U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TheInternetCorp.net, Inc.
(Name of Small Business Issuer in its charter)
Nevada 454390 88-0424430
(State or jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Identification No.
Classification
Code Number
3158 Redhill Avenue, Suite 240, Costa Mesa, California 92626;
(949) 770-2578
(Address and telephone number of Registrant's principal
executive offices and principal place of business)
Brian F. Faulkner, Esq., 3900 Birch Street, Suite 113, Newport
Beach, California 92660
(949) 975-0544
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
number of the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
each class of registered maximum maximum registration fee
securities to offering aggregate
be registered price per offering
unit price
Common stock 14,670,000 $0.016 $234,720 $66.08
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Pursuant to Rule 416, such additional amounts to prevent dilution
from stock splits or similar transactions.
The Offering Price is used solely for purposes of estimating the
registration fee pursuant to Rules 457(f) and 457(g) promulgated
under the Securities Act of 1933.
PART I. INFORMATION REQUIRED IN PROSPECTUS
PROSPECTUS (1)
TheInternetCorp.net, Inc.
14,670,000 Shares (2)
common stock
TheInternetCorp.net, Inc., a Nevada corporation ("TICI"), is
hereby offering 14,670,000 shares of its $0.001 par value common
stock ("Shares") on a delayed basis under Rule 415 pursuant to
the terms of this Prospectus for the purpose of registering all
the outstanding shares of TICI and Cycle-Parts.com, Inc. in
connection with the acquisition of this firm by TICI.
The Shares offered hereby are highly speculative and involve a
high degree of risk to public investors and should be purchased
only by persons who can afford to lose their entire investment
(See "Risk Factors" on page 5).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Information contained herein is subject to completion or
amendment. The registration statement relating to the securities
has been filed with the Securities and Exchange Commission. The
securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective.
This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
Subject to Completion, Dated ________________, 1999
(1) The prospectus incorporates important business and financial
information about the company that is not included in or
delivered with the document; this information is available
without charge to security holders upon written or oral request
to the following: Mr. Vincent van den Brink, 3158 Redhill Avenue,
Suite 240, Costa Mesa, California 92626. To obtain timely
delivery, security holders must request the information no later
than five (5) business days before the date they must make their
investment decision; security holders must request this
information by __________.
(2) Pursuant to SEC Rule 416, there will be a change in the
amount of securities being issued to prevent dilution resulting
from stock splits, stock dividends, or similar transaction.
12,660,000 Shares are to be issued in connection with the
acquisition of Cycle-Parts.net, Inc. by TICI and the remaining
2,000,000 Shares are for the exercise of currently outstanding
warrants.
THE SHARES ARE OFFERED BY TICI SUBJECT TO PRIOR SALE, ACCEPTANCE OF THE
SUBSCRIPTIONS BY TICI AND APPROVAL OF CERTAIN LEGAL MATTERS BY COUNSEL
TO TICI.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY IN
A STATE IN WHICH, OR TO A PERSON WHO, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE in THE INFORMATION
CONTAINED HEREIN SUBSEQUENT TO THE DATE THEREOF. HOWEVER, IF A
MATERIAL CHANGE OCCURS, THIS PROSPECTUS WILL BE AMENDED OR
SUPPLEMENTED ACCORDINGLY FOR ALL EXISTING SHAREHOLDERS, AND FOR
ALL PROSPECTIVE INVESTORS WHO HAVE NOT YET BEEN ACCEPTED AS
SHAREHOLDERS IN TICI.
THIS PROSPECTUS DOES NOT INTENTIONALLY OMIT ANY MATERIAL FACT OR
CONTAIN ANY UNTRUE STATEMENT OF MATERIAL FACT. NO PERSON OR
ENTITY HAS BEEN AUTHORIZED BY TICI TO GIVE ANY INFORMATION OR
MAKE A REPRESENTATION, WARRANTY, COVENANT, OR AGREEMENT WHICH IS
NOT EXPRESSLY PROVIDED FOR OR CONTAINED IN THIS PROSPECTUS; IF
GIVEN OR MADE, SUCH INFORMATION, REPRESENTATION, WARRANTY,
COVENANT, OR AGREEMENT MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
TICI IS A REPORTING COMPANY. EACH PERSON WHO RECEIVES A
PROPSECTUS WILL HAVE AN OPPORTUNITY TO MEET WITH REPRESENTATIVES
OF TICI, DURING NORMAL BUSINESS HOURS UPON WRITTEN OR ORAL
REQUEST TO TICI, IN ORDER TO VERIFY ANY OF THE INFORMATION
INCLUDED IN THIS PROSPECTUS AND TO OBTAIN ADDITIONAL INFORMATION
REGARDING TICI. IN ADDITION, EACH SUCH PERSON WILL BE PROVIDED
WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF
THE INFORMATION THAT IS INCORPORATED BY REFERENCE IN THE
PROSPECTUS AND THE ADDRESS (INCLUDING TITLE OR DEPARTMENT) AND
TELEPHONE NUMBER TO WHICH SUCH REQUEST IS TO BE DIRECTED.
ALL OFFEREES AND SUBSCRIBERS WILL BE ASKED TO ACKNOWLEDGE IN
WRITING THAT THEY HAVE READ THIS PROSPECTUS CAREFULLY AND
THOROUGHLY, AND UNDERSTOOD THE CONTENTS THEREOF; THEY WERE GIVEN
THE OPPORTUNITY TO OBTAIN ADDITIONAL INFORMATION; AND THEY DID SO
TO THEIR SATISFACTION.
TABLE OF CONTENTS
PART I - INFORMATION REQUIRED IN THE PROSPECTUS
A. INFORMATION ABOUT THE TRANSACTION
PROSPECTUS SUMMARY 1
RISK FACTORS 3
TERMS OF THE TRANSACTION 10
PRO FORM FINANCIAL INFORMATION 11
MATERIAL CONTRACTS WITH THE COMPANY BEING ACQUIRED 12
ADDITIONAL INFORMATION REQUIRED FOR REOFFERING BY
PERSONS AND PARTIES DEEMED TO BE UNDERWRITERS 13
INTERESTS OF NAMED EXPERTS AND COUNSEL 14
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES 15
B. INFORMATION ABOUT THE REGISTRANT 18
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED 18
D. VOTING AND MANAGEMENT INFORMATION 30
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS
INDEMNIFICATION OF OFFICERS AND DIRECTORS 32
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 33
UNDERTAKINGS 34
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by detailed
information appearing elsewhere in this prospectus
("Prospectus"). Each prospective investor is urged to read this
Prospectus, and the attached Exhibits, in their entirety.
TICI.
TheInternetCorp.net, Inc. ("TICI") was organized under the laws
of the State of Nevada on April 28, 1999. TICI's principal
executive offices are located at 3158 Redhill Avenue, Suite 240,
Costa Mesa, California 92626; its telephone number is (949) 770-
2578. Since inception, the primary activity of TICI has been
directed to organizational efforts. TICI was formed as a vehicle
to acquire a private company desiring to become an SEC reporting
company in order thereafter to secure a listing on the Over the
Counter Bulletin Board.
The company to be acquired is Cycle-Parts.com, Inc., which was
incorporated in the State of Florida on March 15, 1999. Cycle-
Part's executive offices are located at 2950 S.W. Archer Road,
Suite C, Gainesville, Florida 32608; its telephone number is
(352) 378-2274. On March 16, 1999, Cycle-Parts acquired the
domain name Cycle-Parts.com, the website and related software for
the on-line e-commerce motorcycle parts sales business. Cycle-
Parts sells original manufacturer equipment motorcycle parts
exclusively through the internet.
From the start of its website under the name of
InternetMotorcycleParts.com in May, 1996 through March, 1999, the
business was operated as a sole proprietorship by Mr. Robert
Rill, the president of Cycle-Parts. The main operating activities
consisted of recruiting personnel, developing the technological
structure necessary to operate the website and process orders,
building operating structure, and establishing distributor
relationships necessary to fulfill the parts orders. The
business has been operational since 1996 and has been selling
motorcycle parts over the internet.
Cycle-Parts is a leading e-commerce provider of original
equipment manufacturer motorcycle parts. Original equipment
manufacturer motorcycle parts are those made by the original
manufacturer of a motorcycle. Cycle-Parts offers these parts at
a discount of from 10% to 45% below the retail price. Cycle-
Parts' customers are either present owners of the model
motorcycles carried by Cycle-Parts or they are small parts shop
or repair shop owners who repair these motorcycles.
According to Motorcycle On-Line an estimated 900,000 motorcycle
owners currently use the internet. These motorcycle users have a
mean income of $50,000 a year, and 75% of who require original
equipment parts to repair or restore their motorcycle. The
average cost to the motorcycle owner for these parts is $350.
This allows for a current potential market of $315 million in
motorcycle part sales by internet users, which at current rates
will double each year.
TICI plans to capitalize on current technology and the internet
to develop a direct-to-customer relationship in the parts
industry. To date, TICI is not aware of any other business
that has developed similar direct-to-customer discount parts
sales in the online parts industry. This could be due to the
fact that until recently no medium existed that could accommodate
both a high volume of traffic in the logistical infrastructure
necessary to provide information and target customers in an
efficient and economical manner.
Acquisition Agreement.
TICI has entered into an Agreement and Plan of Reorganization
("Agreement") with Cycle-Parts. At some time after the effective
date of this Registration Statement, Cycle-Parts is to be
acquired by TICI in an exchange of shares with Cycle-Parts, which
will become a wholly owned subsidiary of TICI. This
reorganization requires Company to issue 12,660,000 shares of
common stock, $.001 par value, to the existing shareholders of
Cycle-Parts for 12,660,000 shares of common stock of Cycle-Parts,
$0.01 par value.
Of the 1,000,000 common shares of TICI outstanding prior to the
effective date of the Reorganization Agreement, the sole
shareholder of TICI will sell 990,000 shares back to TICI for
$1.00, and the retain 10,000 shares (which will be registered
under this offering).
The Shareholders of TICI and Cycle-Parts will vote on this
Reorganization at a special meeting at a time and place to be
determined.
Liquidity of Investment.
Although the Shares will be "free trading" on the Over the
Counter Bulletin Board, there will be no established market for
the Shares. Therefore, an investor may not be able to sell is
Shares when he or she wishes; therefore, an investor may consider
his or her investment to be long-term. See "Risk Factors."
Risk Factors.
An investment in TICI involves risks due in part to a limited
previous financial and operating history of Company, as well as
competition in the motor cycle parts industry. Also, certain
potential conflicts of interest arise due to the relationship of
TICI to management and others. See "Risk Factors."
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE
AND INVOLVE A HIGH DEGREE OF RISK. THEY SHOULD BE PURCHASED ONLY
BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT.
THEREFORE, EACH PROSPECTIVE INVESTOR SHOULD, PRIOR TO PURCHASE,
CONSIDER VERY CAREFULLY THE FOLLOWING RISK FACTORS AMONG OTHER
THINGS, AS WELL AS ALL OTHER INFORMATION SET FORTH IN THIS
PROSPECTUS.
No Prior Operations.
TICI is in its initial stages of development with no revenues or
income and is subject to all the risks inherent in the creation
of a new business. Since TICI's principal activities to date
have been limited to organizational activities and prospect
development, it has no record of any revenue-producing
operations. Consequently, there is no operating history upon
which to base an assumption that TICI will be able to achieve its
business plans. In addition, TICI has only limited assets. As a
result, there can be no assurance that TICI will generate
significant revenues in the future; and there can be no assurance
that TICI will operate at a profitable level. If TICI is unable
to obtain customers and generate sufficient revenues so that it
can profitably operate, TICI's business will not succeed.
Although the firm to be acquired by TICI does have an
operating and financial history, it is limited. Therefore, this
firm may not be able to generate sufficient revenues for TICI to
make it successful.
Adequacy of Funding.
The funds available to TICI from its principals will not be
adequate for it to be competitive in the areas in which it
intends to operate. Therefore, TICI will need to raise
additional funds in order to implement its business plan. TICI's
continued operations therefore will depend upon its ability to
raise additional funds through bank borrowings, equity or debt
financing, or asset sales. There is no assurance that TICI will
be able to obtain additional funding when needed, or that such
funding, if available, can be obtained on terms acceptable to
TICI. If TICI cannot obtain needed funds, it may be forced to
curtail or cease its activities. If additional shares were
issued to obtain financing, current shareholders may suffer a
dilutive effect on their percentage of stock ownership in TICI.
Competition.
The market for the distribution and sale of motorcycle
parts, accessories and other related products is intensely
competitive. TICI faces strong existing competition for similar
products and expects to face significant competition from new
companies or existing companies with new products. There are a
number of larger companies which will directly compete with TICI.
In addition, many of these companies may be better financed, have
better name recognition and consumer goodwill, have more
marketing expertise and capabilities, have a large and loyal
customer base, along with other attributes that may enable them
to compete more effectively. Thus, TICI may experience
substantial competition in its efforts to locate and attract
customers for its motorcycle parts. Such competition could have
a material adverse effect on TICI's profitability.
Influence of Other External Factors.
The motorcycle parts industry is a speculative venture necessarily
involving some substantial risk. There is no certainty that the
expenditures to be made by TICI will result in commercially
profitable business. The marketability of its motorcycle parts
will be affected by numerous factors beyond the control of TICI.
These factors include market fluctuations, and the general state
of the economy (including the rate of inflation, and local
economic conditions), which can affect peoples' discretionary
spending. Factors which leave less money in the hands of
potential customers of TICI will likely have an adverse effect on
TICI. The exact effect of these factors cannot be accurately
predicted, but the combination of these factors may result in
TICI not receiving an adequate return on invested capital.
Regulatory Factors.
Possible future consumer legislation, regulations and actions
could cause additional expense, capital expenditures, restrictions
and delays in the activities undertaken in connection with the
motor cycle parts business, the extent of which cannot be
predicted. The exact affect of such legislation cannot be
predicted until it is proposed.
Dependence on the Motorcycle Parts Industry.
TICI's business is influenced by the rate of use and expansion in
the motorcycle parts industry. Although this industry has been
expanding at a rapid rate in recent years, there is no guarantee
that it will continue to do so in the future. Declines in this
industry may influence TICI's revenues adversely.
Reliance on Management.
TICI's success is dependent on its key management, the loss of
whose services could significantly impede the achievement of
TICI's planned development objectives. TICI currently does not
maintain key man life insurance. In addition, none of the
officers or directors, or any of the other key personnel has any
employment agreement with TICI. Therefore, there can be no
assurance that these personnel will remain employed by TICI. The
success of TICI's business objectives will require substantial
additional expertise in such areas as finance, manufacturing and
marketing, among others. Competition for qualified personnel
among companies is intense, and the loss of key personnel, or the
inability to attract and retain the additional, highly skilled
personnel required for the expansion of TICI's activities, could
have a material adverse effect on TICI's business and results of
operations.
In addition, all decisions with respect to the management of
TICI will be made exclusively by the officers and directors of
TICI. Shareholders will only have rights associated with
minority ownership interest rights to make decision which effect
TICI. The success of TICI, to a large extent, will depend on the
quality of the directors and officers of TICI.
Control of TICI by Officers and Directors.
TICI's officers and directors, after the acquisition is
completed, will beneficially own, directly or indirectly,
approximately 44% of the outstanding shares of TICI's common
stock. As a result, such persons, acting together, have the
ability to exercise significant influence over all matters
requiring stockholder approval. Accordingly, it could be
difficult for the investors hereunder to effectuate control over
the affairs of TICI. Therefore, it should be assumed that the
officers, directors, and principal common shareholders who
control the majority of voting rights will be able, by virtue of
their stock holdings, to control the affairs and policies of
TICI.
Limitations on Liability of Directors and Officers.
TICI's Articles of Incorporation include provisions to
eliminate, to the fullest extent permitted by the Nevada Revised
Statutes as in effect from time to time, the personal liability
of directors of TICI for monetary damages arising from a breach
of their fiduciary duties as directors. The Articles of
Incorporation and By-Laws also include provisions to the effect
that TICI may, to the maximum extent permitted from time to time
under applicable law, indemnify any director or officer to the
extent that such indemnification and advancement of expense is
permitted under such law, as it may from time to time be in
effect. TICI has also entered into indemnity agreements with
each director and executive officer of TICI pursuant to which
TICI has agreed to indemnify, to the maximum extent permitted
under the law of the State of Nevada, each such director or
executive officer for any amounts which he becomes legally
obligated to pay in connection with any claim against him based
upon any action or inaction which he may commit, omit or suffer
while acting in his capacity as a director and/or officer of TICI
or its subsidiaries.
Conflicts of Interest.
The officers and directors have other interests to which they
devote substantial time, either individually or through
partnerships and corporations in which they have an interest,
hold an office, or serve on boards of directors, and each will
continue to do so notwithstanding the fact that management time
may be necessary for the business of TICI. As a result, certain
conflicts of interest may exist between TICI and its officers
and/or directors which may not be susceptible to resolution.
In addition, conflicts of interest may arise in the area of
corporate opportunities which cannot be resolved through arm's
length negotiations. All of the potential conflicts of interest
will be resolved only through exercise by the directors of such
judgment as is consistent with their fiduciary duties to TICI.
It is the intention of management, so as to minimize any
potential conflicts of interest, to present first to the Board of
Directors to TICI, any proposed investments for its evaluation.
Lack of Diversification.
The size of TICI makes it unlikely that TICI will be able to
commit its funds to diversify the business until it has a proven
track record, and TICI may not be able to achieve the same level
of diversification as larger entities engaged in this type of
business.
Requirement of Audited Financial Information for Businesses That
May Be Acquired.
TICI will be subject to the periodic reporting requirements of
the Securities Exchange Act of 1934. Current reports will be
required each time a reportable event occurs relating to TICI's
business affairs. Should TICI contemplate the acquisition of a
significant amount of assets of another company or of the other
company itself, it will be required to provide the U.S.
Securities and Exchange Commission ("SEC") with certified
financial statements of that company or companies to be acquired.
No assurances can be given that such certified financial
statements of a contemplated acquisition will be available to us.
We may, therefore, be precluded from making such acquisition or
acquisitions if the requisite financial information is
unavailable or can only be obtained at excessive cost to us.
No Cumulative Voting.
Holders of the Shares are not entitled to accumulate their votes
for the election of directors or otherwise. Accordingly, the
holders of a majority of the Shares present at a meeting of
shareholders will be able to elect all of the directors of TICI,
and the minority shareholders will not be able to elect a
representative to TICI's board of directors.
Absence of Cash Dividends.
The Board of Directors does not anticipate paying cash dividends
on the Shares for the foreseeable future and intends to retain
any future earnings to finance the growth of TICI's business.
Payment of dividends, if any, will depend, among other factors,
on earnings, capital requirements, and the general operating and
financial condition of TICI, and will be subject to legal
limitations on the payment of dividends out of paid-in capital.
Potential Status as a Pseudo California Corporation.
Section 2115 of the California General Corporation Law
subjects certain foreign corporations doing business in
California to various substantive provisions of the California
General Corporation Law in the event that the average of its
property, payroll and sales is more than 50% in California and
more than one-half of its outstanding voting securities are held
of record by persons residing in the State of California. Some
of the substantive provisions include laws relating to annual
election of directors, removal of directors without cause,
removal of directors by court proceedings, indemnification of
officers and directors, directors standard of care and liability
of directors for unlawful distributions. The aforesaid Section
does not apply to any corporation which, among other things, has
outstanding securities designated as qualified for trading as a
national market security on NASDAQ if such corporation has at
least eight hundred holders of its equity securities as of the
record date of its most recent annual meeting of shareholders.
It is currently anticipated that TICI may be subject to Section
2115 of the California General Corporation Law which, in addition
to other areas of the law, will subject TICI to Section 708 of
the California General Corporation Law which mandates that
shareholders have the right of cumulative voting at the election
of directors.
Investment Valuation Determined by the Board of Directors.
TICI's Board of Directors is responsible for valuation of TICI's
investments. There are a wide range of values which are
reasonable for an investment for TICI's services. Although the
Board of Directors can adopt several methods for an accurate
evaluation, ultimately the determination of fair value involves
subjective judgment not capable of substantiation by auditing
standards. Accordingly, in some instances it may not be possible
to substantiate by auditing standards the value of TICI's
investments. TICI's Board of Directors will serve as the
valuation committee, responsible for valuing each of TICI's
investments. In connection with any future distributions which
TICI may make, the value of the securities received by investors
as determined by the Board may not be the actual value that the
investors would be able to obtain even if they sought to sell
such securities immediately after a distribution. In addition,
the value of the distribution may decrease or increase
significantly subsequent to the distributee shareholders' receipt
thereof, notwithstanding the accuracy of the Board's evaluation.
No Public Market for Company's Securities.
Prior to the filing of this Registration Statement, no public
trading market existed for the common stock of TICI. There can
be no assurances that a public trading market for the common
stock will develop or that a public trading market, if developed,
will be sustained. TICI's stock, once a Form 15c2-11 is filed,
will be eligible for listing on the Over the Counter Bulletin
Board due to the effectiveness in July 1999 of a Form 10-SB
previously filed with the SEC. If an active trading market does
in fact develop for the common stock, there can be no assurance that
it will be maintained. If for any reason such securities are not listed
on OTC BB, the listing is not maintained, or a public trading market does
not develop, holders of such securities may have difficulty in selling their
securities should they desire to do so.
Penny Stock Regulations.
TICI's Shares will be quoted on the Over the Counter Market
maintained by the National Association of Securities Dealers,
Inc., which reports quotations by brokers or dealers making a
market in particular securities. In view of the fact that no
broker will be involved in the Offering, it is likely to be
difficult to find a broker who is willing to make an active
market in the stock. The SEC has adopted regulations which
generally define "penny stock" to be any equity security that has
a market price less than $5.00 per share. TICI's shares will
become subject to rules that impose additional sales practice
requirements on broker-dealers who sell penny stocks to persons
other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual
income exceeding $200,000, or $300,000 together with their
spouse). For transactions covered by these rules, broker-dealers
must make a special suitability determination for the purpose of
such securities and must have received the purchaser's written
consent to the transaction prior to the purchase.
Additionally, for any transaction effected involving a penny
stock, unless exempt, the rules require the delivery, prior to
the transaction, of a disclosure schedule prepared by the SEC
relating to the penny stock market. A broker-dealer also must
disclose the commissions payable to both the broker-dealer and
the registered representative, and current quotations for the
securities. Finally, monthly statements must be sent disclosing
recent price information for the penny stock held in the account
and information on the limited market in penny stocks.
Consequently, these rules may restrict the ability of broker-
dealers to sell TICI's Shares and may affect the ability of
purchasers in this offering to sell the Shares in the secondary
market. There is no assurance that a market will develop for
TICI's Shares.
Effects of Failure to Obtain or Maintain Market Makers
TICI is seeking National Association of Securities
Dealers, Inc. member broker/dealers to be authorized market
makers for its common stock. If TICI is unable to obtain market
makers for the common stock or, once obtained, unable to maintain
such market makers, the liquidity of the common stock could be
impaired, not only in the number of shares of common stock which
could be bought and sold, but also through possible delays in the
timing of transactions, and lower prices for the common stock
than might otherwise prevail. Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares
of the common stock on any secondary market. There can be no
assurance TICI will be able to obtain market makers for the
common stock or, once obtained, be able to maintain such market
makers.
Shares Eligible For Future Sale.
Futures shares of common stock which may be issued directly to
management would be issued in reliance on the private placement
exemption under the Securities Act of 1933, as amended ("Act").
Such Shares will not be available for sale in the open market
without separate registration except in reliance upon Rule 144
under the Act. In general, under Rule 144 a person (or persons
whose shares are aggregated) who has beneficially owned shares
acquired in a non-public transaction for at least on year,
including persons who may be deemed affiliates of TICI (as that
term is defined under the Act) would be entitled to sell within
any three-month period a number of shares that does not exceed
the greater of 1% of the then outstanding shares of common stock,
or the average weekly reported trading volume on all national
securities exchanges and through NASDAQ during the four calendar
weeks preceding such sale, provided that certain current public
information is then available. If a substantial number of the
Shares owned by these shareholders were sold pursuant to Rule 144
or a registered offering, the market price of the common stock
could be adversely affected.
Forward-Looking Statements.
This Prospectus contains "forward looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Act of 1934, as
amended, and as contemplated under the Private Securities
Litigation Reform Act of 1995, including statements regarding,
among other items, TICI's business strategies, continued growth
in TICI's markets, projections, and anticipated trends in TICI's
business and the industry in which it operates. The words
"believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward-looking
statements. These forward-looking statements are based largely
on TICI's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond TICI's control. TICI
cautions that these statements are further qualified by important
factors that could cause actual results to differ materially from
those in the forward looking statements, including those factors
described under "Risk Factors" and elsewhere herein. In light of
these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Prospectus will in
fact transpire or prove to be accurate. All subsequent written
and oral forward-looking statements attributable to TICI or
persons acting on its behalf are expressly qualified in their
entirety by this section.
Uncertainty Due to Year 2000 Problem.
The Year 2000 issue arises because many computerized systems
use two digits rather than four to identify a year. Date
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using the year
2000 date is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent
something other than a date. The effects of the Year 2000 issue
may be experienced before, on, or after January 1, 2000, and if
not addressed, the impact on operations and financial reporting
may range from minor errors to significant system failure which
could affect TICI's ability to conduct normal business operations.
This creates potential risk for all companies, even if their own
computer systems are Year 2000 compliant. It is not possible to
be certain that all aspects of the Year 2000 issue affecting TICI,
including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
TICI currently believes that its systems are Year 2000 compliant
in all material respects. Although management is not aware of
any material operational issues or costs associated with
preparing its internal systems for the Year 2000, TICI may
experience serious unanticipated negative consequences (such as
significant downtime for one or more of its web site properties)
or material costs caused by undetected errors or defects in the
technology used in its internal systems. TICI's Year 2000 plans
are based on management's best estimates.
TERMS OF TRANSACTION
The Transaction.
Cycle-Parts is to exchange all of its issued and outstanding
common shares in the amount of 12,660,000 for 12,660,000 common
shares of TICI. Thereafter, Cycle-Parts will become a wholly
owned subsidiary of TICI.
In accordance with the Reorganization Agreement (which is
attached as Exhibit 2 to this Registration Statement and
incorporated by reference into this Prospectus), on its effective
date, the officers and directors of TICI shall resign, and will
be replaced by Karen Bohringer, Terry Cuthbertson, and Gerald I.
Quinn, who will remain as officers and directors of both Cycle-
Parts and TICI.
On the effective date of the Reorganization Agreement, each share
of Cycle-Parts common stock shall be exchanged for and converted
into one share of TICI common stock.. Of the 1,000,000 common
shares of TICI outstanding prior to the effective date of the
Reorganization Agreement, the sole shareholder of TICI will sell
990,000 shares back to TICI for $1.00, and the retain 10,000
shares (which are being included under this Registration
Statement). After the Reorganization, there will be 12,670,000
shares of TICI shares outstanding. In addition, the 2,000,000
five year warrants granted to Wizard Financial Services, Inc.,
Stevens & Lee Inv. Co., Ltd., Terry Cuthbertson, and Gerry I.
Quinn (500,000 each) to purchase 2,000,000 shares of Cycle-Parts
common stock at an exercise price of $.10 per share shall be
exchanged for warrants to purchase 2,000,000 shares of TICI
common stock at an exercise price of $0.10 per share (this
necessitates the delayed nature of this offering under SEC Rule
415).
Reasons for the Acquisition.
TICI is engaging in this transaction so that it can acquire and
operate an on-going company with an established reputation.
Cycle-Parts is engaging in this transaction so that it
shareholders can obtain free trading shares in TICI, as well as
the ability to buy and sell them on the Over the Counter Bulletin
Board and hopefully increase the value of their shares in the
future.
Conditions to Consummation of the Acquisition.
The acquisition will not be completed unless, among other things,
the following conditions are satisfied or, if allowed by law,
waived: The acquisition is approved by the requisite vote of
shareholders of Cycle-Parts; none of the parties to the Agreement
and Plan of Reorganization is subject to any decree, order or
injunction that prohibits the consummation of the acquisition;
and TICI shares to be issued pursuant to the acquisition are
authorized for listing on the Over the Counter Bulletin Board,
subject to official notice of issuance.
Amendment or Termination.
(a) If the closing of the acquisition has not occurred by
December 31, 1999, subject to a 30 day extension by Cycle-Parts,
or any other extension as agreed by the parties, any of the
parties hereto may terminate this Agreement at any time
thereafter by giving written notice of termination to the other
parties; provided, however, that no party may terminate the
Reorganization Agreement if such party has willfully or
materially breached any of the terms and conditions hereof. Said
termination date may be extended or may be terminated prior to
the termination date only by written agreement of the parties
hereto.
(b) The Reorganization Agreement may be canceled prior to the
execution of the above stated term in the event of the following
events: By mutual written agreement, in the event either party
files for relief under federal bankruptcy proceedings, in the
event involuntary bankruptcy proceedings are initiated against
either party hereto in the event of death, liquidation, physical
or mental incapacity of either party hereto, and, in the event of
fraud or misrepresentation by one of the parties hereto
(c) The Reorganization Agreement represents the entire agreement
by and between the parties hereto except as otherwise provided
herein and it may not be changed except by written agreement duly
executed by all of the parties hereto.
Effective Time.
TICI anticipates that the acquisition will become effective
promptly following the special meeting, as discussed above. The
acquisition, if approved by Cycle-Parts shareholders and not
terminated by its Board of Directors, will become effective upon
the filing of Articles of Exchange with the Nevada Secretary of
State, unless a later effective time is specified in this filing.
Required Vote.
A special meeting of the shareholders of TICI and Cycle-Parts
will be held at a time and place to be determined. The purpose
of this meeting will be to consider and vote upon (a) a proposal
to adopt the Agreement and Plan of Reorganization attached as
Schedule A to this Prospectus ("Reorganization Agreement")
providing for Cycle-Parts to become a wholly owned subsidiary of
TICI, and the issuance to Cycle-Parts shareholders of one share
of the common stock of TICI for each share of Cycle-Parts common
stock (totaling 12,660,000), (b) for the election of new officers
and directors of TICI, and (c) any other matters that may
properly come before the special meeting.
The affirmative vote of the holders of a majority of the
outstanding shares of TICI and Cycle-Parts common stock entitled
to vote thereon is required to adopt the Reorganization
Agreement. All shares of TICI and Cycle-Parts common stock
represented at the special meeting by properly executed proxies
received prior to or at the special meeting, and not revoked,
will be voted in accordance with the instructions indicated on
such proxies. If no instructions are indicated, such proxies
will be voted for the adoption of the Reorganization Agreement.
Any proxy given may be revoked by the person giving it at any
time, without affecting any vote previously taken, by (a) giving
notice to the Secretary of Cycle-Parts in writing or in open
meeting or (b) duly executing a later dated proxy relating to
the same shares and delivering it to the Secretary of Cycle-Parts
before the taking of the vote at the special meeting. Any
written notice of revocation or subsequent proxy should be sent
and delivered to Cycle-Parts, Attention: Secretary, or hand
delivered to the Corporate Secretary at or before the taking of
the vote at the special meeting.
Federal Income Tax Consequences and Accounting Treatment.
The reorganization contemplated by the Reorganization Agreement
is intended to qualify as a tax-free reorganization, as
contemplated by Section 368(A) of the Internal Revenue Code of
1986, as amended ("Code").
Shareholders of Cycle-Parts will not, under Section 354 of the
Internal Revenue Code, recognize gain or loss when they receive
shares of TICI's common stock in exchange for an equal number of
shares of Cycle-Parts' common stock in the acquisition; a
stockholder's aggregate basis of the shares in TICI common stock
received in the acquisition will be the same as the aggregate
basis of the shares of Cycle-Parts' common stock surrendered in
exchange for those shares. A stockholder's holding period in the
shares of TICI common stock received in the acquisition will
include the holding period of the shares of Cycle-Parts common
stock surrendered in exchange for those shares, provided that
such stockholder holds those shares of Cycle-Parts' common stock
as capital assets when the acquisition occurs.
TICI believes that the foregoing addresses the material United
States federal income tax consequences of the acquisition to
shareholders. The opinion is based upon the Code, applicable
Treasury Regulations, judicial decisions and current
administrative rulings, all of which are subject to change with
retroactive effect. Because the tax consequences to shareholders
of the acquisition may be affected by their particular
circumstances and by the applicability to them of one or more
special rules like those which apply to dealers in securities,
foreign persons, mutual funds, insurance companies and persons
who do not hold their shares as capital assets, TICI urges
shareholders to consult their own tax advisor concerning the
effect of the acquisition upon them, including the effect of any
state, local or other tax to which they may be subject.
Comparative Rights of Shareholders.
When the acquisition is completed, the rights of shareholders of
Cycle-Parts will be governed by TICI's certificate of
incorporation and bylaws and the Nevada Revised Statutes (`NRS').
Shareholders should consider the following comparison of the NRS
and TICI's articles of incorporation and bylaws, on the one hand,
and the 1999 Florida Statutes ("FS") and Cycle-Parts' existing
articles of incorporation and bylaws, on the other. This
comparison is not intended to be complete and is qualified in its
entirety by reference to the NRS and TICI's articles of
incorporation and bylaws and the FS and Cycle-Parts's articles of
incorporation and bylaws. TICI's articles of incorporation and
its bylaws are available for inspection and copying upon request
by any shareholder. Cycle-Parts's existing articles of
incorporation and bylaws are also available for inspection and
copying upon request by any shareholder. The NRS and TICI's
articles of incorporation and bylaws contain provisions that
could have an anti-takeover effect. The provisions included in
TICI's articles of incorporation and bylaws are intended to
enhance the likelihood of continuity and stability in the
composition of the board of directors and in the policies
formulated by the board of directors and to discourage
transactions that may involve an actual or threatened change of
control of TICI that the Board of Directors does not believe is
in the best interests of shareholders.
Under both the NRS and FS, a shareholder of a corporation
participating in an acquisition may receive cash in the amount of
the fair market value of his shares, as determined by a court, in
lieu of the consideration he would otherwise receive in the
acquisition, unless the transaction falls within a specified
exception. Neither the NRS nor FS requires that dissenters'
rights of appraisal be afforded to shareholders with respect to
an exchange by a corporation if its shares are either listed on a
national securities exchange or designated as a national market
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held by at least 2,000
shareholders, if the shareholders of the corporation receive only
shares of the surviving corporation or of a corporation so listed
or widely held; those shareholders who are the shareholders of a
corporation surviving an acquisition if no vote of those
shareholders is required, as set forth above. A corporation's
articles of incorporation may provide that these exceptions to
dissenters' rights of appraisal do not apply to that corporation.
Cycle-Parts has not made such provision in its articles of
incorporation, whereas TICI has in its articles of incorporation
provisions that to the maximum extent permissible under the NRS,
shareholders are entitled to the statutory appraisal rights
provided with respect to any business combination involving the
corporation and any shareholder (or any affiliate or associate of
any shareholder), which requires the affirmative vote of the
shareholders.
Under the NRS and FS, unless the articles of incorporation of a
corporation otherwise provides, amendments of its articles of
incorporation generally require the approval of the holders of a
majority of the outstanding stock entitled to vote on the
amendment, and if the amendment would increase or decrease the
number of authorized shares of any class or series or the par
value of shares of that class or series or would adversely affect
the rights, powers or preferences of that class or series, a
majority of the outstanding stock of that class or series also
would be required to approve the amendment.
Under the FS, directors can amend the bylaws of a corporation,
unless: (a) the articles of incorporation or this act reserves
the power to amend the bylaws generally or a particular bylaw
provision exclusively to the shareholders; or (b) the
shareholders, in amending or repealing the bylaws generally or a
particular bylaw provision, provide expressly that the board of
directors may not amend or repeal the bylaws or that bylaw
provision. In contrast, under NRS the directors are free to
amend the bylaws. Under both the FS and NRS, a corporation's
shareholders may amend or repeal the corporation's bylaws even
though the bylaws may also be amended or repealed by its board of
directors.
Under the NRS and FS, a special meeting of shareholders can be
called by the corporation's board of directors or by any person
or persons as may be authorized by the corporation's articles of
incorporation or bylaws. Under TICI's bylaws special meetings of
the shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or by the
Board of Directors, and shall be called by the President at the
request of the holders of not less than ten percent (10%) of all
the outstanding shares of the Corporation entitled to vote at the
meeting. Under Cycle-Parts' bylaws the difference is that the
special meeting may be called only by a majority in interest of
the shareholders.
Both the NRS and the FS permit corporate action without a meeting
of shareholders upon the written consent of the holders of that
number of shares necessary to authorize the proposed corporate
action being taken, unless the certificate of incorporation or
bylaws expressly provide otherwise. If proposed corporate action
is taken without a meeting by less than the unanimous written
consent of shareholders, the FS requires that prompt notice of
the taking of the action be sent to those shareholders who have
not consented in writing (the NRS does not requires this).
TICI's bylaws provide that unanimous consent of the shareholders
must be given.
The bylaws of Cycle-Parts provide that the number of directors
shall be determined by the shareholders at the annual meeting (no
set number given); TICI's bylaws specify not less than one. As of
the date of this Prospectus, the board of directors of both TICI
and Cycle-Parts consisted of one person. Under both bylaws, the
directors are to serve until the next annual meeting of the
shareholders.
No holder of TICI common stock or Cycle-Parts common stock has
the right to vote cumulatively in the election of directors.
Under the FS, any director or the entire board of directors may
be removed, with or without cause, by the holders of a majority
of the shares entitled to vote in an election of directors unless
provided otherwise by the corporation's articles of
incorporation. Under the NRS, any director may be removed by the
vote of shareholders representing not less than two-thirds of the
voting power entitled to vote. The bylaws of Cycle-Parts follow
the provisions in FS; TICI's bylaws are silent on the removal of
directors, therefore the NRS would control. Under both TICI and
Cycle-Parts bylaws, newly created directorships resulting from
any increase in the number of directors or any vacancies on the
board of directors may be filled by the affirmative vote of a
majority of the directors then in office. In addition, both
bylaws provide that the directors elected to fill vacancies on
the board of directors will hold office until the annual meeting
of the shareholders.
The NRS and FS both have provisions and limitations regarding
directors' liability. The NRS and FS permit a corporation to
include in its articles of incorporation a provision that
eliminates or limits the personal liability of a director to the
corporation or its shareholders for monetary damages for breach
of fiduciary duties as a director. However, under FS this
provision may not eliminate or limit the liability of a director:
(a) if the director breached or failed to perform his or her
duties as a director; and (b) the director's breach of, or
failure to perform, those duties constitutes: (1) a violation of
the criminal law, unless the director had reasonable cause to
believe his or her conduct was lawful or had no reasonable cause
to believe his or her conduct was unlawful (a judgment or other
final adjudication against a director in any criminal proceeding
for a violation of the criminal law estops that director from
contesting the fact that his or her breach, or failure to
perform, constitutes a violation of the criminal law; but does
not estop the director from establishing that he or she had
reasonable cause to believe that his or her conduct was lawful or
had no reasonable cause to believe that his or her conduct was
unlawful); (2) a transaction from which the director derived an
improper personal benefit, either directly or indirectly; (3) a
circumstance under which the liability provisions of Section
607.0834 (unlawful distributions) are applicable; (4) in a
proceeding by or in the right of the corporation to procure a
judgment in its favor or by or in the right of a shareholder,
conscious disregard for the best interest of the corporation, or
willful misconduct; or (5) in a proceeding by or in the right of
someone other than the corporation or a shareholder, recklessness
or an act or omission which was committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful
disregard of human rights, safety, or property.
Under the NRS, the limitation of liability is for other than acts
or omissions which involve intentional misconduct, fraud, or a
knowing violation of law, or unlawful distributions. The
articles of incorporation of TICI contains provisions which
follow the NRS; the articles of incorporation of Cycle-Parts are
silent on this matter. While these provisions provide directors
with protection from awards for monetary damages for breaches of
their duty of care, it does not eliminate that duty.
Accordingly, these provisions have no effect on the availability
of equitable remedies like an injunction or rescission based on a
director's breach of his duty of care. These provisions apply to
an officer only if he/she is also a director and is acting in the
capacity as a director, and does not apply to officers who are
not directors.
Both the NRS and FS generally permit a corporation to indemnify
its directors and officers against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred in
connection with a third-party action, other than a derivative
action, and against expenses actually and reasonably incurred in
the defense or settlement of a derivative action, provided that
there is a determination that the individual acted in good faith
and in a manner reasonably believed to be in or not opposed to
the best interests of the corporation. That determination must be
made, in the case of an individual who is a director or officer
at the time of the determination: By a majority of the
disinterested directors, even though less than a quorum; by
independent legal counsel, regardless of whether a quorum of
disinterested directors exists; or by a majority vote of the
shareholders, at a meeting at which a quorum is present. Both NRS
and FS require indemnification of directors and officers for
expenses relating to a successful defense on the merits or
otherwise of a derivative or third-party action. Also, both NRS
and FS permit a corporation to advance expenses relating to the
defense of any proceeding to directors and officers contingent
upon those individuals' commitment to repay any advances unless
it is determined ultimately that those individuals are entitled
to be indemnified. TICI's bylaws make indemnification of
directors and officers mandatory to the fullest extent permitted
by law; Cycle-Parts' bylaws have provisions which follow the FS
with regard to indemnification. TICI's bylaws and Cycle-Parts'
articles of incorporation provide for the advancement of expenses
to defend claims and establish procedures for determining whether
a director or officer is entitled to indemnification and
enforcing rights to indemnification and advancement of expenses.
Both the NRS and FS permit corporations to purchase or redeem
their own shares of capital stock.
No holder of TICI common stock or Cycle-Parts common stock has a
preemptive right to subscribe to any or all additional issues of
the stock of TICI or Cycle-Parts, respectively.
Under both the NRS and FS, any stockholder with a proper purpose
may inspect and copy the books, records and stockholder lists of
the corporation.
PRO-FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial
statements include the historical and pro forma effects of the
acquisition of Cycle-Parts by TICI.
The following unaudited pro forma combined condensed financial
statements have been prepared by the management of TICI from its
audited financial statements and the audited financial statements
of Cycle-Parts (see Exhibits 13.1 and 13.2, respectively, to this
Form S-4). The unaudited pro forma combined condensed statements
of reflect the combined operations of these companies as if the
acquisition transaction had occurred on August 31, 1999. See
"Note 1- Basis of Presentation." The pro forma financial
statements are based upon preliminary estimates and certain
assumptions that management of TICI believes are reasonable in
the circumstances.
The unaudited pro forma combined condensed financial statements
are not necessarily indicative of what the financial position or
results of operations actually would have been if the transaction
had occurred on the applicable dates indicated. Moreover, they
are not intended to be indicative of future results of operations
or financial statements of TICI and related notes thereto which
are included in TICI's form 10-SB which has previously been filed
with the SEC. The unaudited pro forma combined condensed
financial statements should be read in conjunction with the
financial statements of Cycle-Parts, which are included as
Exhibits to the Registration Statement and incorporated by
reference in this Prospectus.
The Internet Corp.Net, Inc.
Pro Forma Combined Balance Sheet
August 31, 1999
(unaudited)
TICI
TICI Cycle-Parts Pro Forma Combined
Adjustment Pro Forma
Assets:
Current Assets
Cash 0 52,081 52,081
Accrued Interest
Receivable 0 667 667
Note Receivable 0 50,000 50,000
Total Current Assets 0 102,748 102,748
Organizational costs,
net 219 0 219
Total Assets 219 102,748 102,967
Liabilities And
Shareholders Equity:
Current Liabilities
Accounts Payable 0 0 0
Total Current Liabilities 0 0 0
Shareholders' Equity:
Common Stock 1,000 126,600 127,600
Stock Subscription
Receivable (765) 0 (765)
Additional Paid-In
Capital 0 173,400 173,400
Accumulated Deficit (16) (197,252) (197,268)
Total Shareholders'
Equity 219 102,748 102,967
Total Liabilities and
Shareholders' Equity 219 102,748 102,967
See accompanying notes to financial statements
The Internet corp.Net, Inc.
Pro Forma Combined Condensed Statement of Operations
August 31, 1999
(Unaudited)
TICI
TICI Cycle-Parts Pro Forma Combined
Adjustment Pro Forma
Sales 0 61,219 61,219
Cost of Sales 0 52,696 52,696
Gross Profit 0 8,523 8,523
Operating Expenses 16 207,494 207,510
Interest Income 0 1,719 1,719
Net Loss (16) (197,252) (197,268)
Net Loss Per Share nil nil nil
Weighted Average Shares
Outstanding 1,000,000 12,660,000 12,670,000
See accompanying notes to financial statement
The InternetCorp.Net, Inc.
Pro Forma Combined Condensed Statement of Cash Flows
August 31, 1999
(unaudited)
TICI
TICI Cycle-Parts Pro Forma Combined
Adjustment Pro Forma
Cash Flows from
Operating Activities
Net Income (Loss) (16) (197,252) (197,268)
Depreciation and
Amortization 16 0 16
Accrued Interest
Receivable 0 (667) (667)
Net Cash Used in
Operations 0 (197,919) (197,919)
Cash Flows from
Investing Activities
Organizational Costs (235) 0 (235)
Purchase of Note
Receivable 0 (50,000) (50,000)
Net Cash Used in
Investing (235) (50,000) (50,235)
Cash Flows from
Financing Activities
Issuance of Common
Stock 235 300,000 300,235
Net Cash Provided by
Financing 235 300,000 300,235
Net Increase in Cash 0 52,081 52,081
Cash, April 29, 1999
(TICI) 0
Cash March 16, 1999
(Cycle-Parts) 307,856
Cash August 31, 1999 0 52,081 52,081
See accompanying notes to financial statement
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMETNS
NOTE 1. BASIS OF PRESENTATION.
The accompanying pro forma unaudited condensed financial
statements ("pro forma statements") of TICI have been prepared
from the audited financial statements of TICI and Cycle-Parts for
the four month and five month period, respectively, ended on
August 31, 1999 together with other information made available to
the companies. In the opinion of management, these pro forma
statements include all adjustments necessary for a fair presentation.
NOTE 2. PRO FORM ASSUMPTIONS.
The pro forma unaudited condensed balance sheet gives effect to
an acquisition agreement dated May of 1999 between TICI and
Cycle-Parts. Under the terms of this agreement, TICI is to
exchange 12,660,000 shares of its restricted common stock for
each share representing all of the outstanding ownership interest
of Cycle-Parts. In addition, of the 1,000,000 common shares of
TICI outstanding prior to the effective date of the acquisition
agreement, the sole shareholder of TICI will sell 990,000 shares
back to TICI for $1.00, and the retain 10,000 shares (which will
be registered under this offering).
The pro forma unaudited consolidated condensed balance sheet is
compiled as if the transaction had occurred on August 31, 1999.
The pro forma condensed consolidated statements of income and
cash flows for the four month period ended August 31, 1999 also
give effect as if the acquisition had occurred an April 29, 1999
(inception date).
NOTE 3. PER SHARE INFORMATION.
Pro forma net income (loss) per common share have been calculated
using the weighted average number of TICI's common shares
outstanding during the period ended August 31, 1999 plus the
common shares to be issued under the acquisition agreement as if
the additional shares were outstanding throughout the period.
NOTE 4. ACQUISITION ACCOUNTING METHOD
The pro forma statements have been compiled using the purchase method
as the accounting principle applied to the acquisition agreement.
MATERIAL CONTACTS WITH COMPANY BEING ACQUIRED
Pursuant to the Reorganization Agreement with Cycle-Parts, the
outstanding common stock of Cycle-Parts shall be exchanged for
shares of our common stock on a one for one basis as provided for
in the Reorganization Agreement Also warrants granted to Wizard
Financial Services, Inc., Stevens & Lee Inv. Co., Ltd., Terry
Cuthbertson, and Gerry I. Quinn (500,000 each) to acquire shares
of Cycle-Parts shall be exchanged for warrants to acquire TICI's
stock.
REOFFERING BY PERSONS DEEMED UNDERWRITERS
Not Applicable.
INTEREST OF NAMED EXPERTS AND COUNSEL
No named expert or counsel was hired on a contingent basis, will
receive a direct or indirect interest in the small business
issuer, or was a promoter, underwriter, voting trustee, director,
officer, or employee of the registrant.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
No director of TICI will have personal liability to TICI or any
of its stockholders for monetary damages for breach of fiduciary
duty as a director involving any act or omission of any such
director since provisions have been made in the Articles of
Incorporation limiting such liability. The foregoing provisions
shall not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to TICI or its
stockholders, (ii) for acts or omissions not in good faith or,
which involve intentional misconduct or a knowing violation of
law, (iii) under applicable Sections of the Nevada Revised
Statutes, (iv) the payment of dividends in violation of Section
78.300 of the Nevada Revised Statutes or, (v) for any transaction
from which the director derived an improper personal benefit.
The By-laws provide for indemnification of the directors,
officers, and employees of TICI in most cases for any liability
suffered by them or arising out of their activities as directors,
officers, and employees of TICI if they were not engaged in
willful misfeasance or malfeasance in the performance of his or
her duties; provided that in the event of a settlement the
indemnification will apply only when the Board of Directors
approves such settlement and reimbursement as being for the best
interests of the Corporation. The Bylaws, therefore, limit the
liability of directors to the maximum extent permitted by Nevada
law (Section 78.751).
The officers and directors of TICI are accountable to TICI as
fiduciaries, which means they are required to exercise good faith
and fairness in all dealings affecting TICI. In the event that
a shareholder believes the officers and/or directors have
violated their fiduciary duties to TICI, the shareholder may,
subject to applicable rules of civil procedure, be able to bring
a class action or derivative suit to enforce the shareholder's
rights, including rights under certain federal and state
securities laws and regulations to recover damages from and
require an accounting by management. Shareholders who have
suffered losses in connection with the purchase or sale of their
interest in TICI 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 TICI.
The registrant undertakes the following:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable.
INFORMATION ABOUT THE REGISTRANT
Description of Business.
TICI was organized under the laws of the State of Nevada on April
29, 1999. Since inception, the primary activity of TICI has been
directed to organizational efforts. TICI was formed as a vehicle
to acquire a private company desiring to become an SEC reporting
company in order thereafter to secure a listing on the Over the
Counter Bulletin Board.
TICI plans to capitalize on current technology and the internet
to develop a direct-to-customer relationship in the motor cycle
parts industry. To date, TICI is not aware of any other
business that has developed similar direct-to-customer discount
parts sales in the online parts industry. This could be due to
the fact that until recently no medium existed that could
accommodate both a high volume of traffic in the logistical
infrastructure necessary to provide information and target
customers in an efficient and economical manner.
Description of Property.
None.
Legal Proceedings.
TICI 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.
Market Price for Common Equity and Related Stockholder Matters.
(a) Market Information.
The Shares have not previously been traded on any securities
exchange. There is no common stock of TICI that is subject to
outstanding options or warrants to purchase, or securities
convertible into that stock. The amount of common stock of TICI
which it has agreed to register under the Securities Act is
10,000 (what remains from the 1,000,000 shares currently owned by
the sole shareholder of TICI after he sells 990,000 back to TICI
for the sum of $1.00).
(b) Holders of Common Equity.
As of October 25, 1999, there was 1 shareholder of record of
TICI's common stock.
(c) Dividends.
TICI has not declared or paid a cash dividend to stockholders
since it became a "C" corporation. The Board of Directors
presently intends to retain any earnings to finance Company
operations and does not expect to authorize cash dividends in the
foreseeable future. Any payment of cash dividends in the future
will depend upon TICI's earnings, capital requirements and other
factors.
Plan of Operation.
Up to the present time, the Company has only been in the organizational
phase. Over the next 12 months, after the effective date of this
registration Statement, the Company intends to concentrate its efforts
into futher development and enhancement of the Cycle-Parts website
(www.cycle-parts.com). These chanages will include additional
information and articles of interest to the motorcycle enthusiast. The
Company will also be seeking to enhance its advertising revenues by
the placement of additional advertising on the website.
The Company purchases motorcycle parts directly from distributors, and
based on rapid delivery times, it is not necessary for it to keep parts
on stock at its offices in order for it to complete the sale of
motorcycle parts over its website. However, the Company will seek to
make this operation more efficient by reviewing all phases of the
ordering and delivery process.
The current cash in Cycle-Parts will satisfy the cash needs of the
Company to implement the plan of operation, as set forth above, for
a period of approximately six months. The Company will need to raise
additional capital in order to continue its operations beyond that
point. Such financing will probably take the form of a combination
of debt and equity financing. However, there is no guarantee that
such financing will be available at all or on such terms as will be
acceptable to the Company. See "Risk Factors - Adequacy of Funding."
Currently, the Company does not plan to make significant equipment
purchases in the next 12 months in order to implement its plan of
operation. Also, it does not plan over such period to significantly
change the number of employees.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
From the formation of TICI in Apri1 1999 and up to the present
time, the principal independent accountant for TICI has neither
resigned (or declined to stand for reelection) nor been
dismissed. The independent accountant for TICI is Kurt D.
Saliger, 5000 West Oakey Boulevard, Suite A-4, Las Vegas, Nevada
89146. TICI and its current accountant have had no
disagreements.
INFORMATION ABOUT THE COMPANY BEING ACQUIRED
Description of Business.
Cycle-Parts sells original manufacturer equipment motorcycle
parts exclusively through the internet. From the start of its
website under the name of InternetMotorcycleParts.com in May,
1996 through March, 1999, the business was operated as a sole
proprietorship by Mr. Robert Rill, the President of Cycle-Parts.
The main operating activities consisted of recruiting personnel,
developing the technological structure necessary to operate the
website and process orders, building operating structure, and
establishing distributor relationships necessary to fulfill the
parts orders.
Cycle-Parts. was incorporated in March, 1999 in Florida. On
March 16, 1999, Cycle-Parts.com acquired the domain name, the
website and related software for the on-line e-commerce
motorcycle parts sales business. The former website is linked to
this new website.
Cycle-Parts.com is the leading e-commerce provider of original
equipment manufacturer ("OEM") motorcycle parts. Original
equipment manufacturer motorcycle parts are those made by the
original manufacturer of a motorcycle. Cycle-Parts offers these
parts at a discount of from 10% to 45% below the retail price.
Cycle-Parts now can supply parts for motorcycle for Honda,
Suzuki, Yamaha, and Kawasaki motorcycles. Cycle-Parts is in the
process of adding more models of motorcycles so as to increase
the parts coverage; the company also plans to make available
parts for other brands of motorcycles.
Cycle-Parts' customers are either present owners of the model
motorcycles carried by Cycle-Parts or they are small parts shop
or repair shop owners who repair these motorcycles. To date,
Cycle-Parts is not aware of any other business that has developed
similar direct-to-customer discount parts sales in the online
parts industry. This could be because, until recently, no medium
existed that could accommodate both a high volume of traffic in
the logistical infrastructure necessary to provide information
and target customers in an efficient and economical manner. After
the acquisition, Cycle-Parts will operate as a wholly owned
subsidiary of TICI.
Market Price for Common Equity and Related Stockholder Matters.
(a) Market Information.
Cycle-Parts' common stock has not previously been traded on
any securities exchange. There is no common stock of Cycle-Parts
that is subject to outstanding options or warrants to purchase,
or securities convertible into that stock, as except as follows:
2,000,000 warrants granted to Wizard Financial Services, Inc.,
Stevens & Lee Inv. Co., Ltd., Terry Cuthbertson, and Gerry I.
Quinn (500,000 each) to purchase 2,000,000 shares of Cycle-Parts
common stock at an exercise price of $0.10 per share; such
warrants must be exercised not later than five years from the
date of issuance shall be exchanged for warrants to purchase
2,000,000 shares of TICI common stock at an exercise price of
$0.10 per share.
(b) Holders of Common Equity.
As of October 25, 1999, there were 27 shareholders of record of
Cycle-Parts' common stock.
(c) Dividends.
Cycle-Parts has not declared or paid a cash dividend to
stockholders since it became a "C" corporation. The Board of
Directors presently intends to retain any earnings to finance
Cycle-Parts' operations and does not expect to authorize cash
dividends in the foreseeable future. Any payment of cash
dividends in the future will depend upon Cycle-Parts' earnings,
capital requirements and other factors.
Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion should be read in conjunction with the
financial statements of TICI and notes thereto.
(a) Results of Operations.
Although Cycle-Parts TICI is newly formed as a corporation,
having been incorporated on March 16, 1999, it did operate as a
sole proprietorship prior to that date. It has had limited
operations after the time of incorporation, with revenues of
$61,219 for the period of March 16, 1999 (date of inception)
through August 31, 1999.
(b) Liquidity and Capital Resources.
Net cash used in operating activities was $197,919 for the period
of March 16, 199 through August 31, 1999. This use of cash
results largely from a net loss of $197,252 during this period
(resulting from administrative expenses of $207,494 during this
period). Based upon the issuance of common stock in Cycle-Parts
on the date of inception, the company received a total of
$300,000.
(c) Capital Expenditures.
There have been no material capital expenditures since the
formation of Cycle-Parts in March 1999.
(d) Year 2000 Issue.
Cycle-Parts currently believes that its systems are Year
2000 compliant in all material respects. Although management is
not aware of any material operational issues or costs associated
with preparing its internal systems for the Year 2000, Cycle-
Parts may experience serious unanticipated negative consequences
or material costs caused by undetected errors or defects in the
technology used in its internal systems. Cycle-Parts' Year 2000
plans are based on management's best estimates.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
From the formation of Cycle-Parts in March 1999, and up to the
present time, the principal independent accountant for Cycle-
Parts has neither resigned (or declined to stand for reelection)
nor been dismissed. The independent accountant for Cycle-Parts
is Kurt D. Salinger, 5000 West Oakey Boulevard, Suite A-4, Las
Vegas, Nevada 89146. Cyle Parts and its current accountant have had
no disagreements.
VOTING AND MANAGEMENT INFORMATION
General Information.
The approval of the shareholders of Cycle-Parts for the
acquisition by TICI will be sought in a special meeting of
shareholders. The date, time and place of this meeting are to be
determined. When such information is determined, a proxy
statement will be furnished to shareholders at the direction and
on behalf of the Board of Directors of Cycle-Parts for the
purpose of soliciting proxies for use at the special meeting.
The shares represented by the proxy will be voted in the manner
specified in the proxy. To the extent that no specification is
made as to the proposals set forth in the notice of meeting
accompanying the proxy statement, the proxy will be voted in
favor of such proposals. However, any proxy given pursuant to
this solicitation may be revoked at any time before it is
exercised by giving written notice of such revocation to the
Secretary of Cycle-Parts, by appearing at the meeting and voting
in person, or by submitting a later dated proxy. Neither
attendance at the meeting nor voting at the meeting will revoke
the proxy. A revocation that is not timely received shall not be
taken into account, and the original proxy shall be counted.
Since there is only one shareholder of TICI, his approval for the
transaction and election of new directors will be give by
unanimous written consent. Such consent is permitted under the
bylaws of this company.
Voting Securities.
The record date of shareholders entitled to notice of and to vote
at the special meeting of the shareholders are to be determined.
Each share is entitled to one vote per share on any matter which
may properly come before the meeting and there will be no
cumulative voting right on any shares. The presence at the
meeting, in person or by proxy, of the holders of a majority of
the shares of common stock outstanding on the record date will
constitute a quorum at the meeting. Votes withheld and
abstentions will be counted in determining the presence of a
quorum but will not be voted. Broker non-votes will not be
counted in determining the presence of a quorum and will not be
voted. Pursuant to applicable state law, there are no
dissenter's or appraisal rights relating to the matters to be
voted. All matters to be voted on require an affirmative vote of
a majority of the votes present at the meeting.
The following tables sets forth information regarding the
beneficial ownership of shares of TICI and Cycle-Parts' common
stock as of October 1, 1999 (1,000,000 and 12,660,000 total
issued and outstanding, respectively) by (i) all stockholders
known to each company to be beneficial owners of more than 5% of
the outstanding common stock; (ii) each director; and (iii) all
officers and directors of TICI as a group (each person has sole
voting power and sole dispositive power as to all of the shares
shown as beneficially owned by them):
TheInternetCorp.net, Inc.
Title of Name and Address of Amount of Percent of
Class Beneficial Owner Beneficial Class
Ownership
Common Stock Vincent van den Brink 1,000,000 100.00%
3158 Redhill Avenue
Suite 240
Costa Mesa,
California 92626
Cycle-Parts.com, Inc.
Title of Name and Address of Amount of Percent of
Class Beneficial Owner Beneficial Class
Ownership
Common Stock Goldenvale (1) 5,250,000 41.47%
Investment Holdings, Ltd
Suite 1A
Hirzel Court
Hirzel Street
St. Peter Port,
Guernsey GY1 2NN,
Channel Islands
Common Stock Robert Rill (2) 1,645,000 11.41%
2950 S.W. Archer Road
Suite C
Gainesville,
Florida 32608
Common Stock Terry Cuthberson 100,000 0.79%
211 Tooronga Road
Terrey Hills,
New South Wales 2084
Australia
Common Stock Gerald I. Quinn, 5210 100,000 0.79%
East Williams Circle
Suite 200
Tucson, Arizona 85711
Common Stock Shares of all directors 1,645,000 11.41%
and executive officers
as a group (1 person)
(1) Karen Bohringer (to be an officer and director of TICI after
the acquisition), and her husband John Bohringer, along with
other family members, own Goldenvale Investment Holdings, Ltd.
(2) Robert Rill owns 1,225,000 shares along with his wife, Tara
Rill (who individually owns 220,000 shares). Also included here
are 200,000 shares owned by Strategic Capital Advisors, which is
owned by Mr. Rill.
Management (Pre-Acquisition).
(a) Vincent van den Brink, President/Secretary/Director - TICI.
Mr. van den Brink, age 58, 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,
exporting products and sourcing products for international
clients. He holds degrees in automotive engineering, business
administration, and small business management. He is fluent in
English, Dutch, German and Afrikaans.
(b) Robert A. Rill, President/Director - Cycle-Parts.
Mr. Robert A. Rill, 28 is the President/Director and founder of
Cycle-Parts. He started this internet company which specializes
in the distribution of OEM motorcycle parts using internet as its
exclusive method of distribution in March of 1999, under the
domain name Cycle-Parts.com. Prior to starting the company Mr.
Rill had been developing this internet site over a three year
period operating under the name "Internet Motorcycle Parts" from
July 1996 to March 1999. Mr. Rill is also the President and
founder of Strategic Funding Group Inc. He started this company
in July 1996 which specializes in automobile title loans. Since
inception the company has successfully loaned over $1,000,000 in
micro cap loans to customers of a broad demographic and credit
background. Mr. Rill has successfully expanded the company into
3 cities which currently include Gainesville, Jacksonville, and
Miami, Florida. Prior to this, Mr. Rill was a property finance
manager for College Park Properties. Mr. Rill received an M.B.A.
from the University of Florida in May 1996.
Management (Post-Acquisition).
The following directors (officers) will be a nominee for
election to Board of Directors of both Cycle-Parts and TICI at
the special meeting of the shareholders of each company to be
held after the declaration of effectiveness of this Form S-4:
(a) Terry Cuthberston, President/Director.
Mr. Cuthbertson, age 49, will serve as the President and a
Director of TICI and Cycle-Parts. From 1995 to 1999, Mr.
Cuthbertson was the Director of Finance of Tech Pacific Group,
the largest distributors of information technology and
telecommunications products in the Asia-Pacific region. Tech
Pacific is part of the worldwide Hagemeyer Group of the
Netherlands. Hegemeyer is publicly listed on the Amsterdam Stock
Exchange with worldwide revenues exceeding US $7 billion. Prior
to joining Tech Pacific, he spent the previous 25 years with KPMG
Peat Marwick, Sidney, Australia. While at KPMG, Mr. Cuthberston
worked as a partner in both Audit Services and KPMG Corporate
Services, where he was involved in company refinancing, public
offerings, acquisition reviews, and company restructuring . He
was made a director of KPMG Corporate (NSW) Pty. Ltd. in 1989.
Mr. Cuthberston received a Bachelor of Business degree in 1981
from the New South Wales University of Technology, an Accounting
Procedures Certificate from St. George Technical College, and is
an Associate of the Institute of Chartered Accountants in
Australia.
(b) Gerald I. Quinn, Vice President/Secretary/Director.
Mr. Quinn, age 56, will be Vice-President, Secretary and a
Director of TICI and Cycle-Parts. From May, 1996 to the present,
Mr. Quinn has served as Chief Executive Officer and a Director of
Wavetech International, Inc., a reporting public company. Prior
to this, he was President of Interpretel (Canada) Inc., a
subsidiary of Wavetech, from 1995 to 1996. From 1986 to 1994,
Mr. Quinn was Vice President of University Affairs and
Development at the University of Guelph, one of Canada's leading
teaching and research universities, where he was responsible for
marketing, image development, constituent relations and media
relations, including systems development, telemarketing and the
development of affinity programs. Since 1984, Mr. Quinn has
served as a consultant to Cableshare Interactive Technology,
Inc., a Canadian Toronto Securities Exchange listed public
company that operates in the interactive television industry and
became a director in 1993. In 1997, Mr. Quinn negotiated the
acquisition of Cableshare by Source Media, Inc. (NASDAQ: SRCM).
(c) Karen Bohringer, Director.
Ms. Bohringer, age 39, will serve as a Director of TICI and
Cycle-Parts. From 1990 to present, she has been the owner of
Bohringer & Associates, a computer training company in
Queensland, Australia. In 1983 Ms. Bohringer moved to the United
States to undertake computer programming studies. In 1986 she
received a Certificate with Honors from Harvard University,
Boston, MA in Advanced Cobol Programming and a Diploma in 1985
from the American Institute of Computer Programming in Atlanta,
GA. Upon returning to Australia, Ms. Bohringer lectured on
programming languages at Hales Private College, Melbourne, for 18
months. From 1987 to 1989, she was employed as the Australian
Training Manager for MAI Basic Four, an American computer
hardware/software company, and traveled extensive completing
software installations and staff training. In 1990, Ms.
Bohringer formed Bohringer & Associates, to do contract computer
training for such companies as the Australian Securities
Commission, Australian Wool Corporation, B.H.P., Shell Oil, the
Supreme Court, the Premiers Department, Director of Public
Prosecutions, Department of Health, and the Department of
Housing. Ms. Bohringer has lectured as the Royal Melbourne
Institute of Technology on Pascal Programming.
Executive Compensation.
(a) No officer or director of TICI after the acquisition will
initially be receiving any remuneration.
(b) There will be no annuity, profit sharing, pension or
retirement benefits proposed to be paid to officers, directors,
or employees of TICI in the event of retirement at normal
retirement date as there is no existing plan provided or
contributed to by TICI.
(c) No stock options are proposed to be paid in the future
directly or indirectly by TICI to any officer or director as
there is no such plan which is presently existing.
Certain Relationships and Related Transactions.
None.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Information on this item is set forth in Propsectus under the
heading "Disclosure of Commission Position on Indemnification for
Securities Act Liabilities."
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The Exhibits required by Item 601 of Regulation S-B, and an index
thereto, are attached.
UNDERTAKINGS
A. The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and Notwithstanding
the forgoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospects filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at
that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(d) Provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the small business issuer
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
B. The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one (1) business day of receipt of such request, and
to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
C. The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has caused this registration statement to be signed by
the undersigned, thereunto duly authorized, in the City of Costa
Mesa, State of California, on October 26, 1999.
TheInternetCorp.net, Inc.
By: /s/ Vincent van den Brink
Vincent van den Brink, President
Special Power of Attorney
The undersigned constitute and appoint Vincent van den Brink
their true and lawful attorney-in-fact and agent with full power
of substitution, for him and in his name, place, and stead, in
any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Form S-4 Registration
Statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and
Exchange Commission, granting such attorney-in-fact the full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Vincent van den Brink President, Chief Executive October 26, 1999
Vincent van den Brink Officer, Director
EXHIBIT INDEX
Exhibit
Number Description Method of
Filing
2 Agreement and Plan of Reorganization See Below
3.1 Articles of Incorporation (incorporated by Incorporated
reference to Exhibit 3.1 to the Registration by Referenced
Statement on Form 10-SB/A filed on May 28,
1999)
3.2 Bylaws (incorporated by reference to Exhibit
3.2 to the Registration Statement on Form 10-
SB/A filed on May 28, 1999) Incorporated
by Reference
5 Opinion Re: Legality See Below
13.1 Audited Financial Statement (Registrant) See Below
13.2 Audited Financial Statement (Cycle-Parts) See Below
23.1 Consent of Counsel See Below
23.2 Consent of Accountant (Registrant and Cycle-
Parts) See Below
24 Special Power of Attorney See
Signature Page
27.1 Financial Data Schedule (Registrant) See Below
27.2 Financial Data Schedule (Cycle-Parts) See Below
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated as of the 15th
day of May, 1999 (the "Agreement") is made by and among
TheInternetCorp.net, Inc., a Nevada corporation
("TheInternetCorp"), the shares of which will be publicly traded,
3158 Redhill Ave., Suite 240, Costa Mesa, California 92626 and
Cycle-Parts.com, Inc., a closely held Florida corporation
("Cycle-Parts"), which is domiciled in Florida and its address is
2950 S.W. Archer Road, Suite C, Gainesville, Florida 32608.
WITNESSETH:
WHEREAS, TheInternetCorp desires to acquire one hundred
percent (100%) of all of the common stock of Cycle-Parts;
AND, WHEREAS, Cycle-Parts wishes to sell or exchange one hundred
percent (100%) of its shares to TheInternetCorp.net,
NOW, THEREFORE, consideration of the mutual promises and
representations contained herein, the parties to this contract
agree as follows:
ARTICLE I
Exchange of Shares
1.1 Exchange of Shares. Subject to the terms and conditions of
this agreement, Cycle-Parts agrees to exchange ("the
Exchange")12,660,000 common shares, which represents all of its
outstanding shares of common stock, with the par value of $0.01,
to procure 12,660,000 shares of common stock of TheInternetCorp,
which shall then represent 99% of the issued, and outstanding
stock TheInternetCorp. For federal income tax purposes, the
Exchange is intended to constitute a reorganization within the
meaning of Section 368(a) of the Code. On the Effective Date, all
rights with respect to Cycle-Parts common stock under Cycle-Parts
Warrants that are then outstanding, if any, shall be converted
into TheInternetCorp warrants and become rights with respect to
TheInternetCorp common stock.
1.2 Effective Date. The Exchange shall become effective (the
"Effective Date") on the date the Articles of Share Exchange,
together with the Plan of Reorganization reflecting the Exchange,
shall be accepted for filing by the Secretary of State of Nevada
and the Secretary of State of Florida.
1.3 The Articles of Incorporation and Bylaws of TheInternetCorp
shall continue in effect on and after the Effective Date. The
Articles of Incorporation and Bylaws of Cycle-Parts shall
continue in effect on and after the Effective Date.
1.4 Dissenting Shares. Any shares of capital stock of Cycle-
Parts that, as of the Effective Date, are or may become
"dissenting shares" within the meaning of Section 607 of the
Florida Business Corporation Act shall not be converted into or
represent the right to receive TheInternetCorp common stock in
accordance with Article 1.1, and the holder or holders of such
shares shall be entitled only to such rights as may be granted to
such holder or holders under Section 607 of the Florida Business
Corporation Act. Cycle-Parts shall give TheInternetCorp prompt
notice of any written demand received by Cycle-Parts prior to the
Effective Date to require Cycle-Parts to purchase shares of
capital stock of Cycle-Parts pursuant to Section 607 of the
Florida Business Corporation Act and of any other demand, notice
or instrument delivered to Cycle-Parts prior to the Effective
Date, and the opportunity to participate in all negotiations and
proceedings with respect to any such demand, notice or
instrument. Cycle-Parts will comply with the relevant provisions
of Section 607 of the Florida Business Corporation Act.
ARTICLE II
Representations and Warranties of Cycle-Parts.
Cycle-Parts represents and warrants to TheInternetCorp that:
2.1 Organization. Cycle-Parts warrants that it is a corporation
duly organized, validly existing; and in good standing in the
State of Florida and has all of the necessary powers to own its
properties and to carry on its business as now owned and operated
by it in such States its business requires qualifications.
2.2 Capital. The authorized capital stock of Cycle-Parts is
comprised of 100,000,000 shares of common stock, par value $.01
per share (the "Cycle-Parts Stock"), of which 12,660,000 shares
are issued and outstanding. There currently are not, and at the
effective date and time of this Agreement, there shall not be any
outstanding subscriptions, options, rights, warrants, debentures,
or other instruments, convertible securities or other agreements
or commitments obligating Cycle-Parts to issue or transfer from
treasury any additional shares of its capital stock of any class,
except for the 2,000,000 warrants outstanding,
2.3 Subsidiaries. Cycle-Parts has no subsidiaries, nor does it
own any interest in any other enterprise, excepting those known
to TheInternetCorp.
2.4 Directors and Officers. The Board of Directors of
TheInternetCorp shall resign after the exchange of stock, and the
new Board appointed by Cycle-Parts, consisting of Terry
Cuthbertson, Gerald I. Quinn and Karen Bohringer, shall be sworn
in.
2.5 Financial Statements. It is understood by the parties that
Cycle-Parts or any of its agents, servants or employees are not
making any representation with respect to any activity of any
other firm, person, or corporation. Cycle-Parts does however
represent and warrant that the information furnished by Cycle-
Parts, its agents, servants or employees for and on behalf of
TheInternetCorp by Cycle-Parts is true, correct and accurate.
2.6 Tax Returns. It is not yet necessary for Cycle-Parts to file
Federal, State or local tax returns required by law, nor is
Cycle-Parts required by law to pay any taxes, assessments and
penalties, and none are due and payable. There are no present
disputes as to taxes of any nature, payable by Cycle-Parts.
2.7 Trade Names and Rights. Cycle-Parts owns and holds all
necessary trademarks, service marks, trade names, copyrights,
patents, domain names and proprietary information, and other
rights necessary to do its business as now conducted or proposed
to be conducted.
2.8 Compliance with Laws. Cycle-Parts has complied with, and
is not in violation of any applicable Federal, State, or local
statutes, laws, and regulations affecting its properties or the
operation of its business.
2.9 Litigation. Cycle-Parts is not involved as a defendant or
plaintiff in any suit, action, arbitration, or legal,
administrative or other proceeding, which to the best knowledge
of Cycle-Parts, would affect Cycle-Parts or its business, assets,
or financial condition in a negative manner; or, governmental
investigation which is pending; or, to the best of the knowledge
of Cycle-Parts, threatened against or affecting Cycle-Parts or
its business assets or financial condition. Cycle-Parts is not in
default with respect to any order, writ, injunction or decree of
any Federal, State, local/foreign court, department, agency, or
instrumentality applicable to it.
2.10 Authority. Cycle-Parts has authorized the execution of
this agreement and the consummation of the transaction
contemplated herein, and Cycle-Parts has full power and authority
to execute, deliver, and perform this agreement, and this
agreement is executed by one director so authorized by the board
of directors of Cycle-Parts, and is a legal, valid, and binding
obligation of Cycle-Parts, and is enforceable in accordance with
its terms and conditions, subject to shareholder approval as
stated in Article 2.15.
2.11 Ability to Carry Out Obligations. The execution and
delivery of this agreement by Cycle-Parts and the performance by
Cycle-Parts of its obligations hereunder in the time and manner
contemplated will not cause, constitute, or conflict with, or
result in any of the following: (a) a breach or violation of any
provisions of or constitute a default under any license,
indenture, mortgage instrument, article of incorporation, bylaw,
other agreement or instrument to which Cycle-Parts is a party, or
by which it may be bound, nor will any consents or authorizations
of any party other than those required, (b) any event that would
permit any party to any agreement or instrument to terminate it
or to accelerate the maturity of any indebtedness or other
obligation of Cycle-Parts, or, (c) an event that would result in
the creation or imposition of any lien, charge, encumbrance on
the asset of Cycle-Parts.
2.12 Full Disclosure. None of the representations and
warranties made by Cycle-Parts herein, or any exhibit,
certificate or memorandum furnished or to be furnished by Cycle-
Parts on behalf of Cycle-Parts, contains or will contain any
untrue statement of material fact, or omit any material fact, the
omission of which would be misleading, provided that the auditor
of Cycle-Parts financial statements shall be ultimately
responsible for certifying the truth and accuracy of Cycle-Parts'
audited financial statement.
2.13 Material Contracts. Cycle-Parts has no material contracts
to which it is a party or by which it is bound, other than those
known to the directors of Cycle-Parts and TheInternetCorp.
2.14 Securities. Cycle-Parts acknowledges that the Exchange
Shares shall be issued pursuant to an S-4 registration statement
filed under the Securities Act. No certificate representing such
shares shall bear a restrictive legend with respect to the
Securities Act, and such shares may be freely sold and
distributed under the Securities Act, except those shareholders
who are affiliates as defined under the Securities Act.
2.15 Shareholder Approval. Within five (5) days of the date of
SEC approval of the S-4 registration statement referred to in
Article 3.11, Cycle-Parts shall call, give notice of and convene
a meeting (the "Meeting") of its shareholders to consider and
vote upon the approval and adoption of the Exchange. The approval
and adoption of this Agreement and Plan of Reorganization by the
Board of Directors and the shareholders of Cycle-Parts is a
condition precedent to the undertaking and obligation of
TheInternetCorp to mail its definitive Proxy Statement.
Article III
Representations and Warranties of TheInternetCorp
TheInternetCorp warrants and represents to Cycle-Parts that:
3.1 Organization. TheInternetCorp is a corporation duly
organized, validly existing, and in good standing in the State of
Nevada, and TheInternetCorp warrants that it is a duly organized,
validly existing corporation, in good standing, and has all of
the necessary powers to own its properties and to carry on its
business as now owned and operated by it in such States its
business requires qualifications. TheInternetCorp warrants that
it has One (1) shareholder (of record and beneficially), that it
has filed its Form10-SB with the SEC, and that all necessary SEC
filings will have been made by TheInternetCorp.
3.2 Capital. The issued capital stock of TheInternetCorp is
1,000,000 shares. The authorized capital stock of TheInternetCorp
is comprised of 50,000,000 shares of common stock, $0.001 par
value per share (the "TheInternetCorp Stock"), of which
1,000,000 shares are issued and outstanding. In addition, it has
authorized but unissued 10,000,000 shares of $0.001 par value
Preferred Stock.
3.3 Subsidiaries. TheInternetCorp has no subsidiaries, nor does
it own any interest in any other enterprise, excepting those
known to Cycle-Parts.
3.4 Tax Returns. TheInternetCorp has filed all necessary
Federal, State and/or local tax returns required by law.
TheInternetCorp has paid and discharges all taxes, assessments
and penalties, and none are due and payable. There are no present
disputes as to taxes of any nature, payable by TheInternetCorp.
TheInternetCorp warrants that it does not owe any state or
federal withholding taxes.
3.5 Trade Names and Rights. TheInternetCorp owns and holds all
necessary trademarks, service marks, trade names, copyrights,
patents, and proprietary information, and other rights necessary
to do its business as now conducted or proposed to be conducted.
3.6 Compliance with Laws. TheInternetCorp has complied with,
and is not in violation of any applicable Federal, State, or
local statutes, laws, and regulations affecting its properties or
the operation of its business.
3.7 Litigation. TheInternetCorp is not involved as a defendant
or plaintiff in any suit, action, arbitration, or legal,
administrative or other proceeding, which to the best knowledge
of TheInternetCorp, that would affect TheInternetCorp or its
business, assets, or financial condition in a negative manner;
or, governmental investigation which is pending; or, to the best
of the knowledge of TheInternetCorp, threatened against or
affecting TheInternetCorp or its business assets or financial
condition. TheInternetCorp is not in default with respect to any
order, writ, injunction or decree of any Federal, State,
local/foreign court, department, agency, or instrumentality
applicable to it.
3.8 Authority. Vincent van den Brink is the owner of
1,000,000 shares of TheInternetCorp, has authorized the execution
of this agreement and the consummation of the transaction
contemplated herein, and that TheInternetCorp has full power and
authority to execute, deliver, and perform this agreement, and
this Agreement is executed by its one director so authorized by
the board of directors of TheInternetCorp, and is a legal, valid,
and binding obligation of TheInternetCorp, and is enforceable in
accordance with its terms and conditions.
3.9 Ability to Carry Out Obligations. The execution and
delivery of this agreement by TheInternetCorp and the performance
by TheInternetCorp of its obligations hereunder in the time and
manner contemplated will not cause, constitute, or conflict with,
or result in any of the following: (a) a breach or violation of
any provisions of or constitute a default under any license,
indenture, mortgage instrument, article of incorporation, bylaw,
other agreement or instrument to which Cycle-Parts is a party, or
by which it may be bound, nor will any consents or authorizations
of any Party other than those required, (b) any event that would
permit any party to any agreement or instrument to terminate it
or to accelerate the maturity of any indebtedness or other
obligation of TheInternetCorp, or, (c) an event that would result
in the creation or imposition of any lien, charge, encumbrance on
the asset of TheInternetCorp.
3.10 Full Disclosure. None of the representations and warranties
made by TheInternetCorp herein, or any exhibit, certificate or
memorandum furnished or to be furnished by TheInternetCorp,
contains or will contain any untrue statement of material fact,
or omit any material fact, the omission of which would be
misleading.
3.11 Filing With SEC. Within ten business days following the
date of this Agreement, TheInternetCorp shall prepare and file
with the SEC under the Securities Act of 1933, a registration
statement on Form S-4 covering all shares of TheInternetCorp
Stock issuable as a consequence of the Exchange. Prior to such
filing, Cycle-Parts shall supply to TheInternetCorp, for
inclusion in the Initial Registration Statement, the Financial
Statements (as hereinafter defined). Concurrent with the filing
of the Initial Registration Statement, TheInternetCorp shall also
prepare and file with the SEC, a preliminary proxy statement (the
"Proxy Statement"; the Proxy Statement and the Initial
Registration Statement are collectively referred to as the
"Registration Statement") pertaining to the Exchange. Cycle-Parts
shall cooperate fully with TheInternetCorp in the preparation and
filing of the Registration Statement and any amendments and
supplements thereto. The Registration Statement shall not be
filed, and no amendment or supplement thereto shall be made by
TheInternetCorp, without prior consultation with and the consent
of Cycle-Parts, which consent shall not be unreasonably withheld
or delayed. As promptly as practicable but in no event later than
the Effective Date, TheInternetCorp shall prepare its Rule 15c-
211 disclosure document and have its proposed marketmaker file
Form 211 with the NASD asking permission to have the
TheInternetCorp Stock listed for trading on the OTC Bulletin
Board ("BB").
ARTICLE IV
Covenants Prior to and Subsequent to Closing
4. 1 Covenants Prior to and Subsequent to Closing. It is agreed
between the parties hereto that Cycle-Parts may visit the offices
of TheInternetCorp or TheInternetCorp may visit the offices of
Cycle-Parts to obtain copies of data contained in all currently
active files or current contracts and agreements of any and all
categories of business, with any company or person. Any and all
such data and documentation not previously released by Cycle-
Parts, and being currently in the possession of Cycle-Parts,
shall be delivered into hands of the officers of TheInternetCorp,
or to be delivered to an office of TheInternetCorp. Any and all
such data and documentation not previously released by
TheInternetCorp and necessary to this agreement, and being
currently in the possession of TheInternetCorp shall be delivered
into hands of the officers of Cycle-Parts, or to be delivered to
an office of Cycle-Parts. Such data and documentation shall
include all copies of files, documents, shareholders and
directors minutes, minute books/records, etc., at the earliest
possible time, on or after the effective date hereof.
ARTICLE V
Conditions Precedent to Performance by Parties
5.1 Conditions. Parties to this agreement and the obligations
hereunder shall be subject to the satisfaction at closing of all
the conditions set forth in Article II and Article III. The party
to whom a duty is owed or is owed an obligation of the other
party to this contract waive any or all of these conditions in
whole or in part, provided, however, that no such waiver of a
condition shall constitute a waiver by the party so making a
waiver of any other condition of, or any of said parties other
rights or remedies, at law or in equity, if either party is in
default of any of the representations, warranties or covenants
under this agreement.
5.2 Accuracy of Representations. Except as otherwise permitted
by this agreement, all representations and warranties by either
party in agreement or in any other written statement delivered to
the other under this agreement shall be true and accurate on and
as of the effective date as though made at this time.
5.3 Performance. The parties shall have performed, satisfied
and complied with all covenants, agreements and conditions
required by this agreement to be performed or complied with it on
or before the effective date.
5.4 Absence of Litigation. No action, suit, or proceeding
before any court or any governmental body or authority,
pertaining to the transaction contemplated by this agreement or
its consummation, shall have been instituted or threatened
against either Cycle-Parts or TheInternetCorp on or before the
effective date. No action, suit, or other proceeding before any
court or other governmental body or authority that could
jeopardize or put at risk of loss, the current assets of
TheInternetCorp or Cycle-Parts, shall have been instituted or
threatened against either on or before the effective date of this
agreement. TheInternetCorp and/or Cycle-Parts shall resolve in
its favor any dispute, action, or threatened legal action, from
any court or any governmental body, prior to the effective date
of this agreement, in the event any such action or so threat of
action should currently exist. Any dispute in which
TheInternetCorp or Cycle-Parts may have a part, any action, suit
or proceeding by any person, entity, court or governmental body
or authority against TheInternetCorp and/or Cycle-Parts left
unresolved on the effective date of this agreement, shall
immediately render this Agreement, on that date forever null and
void, without further notice from either TheInternetCorp or
Cycle-Parts.
ARTICLE VI
Miscellaneous
6.1 Termination Prior to Closing. (a) If the Closing has not
occurred by December 31, 1999, subject to a 30 day extension by
Cycle-Parts.com, or any other extension as agreed by the parties
(the "Termination Date"), any of the parties hereto may terminate
this Agreement at any time thereafter by giving written notice of
termination to the other parties; provided, however, that no
party may terminate this Agreement if such party has willfully or
materially breached any of the terms and conditions hereof. Said
termination date may be extended or may be terminated prior to
the termination date only by written agreement of the parties
hereto.
(b) This Agreement may be canceled prior to the execution of the
above stated term in the event of the following events: By mutual
written agreement, in the event either party files for relief
under federal bankruptcy proceedings, in the event involuntary
bankruptcy proceedings are initiated against either party hereto
in the event of death, liquidation, physical or mental incapacity
of either party hereto, and, in the event of fraud or
misrepresentation by one of the parties hereto
6.2 Amendment or Modification. This Agreement shall represent
the entire agreement by and between the parties hereto except as
otherwise provided herein and it may not be changed except by
written agreement duly executed by all of the parties hereto.
6.3 Assignment. Neither party shall have the right to transfer
or assign his interest in this Agreement without the prior
written consent of the other party hereto, which consent shall
not be unreasonably withheld.
6.4 Corporate Authority. If any party hereto is a legal entity,
including but not limited to, an association, corporation, joint
venture, limited partnership, partnership, or trust such party
represents to the other that this agreement and the transactions
contemplated herein and the execution and delivery hereof have
been duly authorized by all necessary corporate partnership or
trust proceedings and actions including but without limitation to
the action on the part of the directors, officers and agents of
said entity. Furthermore, said party represents that appropriate
corporate meetings were held to authorize the aforementioned
obligations and certified copies of such corporate minutes and
corporate resolutions authorizing this transaction have been
delivered to all parties to this agreement prior to or at the
time of execution of this agreement.
6.5 Dispute or Contest: Attorney's Fees. In the unlikely event
that a dispute occurs or a cause of action in law or equity
arises out of the operation, construction, interpretation or
enforcement of this Agreement, the losing party shall bear the
cost of the attorneys fees incurred by the prevailing party ; and
any and all costs applicable thereto, including but not limited
to, court costs, deposition fees, out of pocket expenses and
travel expenses which are incurred by the prevailing party.
6.6 Dispute or Contest: Arbitration. In the unlikely event that
a dispute occurs applicable to the operation, construction,
interpretation or enforcement of this agreement, the parties
hereby agree to submit said dispute to a commercial arbitrator so
that the matter may be arbitrated in lieu of resolving said
dispute in a court of law or equity. The parties shall choose
an arbitrator from the American Arbitration Association pursuant
to the following process:
The parties shall request from the American Arbitration
Association a list of nine commercial arbitrators and each party,
assuming there are two parties to the agreement, shall have four
strikes and thereby strike from said list the arbitrators they do
not wish to use. The remaining arbitrator, the one that has not
been stricken, shall be the arbitrator that shall hear the
matter. The parties agree to follow the American Arbitration
Association rules, guidelines and procedures. The Arbitrator
shall set the matter for hearing; and shall control the
procedures used therein .The parties shall abide by the
arbitrator's decision, which shall be final and binding. The
parties hereto agree that there shall be no right to appeal the
arbitrator's decision. In the event the losing party refuses to
comply with the arbitrator's decision, parties hereby agrees to
an award of Five Thousand and No/100ths ($5,000.00) Dollars as
punitive and/or liquidated damages for said party's noncompliance
with the arbitrator's decision. Said party furthermore agrees to
reimburse the prevailing party, any and all attorneys fees, and
costs of litigation incurred in order to compel the losing
party's performance in compliance with the arbitrator's decision.
6.7 Confidential Information. The parties hereto agree that
the information and data at each other's disposal during the term
of the negotiation of this agreement, operation and enforcement
of this Agreement is considered proprietary information and
confidential. Such information if disseminated to third parties
would be detrimental to the owner of said proprietary data.
Accordingly, each party hereto agrees to take any and all
reasonable precautions to restrict the dissemination of such
information by its employees, agents or subcontractors. This
obligation shall continue notwithstanding the termination of this
Agreement for a period of five years from the effective date of
this agreement. During the term of this Agreement or any
extension thereto, neither party shall permit access by any non-
affiliated to said proprietary information without the other
party's written permission thereto.
6.8 Defense, Hold Harmless and Indemnity Clause. It is the
specific and express intent and the agreement of the parties
hereto that in the event one party hereto should cause, either
directly or indirectly, damage, loss, destruction, liability or
claims against the other party as a result of intentional
conduct, negligence or otherwise, said offending party shall hold
harmless and indemnify the other party from any and all
obligations, liabilities, cause of actions, law suits, damages,
assessments, including legal fees etc. as a result of said
offending party's intentional actions or negligence. This
indemnification clause shall survive this Agreement and be
enforceable as a separate agreement in the event necessary.
6.9 Force Majeure. Neither party shall be liable or responsible
to the other party for any delay, damage, loss, failure,
inability to perform caused by "force majeure." The term "force
majeure", as used in this agreement, shall mean an act of God,
strike, act of the public enemy, war, mines or other items of
ordinance, blockage, public rioting, lightning, fire, storm,
flood, explosions, inability to obtain materials, supplies, labor
permits, servitudes, rights of way, acts or restraints of any
governmental authority, epidemics, landslides, lightning storms,
earthquakes, floods, storms, washouts, arrests, restraints of
rulers and peoples, civil disturbances, explosions, breakage or
accident to machinery or lines of equipment, temporary failure of
equipment, freezing of equipment and any other cause whether of
the kinds specifically enumerated above or otherwise which are
not reasonably within the control of the parties hereto and which
by the exercise of due diligence could not be reasonably
prevented or overcome. Such causes or contingencies effecting the
performance of this agreement by any party hereto shall not
relieve such party of liability in the event of its concurring
negligence or in the event of its failure to remedy this
situation if it is within its reasonable control or it could
reasonably remove the cause which has prevented its performance.
The parties shall use all reasonable dispatch to remove all
contingencies effecting the performance of this agreement. This
clause shall not relieve any party from its obligations to make
payments of amounts then due for previous work; or obligations
contemplated and performed hereunder. Furthermore, the party
asserting this privilege shall give a full and complete notice of
the facts which it considers to excuse its performance under this
"force majeure" clause. The parties hereto agree in the event
time limits are not met under this agreement as a result of
"force majeure", to an extension of said time limit or deadline
for the number of days for which the "force majeure" condition
existed and after said force majeure condition has expired, the
contract shall continue under the same operations and
circumstances as existed prior to the "force majeure" event.
6.10 Further Assurances. Each party hereto further agrees that
it shall take any and all necessary steps, sign and execute any
and all necessary documents or documents which are required to
implement the terms of the agreement of the parties contained in
this contract, and each party shall refrain from taking any
action, either expressly or impliedly, which would have the
effect of prohibiting or hindering the performance of the other
party to this Agreement. This Agreement and exhibits attached
hereto and incorporated herein contain the entire agreement of
the parties, and there are no representations, inducements,
promises, agreements, arrangements, undertakings, oral or
written, between the parties hereto other than those expressly
set forth hereinabove and duly executed in writing. No agreement
of any kind shall be binding upon either party until the same has
been made in writing and duly executed by both parties hereto.
Upon execution of this agreement by all parties, all previous
agreements, contracts, arrangements or undertakings of any kind
relative to the matters contained herein are hereby canceled and
all claims and demands not contained in this agreement are deemed
fully completed and satisfied.
6.11 Independent Status. It is agreed and understood that any
work requested by the parties hereto shall be performed under the
terms of the Agreement and that all parties hereto are considered
independent contractors. Each party is interested only in the
results obtained hereunder and has the general right of
inspection and supervision in order to secure the satisfactory
completion of such work. Neither party shall have control over
the other party with respect to its hours, times, employment etc.
Under no circumstances shall either party hereto be deemed an
employee of the other, nor shall either party act as an agent of
the other party. Furthermore, the parties hereto warrant that all
obligations imposed on them by this Agreement shall be performed
with due diligence in a safe competent workmanlike manner and in
compliance with any and all applicable statutes, rules and
regulations. Any and all joint venture or partnership status is
hereby expressly denied and the parties expressly state that they
have not formed either expressly or impliedly a joint venture or
partnership.
6.12 Captions and Paragraph Headings. The captions, numbering
sequences, titles, paragraph headings and punctuational
organization used in this Agreement are for convenience only and
shall in no way define, limit or describe the scope or intent of
this agreement or any part thereof. The paragraph headings used
herein are descriptive only and shall have no legal force or
effect whatsoever other than to aid a reasonable interpretation
of the agreement. The titles to each of the various articles and
paragraphs are included for convenience or reference only and
shall have no effect on or be deemed as part of the text of this
Agreement. Use of pronouns such as the use of neuter, singular or
pronouns refer to the parties described herein and shall be
deemed a proper reference even though the parties may be an
individual, partnership, corporation, association, trust, group
of two or more individuals, partnerships, corporations or joint
venture. Any necessary grammatical changes required to make the
provisions of this Agreement apply in the plural sense where
there is more than one party to this Agreement and to either
corporations, associations, partnerships, trusts, individuals,
males or females, shall in all instances be assumed as though
each case were fully expressed. If any word, phrase, clause or
paragraph or other provision of this agreement is adjudicated or
otherwise found to be against public policy, void or
unenforceable, then said words or provisions shall be deleted or
modified in keeping with the express intent of the parties hereto
as necessary to render this Agreement valid and enforceable. All
such deletions or modifications shall be the minimum required to
effect the foregoing and the intent of the parties to this
Agreement.
6.13 Multiple Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original
and all of which when taken together shall constitute but one and
the same Agreement. In the event that a comparison of said
multiple agreements reveals that said Agreements contain
differences or inconsistencies, then the Agreement which is first
executed and signed by all of the parties hereto, shall be deemed
the original Agreement and all said other agreements, although
duly signed by the said parties, shall be deemed inferior and
subordinate to the aforesaid first signed Agreement.
6.14 Notices. Any and all notices or other communications
required or permitted to be even pursuant to this Agreement shall
be in writing and shall be considered as properly given if mailed
by certified, return receipt requested mail, postage prepaid and
addressed as follows:
To:
TheInternetCorp.net, Inc.
3158 Redhill Ave., Ste. 240
Costa Mesa, CA 92626
Cycle-Parts.Com, Inc.
2950 S.W. Archer Road, Ste. C,
Gainesville, Florida 32608
Either party hereby reserves the right to designate in writing to
the other party a change of address or other place that said
notices shall be sent to.
6.15 No Waiver. The failure or delay of either party in the
enforcement of the rights detailed herein shall not constitute a
waiver of said rights nor shall it be considered as a basis for
estoppel either at equity or at law. Such party may exercise its
rights herein despite said delay or failure to enforce said
rights at the time the cause of action or right or obligation
arose.
6.16 Parties Bound Clause. This Agreement shall be binding upon
and inure to the benefit to the parties hereto, their respective
heirs, executors, administrators, legal representatives,
successors and assigns. The parties hereto expressly agree that
in the event a party hereto seeks to or does transfer any and
all, or part of its assets to a separate entity, not a party to
this agreement, said entity shall be liable under this Agreement
as if said transfer had not occurred.
6.17 Severability. If any provisions of this agreement shall for
any reason be held violative of any applicable law, governmental
rule or regulation, or if said Agreement is held to be
unenforceable or unconscionable then the invalidity of such
specific provision herein shall not be held to invalidate the
remaining provisions of this Agreement. Such other provisions and
the entirety of this Agreement shall remain in full force and
effect unless the removal of said invalid provision destroys the
legitimate purposes of this Agreement in which event this
Agreement shall be null and void.
6.18 State Law and Venue Determination. This Agreement shall be
subject to and governed under the laws of the State of Florida.
Any and all obligations are performable and payable in Alachua
County, Florida. The parties hereto agree that venue for
purposes of any and all lawsuits, cause of actions, arbitrations
or other disputes shall be in Alachua County, Florida.
6.19 Status of Agreement and Prior Understandings. This
Agreement and the exhibits attached hereto and incorporated
herein, if any, contains the entire Agreement of the Parties and
there are no representations, inducements, promises, agreements,
arrangements or undertakings, oral or written between the Parties
hereto other than those set forth and duly executed in writing.
No agreement of any kind shall be binding upon either Party
unless and until the same has been made in writing and duly
executed by both Parties.
6.20 Time. Time is of the essence in this Agreement and,
accordingly, all time limits shall be strictly construed and
strictly enforced. Failure of one party to this Agreement to
meet a deadline imposed hereunder shall be considered a material
and significant breach of this Agreement and shall entitle the
non breaching party to any and all rights of default as stated
hereinabove.
6.21 Acceptance. This Agreement shall not be binding until it is
executed by both parties to this agreement.
6.22 Date of Effectiveness. This Agreement shall become
effective upon the execution of the same by all of the parties
hereto and all obligations contained herein shall be conclusive
and binding upon all of the parties hereto. Accordingly, this
Agreement shall no longer be considered executory as of the date
that all parties have affixed their signatures hereto.
6.23 Signatory Clause. This Agreement is signed, accepted and
agreed to by all parties hereto by and through the parties or
their agents or authorized representatives. All parties hereto
hereby acknowledge that they have read and understand this
Agreement and the attachments and/or exhibits hereto. All parties
further acknowledge that they have executed this legal document
voluntarily and of their own free will.
6.24 Public Disclosure. From and after the date hereof through
the Closing Date, TheInternetCorp shall not issue a press release
or any other public announcement with respect to the transactions
contemplated hereby without the prior consent of Cycle-Parts.com,
which consent shall not be unreasonably withheld or delayed. It
is understood by Cycle-Parts.com that TheInternetCorp is required
under the Exchange Act to make prompt disclosure of any material
transaction.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, HAVE HAD
THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF THEIR OWN
CHOICE, AND UNDERSTAND EACH OF THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
Cycle Parts.com, Inc.
By:/s/Robert Rill
Robert Rill, President
TheInternetCorp.net, Inc.
By:/s/Vincent Van den Brink
Vincent Van den Brink, President
Brian F. Faulkner
Attorney at Law
3900 Birch Street, Suite 113
Newport Beach, California 92660
October 25, 1999
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: TheInternetCorp.net, Inc. - Form S-4
Dear Sir/Madame:
I have acted as counsel to TheInternetCorp.net, Inc., a Nevada
corporation ("TICI"), in connection with its Registration
Statement on Form S-4 relating to the acquisition of Cycle-
Parts.com, Inc. by TICI and in connection therewith the
registration of 12,670,000 shares of its common stock ("Shares"),
$0.001 par value per Share, at a maximum offering price of $1.00
per Share, and delayed registration of 2,000,000 shares to be
issued upon the exercise of warrants for such shares.
In my representation, I have examined such documents, corporate
records, and other instruments as we have deemed necessary or
appropriate for purposes of this opinion, including, but not
limited to, the Articles of Incorporation and Bylaws of TICI.
Based upon the foregoing, it is my opinion that TICI is duly
organized and validly existing as a corporation under the laws of
the State of Nevada, and that the Shares, when issued and sold,
will be validly issued, fully paid, and non-assessable.
Sincerely,
/s/Brian F. Faulkner
Brian F. Faulkner, Esq.
INDEPENDENT AUDITORS' REPORT
Board of Directors
TheInternetCorp.net, Inc.
I have audited the accompanying balance sheet of
TheInternetCorp.net, Inc. (a development stage company), as of
August 31, 1999, and the related statements of operations,
stockholders' equity and cash flows for the period from inception
(April 29, 1999) to August 31, 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 in accordance with standards
established by the American Institute of Certified Public
Accountants.
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. as of August 31, 1999 and the results
of its operations and its cash flows for the period from
inception (April 29, 1999 ) to August 31, 1999 in conformity with
generally accepted accounting principles.
Kurt D. Saliger C.P.A. (Nevada State License No. 2335)
Las Vegas, Nevada
October 6, 1999
TheInternetCorp.net, Inc.
(A Development Stage Company)
BALANCE SHEET
August 31, 1999
ASSETS
CURRENT ASSETS:
Cash $0
Accounts Receivable $0
TOTAL CURRENT ASSETS $0
ORGANIZATIONAL COSTS, NET $219
TOTAL ASSETS $219
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 August 31, 1999,
1,000,000 shares $1,000
Stock Subscription Receivable $(765)
Additional paid in Capital $0
Deficit Accumulated During
Development Stage $(16)
TOTAL STOCKHOLDERS' EQUITY $219
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $219
See accompanying notes to financial statements & audit report
TheInternetCorp.net, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
INCOME:
Revenue $0
TOTAL INCOME $0
EXPENSES:
General, and Administrative $0
Amortization $16
Total Expenses $16
Net Profit/Loss(-)
From Operations $(16)
Interest Income $0
INCOME (LOSS) BEFORE
INCOME TAXES $(16)
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)
STATEMENT OF STOCKHOLDERS' EQUITY
(Deficit)
Common Stock Additional Accumulated
Shares Amount paid-in During
capital Development
Stage
Issued for
cash and organizational
costs
April 29, 1999 1,000,000 $1,000 $0
Stock Subscription
Receivable $ (765)
Net Income April 29,
1999 (inception)
to August 31, 1999 $(16)
Balance
August 31, 1999 1,000,000 $ 235 $0 $(16)
See accompanying notes to financial statements & audit report
TheInternetCorp.net, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Cash Flows from Operating Activities:
Net Income $ (16)
(Increase) Amortization $ 16
Net Cash (Used) In Operating Activities $ 0
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of organizational costs $ (235)
$ (235)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash $ 235
Net Increase in Cash $ 0
Cash, April 29, 1999 $ 0
Cash, August 31, 1999 $ 0
See accompanying notes to financial statements & audit report
TheInternetCorp.net, Inc.
(A Development Stage Company)
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 August 31, 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 the Company consists of 50,000,000
shares with a par value of $0.001 per share.
Preferred Stock.
The authorized Preferred Stock of the Company consists of
10,000,000 shares with a par value of $0.001 per share.
INDEPENDENT AUDITORS' REPORT
Board of Directors
Cycle-Parts.com, Inc.
I have audited the accompanying balance sheet of Cycle-Parts.com,
Inc. (a development stage company), as of August 31, 1999, and
the related statements of operations, stockholders' equity and
cash flows for the period from inception (March 16, 1999) to
August 31, 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 in accordance with standards established by the American
Institute of Certified Public Accountants.
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
Cycle-Parts.com, Inc. as of August 31, 1999 and the results of
its operations and its cash flows for the period from inception
(March 16, 1999 ) to August 31, 1999 in conformity with generally
accepted accounting principles.
Kurt D. Saliger C.P.A. (Nevada State License No. 2335)
Las Vegas, Nevada
October 22, 1999
Cycle-Parts.com, Inc.
(A Development Stage Company)
BALANCE SHEET
ASSETS
CURRENT ASSETS
Cash $ 52,081
Note Receivable 50,000
Accrued Interest Receivable 667
TOTAL CURRENT ASSETS $ 102,748
TOTAL ASSSETS $ 102,748
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable 0
TOTAL CURRENT LIABILITIES 0
LONG-TERM DEBT 0
STOCKHOLDERS' EQUITY
Common Stock, $0.01 par value
Authorized 100,000,000 shares, issued
And outstanding at August 31, 1999
12,660,000 shares $ 126,600
Additional Paid In Capital 173,400
Deficit Accumulated During Development Stage (197,252)
TOTAL STOCKHOLDERS' EQUITY $ 102,748
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 102,748
See accompanying notes to financial statements.
Cycle-Parts.com, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
REVENUES $ 61,219
COSTS OF REVENUES 52,696
GROSS PROFIT 8,523
OPERATING EXPENSES
Selling, general and administrative 207,494
Depreciation 0
TOTAL OPERATING EXPENSES $ 207,494
INCOME (LOSS) FROM OPERATIONS (207,494)
OTHER INCOME (EXPENSES)
Interest income 1,719
Interest expense 0
INCOME (LOSS) BEFORE INCOME TAXES (197,252)
Income Taxes 0
NET PROFIT (LOSS) (197,252)
NET PROFIT (LOSS) PER SHARE
- BASIC AND DILUTED (0.0016)
AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING 12,660,000
See accompanying notes to financial statements.
Cycle-Parts.com, Inc.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
COMMON STOCK
Number Additional (Deficit)
of Paid In Accumulated
Shares Amount Capital During
Development
Stage
Issued for cash
March 16, 1999 12,660,000 $126,600 $173,400
(Net Loss) March 16,
1999 (Inception) to
August 31,1999 ($197,252)
Balance
August 31, 1999 12,660,000 $126,600 $173,400 ($197,252)
See accompanying notes to financial statements.
Cycle-Parts.com, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES
(Net Loss) ($197,252)
Accrued Interest Receivable (667)
Net Cash (Used) In Operating Activity ($197,919)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Note Receivable ($ 50,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash $300,000
Net increase in cash $ 52,081
Cash, March 16, 1999 $307,856
Cash, August 31, 1999 $ 52,081
See accompanying notes to financial statements.
Cycle-Parts.com, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS.
Cycle-Parts.Com, Inc., which was previously a sole proprietorship
known as Internet Motorcycle Parts.Com and Ameril Sport Bikes,
(collectively, the "Company"), was incorporated under the laws of
the state of Florida on March 16, 1999. The Company is engaged
in the business of selling original equipment manufacturer
("OEM") motorcycle parts through the Internet. All revenue is
received electronically and all related inventories are drop
shipped directly from the Company's suppliers.
On March 16, 1999, the Company issued 12,660,000 shares of its
one cent ($.01) par value common stock for $300,000 in cash and
certain services.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Accounting Method.
The Company records income and expenses on the accrual method of
accounting.
Cash and Cash Equivalents.
The Company maintains a cash balance in an interest bearing bank
that currently does not exceed federally insured limits. For the
purpose of the statement of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of August 31, 1999.
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
differences between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Estimates.
The preparation of the 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, disclosure of contingent assets and
liabilities, and the reported amounts of revenue and expenses
during the reporting period Actual results could differ from
those estimates.
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 of
number of common shares outstanding during the period. Diluted
loss per share reflects per share amounts that would result if
dilutive common stock equivalents had been converted to common
stock. As of August 31, 1999, warrants have been excluded form
the loss per share calculations because they would not be
dilutive.
NOTE 3 - NOTE RECEIVABLE.
The Company issued a note receivable to OTC Dreamwerks, Inc. on
April 20, 1999 in the amount of $50,000. The note receivable
bears interest at the rate of 4% simple interest per annum. The
principal and interest is payable anytime upon demand from the
Company 24 months after the date of issue. The note receivable
is unsecured.
NOTE 4 - STOCKHOLDERS' EQUITY.
Common Stock.
The authorized common stock of the Company consists of
100,000,000 shares of its $0.01 par value common stock.
Preferred Stock.
The Company is not authorized to issue preferred stock.
Stock Warrants.
The Company issued stock warrants to purchase 2,000,000 shares of
common stock for $0.10 to various consultants.
NOTE 5 - MERGER AGREEMENT.
In May of 1999, the Company entered into a reverse merger
agreement with TheInternetCorp.Net, Inc. ("TICN"). Pursuant to
terms of the agreement, the Company's shareholders will be issued
one share of TICN's common stock in exchange for each share of
their common stock in the Company.
Brian F. Faulkner
Attorney at Law
3900 Birch Street, Suite 113
Newport Beach, California 92660
October 25, 1999
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: TheInternetCorp.net, Inc. - Form S-4
Dear Sir/Madame:
I have acted as counsel to TheInternetCorp.net, Inc., a Nevada
corporation ("TICI"), in connection with its Registration
Statement on Form S-4 relating to the acquisition of Cycle-
Parts.com, Inc. by TICI and in connection therewith the
registration of 12,670,000 shares of its common stock ("Shares"),
$0.001 par value per Share, at a maximum offering price of $1.00
per Share, and delayed registration of 2,000,000 shares to be
issued upon the exercise of warrants for such shares. I hereby
consent to all references to my firm included in this
Registration Statement, including the opinion of legality.
Sincerely,
/s/Brian F. Faulkner
Brian F. Faulkner, Esq.
Kurt D. Saliger
Certified Public Accountant
5000 West Oakey Boulevard, Suite A-4
Las Vegas, Nevada 89146
October 25, 1999
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: TheInternetCorp.net, Inc. - Form S-4
Dear Sir/Madame:
The firm of Kurt D. Saliger, Certified Public Accountant,
consents to the inclusion of my report of October 6, 1999 on the
financial statements of TheInternetCorp.net, Inc. for the period
ended August 31, 1999, and the inclusion of my report dated
October 22, 1999 on the financial statements of Cycle-Parts.com,
Inc. for the period ended August 31, 1999, and to all references
to my firm, in the S-4 Registration Statement of
TheInternetCorp.net, Inc.
Sincerely,
/s/Kurt D. Saliger
Kurt D. Saliger, C.P.A.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<INCOME-PRETAX> (16)
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