over a sixty (60) month period.
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109, (SFAS #109), "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax expense
(benefit) results from the net change during the year of deferred
tax assets and liabilities.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128, (SFAS #128), "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number of
common shares outstanding during the period. Diluted loss per share
reflects per share amounts that would have resulted if dilative
common stock equivalents had been converted to common stock. As of
April 30, 1999, the Company had no dilative common stock equivalents
such as stock options.
NOTE 3- INCOME TAXES
There is no provision for income taxes for the period ended
April 29, 1999 (inception) to April 30, 1999 due to the zero
net income and no Nevada state Income tax in the state of the
Company's domicile
NOTE 4- SHAREHOLDERS' EQUITY
Common Stock
The authorized common stock of American Flintlock Company
consists of 50,000,000 shares with a par value of $.001 per
share.
Preferred Stock
The authorized Preferred Stock of American Flintlock Company
consists of 10,000,000 shares with a par value of $0.001 per
share.
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