============================================================================
SECURITIES AND EXCHANGE COMMISSIO
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act
October 13, 2000
Date of Report
---------------------------------
(Date of Earliest Event Reported)
SYNDICATION NET.COM, INC.
-----------------------------------------------------
(Exact Name of Registrant as Specified in
its Charter)
The Hartke Building
7637 Leesburg Pike
Falls Church, Virginia 22043
----------------------------------------
(Address of principal executive offices)
202/467-2788
------------------------------
(Registrant's telephone number)
Delaware 0-29701 52-2218873
-------------- ------------- -------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation
GENERATION ACQUISITION CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
--------------------------------
(Former name and former address)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) On October 13, 2000,
pursuant to an Agreement and Plan of
Reorganization (the "Acquisition Agreement")
between Generation Acquisition Corporation
("Generation"), Life2K.com, Inc. ("Life2K")
and the owners of the outstanding shares of
Life2K, Generation acquired all the
outstanding shares of common stock of Life2K
from the shareholders thereof in an exchange
for an aggregate of 10,656,750 shares of
common stock of Generation (the "Acquisition").
The Acquisition is intended to
qualify as a reorganization within the
meaning of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended.
On October 13, 2000, pursuant
to an Agreement and Plan of Merger (the
"Merger Agreement") between Generation and
its wholly-owned subsidiary, Life2K, Life2K
was merged with and into Generation.
In connection with the merger,
Generation changed its name to
SyndicationNet.com, Inc. ('SyndicationNet"
or the "Company").
Copies of the Acquisition
Agreement and Merger Agreement are filed as
exhibits to this Current Report and are
incorporated in their entirety herein. The
foregoing description is modified by such
reference.
(b) The following table
contains information regarding the
shareholdings of SyndicationNet's current
directors and executive officers and those
persons or entities who beneficially own
more than 5% of its common stock (giving
effect to the exercise of any warrants held
by each such person or entity which are
exercisable within 60 days hereof):
Number of shares of Percent of Common
Common Stock Beneficially Stock Beneficially
Name Owned (1) Owned (1)
Vance Hartke 10,000 *
President and Director
6500 Kerns Court
Falls Church, VA 22044
Cynthia White 20,000 *
Chief Financial Officer
102 NE 2 Street, #333
Boca Raton, FL 33432
Mark Griffith 10,000 *
Secretary, Treasurer and
Director
465 N.E. 3rd Street
Boca Raton, FL 33432
Mark Solomon 94,000 *
Director
901 South Federal Highway
Fort Lauderdale, FL 22216
Wayne Hartke 10,000 *
Director
10824 Burr Oak Way
Burke, VA 22015
Howard B. Siegel 10,000 *
Director
15902 South Barker Landing
Houston, TX 77079
Dale Hill 5,097,168 47.8%
5056 Westgrove Drive
Dallas, Texas 75248
Brian Sorrentino 3,672,924 34.4%
422 N.E. 3rd Street
Boca Raton, FL 33432
All Officers and Directors 154,000 1.44%
as a group (6 persons)
* Represent less than 1% of the outstanding shares of the Company
(1) Based upon 10,656,750 shares of the Company's common stock
issued and outstanding as of October 17, 2000.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged
pursuant to the Acquisition Agreement was
negotiated between Generation and Life2K. In
evaluating the Acquisition, Generation used
criteria such as Life2K's ability to acquire
controlling interests in or participate in
the creation of, and provide financial,
management and technical support to,
development stage Internet business to
business ("B2B") or e-commerce businesses,
Life2K's proposed acquisition strategy,
Life2K management's experience in the
financial, business and Internet industry,
and Life2K's anticipated business
operations. Generation had no assets or
liabilities and in evaluating Generation,
Life2K placed a primary emphasis on
Generation's status as a reporting company
under Section 12(g) of the Securities
Exchange Act of 1934, as amended, and the
facilitation of Life2K becoming a reporting
company under the 1934 Act.
(b) The Company intends to
actively develop the business strategies,
operations and management teams of acquired
or founded entities.
THE COMPANY
SyndicationNet.com, Inc., a
Delaware corporation, is a start-up holding
company which was formed to acquire
controlling interests in or to participate
in the creation of, and to provide
financial, management and technical support
to, development stage Internet business to
business ("B2B") or e-commerce businesses.
The Company's strategy is to integrate
affiliated companies into a network and to
actively develop the business strategies,
operations and management teams of the
affiliated entities.
The Company currently has one
wholly-owned subsidiary, Kemper Pressure
Treated Forest Products, Inc. ("Kemper").
Kemper is engaged in the retail brokerage
business of preservative treated lumber such
as utility poles, bridge pilings, timber and
guardrail posts. Kemper is also developing
computer software applications that will
enable Kemper to manage on-line bidding for
the treatment, sale and shipment of
processed wood.
The Company has limited
finances and requires additional funding in
order to accomplish its acquisition
objectives. There is no assurance that the
Company will have revenues in the future or
that it will be able to secure other funding
necessary for its future growth and
expansion. The Company intends to acquire
companies in the early stages of development
with limited operating history, little
revenue and possible losses, and if such
entities do not succeed, the value of the
Company's assets, its results of operations
and the price of the Company's common stock
could decline. See "Risk Factors".
THE MARKET
The Company believes that the
Internet's substantial growth has created a
market opportunity to facilitate the
activities of electronic commerce. As
Internet-based network reliability, speed
and security continue to improve, and as
more businesses are connected to and
familiar with the Internet, traditional
"brick and mortar" businesses are beginning
to use the Internet to conduct e-commerce
and to create new revenue opportunities by
enhancing their interactions with new and
existing customers. Businesses are also
using the Internet to increase efficiency in
their operations through improved
communications, both internally and with
suppliers and other business partners. The
Company's management team believes that it
can offer development stage Internet
companies strategic guidance regarding
business model development, market
positioning, management selection,
day-to-day operational support and the
introduction to strategic investors that
start-up companies often need to fulfill
their business objectives.
BUSINESS AND ACQUISITION STRATEGY
The Company may take advantage
of various potential business acquisition
opportunities through the issuance of the
Company's securities. The Company believes
it can assist development stage companies in
the following areas:
-to develop and implement
business models that capitalize
on the Internet's ability to
provide solutions to
traditional companies;
- to build a corporate
infrastructure including a
management team, a qualified
sales and marketing department,
information technology, finance
and business development;
- to assist in managing rapid
growth and the flexibility to
adopt to the changing Internet
marketplace and technology;
- to assist in evaluating,
structuring and negotiating
joint ventures, strategic
alliances, joint marketing
agreements and other corporate
transactions; and
-to advise in matters related
to corporate finance, financial
reporting and accounting
operations.
The Company believes that its
management team is qualified to identify
companies that are positioned to succeed.
In evaluating whether to act as a consultant
to a particular company or, perhaps, to
acquire an interest in an existing company,
the Company intends to apply an analysis
which includes, but is not limited to, the
following factors:
1. Industry evaluation to
determine inefficiencies that may be
alleviated though Internet or e-commerce use
and evaluation of the profit potential, the
size of the market opportunity and the
competition that exists for that particular
industry.
2. Target company evaluation
to determine if the target company has the
products, services and skills to become
successful in its industry.
3. Overall quality and
industry expertise evaluation of a potential
acquisition candidate in deciding whether to
acquire a target company. If the target
company's management skills are lacking, a
determination must be made as to whether a
restructuring of its corporate
infrastructure is feasible and, if done so,
whether it would be successful.
4. Evaluation of the Company's
equity position in a target company and
extent that the Company will be able to
exert influence over the direction and
operations of the development stage company.
5. As a condition to any
acquisition, the Company intends to require
representation on the target company's board
of directors to ensure its ability to
provide active guidance to the acquired
company. The Company intends to structure
its acquisitions to permit the acquired
company's management and key personnel to
retain an equity stake in the company.
COMPETITION
The market to acquire interests
in development stage Internet companies is
highly competitive. The Company is a
development stage company without operating
history and many of the Company's
competitors will have more experience
identifying and acquiring equity interests
in Internet companies and have greater
financial, research and management resources
than the Company. In addition, the Company
may encounter substantial competition from
new market entrants. Some of the Company's
current and future competitors may be
significantly larger and have greater name
recognition than the Company. Many
investment oriented entities have
significant financial resources which may be
more attractive to entrepreneurs of
development stage companies than obtaining
the Company's consulting, management skills
and networking services. There can be no
assurance that the Company will be able to
compete effectively against such competitors.
BUSINESS OF THE COMPANY'S SUBSIDIARY, KEMPER
PRESSURE TREATED FOREST PRODUCTS, INC.
The Company's wholly owned
subsidiary, Kemper Pressure Treated Forest
Products, Inc. ("Kemper") was incorporated
on December 28, 1987 under the state laws of
Mississippi. Kemper was organized to
procure, buy, sell and harvest products for
treating poles, conventional lumber and wood
products, as well as preserve and treat wood
and forest products for sale in wholesale
and retail markets. On October 9, 1997,
Kemper entered into an asset purchase
agreement and lease assignment with Electric
Mills Wood Preserving, Inc. ("Electric
Mills"), under which Kemper sold all its
assets and reassigned its lease related to
its manufacturing enterprise. Currently
Kemper acts as a retail broker of treated
timber, having eliminated virtually all of
its manufacturing capacities.
Kemper markets, distributes and
arranges transportation for treated pine and
hardwood lumber products which are used for
utility poles, transmission poles, pilings,
bridge timbers, mining ties and guardrail
posts. Kemper, in working with the utility
industry, procures two classifications of
lumber poles: (i) distribution poles which
are typically used for electricity, cable,
telephone and other wires and (ii)
transmission poles capable of carrying high
voltage electricity.
OPERATIONS OF KEMPER
Kemper currently engages the
services of a third party supplier, Electric
Mills, which provides 100% of Kemper's wood
treating and procurement services on a per
purchase basis. Management believes that,
if needed, other suppliers could provide
these services on comparable terms. A change
in suppliers could, however, cause a delay
in manufacturing and a possible loss of
sales, which would adversely affect
Kemper's results of operations.
Kemper currently has one customer,
Shelby County Forest Products, Inc., Tacoma,
Washington, which accounts for 100% of
Kemper's revenues. Although Kemper's
management team is continually negotiating
contracts with potential customers, a loss
of its current customer would have a
material adverse affect on Kemper's results
of operations.
For the six month period ending June
30, 2000, Kemper had incurred a net
operating loss of $(93,757).
SUMMARY FINANCIAL STATEMENTS
The following is taken from the
audited consolidated financial statements
for Life2K.com, Inc. and subsidiary of
December 31, 1999 and 1998 and the unaudited
consolidated financial statements for
Life2K.com, Inc. and subsidiary for the
six months ended June 30, 2000.
Year Ended Year Ended 6 Months
December 31 December 31 Ended June
1999 1998 30, 2000
unaudited
Income Statement Items:
Sales $5,597,676 $4,494,708 $3,380,537
Cost of sales 5,526,429 4,403,509 3,357,919
Gross margin 71,147 91,199 22,618
Operating Loss (186,318) (83,902) (93,757)
Balance Sheet Items
Total current assets 493,420 11,271
Total assets 496,150 660,187
Current liabilities 962,524 1,012,318
COMPETITION IN THE WOOD PRODUCTS INDUSTRY
The wood products industry is highly
competitive and includes a large number of
companies manufacturing relatively
standardized products. The principal means
of competition in the lumber industry are
log costs, unit production costs, pricing,
product quality, and the ability to satisfy
customer needs promptly. Many of Kemper's
competitors are larger integrated companies
that have significantly greater financial,
production, harvesting and marketing
resources than Kemper. Several of these
competitors owns acres of timberland and
have a significant base of low-cost fee
timberland and timber contracts which
protects them from fluctuations in log
prices and gives them a potential advantage
over Kemper, which relies on the open log
market to supply the bulk of its raw
materials requirements.
EMPLOYEES
As of October 25, 2000 the Company
and its subsidiary had an aggregate of three
full time employees and one significant
consultant.
PROPERTY
The Company is headquartered in the
Hartke Building located at 7637 Leesburg
Pike, Falls Church, Virginia 22043. Retired
Senator Vance Hartke, the president of the
Company and the owner of the Hartke
Building, has granted the Company the use of
office space in the Hartke Building with
accrued rent to be paid at such time as the
Company has acquired adequate liquidity to
pay the accrued and current rent. The
Company projects that such office space
should be sufficient for its anticipated
needs for the foreseeable future.
The Company's telephone number is
703/748-3480 or 202/467-2788, and its fax
number is 703/790-5435.
LITIGATION
There is no current outstanding
litigation in which the Company is involved
other than routine litigation incidental to
ongoing business.
DESCRIPTION OF SECURITIES
The Company's certificate of
incorporation, by-laws and corporate
governance are subject to the provisions of
the Delaware General Corporation Law, as
amended and interpreted from time to time.
COMMON STOCK
The Company is authorized to
issue 100,000,000 shares of common stock,
$.0001 par value per share, of which
10,656,750 shares were outstanding as of the
date of this report.
Holders of shares of common
stock are entitled to one vote for each
share on all matters to be voted on by the
stockholders. Holders of common stock do
not have cumulative voting rights. Holders
of common stock are entitled to share
ratably in dividends, if any, as may be
declared from time to time by the Board of
Directors in its discretion from funds
legally available therefor. In the event of
a liquidation, dissolution or winding up of
the Company, the holders of common stock are
entitled to share pro rata all assets
remaining after payment in full of all
liabilities.
Holders of common stock have no
preemptive rights to purchase the Company's
common stock. There are no conversion or
redemption rights or sinking fund provisions
with respect to the Common Stock.
PREFERRED STOCK
The Company is authorized to
issue 20,000,000 shares of preferred stock,
$.0001 par value per share. As of the date
of this report, there were no shares of
preferred stock outstanding. The Board of
Directors is authorized to provide for the
issuance of shares of preferred stock in
series and, by filing a certificate pursuant
to the applicable law of the State of
Delaware, to establish from time to time the
number of shares to be included in each such
series, and to fix the designation, powers,
preferences and rights of the shares of each
such series and the qualifications,
limitations or restrictions thereof without
any further vote or action by the
shareholders. Any shares of preferred stock
so issued would have priority over the
common stock with respect to dividend or
liquidation rights. Any future issuance of
preferred stock may have the effect of
delaying, deferring or preventing a change
in control of the Company without further
action by the shareholders and may adversely
affect the voting and other rights of the
holders of common stock. At present, the
Company has no plans to issue any preferred
stock nor adopt any series, preferences or
other classification of preferred stock.
MARKET FOR THE COMPANY'S SECURITIES
There is currently no trading
market for the Company's securities. The
Company intends to file a registration
statement on Form SB-2, or such other form
as may be required, to register certain of
the securities held by its shareholders and
such other securities as it may deem
advisable.
After effectiveness of the
registration statement, the Company intends
to apply for quotation of its securities on
the NASD OTC Bulletin Board. If the Company's securities are
not quoted on the NASD OTC Bulletin Board, a
securityholder may find it more difficult to
dispose of, or to obtain accurate quotations
as to the market value of, the Company's
securities. The over-the-counter market
("OTC") differs from national and regional
stock exchanges in that it (1) is not cited
in a single location but operates through
communication of bids, offers and
confirmations between broker-dealers and (2)
securities admitted to quotation are offered
by one or more broker-dealers rather than
the "specialist" common to stock exchanges.
When qualified, if ever (of which there can
be no assurance), the Company intends to
apply for quotation of its securities on the
Nasdaq SmallCap Market.
In order to qualify for
admission for listing on the Nasdaq SmallCap
Market, an equity security must, in relevant
summary, (1) be registered under the
Securities Exchange Act of 1934; (2) have at
least three registered and active market
makers, one of which may be a market maker
entering a stabilizing bid; (3) for initial
inclusion, be issued by a company with
$4,000,000 in net tangible assets, or
$50,000,000 in market capitalization, or
$750,000 in net income in two of the last
three years (if operating history is less
than one year then market capitalization
must be at least $50,000,000); (4) have a
public float of at least 1,000,000 shares
with a value of at least $5,000,000; (5)
have a minimum bid price of $5.00 per share;
and (6) have at least 300 beneficial
shareholders.
In order to qualify for
quotation on the NASD OTC Bulletin Board, an
equity security must have one registered
broker-dealer, known as the market maker,
willing to list bid or sale quotations and
to sponsor such a Company listing. If it
meets the qualifications for trading
securities on the NASD OTC Bulletin Board
the Company's securities will trade on the
NASD OTC Bulletin Board until such future
time, if at all, that it applies and
qualifies for admission for listing on the
Nasdaq SmallCap Market. The Company may
never qualify for trading on the NASD OTC
Bulletin Board or listing on the NASD
SmallCap Market.
MANAGEMENT
The following table sets forth
certain information regarding the members of
the Company's board of directors and its
executive officers:
Name Age Position
Vance Hartke 81 President and Director
Mark Griffith 41 Treasurer, Secretary and Director
Cynthia White 32 Chief Financial Officer
Mark Solomon 45 Director
Wayne Hartke 52 Director
Howard B. Siegel 57 Director
The Company's directors have been
elected to serve until the next annual
meeting of the stockholders of the Company
and until their respective successors have
been elected and qualified or until death,
resignation, removal or disqualification.
The Company's Certificate of Incorporation
provides that the number of directors to
serve on the Board of Directors may be
established, from time to time, by action of
the Board of Directors. Vacancies in the
existing Board are filled by a majority vote
of the remaining directors on the Board.
The Company's executive officers are
appointed by and serve at the discretion of
the Board. Directors receive an annual
issuance of 10,000 shares of the Company's
common stock for serving as directors of the
Company and are repaid for expenses incurred
in performing their obligations thereof.
SENATOR VANCE HARTKE, ESQ. (retired)
has served as the President and a director
of the Company since August 1999. Senator
Hartke received his Juris Doctor in 1948
from Indiana University Law School. From
1956 to 1958, Senator Hartke served as the
Mayor of the City of Evansville, Indiana.
From 1958 to 1976, Senator Hartke served as
the United States Senator from Indiana for
three terms. Senator Hartke was a member of
the United States Senate Finance Committee
and a member of the United States Senate
Commerce Committee.
Senator Hartke is a practicing
attorney who currently heads "The Hartke
Group", a full service, family-owned,
business advisory/consulting firm. Over a
period of 30 years, Senator Hartke has been
involved with the United Nation, the World
Health Organization, the Food and
Agricultural Organization, the United
Nations Development Program, the World Bank,
U.S. Aide, the Overseas Private Investment
Corporation, the Export-Import Bank, the
Inter American Development Bank and various
agencies of the United States
Administration, the United States Senate and
the United States House of Representatives.
Senator Hartke is the co-founder of
the American Trial Lawyers Association and
the founder of the International Executive
Service Corps. Senator Hartke currently
serves as a director of Neptune
Pharmaceuticals USA, Inc., a privately held
company that imports and exports
pharmaceutical products and also serves as a
director of Wood Holdings, Inc. and Wood
Sales, Inc., privately held companies in the
wood preservative industry.
MARK SOLOMON, ESQ. has served as
Chairman of the Board of Directors of the
Company since August 1999. Mr. Solomon
received a Bachelor of Science Degree from
Nova University in 1976 and received his
Juris Doctor from Nova University Law School
in 1979. Mr. Solomon is a practicing
attorney specializing in criminal law and
business law.
CYNTHIA WHITE has served as the
Chief Financial Officer of the Company since
August 1999. Since October 1991, Ms. White
has owned The Accelerated Group, Inc., an
accounting firm which specializes in
corporate and individual taxes, audits,
financial reporting and business
consultation. From 1992 to 1993, Ms. White
served as the Comptroller for
Optoelectronics, Inc. and prior to that
served as an accountant for Florida Business
Services, Inc. and the accounting firm of
James and Surman. In 1992, Ms. White
received her Bachelor of Arts degree from
Florida Atlantic University with a major in
accounting. Ms. White also serves as the
treasurer for the Boca Raton Society for the
Disabled, Inc.
MARK GRIFFITH has served as the
Treasurer, Secretary and a director of the
Company since August 1999. Mr. Griffith
received his Bachelor of Arts degree in
History and in Education from Salisbury
State University in 1984. Prior to 1997,
Mr. Griffith worked as a stockbroker for
J.W. Grant and Associates. From 1997 to
present Mr. Griffith served as the Chief
Compliance Officer for the Agean Group, a
securities brokerage firm located in Florida.
WAYNE HARTKE, ESQ. has served as a
director of the Company since August 1999.
Mr. Hartke received his Bachelor of Arts
from the University of Pennsylvania in 1970
and his Juris Doctor in 1973 from the
California Western School of Law. Since
1978, Mr. Hartke has been a partner in the
law firm of Hartke & Hartke. Mr. Hartke
served as corporate counsel to Norris
Satellite Communications, Inc. where he
participated in negotiations regarding
satellite launch contracts. Mr. Hartke also
has experience in Federal Communications
Commission license applications, the
development and sale of coal properties,
international crude oil purchases and the
acquisition and marketing of Internet domain
names.
Mr. Hartke currently serves as a
director of Wood Holdings, Inc. and Wood
Sales, Inc., privately held companies in the
wood preservative industry. Mr. Wayne Hartke
is the son of retired Senator Vance Hartke,
the President and a director of the Company.
HOWARD S. SIEGEL, ESQ. has served
as a director of the Company since August
1999. Mr. Siegel received his Juris Doctor
in 1969 from St. Mary's University Law
School. Since 1969, Mr. Siegel has been a
practicing attorney. For the past five
years Mr. Siegel has worked as an attorney
with the law office of Yuen & Associates,
located in Houston, Texas. Prior to working
for Yuen & Associates, Mr. Siegel was
employed with the Internal Revenue Service,
Tenneco, Inc., Superior Oil Company and
Braswell & Paterson. Mr. Siegel serves as a
director of Golden Triangle Industries, Inc.
(GTII), a public company traded on the
Nasdaq Stock Market, and serves as a
director for Signature Motor Cars, Inc, a
privately-held company.
RELATED TRANSACTIONS
On April 7, 1999 Kemper ratified a
corporate service consulting agreement with
Source Management Services, Inc., a company of
which Brian Sorrentino, a controlling shareholder,
is the principal.
Source Management is to oversee
the general activities of Kemper on a day to
day basis, develop and execute Kemper's
business plan, assist in the preparation of
audits, registration statements and the
listing of Kemper's securities on the NASD
OTC Bulletin Board. For the fiscal year
2000, Kemper has agreed to compensate Source
Management the greater of $150 per hour or
$17,500 per month. If and when Kemper's
securities are traded on any United States
stock exchange, Source Management will be
awarded a bonus of 5% of the outstanding
shares of Kemper's common stock. See
"MANAGEMENT: Consulting Agreement"
On March 3, 1999 the Company
borrowed $100,000 from Brian Sorrentino, a
greater than 5% shareholder of the Company's
common stock and the principal of Source
Management. The Company executed a promissory
note for the loan amount at an interest rate
of 12% per annum. The loan, due March 3,
2000, has not been paid as of the date of
this filing.
DIRECTOR COMPENSATION
The Company annually grants
each member of its board of directors 10,000
shares of the Company's common stock.
MANAGEMENT TEAM
The Company anticipates that
its management team will act as consultants
to identified target businesses. Once the
Company has established a relationship with
a target business, whether it acquires a
controlling interest of an existing company
or participates in the creation of a new
company, it will analyze its operations, if
any, and will integrate that company into
the anticipated network of affiliated
companies. The management team will provide
financial, managerial and technical support
to the network of affiliated companies and
actively develop the business strategies,
operations and individual management teams
of the affiliated companies.
EMPLOYMENT AGREEMENTS
The Company has not entered
into employment agreements with any of its
officers or employees. All key employees
serve in their positions until further
action of the President of the Company or
the Board of Directors.
CONSULTING AGREEMENT
On April 7, 1999 Kemper ratified a
corporate services consulting agreement with
Source Management Services, Inc. Brian
Sorrentino, a significant shareholder of
SyndicationNet, is the president and sole
director and shareholder of Source
Management. Source Management is to oversee
the general activities of Kemper on a day to
day basis, develop and execute Kemper's
business plan, assist in the preparation of
audits, registration statements and the
listing of Kemper's securities on the OTC
Bulletin Board. For the fiscal year 2000,
Kemper has agreed to compensate Source
Management the greater of $150 per hour or
$17,500 per month. If and when Kemper's
securities are traded on any United States
securities market, Source Management will be
awarded a bonus of 5% of the outstanding
shares of Kemper's common stock.
EXECUTIVE COMPENSATION
No officers of the Company earned
more than $100,000 a year during any of the
last three fiscal years. There is no key man
life insurance on any director or officer.
RISK FACTORS
SYNDICATIONNET IS CURRENTLY OPERATING AT A LOSS
The Company currently operates
at a loss. If losses continue, the Company
may need to raise additional capital through
the sale of its securities or from debt or
equity financing. If the Company is not
able to raise such financing or obtain
alternative sources of funding, management
will be required to curtail operations. The
Company's operations are subject to the
risks and competition inherent in the
establishment of a new business enterprise.
There can be no assurance that future
operations will be profitable. Revenues and
profits, if any, will depend upon various
factors, including whether the Company will
be able to effectively evaluate the overall
quality and industry expertise of potential
acquisition candidates, whether the Company
will have the funds to provide seed capital
and mezzanine financing to e-commerce and
Internet-related companies and whether the
Company can develop and implement business
models that capitalize on the Internet's
ability to provide solutions to traditional
companies. The Company may not achieve its
business objectives and the failure to
achieve such goals would have an adverse
impact on it.
SYNDICATIONNET DOES NOT HAVE FUNDS CURRENTLY
AVAILABLE FOR ACQUISITIONS
SyndicationNet does not
currently have funds reserved or available
for the acquisition of controlling interests
or for the creation of Internet or
e-commerce businesses. The Company's
strategy is to integrate affiliated
companies into a network and to actively
develop the business strategies, operations
and management teams of the affiliated
entities. SyndicationNet will need to raise
funds in order to commence its business
plan.
SYNDICATIONNET MAY NEED TO RAISE ADDITIONAL
FUNDS IN THE FUTURE FOR ITS OPERATIONS AND
IF SYNDICATIONNET IS UNABLE TO SECURE SUCH
FINANCING, SYNDICATIONNET MAY NOT BE ABLE TO
SUPPORT ITS OPERATIONS
Future events, including the
problems, delays, expenses and difficulties
frequently encountered by new companies, may
lead to cost increases that could make the
Company's funds insufficient to support its
operations. The Company may seek additional
capital, including an offering of its equity
securities, an offering of debt securities
or obtaining financing through a bank or
other entity. The Company has not
established a limit as to the amount of debt
it may incur nor has the Company adopted a
ratio of its equity to debt allowance. If
the Company needs to obtain additional
financing, such financing may not be
available from any source, nor available on
terms acceptable to the Company. Any future
offering of securities may not be
successful. If additional funds are raised
through the issuance of equity securities,
there may be a significant dilution in the
value of the Company's outstanding common
stock. The Company could suffer adverse
consequences if it is unable to obtain
additional capital when needed.
LIMITED TIME AVAILABLE FOR MANAGEMENT TEAM
TO DEVOTE AFFAIRS OF SYNDICATIONNET
SyndicationNet intends that its
management team will identify companies that
are positioned to succeed and to assist
those companies with financial, managerial
and technical support. SyndicationNet's
management team consists of individuals who
are concurrently involved in other
activities and careers and will be spending
only a limited amount of time on the affairs
of SyndicationNet.
LIMITED EXPERIENCE WHICH MAY DIMINISH APPEAL
TO POTENTIAL AFFILIATED COMPANIES
SyndicationNet has no
experience in assisting development stages
Internet or ecommerce businesses nor in
establishing a network of affiliated network
B2B companies. This lack of experience may
diminish the appeal of the services offered
by SyndicationNet to potential development
stage companies.
LIMITED OPERATING HISTORY ON WHICH TO MAKE
AN INVESTMENT DECISION
The Company has a limited
operating history upon which an investor may
evaluate making an investment in the
Company. Accordingly, in reviewing the
actual operating results of the Company, an
investor will only be able to examine the
operating results of the Company's
wholly-owned subsidiary in making an
investment decision. While the Company
intends to acquire Internet related
businesses in exchange for cash or the
issuance of securities, no acquisitions have
been consummated and any future acquisitions
may not be consummated.
THERE IS NO CURRENT TRADING MARKET FOR
SYNDICATIONNET'S SECURITIES
There is currently no established
public trading market for the Company's
securities. The Company can give no
assurance that an active trading market in
the Company's securities will develop or, if
developed, that it will be sustained. The
Company intends to apply for admission to
quotation of its securities on the NASD OTC
Bulletin Board and, if and when qualified,
it intends to apply for admission to
quotation on the Nasdaq SmallCap Market. If
for any reason the Company's common stock is
not listed on the NASD OTC Bulletin Board or
a public trading market does not otherwise
develop, shareholders may have difficulty
selling their common stock should they
desire to do so. Various factors, such as
the Company's operating results, changes in
laws, rules or regulations, general market
fluctuations, changes in financial estimates
by securities analysts and other factors may
have a significant impact on the market
price of the Company's securities.
SYNDICATIONNET'S ACQUISITION STRATEGY MAY
INVOLVE SPECULATIVE INVESTMENTS
The Company's success depends on its
ability to develop or select companies that
will be ultimately successful. If the
Company consummates an acquisition of an
Internet related company, economic,
governmental, and internal factors outside
the Company's control may affect the results
of operations of such acquired company. The
Company intends to seek out companies in the
early stages of their development with
limited operating history, little revenue
and possible losses. If the Company becomes
affiliated with such entities and they do
not succeed, the value of the Company's
assets, its results of operations and the
price of the Company's common stock could
decline.
DEPENDENCE ON KEY PERSONNEL
The Company's success in
achieving its growth objectives is dependant
to a substantial extent upon the continuing
efforts and abilities of certain key
management personnel, including the efforts
of retired Senator Vance Hartke, the
Company's President, as well as other
executive officers and management. The
Company does not have employment agreements
with any of its executive officers. The
loss of the services of any of the executive
officers may have a material adverse effect
on the Company's business, financial
condition, results of operations and
liquidity. The Company can give no assurance
that it will be able to maintain and achieve
its growth objectives should the Company
lose any or all of these individuals' services.
DEPENDENCE ON THE VALUATIONS OF
INTERNET-RELATED COMPANIES
The Company intends its
strategy to involve consulting with start-up
Internet companies and assisting them in
their business development thereby creating
value for the Company's shareholders. The
Company may also take advantage of various
potential business acquisition opportunities
through the issuance of the Company's
securities. The development of the Internet
and electronic commerce market is in its
early stages. If widespread commercial use
of the Internet does not continue to
develop, many Internet companies may not
succeed including those acquired by the
Company. The Company's success is further
dependent on the acceptance by the public
and private capital markets of
Internet-related companies. If the capital
markets for Internet-related companies or
the initial public offerings of those
companies weakens for an extended period of
time, the Company may not be able to raise
capital or take acquired companies public as
a means of creating shareholder value.
COMPLIANCE WITH THE INVESTMENT COMPANY ACT
The Company's ownership interest in
companies that it seeks to consult with
and/or acquire could result in the Company
being classified as an investment company
under the Investment Company Act of 1940. If
the Company is required to register as an
investment company, then it will incur
substantial additional expenses as the
result of the Investment Company Act of
1940's record keeping, reporting, voting,
proxy disclosure and other legal
requirements. The Company has obtained no
formal determination from the Securities and
Exchange Commission as to its status under
the Investment Company Act of 1940. Any
violation of such Act could subject the
Company to material adverse consequences.
In the event the Company engages in business
combinations which result in it holding
passive investment interests in a number of
entities, the Company could be subject to
regulation under the Investment Company Act
of 1940. Passive investment interests, as
used in the Investment Company Act,
essentially means investments held by
entities which do not provide management or
consulting services or are not involved in
the business whose securities are held. In
such event, the Company would be required to
register as an investment company and could
be expected to incur significant
registration and compliance costs.
Restrictions on transactions between an
investment company and its affiliates under
the Investment Company Act of 1940 would
make it difficult, if not impossible, for
the Company to implement its business
strategy of actively managing, operating and
promoting collaboration among the Company's
to be acquired network of affiliated entities.
GOVERNMENT REGULATIONS AND LEGAL UNCERTAINTIES
Currently, there are few laws or
regulations directed specifically at
electronic commerce. However, because of the
Internet's popularity and increasing use,
new laws and regulations may be adopted. New
laws and regulations may cover issues such
as the collection and use of data from Web
site visitors and related privacy issues,
pricing, content, copyrights, distribution
and quality of goods and services. The
enactment of any additional laws or
regulations may impede the growth of the
Internet and place additional financial
burdens on the Company's business and the
businesses of the companies that may be
acquired in the future. Laws and regulations
directly applicable to Internet businesses
and electronic communication are becoming
more prevalent. For example, the United
States Congress enacted laws regarding
online copyright infringement and the
protection of information collected online
from children. Although these laws may not
have a direct adverse effect on the
Company's business , they add to the legal
and regulatory burden faced by Internet
companies.
There can be no assurance that
existing laws and regulations which are not
currently applicable to the Company will not
be interpreted more broadly in the future so
as to apply to the Company's existing
activities or that new laws and regulations
will not be enacted with respect to the
Company's activities, either of which could
have a material adverse effect on the
Company's business, financial condition,
results of operations and liquidity.
SHARES AVAILABLE FOR FUTURE SALE MAY AFFECT
THE LIQUIDITY OF SYNDICATIONNET'S COMMON
STOCK
The market price of the
Company's common stock could drop, assuming
a trading market for the Company's shares is
established, if substantial amounts of
shares are sold in the public market or if
the market perceives that such sales could
occur. A drop in the market price could
adversely affect holders of the stock and
could also harm the Company's ability to
raise additional capital by selling equity
securities.
ADDITIONAL SHARES ENTERING THE MARKET, IF
ONE SHOULD DEVELOP, PURSUANT TO RULE 144
WITHOUT ADDITIONAL CAPITAL CONTRIBUTION
The outstanding restricted
shares of the Company will become eligible
for sale in the public market pursuant to
Rule 144 without additional capital
contribution to the Company. The addition of
such shares to the shares already available
to the public market, may reduce the then
current market price of the Company's shares
without any increase to the Company's
capital which may result in a dilution in
the value of the outstanding shares.
THE APPLICATION OF THE "PENNY STOCK
REGULATION" COULD ADVERSELY AFFECT THE
MARKET PRICE OF SYNDICATIONNET'S COMMON STOCK
Upon commencement of trading in
the Company's common stock, if such occurs
(of which there can be no assurance) the
Company's common stock may be deemed a penny
stock. Penny stocks generally are equity
securities with a price of less than $5.00
per share other than securities registered
on certain national securities exchanges or
quoted on the Nasdaq Stock Market, provided
that current price and volume information
with respect to transactions in such
securities is provided by the exchange or
system. The Company's securities may be
subject to "penny stock rules" that impose
additional sales practice requirements on
broker-dealers who sell such securities 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, the
broker-dealer must make a special
suitability determination for the purchase
of such securities and have received the
purchaser's written consent to the
transaction prior to the purchase.
Additionally, for any transaction involving
a penny stock, unless exempt, the "penny
stock rules" require the delivery, prior to
the transaction, of a disclosure schedule
prescribed by the Commission relating to the
penny stock market. The 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 on the limited market in penny
stocks. Consequently, the "penny stock
rules" may restrict the ability of
broker-dealers to sell the Company's
securities and may have the effect of
reducing the level of trading activity of
the Company's common stock in the secondary
market. The foregoing required penny stock
restrictions will not apply to the Company's
securities if such securities maintain a
market price of $5.00 or greater. There can
be no assurance that the price of the
Company's common stock will reach or
maintain such a level.
FUTURE AUTHORIZATION OF SYNDICATIONNET'S
PREFERRED STOCK MAY HAVE AN ADVERSE EFFECT
ON THE RIGHTS OF HOLDERS OF THE COMMON
STOCK.
The Company may, without
further action or vote by its shareholders,
designate and issue additional shares of its
preferred stock. The terms of any series of
preferred stock, which may include priority
claims to assets and dividends and special
voting rights, could adversely affect the
rights of holders of the common stock and
thereby reduce the value of the Company's
common stock. The designation and issuance
of preferred stock favorable to current
management or shareholders could make a
possible takeover of the Company or the
removal of its management more difficult and
discharge hostile bids for control of the
Company which bids might have provided
shareholders with premiums for their shares.
THE AVAILABILITY OF LUMBER
The availability and costs of
obtaining softwood and hardwood lumber are
critical elements for the Company's
subsidiary, Kemper, to continue to operate
its business operations. The supply of trees
of acceptable size for the production of
utility poles and has decreased in recent
years in relation to the demand, and
accordingly, prices have increased.
Moreover, the supply of timber, and
therefore lumber, is significantly affected
by the availability of timber from public
lands, particularly in the Pacific
Northwest. In response to environmental
concerns, the United States government has,
over recent years, reduced the amount of
timber offered for sale. The Company can
give no assurance that it will be able to
source wood raw materials at economic prices
in the future.
CYCLES AFFECTING LUMBER AND OTHER WOOD PRICES
The demand for, and prices of,
timber and manufactured wood products,
including lumber, are affected primarily by
the cyclical supply and demand factors of
the forest products industry. Factors that
may affect the price of timber that are
outside the control of the Company include
general economic conditions, interest rates,
residential construction activities and the
whether conditions for harvesting of timber.
DEPENDENCE ON ONE CUSTOMER
Kemper currently has one
customer which accounts for 100% of its
revenues. Kemper does not have a written
contract with its current customer.
Although Kemper is continually negotiating
contracts with potential customers, a loss
of its only customer would greatly affect
the operating results of Kemper and of the
Company.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On October 30, 2000 in
connection with the acquisition by
Generation of Life2K.com, Generation
dismissed its independent accountant,
Weinberg & Company, P.A., ("Weinberg").
None of the reports of Weinberg on the
Generation financial statements during the
past two fiscal years contained an adverse
opinion or disclaimer of opinion, or was
modified as to audit scope or accounting
principles. During Generation's engagement
of Weinberg, there were no disagreements
with Weinberg on any matter of accounting
principles or practices, financial statement
disclosure, or auditing scope or procedure,
which disagreements, if not resolved to
Weinberg's satisfaction would have caused
Weinberg to make reference to the subject
matter of the disagreement in connection
with its report.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The sole officer and director of
Generation resigned effective upon
completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
No financial statements are filed
herewith. The Registrant is required to file
audited financial statements no later than
60 days after the date that this
report must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
2.0 Agreement and Plan of Reorganization
2.1 Agreement and Plan of Merger
16.0 Letter from former accountants
on change in certifying
accountants
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the
Registrant has duly caused this Current
Report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYNDICATION NET.COM, INC.
BY /s/ Vance Hartke
President
November 2, 2000
