<PAGE>2
As filed with the Securities and Exchange Commission
on October 6, 1999
Commission File Number 333-63015
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
REGISTRATION STATEMENT
Under The Securities Act of 1933
BioNet Technologies, Inc.
NEVADA 84-1247085
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdictions Classification Code Number) Identification
number)
of incorporation
or organization
3035 Staysail Lane
Jupiter, Florida 33477
Telephone: (561) 745-1949
(Address and telephone number of registrant's principal executive
offices and principal place of business.)
(Name, address and telephone number of agent for service.)
with copies to:
Jody M. Walker
Attorney At Law
7841 South Garfield Way
Littleton, Colorado 80122
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box: | x |
<TABLE>
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed Amount of
class of Amount to be offering aggregate registration
securities registered price offering price fee
<S> <C> <C> <C> <C>
Common Stock(1)
$.001 par value 2,000,000 $.56(2) $1,120,000 $350.00
</TABLE>
(1)Represents Common Stock to be registered for distribution to
shareholders of Immune Technologies, Inc. as of May 30, 1998.
(2)Based on bid price of the Company's Common Stock solely for purposes
of computing the registration fee
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states
that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>3
PRELIMINARY PROSPECTUS DATED OCTOBER 6, 1999
SUBJECT TO COMPLETION
2,000,000 Common Shares to be distributed to Shareholders of
Immune Technologies, Inc.
BioNet Technologies, Inc.
Immune Technologies, Inc., an unaffiliated Nevada corporation
("Immune") proposes to distribute our Common Shares to their
shareholders. This distribution was agreed to based on arms length
negotiations between their management and us when we acquired certain
of their assets.
They shall:
distribute to its shareholders, (the "Distribution") a dividend
of one of our Common Shares for each one share of its common
stock, par value $.001 per share (the "Immune Common Stock"),
held by each Immune shareholder on the Record Date.
distribute our Common Shares to their shareholders of record at
the close of business on May 30, 1998 (the "Record Date").
distribute 2,000,000 of our Common Shares owned by them, which
represents 2.39% of our outstanding common shares on the Record
Date.
complete the distribution as soon as practicable after the
effective date of this registration statement as
make the distribution without the payment of any consideration
by their shareholders. See "The Distribution."
Immune may be deemed to be an underwriter under the Securities Act of
1933.
We will pay the expenses of the Distribution. These expenses are
estimated to be $92,850.
We have had only a limited trading market for our Common Stock. There
can be no assurance, however, that that an active trading in our Common
Stock and/or a liquid market in our Common Stock will develop or, if
developed, that it will be maintained.
Consider carefully the risk factors beginning on page 10 in this
prospectus.
Neither the SEC nor any state securities commission has approved these
Common Shares or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
We provides management control and oversight along with capital to our
division, Immune Technologies and our subsidiary, GreenGold
International. We coordinate the interrelationship between ou division
and subsidiary.
The date of the Prospectus is October 6, 1999
<PAGE>4
REPORTS TO SECURITY HOLDERS
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith will file
reports and other information with the Securities and Exchange
Commission. We file reports with the Securities and Exchange
Commission. The reports and other information we file can be inspected
and copied at the public reference facilities maintained by the
Commission in Washington, D.C. and at the Chicago Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and the New York Regional Office, 7 World Trade Center, New
York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549
at prescribed rates.
We will furnish to shareholders: (i) an annual report containing
financial information examined and reported upon by its certified
public accountants; (ii) unaudited financial statements for each of the
first three quarters of the fiscal year; and (iii) additional
information concerning our business and operations deemed appropriate
by the Board of Directors.
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission") a registration statement (together with all amendments
and exhibits thereto, the "Registration Statement") under the Act with
respect to the securities offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the Rules and
Regulations of the Commission. For further information with respect to
us and the securities we offer, reference is made to the Registration
Statement. Copies of such materials may be examined without charge at,
or obtained upon payment of prescribed fees from, the Public Reference
Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549, at the Chicago Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and the New York Regional Office, 7 World Trade Center, New
York, New York 10048.
We will voluntarily file periodic reports in the event its obligation
to file such reports is suspended under Section 15(d) of the Exchange
Act.
We will provide without charge to each person who receives a
prospectus, upon written or oral request of such person, a copy of any
of the information that was incorporated by reference in the prospectus
(not including exhibits to the information that is incorporated by
reference unless the exhibits are themselves specifically incorporated
by reference). Requests for copies of said documents should be
directed to L. Alan Schafler, President, BioNet Technologies, Inc.,
3035 Staysail Lane, Jupiter, Florida 33477
The Commission maintains a Web site -- //www.sec.gov -- that contains
reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission.
UNTIL , 1999 (90 DAYS AFTER THE DATE OF THE PROSPECTUS), ALL
PERSONS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR
NOT PARTICIPATING IN THE OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF SUCH PERSONS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
NO DEALER, SALESMAN, AGENT OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, OR THE UNDERWRITER, IF AN UNDERWRITER ASSISTS IN THE SALE OF
THE SECURITIES.THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A
SOLICITATION BY ANYONE TO
ANY PERSON IN ANY STATE, TERRITORY OR POSSESSION OF THE UNITED STATES
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED BY THE LAWS
THEREOF, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
<PAGE>5
NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
<TABLE>
TABLE OF CONTENTS
<S> <C>
PROSPECTUS SUMMARY 6
RISK FACTORS 8
THE DISTRIBUTIONS 12
DILUTION 13
THE COMPANY 13
BUSINESS ACTIVITIES 14
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION 15
Trends and Uncertainties
Capital and Source of Liquidity
Results of Operations
MANAGEMENT 17
Officers and Directors
Remuneration
Indemnification
CERTAIN TRANSACTIONS 19
PRINCIPAL SHAREHOLDERS 19
MARKET FOR REGISTRANT'S COMMON EQUITY 21
DESCRIPTION OF SECURITIES 22
LEGAL MATTERS 23
LEGAL PROCEEDINGS 23
EXPERTS 23
INTERESTS OF NAMED EXPERTS AND COUNSEL 23
</TABLE>
<PAGE>6
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information, financial statements and notes to the financial statements
including the notes thereto appearing elsewhere in this Prospectus.
THE COMPANY. Our company was incorporated in the
State of Florida on May 22, 1986
using the name Global Wrestling
Alliance, Inc. We were authorized
to issue 75,000,000 common shares at
$.0001 par value. We had limited
operations from 1988 through 1990 and
ceased operations at that time.
We experienced a change in control
and pursuant to a Board of Directors
meeting and subsequent written
consent of a majority of our
shareholders on May 31, 1993, we
began operations under the name
Pratt, Wylce & Lords, Ltd. and we
effectuated a One for One Hundred
reverse stock split was effectuated.
We were reincorporated in the State
of Nevada on August 18, 1993.
Pursuant to the Articles of Merger,
we are authorized to issue 75,000,000
common shares at $.001 par value and
as of July 31, 1999, we had 9,040,564
common shares outstanding.
In 1998, we changed our name was
changed to Bionet Technologies, Inc.
to more accurately reflect the nature
of our business.
Our previous business objective was
to provide consulting services which
assist the client-company in becoming
a publicly traded company. Since we
stopped providing financial
consulting activities, we have
carried out administrative functions
and have begun liquidating our
investment portfolio. We are
currently seeking new business
activities unrelated to the provision
of financial services.
During the years ended January 31,
1997 and 1998, we made working
capital advances to Immune
Technologies, Inc. (Immune), a former
client company, amounting to $79,800.
The business of Immune consists of
research and development and
marketing of products based on new
technology for the prevention and
related therapy of infectious
diseases in animals.
Subsequent to January 31, 1998 we
entered into a purchase and sale
agreement with Immune whereby we
purchased certain assets of Immune
consisting primarily of accounts
receivable, furniture, equipment and
intangible assets. The purchase
price paid consists of 2,000,000
shares of our common stock and the
cash advances made
<PAGE>7
During August 1998, we issued
1,900,000 shares of our restricted
common stock to the certain
shareholders of Greengold Corporation
(Greengold) in exchange for 100% of
the outstanding common stock of
Greengold.
Greengold, to date, has been engaged
in research and development of
technology that it hopes to utilize
in the recycling and disposal of
animal waste with the first
application being hog waste.
Additional applications of its
technology are in the treatment of
industrial and municipal water and
waste treatment facilities. The
assets and liabilities of Greengold
consist of patent costs of $7,500 and
accounts payable of $28,649 at the
acquisition date. The fair value of
the stock issued in the transaction
amounted to $475,000. The excess of
the fair value of the purchase price
over the assets acquired has been
treated as the purchase of research
and development costs by the Company
and has been charged to expense
during the current quarter.
Our principal offices are located at
3035 Staysail Lane, Jupiter, Florida
33477. Our telephone number is
(561) 745-1949.
IMMUNE DISTRIBUTION
Distributing Corporation Immune Technologies, Inc., a Nevada
corporation.
Securities Being Distributed 2,000,000 Common Shares by Immune
Purpose of Immune Distribution To enhance our ability to raise
additional capital, if necessary, in
the future.
Immune Distribution Ratio One Common Share for approximately
every one share of Immune Common
Stock owned of record on May 30,
1998, (the "Record Date").
Use of Proceeds The securities to which this from
Immune distribution Prospectus
relates are being distributed to
holders of Immune Common Stock as a
dividend and neither Immune nor us
will receive any cash or other
proceeds in connection with the
Distribution.
MARKET FOR COMMON STOCK Prior to the date hereof, we have had
only a limited trading market for our
Common Stock. Our Common Shares are
quoted on the NASD Electronic
Bulletin Board.
We cannot be assured that an active
trading and/or a liquid market will
develop or, if developed, that it
will be maintained. See "Risk
Factors" and "Market Listing."
RISK FACTORS We will be subject to material risks,
such as uncertainty of future
financial results, liquidity
dependent on additional capital and
<PAGE>8
debt financing and risks related to
our operations, in connection with
the distribution of the securities.
See "Risk Factors."
ABSENCE OF DIVIDENDS;
DIVIDEND POLICY Management does not currently intend
to pay regular cash dividends on our
Common Stock Our Board of Directors
will review such policy from time to
time in light of, among other things,
our earnings and financial position.
We do do not anticipate paying
dividends on our Common Stock in the
foreseeable future. See "Risk
Factors."
TRANSFER AGENT Florida Atlantic Stock Transfer, Inc.
is our Transfer Agent.
- ----------------------------------------------------------
RISK FACTORS
- ----------------------------------------------------------
In analyzing this offering, prospective investors should read this
entire Prospectus and carefully consider, among other things, the
following Risk Factors:
Risk Factors relating Our Business.
Conflicts of Interest. Some of our directors are currently principals
of other businesses. As a result, conflicts of interest may arise.
The directors shall immediately notify the other directors of any
possible conflict that may arise due to their involvement with other
businesses. The interested directors in any conflict shall refrain
from voting on any matter in which a conflict of interest has arisen.
We have adopted a policy that any transactions with directors, officers
or entities of which they are also officers or directors or in which
they have a financial interest, will only be on terms which are fair
and reasonable to us and approved by a majority of our disinterested
directors. For further discussion see "Management - Conflicts of
Interest Policy." We cannot be assured that such other activities
will not interfere with the officers' and directors' ability to
discharge their obligation herein.
Benefit to Management. In the future, we may compensate our
management with substantial salaries and other benefits. We may be
burdened with the payment of future larger salaries, commissions and
the costs of these benefits. We may be limited or prevented from
achieving profitable operations in the future due to these payments.
However, we would not continue to compensate management with such
substantial salaries and other benefits under circumstances where to do
so would have a material negative effect on our financial condition.
Although we have utilized specific factors in determining the increase
in compensation and benefits have been determined, management
anticipates that individual performance, our liquidity and
profitability will be part of the determining factors. See
"MANAGEMENT - Remuneration."
Dependence on Key Individuals. Our future success is highly dependent
upon management skills of our key individuals and our ability to
attract and retain qualified key individuals. Our inability to obtain
and employ these individuals would have a serious effect upon our
business. Other than the employment agreement with L. Alan Schafler, we
do not any plans or proposals to enter into employment contracts with
any key individuals. We cannot be assured that we will be successful
in retaining its key employees or that it can attract or retain
additional skill personnel required. We may, in the future, purchase
key man life insurance. "COMPANY - Employees" and "MANAGEMENT."
Vulnerability to Fluctuations in the Economy. Demand for the our
products is dependent on, among other things, general economic
conditions that are cyclical in nature. Prolonged recessionary periods
may be damaging to us.
<PAGE>9
"Penny" Stock Regulation of Broker-Dealer Sales of Company Securities.
We list our Common Shares on the OTC Bulletin Board and will then apply
for a NASDAQ listing upon meeting the requirements, if ever. Upon
completion of this offering, we will not meet the requirements for a
NASDAQ listing Until we obtain a listing on NASDAQ, if ever, our
securities will be covered by a Rule 15g-9 under the Securities
Exchange Act of 1934 that imposes additional sales practice
requirements on broker-dealers who sell such securities to persons
other than established customers and institutional accredited investors
(generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 jointly with their spouse). For
transactions covered by the rule, the broker-dealer must furnish to all
investors in penny stocks, a risk disclosure document required by Rule
15g-9 of the Securities Exchange Act of 1934, make a special
suitability determination of the purchaser and have received the
purchaser's written agreement to the transaction prior to the sale. In
order to approve a person's account for transactions in penny stock,
the broker or dealer must (i) obtain information concerning the
person's financial situation, investment experience and investment
objectives; (ii) reasonably determine, based on the information
required by paragraph (i) that transactions in penny stock are suitable
for the person and that the person has sufficient knowledge and
experience in financial matters that the person reasonably may be
expected to be capable of evaluating the rights of transactions in
penny stock; and (iii) deliver to the person a written statement
setting forth the basis on which the broker or dealer made the
determination required by paragraph (ii) in this section, stating in a
highlighted format that it is unlawful for the broker or dealer to
effect a transaction in a designated security subject to the provisions
of paragraph (ii) of this section unless the broker or dealer has
received, prior to the transaction, a written agreement to the
transaction from the person; and stating in a highlighted format
immediately preceding the customer signature line that the broker or
dealer is required to provide the person with the written statement and
the person should not sign and return the written statement to the
broker or dealer if it does not accurately reflect the person's
financial situation, investment experience and investment objectives
and obtain from the person a manually signed and dated copy of the
written statement.
A penny stock means any equity security other than a security (i)
registered, or approved for registration upon notice of issuance on a
national securities exchange that makes transaction reports available
pursuant to 17 CFR 11Aa3-1 (ii) authorized or approved for
authorization upon notice of issuance, for quotation in the NASDAQ
system; (iii) that has a price of five dollars or more or . . . . (iv)
whose issuer has net tangible assets in excess of $2,000,000
demonstrated by financial statements dated less than fifteen months
previously that the broker or dealer has reviewed and has a reasonable
basis to believe are true and complete in relation to the date of the
transaction with the person. Consequently, the rule may affect the
ability of broker-dealers to sell our securities and also may affect
the ability of Immune Technologies, Inc. shareholders in this
Distribution to sell their shares in the secondary market. See
"Market for Registrant's Common Equity and Related Stockholder Matters
- - Broker-Dealer Sales of Company's Securities."
Limited Operating History; Operating Losses; Potential Fluctuations in
Operating Results. We cannot be assured that we will generate
significant revenues or that we will achieve profitability or positive
cash flow from our operations. We will incur losses in the near term.
In addition, we may continue to experience fluctuations in operating
results in the future caused by various factors, some of which are
outside of our control, including general economic conditions, specific
economic conditions in the parking structure industry, capital
expenditures and other costs related to the expansion of operations,
the timing of revenue, the introduction of our products or our
competitors and the mix of products and services sold. As a strategic
response to a changing competitive environment, we may elect, from time
to time, to make certain pricing, service or marketing decisions or
acquisitions that could have an adverse effect on our business, results
of operations and financial condition from quarter to quarter.
Possible Need for Additional Financing. Based upon our current level
of operations and anticipated growth, we believe that the we will be
sufficient to enable the Company to satisfy anticipated cash flow
requirements for operating, investing and financing activities,
including lease and other debt obligations through the sale of our
<PAGE>10
investment securities and revenues from operations. However, if we
are unable to satisfy such requirements from these sources, we would be
required to adopt one or more alternatives, such as reducing or
delaying acquisitions and capital expenditures, refinancing or
restructuring its indebtedness, or selling material assets or
operations. We cannot be assured that such alternatives would be
available to us at all or on terms reasonably acceptable to us. While
we have no plans for other acquisitions, we may determine it is in our
best interest to acquire other companies or to develop new businesses
in the future that require us to raise additional capital in the form
of debt or equity to satisfy such need.
Limited Public Market. We only have a limited market for our Common
Shares and we cannot be assured that an active public market will ever
develop.
Financial Condition. Although management anticipates that we will
have adequate funds to pay all of our operating expenses, there can be
no assurance that this will in fact occur or that we can be operated in
a profitable manner. Profitability depends upon many factors,
including the success of the Company's operations.
Lack of Dividends. We cannot be assured that our operations of the
Company will become profitable. At the present time, we intend to use
any earnings that may be generated to finance our growth and that of
our division and subsidiary. See "Description of Securities" and
"Dividend Policy."
Risk Factors relating to our division, Immune Technologies.
Government Regulation. Immune Technologies shall file for approval of
its products to be utilized on animals with the United States
Department of Agriculture ("USDA"). We cannot be assured that Immune
Technologies will be able to obtain the required approvals. For
Immune Technologies' products that will be utilized by humans, Immune
Technologies shall not pursue Food and Drug Administration ("FDA")
approval. Immune Technologies shall purse and obtain any and all
approvals.
No Diversification. Immune Technologies has been formed to research,
development and marketing of products for the prevention and adjuvant
therapy of infectious diseases in humans and animals. Therefore,
Immune Technologies' financial viability will depend almost exclusively
on its ability to generate revenues from its operation, and Immune
Technologies will not have the benefit of reducing its financial risks
by relying on revenues derived from other operations.
Dependence on Key Individuals. The future success of Immune
Technologies is highly dependent upon the management skills of its key
employees and Immune Technologies' ability to attract and retain
qualified key employees. Immune Technologies' inability to obtain and
employ these individuals would have a serious effect upon their
business. We cannot be assured that Immune Technologies will be
successful in retaining its key employees or that it can attract or
retain additional skill personnel required. Immune Technologies
intends to enter into employment agreements for annual terms with its
senior management personnel upon successful commencement of operations.
See "CORPORATION - Employees" and "MANAGEMENT."
No Independent Market Research of Potential Demand for Immune
Technologies' Current Operations. Immune Technologies has conducted no
independent market research providing management with independent
assurance from which it can estimate potential demand for its business
operations. Even in the event market demand is independently
identified, we cannot be assured that Immune Technologies will be
successful. See "BUSINESS ACTIVITIES."
Risk Factors relating to the Company's subsidiary, GreenGold
International.
Limited Operating History and Uncertainty of Future Operating Results.
Since its incorporation in 1995, GreenGold's activities have been
principally devoted to positioning itself to achieve its business
objectives. It has had no operating revenue to date and expects to
incur losses and administrative expenses until sales of its products
commence and/or revenues are received from any of its proposed
operations. GreenGold believes future operating results over both the
<PAGE>11
short and long term will be subject to annual and quarterly
fluctuations due to several factors, some of which are outside the
control of GreenGold. These factors include fluctuating market demand
for GreenGold's products, the quality of products, pricing, competitive
products and general economic conditions.
Creating an Efficient Distribution System. The Aquameal System is a
new technology with important differences from existing acquacultural
technologies. This puts a special burden on the distribution system
that GreenGold proposes to create in North Carolina.
Soybean Price Fluctuations in the Commodities Market. While the long-
range trend for soybean prices is expected to continue upward in the
coming years, we cannot guarantee that prices will not continue to
fluctuate significantly. A season or more of lower-than-average prices
may erode GreenGold's projected gross margin.
Technical Expectations Needing Further Verification. A number of
aspects of the commercial Aquameal system remain to be proven in full-
scale operation. These include design of the specialized harvesting
unit, system robustness and ease of operation, large-scale field
drying, routine treatment efficacy, and efficiency of duckweed feed in
commercial animal husbandry.
Uncertainty of Product Revenue. We cannot be assured that GreenGold's
proposed products will be successfully developed, commercialized and
accepted by the marketplace or that sufficient revenues will be
realized to support operations or future research and development
programs.
Risk That Proposed Products Will Never Be Successfully Developed.
Certain applications of GreenGold's technologies are in early or middle
stages of development and will require significant further research,
development, testing and regulatory clearances prior to
commercialization. We cannot be assured that any of such applications
will be successfully developed, prove to be safe and efficacious,
receive requisite regulatory approvals, be capable of being produced in
commercial quantities at reasonable costs or be successfully marketed
and distributed.
Uncertainty of Market Acceptance of Proposed Products. GreenGold's
future growth and profitability will depend, in large part, on the
success of its personnel and others in fostering acceptance by the
agricultural community. Such acceptance will be substantially
dependent on educating these communities as to the distinctive
characteristics and perceived treatment and treatment cost benefits of
GreenGold's proposed products. We cannot be assured that GreenGold's
efforts or those of others will be successful or that any of its
proposed products will receive the necessary acceptance by these
communities.
Lack of Marketing Experience; Dependence on Outside parties for
Marketing and Distribution of Products. If GreenGold's products are
successfully developed and/or approved by applicable regulatory
agencies, GreenGold intends to market and distribute some of its
products through others pursuant to contractual arrangements such as
joint venture, licensing or similar collaborative arrangements or
distribution agreements. Any contractual arrangements with others may
result in a lack of some element of control by GreenGold over any or
all of the marketing and distribution of such products. Although
GreenGold is currently engaged in preliminary efforts to establish
marketing arrangements with respect to certain of its proposed
products, we cannot be assured that GreenGold will be able to enter
into any such arrangements on terms acceptable to GreenGold, or at all.
Intense Competition and Possible Technological Obsolescence. GreenGold
is engaged in a rapidly evolving and highly competitive field.
Competition from others is at present minimal, but it is expected to
increase rapidly in the near future. Most of these companies have
substantially greater capital resources, research and development
staffs, facilities and experience in obtaining regulatory approvals, as
well as in the manufacturing, marketing and distribution of products,
than GreenGold. In addition, technologies that may be developed in
the future are, or may be, the basis for competitive products. We
cannot be assured that GreenGold's competitors will not succeed in
developing technologies and products that are more effective and/or
less costly than any that are being developed by GreenGold or which
could render GreenGold's technologies obsolete.
<PAGE>12
Patents and Proprietary Rights; No Assurance of Enforceability or
Significant Competitive Advantage. GreenGold holds a patent on its
AquamealTM System. We cannot be assured that the patent will provide
GreenGold with significant competitive advantages, or that challenges
will not be instituted against the validity or enforceability of any
patent owned by GreenGold or, if instituted, that such challenges will
not be successful. The cost of litigation to uphold the validity and
prevent infringement can be substantial. Furthermore, we cannot be
assured that others will not independently develop similar technologies
or duplicate GreenGold's technologies or design around the patented
aspects of GreenGold's technologies. However, if further patents are
not issued on innovations from present or future patent applications,
GreenGold may be subject to greater competition. In some cases,
GreenGold may rely on trade secrets to protect its innovations. We
cannot be asssured that trade secrets will be established, that secrecy
obligations will be honored, or that others will not independently
develop similar or superior technology.
Government Regulation. Greengold's business is subject to various
federal, state and local government regulations, including those
relating to the quality of surface and ground water under state
approved farm waste management plans. Obtaining and maintaining
licenses and permits is a client obligation. The failure by clients
to maintain current waste management permits would have a material
adverse effect on GreenGold's operating results.
Trademarks. GreenGold's ability to successfully implement its
concept will depend in part upon its ability to protect its trademarks.
GreenGold has filed a trademark application with the United States
Patent and Trademark Office to register its mark and design. There
can be no assurance that it can protect such mark and design against
prior users in areas where GreenGold conducts operations. We cannot
be assured that GreenGold will be able to prevent competitors from
using the same or similar marks, concepts or appearance.
No Diversification. GreenGold operates on the sale of its AquamealTM
System and sale of processed AquamealTM. Therefore, GreenGold's
financial viability will depend almost exclusively on GreenGold's
ability to generate revenues from its operations, and GreenGold will
not have the benefit of reducing its financial risks by relying on
revenues derived from other operations.
Dependence on Key Individuals. The future success of GreenGold is
highly dependent upon GreenGold's ability to attract and retain
qualified key employees. GreenGold has entered into definitive
employment agreements with three of the officers. The inability to
attract and retain these individuals for the long term would have a
material impact upon the business of GreenGold.
No Independent Market Research of Potential Demand for Current
Operations. We and our subsidiary have had no independent organization
conducted regarding market research providing management with
independent assurance from which to estimate potential demand for
GreenGold's business operations. Even in the event market demand is
independently identified, we cannot be assured GreenGold will be
successful.
- -------------------------------------------------------
THE DISTRIBUTIONS
- -------------------------------------------------------
Immune Technologies, Inc. Subsequent to January 31, 1998, we entered
into a purchase and sale agreement with Immune Technologies, Inc.
("Immune") whereby we would purchase certain assets of Immune
consisting primarily of accounts receivable, furniture, equipment and
intangible assets. The purchase price paid consisted of 2,000,000
shares of our common stock and the cash advances made.
After careful study and review, the Board of Directors of Immune
determined that it would be in the best interests of Immune and its
shareholders to distribute all of our Common Shares held by Immune to
its shareholders. In addition, we and Immune determined that such a
distribution would be in our best interests. Immune shareholders may
realize economic benefits from the sale of any Common Shares
distribution if a market for our Common Stock develops, although there
can be no assurances that any such market will result. Immune and we
believe that the distribution to Immune's shareholders, which will
<PAGE>13
result in an increased shareholder base of the Company, will be an
advantage to us at such time as we may require additional capital
and/or make application to NASDAQ. The increased shareholder base of
approximately 147 shareholders represents an increase in potential
future purchasers of additional stock in any subsequent offering or in
the stock market if these individuals are satisfied with the
performance of our operations. The estimated cost of the distribution
(along with the distribution to Prepaid shareholders) is $22,850 that
will be paid by the Company.
Accordingly, after obtaining the approval of the independent directors
on Immune's Board of Directors, the Board of Directors of Immune
declared a dividend pursuant to which, as soon as practicable after
the effective date of this registration statement 2,000,000,
constituting all of the Common Shares owned by Immune, will be
distributed to the shareholders of record of Immune as of May 30, 1998
on the basis of one Common Share for each common share of Immune
Common Stock held. The Common Shares are being distributed by Immune
as a dividend to holders of Immune Common Stock and neither the Company
nor Immune will receive any cash or other proceeds in connection with
the Distribution. No fractional Common Shares will be issued. Immune
had approximately 147 shareholders of record on the Record Date.
In order to comply with certain provisions of Nevada corporate law, on
April 29, 1999 (the "Payment Date') Immune deposited the Common Shares
to be distributed with Florida Atlantic Stock Transfer, Inc. (the
"Depositary"). The Depositary will hold such Common Shares for the
benefit of Immune shareholders on the Record Date. The terms of the
agreement with the Depositary provides that the Common Shares will be
released promptly after the Registration Statement to which this
Prospectus relates is declared effective by the Commission. However,
if the Registration Statement is not declared effective prior to July
31, 2000, then, unless such date is changed by notice to the Depositary
from the Company, the Depositary shall return all such Common Shares to
Immune without effecting the distribution.
- -------------------------------------------------------
DILUTION
- -------------------------------------------------------
Further Dilution. We may issue additional restricted Common Shares
pursuant to private business transactions. Any sales under Rule 144
after the applicable holding period may have a depressive effect upon
the market price of our Common Shares. See "SALES OF STOCK PURSUANT TO
RULE 144."
- -------------------------------------------------------
THE COMPANY
- -------------------------------------------------------
Organizational History. The Company was incorporated in the State of
Florida on May 22, 1986 using the name Global Wrestling Alliance, Inc.
The Company was authorized to issue 75,000,000 common shares at $.0001
par value. The Company had limited operations from 1988 through 1990
and ceased operations at that time. The Company experienced a change
in control and pursuant to a Board of Directors meeting and subsequent
written consent of a majority of its shareholders on May 31, 1993, the
Company began operations of its present business under the name Pratt,
Wylce & Lords, Ltd. and a One for One Hundred reverse stock split was
effectuated. The Company was reincorporated in the State of Nevada on
August 18, 1993. Pursuant to the Articles of Merger, the Company is
authorized to issue 75,000,000 common shares at $.001 par value and as
of December 31, 1998 there were 3,204,270 common shares outstanding. In
1998, the name of the Company was changed to Bionet Technologies, Inc.
to more accurately reflect the nature of its proposed business.
The previous business objective of the Company was to provide
consulting services which assist the client-company in becoming a
publicly traded company. Since its cessation of financial consulting
activities, the Company has carried out administrative functions and
has begun liquidating its investment portfolio. The Company is
currently seeking new business activities unrelated to the provision of
financial services.
<PAGE>14
During the years ended January 31, 1997 and 1998, the Company made
working capital advances to Immune Technologies, Inc. (Immune), a
former client company, amounting to $79,800. The business of Immune
consists of research and development and marketing of products based on
new technology for the prevention and related therapy of infectious
diseases in animals.
Subsequent to January 31, 1998 the Company entered into a purchase and
sale agreement with Immune whereby the Company would purchase certain
assets of Immune consisting primarily of accounts receivable,
furniture, equipment and intangible assets. The purchase price paid
consists of 2,000,000 shares of the Company's common stock and the cash
advances made
.
During August 1998, the Company agreed to issued 1,900,000 shares of
its restricted common stock to the certain shareholders of Greengold
Corporation (Greengold) in exchange for 100% of the outstanding common
stock of Greengold. Greengold, to date, has been engaged in research
and development of technology that it hopes to utilize in the recycling
and disposal of animal waste with the first application being hog
waste. Additional applications of its technology are in the treatment
of industrial and municipal water and waste treatment facilities. The
assets and liabilities of Greengold consist of patent costs of $7,500
and accounts payable of $28,649 at the acquisition date. The fair
value of the stock issued in the transaction amounted to $475,000. The
excess of the fair value of the purchase price over the assets acquired
has been treated as the purchase of research and development costs by
the Company and has been charged to expense during the current quarter.
Competition. Any proposed business of the Company could be very
competitive. The Company will encounter competition in its chosen
business who are already offering, or will in the future offer, the
same or similar products services as those which may be offered by the
Company. Entities with greater established financial resources and
contacts than the Company may be competitors in the Company's chosen
business industries. They may develop marketing strategies that are
competitive with or superior to the Company's products and/or services
or which can be marketed more effectively.
Federal and/or State Regulation. The Company is not subject to any
federal or state regulations regarding its services or proposed
activities. However, the Company files required reports under Section
12g of the Securities Act of 1934.
Employees. The Company has two full time employees and no part time
employees. The Company shall employ additional individuals as
required.
Seasonal Nature of Business Activities. The Company's business
activities are not seasonal. The business activities of the Company's
subsidiary may be seasonal in the future.
- -------------------------------------------------
BUSINESS ACTIVITIES
- -------------------------------------------------
The Company provides the management control and oversight, maintains
operating systems and provides the capital necessary to operate each
division and subsidiary. The Company also coordinates the
interrelationship between the various divisions and subsidiaries. The
Company provides management oversight, establishes controls and
maintains operating systems. Immune Technologies is a division of the
Company and GreenGold International is a subsidiary of the Company.
Immune Technologies and GreenGold each have their own executive
structure but the management of all divisions and subsidiaries is
responsible to the president of Company.
<PAGE>15
- ----------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- ----------------------------------------------------------------
Trends and Uncertainties. Due to its change in business, the Company
can no longer operate on revenues from its consulting fee income.
During June, 1998, the Company issued 2,000,000 restricted Common
Shares to Immune Technologies, Inc. (Immune) in exchange for certain
assets of Immune. Immune had been a client of the Company and the
Company had advanced an aggregate of $79,800 to Immune during 1997 and
1998 to assist in meeting that company's working capital requirements.
Immune had been engaged in research and development of technology that
it hopes to utilize in the diagnosis and treatment of animal diseases.
The assets acquired from Immune consist of cash, inventory and fixed
assets aggregating $100,972 at the purchase date.
During August 1998, the Company issued 1,900,000 of its restricted
common stock to the certain shareholders of Greengold Corporation
(Greengold) in exchange for 100% of the outstanding common stock of
Greengold. Greengold, to date, has been engaged in research and
development of technology that it hopes to utilize in the recycling and
disposal of animal waste with the first application being hog waste.
Additionally applications of its technology are in the treatment of
industrial and municipal water, waste treatment facilities and the
elimination and control of waste lagoons. The assets and liabilities
of Greengold consist of patent costs of $7,500 and accounts payable of
$28,649 at the acquisition date.
The Company will have to seek equity or debt financing to continue
operations regarding its new acquisitions.
Capital Resources and Source of Liquidity. The Company currently has
no material commitments for capital expenditures. The Company can
meet its short term cash flow needs from the sale of investment
securities ($41,438 for the six months ended July 31, 1999) and the
proceeds from stock subscriptions of $556,755. In the long term, the
Company shall utilize the sale of its investment securities to meet its
cash flow needs until the Company can implement its new business plan.
Going Concern. The Company is not currently delinquent on any of its
obligations even though the Company has ceased to generate revenue from
its consulting services.
For the six months ended July 31, 1999, the Company received proceeds
from the sale of investments of $41,438 and purchased fixed assets of
$4,704. This resulted in net cash provided by investing activities of
$36,734 for the six months ended July 31, 1999.
For the six months ended July 31, 1998, the Company received proceeds
from the sale of investment securities of $71,220 and made advances of
$23,700 to an affiliate. This resulted in net cash provided by
investing activities of $47,520 for the six months ended July 31, 1998.
For the year ended January 31, 1999, the Company received proceeds from
the sale of investments of $131,694 and purchased fixed assets of
$32,049. This resulted in net cash provided by investing activities of
$99,645 for the year ended January 31, 1999.
For the year ended January 31, 1998, the Company received the proceeds
from the sale of investment securities of $173,114, made advances to an
affiliate of $56,100 and purchased fixed assets of $1,000 resulting in
net cash provided by investing activities of $116,014.
For the six months ended July 31, 1999, the Company received stock
subscriptions of $556,755. This resulted in net cash provided by
financing activities of $556,755 for six months ended July 31, 1999.
For the six months ended July 31, 1998, the Company received proceeds
from the sale of common stock of $1,550 and advances from stockholders
of $77,150 resulting in net cash provided by financing activities of
$78,700.
For the year ended January 31, 1999, the Company received from the sale
of common stock of $197,683, proceeds from stock subscriptions of
$150,329 and advances from stockholders of $108,119. This resulted in
net cash provided by financing activities of $456,131 for year ended
January 31, 1999.
<PAGE>16
Net cash provided by financing activities for the year ended January
31, 1998 was $172,780 from the sale of its common stock ($85,961) and
from advances by stockholders ($86,819).
Results of Operations. For the six months ended July 31, 1999, the
Company did not receive any revenue due to the cessation of previous
operations and the subsequent acquisitions of Immune and Greengold.
The Company had general and administrative expenses of $573,330 for the
six months ended July 31, 1999 which consisted primarily of salaries
and wages of $139,259, legal of $11,987, accounting of $12,194, travel
of $27,975, advertising of $1,685, insurance of $24,428, consulting of
$203,621, moving expense of $3,089, rent of $18,611, research and
development of $74,619 and other expenses of $55,862.
For the six months ended July 31, 1998, the Company did not receive any
revenue. The Company had general and administrative expenses of
$153,679 for the six months ended July 31, 1998 that consisted
primarily of salaries and wages of $107,500, legal of $2,173,
accounting of $10,975, travel of $8,152, advertising of $890, telephone
of $2,077, printing of $305, consulting of $10,000, insurance of
$7,427, moving expense of $17,842 and other expenses of $28,599.
For the year ended January 31, 1999, the Company did not receive any
revenue due to the cessation of previous operations and the subsequent
acquisitions of Immune and Greengold. The Company had general and
administrative expenses of $833,850 for the year ended January 31, 1999
which consisted primarily of salaries and wages of $226,163, legal of
$30,037, accounting of $11,975, travel of $22,270, advertising of $890,
telephone of $6,208, printing of $1,341, insurance of $45,931,
consulting of $129,706, moving expense of $19,233, rent of $14,558 and
other expenses (including consolidation adjustments) of $325,538. The
Company also had a charge off of acquired research and development
costs of $1,475,000 for the year ended January 31, 1999.
For the year ended January 31, 1998, the Company did not receive any
revenue due to the cessation of operations. The Company had general
and administrative expenses of $217,052 for the year ended January 31,
1998 which consisted primarily of salaries and wages of $101,702, legal
of $15,700, accounting of $4,571, travel of $18,106, advertising of
$3,565, telephone of $10,401, printing of $3,567, rent of $45,590 and
other expenses of $53,850.<PAGE>9
Plan of Operation. During January 1997, the Company determined that
it was unable to complete certain of its consulting projects and would
be unable to accept new consulting clients in the future. The Company
negotiated contract termination agreements with all of its active
clients that provide for the immediate discontinuance of consulting
services. The termination contracts provide that the Company retains
as revenue all cash paid to date and that the Company returns all or a
major portion of common stock issued to it by client companies.
The Company currently intends to acquire businesses and assets as may
provide gain for the shareholders. The Company has acquired certain
assets of Immune Technologies, Inc. and intends to continue to pursue
Immune's business plan. Additionally, the Company acquired 80% of the
outstanding common stock of Greengold Corporation and is continuing
Greengold's business plan. The Company may also choose to form
corporations for the purpose of pursuing such business ventures as are
deemed potentially profitable by the Board of Directors.
Impact of Year 2000. The Year 2000 issue is the result of computer
programs being written using two digits rather than four to define the
applicable year. Any of the Company's computer programs that have
time-sensitive software may recognize a date using 000 as the year 1900
rather than the year 2000.
This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary
inability to process transactions, send payments on invoices, or engage
in similar normal business activities.
The Company has initiated formal communications with its business
venture associates and affiliates to determine the extent to which the
Company's interface systems are vulnerable to those third parties'
failure to remediate their own Year 2000 issues. There can be no
guarantee that the systems of other companies on which the Company's
own systems may rely will be timely converted and would not have an
adverse effect on the Company's systems.
<PAGE>17
The Company's management has assessed the computer systems for the
Company and determined the overall systems to be Y2K ready. The few
PC computer systems in the Company have been converted to newer
computers that are Certified Year 2000 compliant. Some individual
minor issues have been addressed and will be resolved in the middle of
1999. These issues would not significantly affect the function of the
Company in any case.
The Company believes that the Year 2000 issue will not pose significant
operational problems for its computer systems.
- ---------------------------------------------------------
MANAGEMENT
- ---------------------------------------------------------
Officers and Directors. Pursuant to the Articles of Incorporation,
each Director shall serve until the annual meeting of the stockholders,
or until his successor is elected and qualified. The Company's basic
philosophy mandates the inclusion of directors who will be
representative of management, employees and the minority shareholders
of the Company. Directors may only be removed for "cause". The term
of office of each officer of the Company is at the pleasure of the
Company's Board.
The Executive Officers and Directors are:
<TABLE>
<S> <C> <C>
L. Alan Schafler, age 63 President/Secretary/Treasurer June 1997
Treasurer Director to present
Erich Schmid, age 52 Director November, 1997
to present
James Yanai, age 59 Director November, 1997
to present
</TABLE>
Resumes:
L. Alan Schafler. Mr. Schafler has been President, Treasurer and a
Director of the Company since June 1997. Mr. Schafler has been the
president of L. Alan Schafler & Associates for the last five years.
From 1974 to present, Mr. Schafler has been a management consultant
providing strategic planning and problem solving resource in a wide
range of corporate disciplines. Mr. Schafler's specialty is the review
and appropriate realignment of integrated corporate functions to
maximize the growth and profitability of the business enterprise.
Mr. Schafler obtained a B.B.A. degree in accounting from Hofstra
University in 1957 and an MBA in Finance/Management from New York
University Graduate School of Business in 1959. Mr. Schafler has
attended continuing financial/management post MBA studies and seminars
at New York University Graduate School of Business. Mr. Schafler has
been an instructor and advisor for Management Decision Laboratory at
the NYU Graduate School of Business. and attended and instructed
programming and systems courses at the Systems Research Institute.
James Yanai. Mr. Yanai is currently a Director of the Company. He
has worked as a buyer for Delta Floral Distributors, a flower
distributor since 1993.
Erich K. Schmid. From 1994 to present, Mr. Schmid has been President
of Business Intermediary Services, Ltd., a business brokerage firm he
co-founded specializing in middle-market transactions. Mr. Schmid has
also been a Director of Redneck Foods, Inc., a restaurant company from
January 31, 1997. From 1985 to 1994, Mr. Schmid was a Vice President
with New South Business Ventures, Inc. and its predecessor T.C.
Wilkinson, Jr. & Associates, Inc., general business brokerage firms.
He is a member of the International Business Brokers Association, Inc.
and is a Certified Business Intermediary. Mr. Schmid earned a
Bachelor of Science in industrial management and a Master of Science in
management from the University of Akron in 1971 and 1996, respectively.
<PAGE>18
Indemnification. The Company shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the State
of Nevada, any person made, or threatened to be made, a party to an
action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director or
officer of the Company, or served any other enterprise as director,
officer or employee at the request of the Company. The Board of
Directors, in its discretion, shall have the power on behalf of the
Company to indemnify any person, other than a director or officer, made
a party to any action, suit or proceeding by reason of the fact that
he/she is or was an employee of the Company.
Pursuant to the Company's bylaws, the Company shall have the right to
indemnify , to purchase indemnity insurance for, and to pay and advance
expenses to, Directors, Officers and other persons who are eligible
for, or entitled to, such indemnification, payments or advances, in
accordance with and subject to the provisions of The Nevada Revised
Statutes and any amendments thereto, to the extent such
indemnification, payments or advances are either expressly required by
such provisions or are expressly authorized by the Board of Directors
within the scope of such provisions. The right of the Company to
indemnify such persons shall include, but not be limited to, the
authority of the Company to enter into written agreements for
indemnification with such persons.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
Company, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by
a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceedings) is asserted by
such director, officer, or controlling person in connection with any
securities being registered, the Company will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issues.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE COMPANY FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
Conflicts of Interest Policy. The Corporation has adopted a policy
that any transactions with directors, officers or entities of which
they are also officers or directors or in which they have a financial
interest, will only be on terms consistent with industry standards and
approved by a majority of the disinterested directors of the
Corporation's Board of Directors. No such transactions by the
Corporation shall be either void or voidable solely because of such
relationship or interest of directors or officers or solely because
such directors are present at the meeting of the Board of Directors of
the Corporation or a committee thereof which approves such
transactions, or solely because their votes are counted for such
purpose if: (i) the fact of such common directorship or financial
interest is disclosed or known by the Board of Directors or committee
and noted in the minutes, and the Board or committee authorizes,
approves or ratifies the contract or transaction in good faith by a
vote for that purpose without counting the vote or votes of such
interested directors; or (ii) the fact of such common directorship or
financial interest is disclosed to or known by the shareholders
entitled to vote and they approve or ratify the contract or transaction
in good faith by a majority vote or written consent of shareholders
holding a majority of the Common Shares entitled to vote (the votes of
the common or interested directors or officers shall be counted in any
such vote of shareholders), or (iii) the contract or transaction is
fair and reasonable to the Corporation based on the material similarity
of terms to recent consulting agreements not involving interested
parties, or in all other agreements by competitive bids, at the time it
is authorized or approved. In addition, interested directors may be
counted in determining the presence of a quorum at a meeting of the
Board of Directors of the Corporation or a committee thereof which
approves such transactions.
<PAGE>19
Non-Qualified and Incentive Stock Option Plans. During 1995, the
Company adopted the 1995 Non-Statutory Stock Option Plan that provides
for granting to the Company's officers, directors, employees and
certain other individuals who consult with or advise the Company,
options to acquire 750,000 shares of the Company's common stock. The
shares issuable under the 1995 plan are at a price not less than 85% of
the fair market value of the stock on the date of grant. The exercise
periods of the options are not to exceed ten years.
The Board of Directors suspended the Plan on June 12, 1996 and any
options granted in 1996 were suspended. The Board of Directors
reinstated the Plan after the Company removed itself from the
Investment Act of 1940. However, the Board of Directors did not
reinstate any of the suspended options.
Executive Compensation. The following table sets forth certain
summary information concerning the total remuneration paid or accrued
by the Company, to or on behalf of the Company's Chief Executive
Officer and the Company's executive officers determined as of the end
of last year.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name Annual Restricted LTIP Other
and Compen- Stock Options/ Pay- Compen-
Principal Salary Bonus sation Awards SARs Outs sation
Position Year ($) ($) ($) ($) ($) ($) ($)
Alan Schafler 1998 $52,500 - - - $7,500(2) - -
President,
Treasurer
Chief Financial
Officer
Timothy
President,
Treasurer
Chief Financial
Officer 1997 $17,500 - - - - - -
1996 $ 177,000 - - - - - -
</TABLE>
No other officer has received compensation in the last three years.
In June 1997, Mr. Schafler received options Valued at $.01 per option
to purchase 750,000 Common Shares of the Company exercisable at $.19
per Common Share for a period of three years.
- ------------------------------------------------------
CERTAIN TRANSACTIONS
- ------------------------------------------------------
During the years ended January 31, 1999 and 1998, the Company's former
president who is currently a major shareholder of the Company made
working capital advances to the Company of $108,119 and $86,819,
respectively. The shareholder has agreed to convert the balance due to
him at January 31, 1999 into shares of the Company's restricted common
at a conversion rate of $.19 per share. The stock price represents the
trading bid price of the Company's common stock as of the date the
conversion was approved by the Company's Board of Directors.
- ----------------------------------------------------------------
PRINCIPAL SHAREHOLDERS
- ----------------------------------------------------------------
There are currently 9,040,564 Common Shares outstanding. The following
tabulates holdings of shares of the Company by each person who, subject
to the above, at the date of this Prospectus, holds of record or is
known by Management to own beneficially more than 5.0% of the Common
Shares and, in addition, by all directors and officers of the Company
individually and as a group.
<PAGE>20
Shareholdings
<TABLE>
<CAPTION>
Number & Class
Name and Address of Shares(1) Percentage
<S> <C> <C>
L. Alan Schafler
2035 Staysail Lane
Jupiter, Florida 33477 500,000 5.53%
Erich K. Schmid
40 Spring Hollow Lane
Fairview, NC 28730 10,000(2) .11%
James Yanai
17600 Van Ness
Torrence, CA 90504 10,000(2) .11%
Timothy Miles and MaryEllen Miles
#9 Niblick
Hilton Head Island, SC 29938 1,918,604 21.22%
Paul Skillicorn
Rt. 1, Box 440
Snow Hill, NC 28580 760,608 8.41%
William Spira
14221 Park Avenue South
Burnsville, MN 55337 760,608 8.41%
Immune Technologies, Inc.
6400 Bradley Park Drive
Suite A-4
Columbus, Georgia 31904 2,000,000 22.12%
All Directors & Officers
as a group (3 persons) 500,000 5.53%%
</TABLE>
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, beneficial ownership of a security consists of sole or
shared voting power (including the power to vote or direct the voting)
and/or sole or shared investment power (including the power to dispose
or direct the disposition) with respect to a security whether through a
contract, arrangement, understanding, relationship or otherwise.
Unless otherwise indicated, each person indicated above has sole power
to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable community property laws.
(2)Assumes exercise of outstanding options. The Company has issued to
each Erich Schmidt and James Yanai, Directors, an option to purchase
10,000 Common Shares at $.25 per Common Shares. The option period is
for three years from December, 1998.
Options. The Company has issued Dexter Thompson, a non-affiliate an
option to purchase 9,000 Common Shares at $.437 per Common Share. The
option vests in three equal installments annually beginning April 5,
2000.
The Company has issued Anthony Bertrami, a non-affiliate, an option to
purchase 20,000 Common Shares at $.25 per Common Shares. The option
period is for three years from December, 1998.
The Company has issued Clint Clark, a non-affiliate an option to
purchase 10,000 Common Shares at $.25 per Common Shares. The option
period is for two years from May 30, 1997.
<PAGE>21
- ----------------------------------------------------------
MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
- ----------------------------------------------------------
The Company's Common Stock is traded on the OTC Bulletin Board under
the symbol "BNTK". The following table sets forth the range of high
and low bid quotations for the Company's Common Stock for each quarter
of the last two fiscal years, as reported by the OTC Bulletin Board.
The Company's market makers are Paragon Capital Corp., Olsen Payne
Company, Sharpe Capital, Inc., Wien Securities Corp. and North American
Institutional Brokers. The quotations represent inter-dealer prices
without retail markup, markdown or commission, and may not necessarily
represent actual transactions.
Quarter Ended Bid Price
High Low
7/31/99 .625 .625
4/30/99 .562 .562
1/31/99 1.125 .937
10/31/98 .25 .25
7/31/98 .437 .375
4/30/98 .375 .375
1/31/98 .406 .375
10/31/97 .500 .437
The Company's common stock commenced trading on the over-the-counter
market in October 1996. Prior to that time, there was no market for the
securities of the Company.
Holders. The approximate number of holders of record of the
Company's $.001 par value Common Stock, as of December 31, 1999, was
500. Currently, as of September 30, 1999, there are 635 holders of
record.
Dividends. Holders of the Company's Common Stock are entitled to
receive such dividends as may be declared by its Board of Directors.
Since inception no dividends on the Company's Common Stock have ever
been paid, and the Company does not anticipate that dividends will be
paid on its Common Stock in the foreseeable future.
Broker-Dealer Sales of Company Securities. Until the Company
successfully obtains a listing on the NASDAQ quotation system, if ever,
the Company's securities may be covered by Rule 15g-2 under the
Securities Exchange Act of 1934 that imposes additional sales practice
requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000
or $300,000 jointly with their spouse). For transactions covered by
the rule, the broker-dealer must make a special suitability
determination of the purchaser and have received the purchaser's
written agreement to the transaction prior to the sale. In order to
approve a person's account for transactions in designated securities,
the broker or dealer must (i) obtain information concerning the
person's financial situation, investment experience and investment
objectives; (ii) reasonably determine, based on the information
required by paragraph (i) that transactions in designated securities
are suitable for the person and that the person has sufficient
knowledge and experience in financial matters that the person
reasonably may be expected to be capable of evaluating the rights of
transactions in designated securities; and (iii) deliver to the person
a written statement setting forth the basis on which the broker or
dealer made the determination required by paragraph (ii) in this
section, stating in a highlighted format that it is unlawful for the
broker or dealer to effect a transaction in a designated security
subject to the provisions of paragraph (ii) of this section unless the
broker or dealer has received, prior to the transaction, a written
agreement to the transaction from the person; and stating in a
highlighted format immediately preceding the customer signature line
that the broker or dealer is required to provide the person with the
written statement and the person should not sign and return the written
statement to the broker or dealer if it does not accurately reflect the
person's financial situation, investment experience and investment
objectives and obtain from the person a manually signed and dated copy
of the written statement. A designated security means any equity
security other than a security (i) registered, or approved for
<PAGE>22
registration upon notice of issuance on a national securities exchange
that makes transaction reports available pursuant to 17 CFR 11Aa3-1
(ii) authorized or approved for authorization upon notice of issuance,
for quotation in the NASDAQ system; (iii) that has a price of five
dollars or more or . . . (iv) whose issuer has net tangible assets in
excess of $2,000,000 demonstrated by financial statements dated less
than fifteen months previously that the broker or dealer has reviewed
and has a reasonable basis to believe are true and complete in relation
to the date of the transaction with the person. Consequently, the
rule may affect the ability of broker-dealers to sell the Company's
securities and also may affect the ability of purchasers in this
Distribution to sell their shares in the secondary market.
The Company's securities will likely continue to trade below $5.00 and
such securities is subject to the penny stock rules discussed above.
- --------------------------------------------------------------
DESCRIPTION OF SECURITIES
- ---------------------------------------------------------------
Qualification. The following statements constitute brief summaries of
the Company's Certificate of Incorporation and Bylaws, as amended.
Such summaries do not purport to be complete and are qualified in their
entirety by reference to the full text of the Certificate of
Incorporation and Bylaws.
The Company's articles of incorporation authorize it to issue up to
75,000,000 Common Shares. Shares of common stock purchased in this
offering will be fully paid and non-assessable.
Common Stock. There are presently outstanding 10,897,263 Common Shares.
Holders of Common Shares of the Company are entitled to cast one vote
for each share held at all shareholders meetings for all purposes.
There are no cumulative voting rights. Upon liquidation or
dissolution, each outstanding Common Share will be entitled to share
equally in the assets of the Company legally available for distribution
to shareholders after the payment of all debts and other liabilities.
Common Shares are not redeemable, have no conversion rights and carry
no preemptive or other rights to subscribe to or purchase additional
Common Shares in the event of a subsequent offering. All outstanding
Common Shares are, and the shares offered hereby will be when issued,
fully paid and non-assessable.
There are no limitations or restrictions upon the rights of the Board
of Directors to declare dividends out of any funds legally available
therefor. The Company has not paid dividends to date and it is not
anticipated that any dividends will be paid in the foreseeable future.
The Board of Directors initially may follow a policy of retaining
earnings, if any, to finance the future growth of the Company.
Accordingly, future dividends, if any, will depend upon, among other
considerations, the Company's need for working capital and its
financial conditions at the time.
Board of Directors, and shares so issued, the consideration for which
have been paid or delivered, shall be deemed fully paid stock and the
holder of such shares shall not be liable for any further payment
thereon.
The capital stock of the Company, after the amount of the subscription
price or par value has been paid in full, shall not be subject to
assessment to pay debts of the Company and no paid up stock and no
stock issued as fully paid shall ever be accessible or assessed and the
Articles of Incorporation shall not be amended in this particular.
Transfer Agent. Florida Atlantic Stock Transfer, Inc. acts as transfer
agent for the Company.
<PAGE>23
- -----------------------------------------------------------
LEGAL MATTERS
- -----------------------------------------------------------
The due issuance of the Common Shares offered hereby will be opined
upon for the Company by J. M. Walker, Attorney-At-Law, in which opinion
Counsel will rely on the validity of the Certificate and Articles of
Incorporation issued by the State of Nevada, as amended and the
representations by the management of the Company that appropriate
action under Nevada law has been taken by the Company.
- --------------------------------------------------------
LEGAL PROCEEDINGS
- --------------------------------------------------------
The Company is not involved in any legal proceedings as of the date of
this Prospectus.
- --------------------------------------------------------
EXPERTS
- --------------------------------------------------------
The audited financial statements included in this Prospectus have been
so included in reliance on the report of James E. Scheifley and
Associates, P.C., Certified Public Accountants, on the authority of
such firm as experts in auditing and accounting.
- --------------------------------------------------------
INTERESTS OF NAMED
EXPERTS AND COUNSEL
- --------------------------------------------------------
None of the experts or counsel named in the Prospectus are affiliated
with the Company.
<PAGE>24
- --------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------
Unaudited Consolidated Balance Sheet
As of July 31, 1999 25
Unaudited Consolidated Statements of Operation
For the three and six months ended July 31,
1999 and 1998 26
Unaudited Consolidated Statements of
Cash Flows for the Six Months ended July 31,
1999 and 1998 27
Notes to Unaudited Financial Statements 28
Independent Auditor's Report 29
Consolidated Balance Sheet as of January
31, 1999 30
Consolidated Statements of Operations for the
Year ended January 31, 1999 and 1998 31
Consolidated Statements of Stockholders'
Equity for the Years ended January 31,
1999 and 1998 32
Consolidatee Statements of Cash Flows for the
Year ended January 31, 1999 and 1998 33
Notes to Financial Statements 34
<PAGE>25
BioNet Technologies, Inc.
Consolidated Balance Sheet
July 31, 1999
ASSETS
<TABLE>
<CAPTION>
Current assets:
<S> <C>
Cash and cash equivalents $ 107,853
Trading securities 138,750
Inventory 11,890
-------------
Total current assets 258 493
Property and equipment, at cost, net of
accumulated depreciation of $25,049 100,939
Other assets 31,353
-------------
$390,785
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 63,004
Accrued expenses 55,943
-------------
Total current liabilities 118,947
Stockholders' equity:
Preferred stock, $.001 par value,
50,000 shares authorized,
5,000 shares issued and outstanding 5
Common stock, no par value,
75,000,000 shares authorized,
9,040,564 shares issued and outstanding 9,041
Additional paid in capital 2,565,683
Subscriptions to common stock 902,022
Accumulated deficit (3,204,913)
-----------
271,838
-----------
$390,785
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>26
BioNet Technologies, Inc.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31, July 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues $ - $ - $ - $ -
Costs and expenses
General and administrative 310,190 153,679 573,330 195,940
Charge off of acquired research and development cost - 978,828 - 978,828
--------- -------- --------- ---------
(Loss) from operations (310,190) (1,132,507) (573,330) (1,174,768)
Other income and (expense):
Gain (loss) realized from sale of investments 23,438 5,796 (21,062) 36,952
Unrealized gain (loss) on investments (11,000) (54,615) (33,000) 1,985
Interest espense (355) - (925) -
--------- -------- --------- ---------
12,083 (48,819) (54,987) 38,937 3
(Loss) before income taxes (298,107) (1,181,326) (628,317) (1,135,831)
Provision for income taxes - - - -
--------- -------- --------- ---------
Net income (loss) $(298,107) $(1,181,326) $(628,317) $(1,135,831)
Basic earnings (loss) per share:
Net income (loss) $ (0.33) $ (0.30) $ (0.07) $ (0.31)
Weighted average shares outstanding 9,040,564 3,956,070 9,040,564 3,621,703
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>27
BioNet Technologies, Inc.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
July 31,
1999 1998
<S> <C> <C>
Net cash provided by (used in)
operating activities $ (503,378) $ (123,321)
Cash flows from investing activities:
Proceeds from sale of investments 41,438 71,220
Advances to affiliate - (23,700)
Purchase of fixed assets
Net cash provided by (used in) investing activities (4,704) -
----------- ---------
36,734 47,520
Cash flows from financing activities:
Proceeds from sale of common stock - 1,550
Proceeds from stock subscriptions 556,755 -
Advances from stockholders - 77,150
----------- --------
Net cash provided by (used in) financing activities 556,755 77,700
Increase (decrease) in cash 90,111 2,899
Cash and cash equivalents,
beginning of period 17,742 1,528
---------- --------
Cash and cash equivalents,
end of period $ 107,853 $ 4,427
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>28
Bio Net Technologies, Inc.
Notes to Unaudited Financial Statements
31-Jul-99
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
provisions of Regulation SB. Accordingly, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. These
financial statements should be read in conjunction with
information provided in the Company's report on Form 10-K for
the year ended January 31, 1999.
The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the
full year.
Income (loss) per share was computed using the weighted average
number of common shares outstanding.
Investments
At July 31, 1999 the Company had investments in common equity
securities as follows:
Historical Fair
Shares Cost Value
Level Best Golf, Inc. 3,500 5,250 -
Immune Technologies, Inc. 10,000 15,000 -
National Sorbents, Inc. 88,000 264,000 66,000
Advanced Sterilizer Technology 10,000 15,000 -
Casinovations, Inc. 29,100 43,650 72,750
Grand Slam Licensing, Inc. 10,000 15,000 -
First Nordic 55,000 5,000 -
--------- ---------
$362,900 $138,750
Fair value of National Sorbents Inc. and Coronado Industries as
of April 30, 1999 was determined by reference to price quoted
on the NASDAQ OTC Bulletin Board. No public market exists for
the other securities listed. Fair value of these securities is
based on the price paid by qualified investors in recent
private placements of the securities as adjusted by management
to reflect significant changes in investee company financial
conditions.
During the six months ended July 31, 1999, the Company received
net proceeds from the sale of investment securities aggregating
$41,438 and recorded losses from the transactions aggregating
$21,062.00
During the six months ended July 31, 1999, the Company received
gross proceeds from the sale of stock subscriptions aggregating
$556,755.00
<PAGE>29
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
BioNet Technologies, Inc.
(formerly Pratt, Wylce & Lords, Ltd.)
We have audited the balance sheet of BioNet Technologies, Inc. as of
January 31, 1999, and the related statements of operations, changes in
stockholders' equity, and cash flows for each of the two years then
ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present
fairly, in all material respects, the financial position BioNet
Technologies, Inc. as of January 31, 1999, and the results of its
operations, changes in stockholders' equity and cash flows for each of
the two years then ended, in conformity with generally accepted
accounting principles.
As discussed in Note 3 to the financial statements, investment
securities not readily marketable amounting to $135,250 as of January
31, 1999, have been valued at fair value as determined by the Board of
Directors. We have reviewed the procedures applied by the directors in
valuing such securities and investments and have inspected underlying
documentation, and in the circumstances, we believe the procedures are
reasonable and the documentation appropriate. However, because of the
inherent uncertainty of valuation, the Board of Directors estimate of
fair values may differ significantly from the values that would have
been used had a ready market existed for the securities, and the
difference could be material.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
June 12, 1999
<PAGE>30
BioNet Technologies, Inc.
Consolidated Balance Sheet
January 31, 1999
ASSETS
Current assets:
Cash and cash equivalents $ 17,742
Trading securities 234,250
Inventory 11,890
------------
Total current assets 263,882
Property and equipment, at cost, net of
accumulated depreciation of $13,049 108,215
Other assets 9,103
------------
$ 381,200
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 91,618
Accrued expenses 41,182
------------
Total current liabilities 132,800
Stockholders' equity:
Preferred stock, no par value,
50,000 shares authorized,
5,000 shares issued and outstanding 5
Common stock, no par value,
75,000,000 shares authorized,
7,915,564 shares issued and outstanding 9,041
Additional paid in capital 2,565,683
Subscriptions to common stock 345,267
Unearned services (95,000)
Accumulated deficit (2,576,596)
------------
248,400
------------
$ 381,200
See accompanying notes to consolidated financial statements.
<PAGE>31
BioNet Technologies, Inc.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Year Ended January 31,
1999 1998
<S> <C> <C>
Revenues $ - $ -
Costs and expenses
General and administrative 833,850 217,052
Charge off of acquired research and develpoment costs 1,475,000 -
---------- ---------
(Loss) from operations (2,308,850) (217,052)
Other income and (expense):
Gain (loss) realized from sale of investments 34,194 20,797
Unrealized gain (loss) on investments 69,756 (244,474)
Interest espense (1,087) -
---------- --------
102,863 (223,677)
(Loss) before income taxes (2,205,987) (440,729)
Provision for income taxes - -
---------- ---------
Net (loss) $(2,205,987) $(440,729)
Basic earnings (loss) per share:
Net income (loss) $ (.39) $ (.14)
Weighted average shares outstanding 5,715,465 3,040,652
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>32
BioNet Technologies, Inc.
Consolidated Statement of Stockholders' Equity
Years Ended January 31, 1999 and 1998
<TABLE>
<CAPTION>
Additional Unpaid
Preferred Stock Common Stock Paid In Stock Unearned Accumulated
Shares Amount Shares Amount Capital Subscriptions Services Deficit Total
<S> <C> <C> <C> <C> <C> <C>
Balance, January 31, 1997 - - 2,874,596 $2,875 $455,461 $(31,500) - $15,923 $(362,966)
Sale of common stock
for cash 380,674 380 99,580 - - 99,960
Collection of stock
subscriptions - - - - - 31,500 - - 31,500
Net loss for the year - - - - - - - (386,532) (386,532)
------ ------ ------- ------- ------ ------- ------ -------- --------
Balance, January 31, 1998 - - 3,255,270 3,255 555,041 - - (370,609) 187,687
Sale of stock for cash - - 760,294 761 196,923 - - - 197,683
Common stock issued
for services - - 1,125,000 1,125 212,625 - $(95,000) - 118,750
Preferred shares issued
for services 5,000 5 - - 4,995 - - - 5,000
Fair value of preferred
stock conversion rights
vested during year - - - - 125,000 - - - 125,000
Stock subscriptions
received in cash - - - - - 150,329 - - 150,329
Stock subscriptions
received for debt
conversion - - - - - 194,938 - - 194,938
Common shares issued
for merger - - 1,900,000 1,900 473,100 - - - 475,000
Common shares issued
for asset purchase - - 2,000,000 2,000 998,000 - - - 1,000,000
Net loss for the year - - - - - - - (2,205,987) (2,205,987)
------- ------ --------- ------ ------- ------ ------ --------- ---------
Balance, January 31, 1999 5,000 $ 5 9,040,564 $ 9,041 $ 2,565,683 $ 345,267 $(95,000)$(2,576,596) $248,400
====== ====== ========= ======= =========== ========= ======== =========== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>33
BioNet Technologies, Inc.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Year Ended January 31,
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (2,205,987) $ (440,729)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 9,837 1,343
Unrealized (appreciation) depreciation on investments (69,796) 244,474
Gain from sale of investments (34,194) (20,797)
Write off of purchased research costs 1,475,000 -
Common stock issued for services 248,750 14,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts and notes receivable - 1,100
Inventory (11,890) -
(Decrease) increase in:
Accounts payable 9,285 (97,600)
Accrued expenses 39,433 -
----------- ---------
Total adjustments 1,666,425 142,520
----------- ---------
Net cash provided by (used in)
operating activities (539,562) (298,209)
Cash flows from investing activities:
Proceeds from sale of investments 131,694 173,114
Advances to affiliate - (56,100)
Purchase of fixed assets (32,049) (1,000)
----------- ---------
Net cash provided by (used in) investing activitie 99,645 116,014
----------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock 197,683 85,961
Proceeds from stock subscriptions 150,329 -
Advances from stockholders 108,119 86,819
----------- ---------
Net cash provided by (used in) financing activitie 456,131 172,780
----------- ---------
Increase (decrease) in cash 16,214 (9,415)
Cash and cash equivalents,
beginning of period 1,528 10,943
----------- ---------
Cash and cash equivalents,
end of period $ 17,742 $ 1,528
========== ========
</TABLE>
<TABLE>
<CAPTION>
Year Ended January 31,
1999 1998
<S> <C> <C>
Supplemental cash flow information:
Cash paid for interest $ - $ -
Cash paid for income taxes $ - $ -
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>34
BioNet Technologies, Inc.
Notes to Financial Statements
Note 1. Summary of significant accounting policies.
Organization
The Company was incorporated in the State of Florida on May 22, 1986 as
Pratt, Wylce & Lords, Ltd The Company had limited operations from 1988
through 1990 and ceased operations at that time. The Company
experienced a change in control and began operations of its present
business as of May 31, 1993. The Company was reincorporated in the
State of Nevada on August 18, 1993 and during the year ended January
31, 1999 changed its name to BioNet Technologies, Inc.
The Company was in the business of providing financial consulting
services for corporate clients. As compensation for these services,
the Company received both cash and common stock of the companies to
which it provided its services. The Company had elected to be treated
as a Business Development Company pursuant to Section 54 of the
Investment Company Act of 1940.
During January 1997, the Company determined that it was unable to
complete certain of its consulting projects and would be unable to
accept new consulting clients in the future. The Company negotiated
contract termination agreements with all of its active clients which
provide for the immediate discontinuance of consulting services. The
termination contracts provide that the Company retain as revenue all
cash paid to date and that the Company return all or a major portion on
common stock issued to it by client companies. Since its cessation of
financial consulting activities during January 1997 the Company has
carried out administrative functions and has begun liquidating its
investment portfolio. The Company is currently seeking new business
activities unrelated to the provision of financial services and during
the year ended January 31, 1999 has completed a merger with GreenGold
International, Inc. and a asset acquisition agreement with Immune
Technologies, Inc. (see Note 2,)
Securities valuation
Investments in unrestricted securities that are traded in the over-the-
counter market are generally valued at the closing bid price on the
last day of the year. Restricted securities and securities for which
no public market exist are valued at fair value as determined by the
Board of Directors. These securities are initially valued at the price
per share provided for in the client company's private sale of its
securities. Periodic adjustments to the initial fair value are made
when deemed appropriate by the directors based upon intervening events
or circumstances that would have a material effect on the Company's
ability liquidate the securities. Such intervening events and
circumstances would include among others material changes in the
client's financial position and results of operations, doubts about the
client's ability to continue as a going concern, a petition in
bankruptcy, the discovery of a material legal or environmental claim,
more recent sales of non-trading securities or the abandonment of plans
to complete a registration of the securities for public sale.
Cash and cash equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents. The Company had no cash
equivalents during the periods presented.
Furniture and equipment
Furniture and equipment are stated at cost. Depreciation is provided
for by the straight-line method over estimated useful lives as follows:
Equipment 5 years
Revenue
Revenue from the sale of investments is recorded on settlement dates as
determined by independent brokers and dealers in securities. The use of
trade dates for determination of such revenue would not have a material
effect on reported amounts.
Income taxes
Deferred taxes are provided to reflect the income tax effects of
amounts included for financial statement purposes in different periods
than for tax purposes, principally unrealized appreciation of
investments and the valuation of securities received as revenue, the
constructive receipt of which for income tax purposes precedes the
establishment of fair value under generally accepted accounting
<PAGE>35
principles. Valuation of the securities for income tax purposes is
based on fair value at the date the shares are issued to the Company,
which is generally one to three months prior to the private sale of
stock by the client company.
Per share amounts
In February 1997, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 128, "Earnings Per Share." SFAS No. 128 supersedes and
simplifies the existing computational guidelines under Accounting
Principles Board ("APB") Opinion No. 15, "Earnings Per Share."
The statement is effective for financial statements issued for periods
ending after December 15, 1997. Among other changes, SFAS No. 128
eliminates the presentation of primary earnings per share and replaces
it with basic earnings per share for which common stock equivalents are
not considered in the computation. It also revises the computation of
diluted earnings per share. The Company has adopted SFAS No. 128 and
there is no material impact to the Company's earnings per share,
financial condition, or results of operations. The Company's earnings
per share have been restated for all periods presented to be consistent
with SFAS No. 128.
The basic loss per share is computed by dividing the net loss for the
period by the weighted average number of common shares outstanding for
the period. Loss per share is unchanged on a diluted basis since the
assumed exercise of common stock equivalents would have an anti-
dilutive effect.
Concentration of credit risk
Financial instruments that potentially subject the Company to a
concentration of credit risk consist principally of cash and
investments in client company common stocks. During the year the
Company did not maintain cash deposits at financial institutions in
excess of the $100,000 limit covered by the Federal Deposit Insurance
Corporation. Client company common stocks are generally thinly traded
new issues traded in the over-the-counter market or securities for
which no market exists. Attempts by the Company or others to sell
substantial positions in these securities could have material negative
effects on quoted market prices and the resulting fair value of the
securities.
Estimates
The preparation of the Company's financial statements requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual
results could differ from these estimates. Management estimates the
fair value of its investments in securities for which no public market
exists based on the factors mentioned above. It is reasonably possible
that changes may occur in the near future with respect to client
company activities that would require adjustment of the fair value of
these securities.
Stock-based Compensation
The Company adopted Statement of Financial Accounting Standard No. 123
(FAS 123), Accounting for Stock-Based Compensation beginning with the
Company's first quarter of 1996. Upon adoption of FAS 123, the Company
continued to measure compensation expense for its stock-based employee
compensation plans using the intrinsic value method prescribed by APB
No. 25, Accounting for Stock Issued to Employees. The Company paid
stock based compensation to certain officers and shareholders as
described in Notes 5 and 8.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines
for all items that are to be recognized under accounting standards as
components of comprehensive income to be reported in the financial
statements. The statement is effective for all periods beginning after
December 15, 1997 and reclassification financial statements for earlier
periods will be required for comparative purposes. To date, the
Company has not engaged in transactions which would result in any
significant difference between its reported net loss and comprehensive
net loss as defined in the statement.
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1
<PAGE>36
provides authoritative guidance on when internal-use software costs
should be capitalized and when these costs should be expensed as
incurred.
Effective in 1998, the Company adopted SOP 98-1, however the Company
has not incurred costs to date which would require evaluation in
accordance with the SOP.
Effective December 31, 1998, the Company adopted SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"). SFAS 131 superseded SFAS No. 14, Financial Reporting for
Segments of a Business Enterprise. SFAS 131 establishes standards for
the way that public business enterprises report information about
operating segments in annual financial statements and requires that
those enterprises report selected information about operating segments
in interim financial reports. SFAS 131 also establishes standards for
related disclosures about products and services, geographic areas, and
major customers.
The adoption of SFAS 131 did not affect results of operations or
financial position. To date, the Company has not operated in any
business activity.
Effective December 31, 1998, the Company adopted the provisions of SFAS
No. 132, Employers' Disclosures about Pensions and Other Post-
retirement Benefits ("SFAS 132"). SFAS 132 supersedes the disclosure
requirements in SFAS No. 87, Employers' Accounting for Pensions, and
SFAS No. 106, Employers' Accounting for Post-retirement Benefits Other
Than Pensions. The overall objective of SFAS 132 is to improve and
standardize disclosures about pensions and other post-retirement
benefits and to make the required information more understandable. The
adoption of SFAS 132 did not affect results of operations or financial
position.
The Company has not initiated benefit plans to date, which would
require disclosure under the statement.
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities
("SFAS 133"), which is required to be adopted in years beginning after
June 15, 1999. SFAS 133 will require the Company to recognize all
derivatives on the balance sheet at fair value. Derivatives that are
not hedges must be adjusted to fair value through income. If the
derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of derivatives will either be offset against the change
in fair value of hedged assets, liabilities, or firm commitments
through earnings or recognized in other comprehensive income until the
hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in
earnings. The Company has not yet determined what the effect of SFAS
133 will be on earnings and the financial position of the Company,
however it believes that it has not to date engaged in significant
transactions encompassed by the statement.
Note 2. Business acquisitions
During June 1998, the Company issued 2,000,000 shares of its restricted
common stock to the shareholders of Immune Technologies, Inc. (ITI) in
exchange for certain assets of ITI. ITI had been a client of the
Company and the Company had advanced an aggregate of $79,800 to Immune
during 1997 and 1998 to assist in meeting that company's working
capital requirements. Immune to date has been engaged in research and
development of technology it hopes to utilize in the diagnosis and
treatment of animal diseases.
The assets acquired from ITI consist of cash, inventory and fixed
assets aggregating $100,972 at the purchase date. The fair value of
the stock issued in the transaction amounted to $1,000,000. The excess
of the fair value of the purchase price over the assets acquired has
been treated as the purchase of research and development costs by the
Company and has been charged to expense during the current year.
During August 1998, the Company agreed to issued 1,900,000 shares of
its restricted common stock to the certain shareholders of Greengold
Corporation (Greengold) in exchange for 80% of the outstanding common
<PAGE>37
stock of Greengold. Greengold to date has been engaged in research and
development of technology it hopes to utilize in the recycling and
disposal of hog farm waste.
The assets and liabilities of Greengold consist of patent costs of
$7,500 and accounts payable of $28,649 at the acquisition date. The
fair value of the stock issued in the transaction amounted to $475,000.
The excess of the fair value of the purchase price over the assets
acquired has been treated as the purchase of research and development
costs by the Company and has been charged to expense during the current
year.
Had the above described acquisitions occurred at the beginning of the
fiscal year ended January 31, 1999, the Company's results of operations
would be as follows:
Revenues $ -
Net loss $(2,099,874)
Basic loss per share $ (.29)
Note 3. Investments
Common stock of client companies was issued to the Company as payment
for its services and was recorded as revenue ratably over the term of
the consulting contract. As indicated in Note 1, the Company has
completed termination agreements with all of its consulting clients.
At January 31, 1999 the Company had investments in listed common equity
securities as follows:
<TABLE>
<CAPTION>
Historical Fair
Shares Cost Value
<S> <C> <C> <C>
Free trading shares:
National Sorbents, Inc. 88,000 $264,000 $
99,000
First Nordic 55,000 5,000 -
-------- -------
- -
$269,250 $
99,000
</TABLE>
Fair value of securities as of January 31, 1999 was determined by
reference to prices quoted on the NASDAQ OTC Bulletin Board.
The shares of National Sorbents, Inc. were issued to the Company during
November 1995. At January 31, 1997, the Board of Directors determined
that intervening events and circumstances had arisen that would require
adjustment of the fair value of these securities as of January 31, 1997
to zero value. Specifically, the company has suffered significant
deterioration of financial position and results of operations and has
halted its efforts to register its securities for public sale. During
the year ended January 31, 1998, this client company was able to
establish limited trading of its securities in the over the counter
market.
At January 31, 1998 the Company had investments in common equity
securities for which no public market exists as follows:
Historical Fair
Shares Cost Value
Rubicon Sports, Inc. 25,000 $ 37,500 $ 62,500
Immune Technologies, Inc. 10,000 15,000 -
Casinovations Incorporated 29,100 43,650 72,750
---------- ---------
$ 96,150 $ 135,250
The securities of Rubicon Sports, Inc and Casinovations Incorporated
were valued at their fair value, which in both cases amounted to $2.50
per share. Both of these companies have continued private offerings of
their securities at $2.50 per share during the year ended January 31,
1999. No intervening events or circumstances occurred subsequent to
the valuation of these securities that would require an adjustment to
their valuation as of January 31, 1999. The shares of Immune
Technologies, Inc. have been reduced to a zero value as that company
became an inactive shell company as a result of the asset acquisition
described in Note 2.
<PAGE>38
The Company owns less than 15% of outstanding common stock of its
former client companies.
During the year ended January 31, 1999, the Company completed the
followingtransactions with respect to its portfolio of listed
securities:
Sales for cash
Shares Proceeds Gain
Players Network, Inc. 25,000 $ 43,282 $ 5,782
Coronado Industries, Inc. 100,000 $ 88,412 $ 28,412
During the year ended January 31, 1998, the Company completed the
following transactions with respect to its portfolio of listed
securities:
Sales for cash
Shares Proceeds Gain (Loss)
National Sorbents, Inc. 40,000 $ 7,520 $(52,480)
Gaming Ventures, Inc. 13,444 $ 32,988 $ 12,822
Level Best Golf 48,101 $132,606 $ 60,455
Note 4. Furniture and equipment
Furniture and equipment consists of the following at January 31, 1999:
Office equipment $ 27,007
Lab equipment 92,757
Leasehold improvements 15,100
--------
134,864
Less accumulated depreciation (13,049)
--------
$121,815
Depreciation expense charged to operations was $9,838 and $1,343 during
the years ended January 31, 1999 and 1998 respectively.
Note 5. Capital share transactions
During the period covered by these financial statements the Company
issued shares of common stock without registration under the Securities
Act of 1933. Although the Company believes that the sales did not
involve a public offering of its securities and that the Company did
comply with the "safe harbor" exceptions from registration under
section 4(2), it could still be liable for recession of the sales if
such exceptions were found not to apply. The Company has not received
a request for rescission of shares nor does it believe that it is
probable that its shareholders would pursue rescission nor prevail if
such action were undertaken
During the year ended January 31, 1998 the Company issued 329,674
shares of its common stock to a limited investor group for cash
aggregating $85,961.Additionally, the Company issued 50,000 shares of
its common stock valued at $.25 per share for services provided to the
Company.
Additionally, the Company issued 50,000 shares of its common stock
valued at $.25 per share for services provided to the Company during
the year ended January 31, 1998.
During the year ended January 31, 1999 the Company issued 760,294
shares of its common stock to a limited investor group for cash
aggregating $197,683 and collected an additional $150,329 in cash and
converted $197,938 of shareholder debt in exchange for subscriptions to
its restricted common stock. The subscribed stock will be issued at
$.19 per share based in the trading value of the Company's common stock
during the subscription period.
Additionally during 1999, the Company issued an aggregate of 3,900,000
shares of its common stock for the acquisitions of ITI and GGC (see
Note 2).
<PAGE>39
In connection with an employment contract with its president, the
Company issued 5,000 shares of its $.001 par value preferred stock at a
nominal value of $1.00 per share for services provided by the officer.
The shares are convertible into common stock at the rate of 1,000
shares of common stock for each share of preferred stock to be
converted. Conversion rights vest to the officer based upon
performance goals for the Company as included in the employment
contract.
During the year ended January 31, 1999, the first performance goal was
attained whereby the Company became obligated to convert 250 shares of
the preferred stock into its restricted common stock. The fair value of
the common stock at the vesting date amounted to $.50 per share based
upon the bid value of the stock. The Company has recorded $125,000 of
compensation expense in connection with the vesting of the conversion
rights. Additional vesting of the conversion rights will be based upon
the maintenance of minimum bid prices of the Company's common stock for
a thirty day period at the following levels: 250 shares at $.50, 250
shares at $.75, 250 shares at $1.50, balance of the shares (4,000) 250
shares are convertible for each $.50 increase in the minimum bid price
for the thirty day period or upon the Company achieving an annual net
profits and annual increases thereof of $.05 per share for each
subsequent 250 share preferred stock series. . Subsequent to January
31, 1999, 500 shares of the preferred stock became convertible.
During the year ended January 31, 1999, the Company issued an aggregate
of 1,125,000 shares of its common stock as compensation to an officer
and others for services performed and to be performed for the Company.
The shares were valued at the bid price of the Company's common stock
($.19 per share) at the date that the compensation shares were approved
by the Company and the recipients. The value of the compensation
shares issued for future services amounted to $95,000 and has been
shown in the accompanying financial statements as unearned services, a
reduction of stockholders' equity. This amount will be recorded as
expense during the year ended January 31, 2000.
Note 6. Commitments
The Company has entered into an operating lease for its office and
research facility which calls for annual rental payments aggregating
$19,200. The lease term extends through June 30, 2003. Minimum annual
rental payments under the lease are as follows for the years ended
January 31, 2000 through 2003: 2000 - $19,200; 2001 - $19,200; 2002 -
$19,200, 2003 - $8,000.
Rent expense amounted to $14,558 and $5,590 for the years ended January
31, 1999 and 1998, respectively.
The Company has entered into an employment agreement with its president
which provides for annual compensation and benefits aggregating
$153,000 for the year ended January 31, 2000 and $168,000 annually
thereafter through 2003.
Note 7. Income taxes
Deferred income taxes may arise from temporary differences resulting
from income and expense items reported for financial accounting and tax
purposes in different periods. Deferred taxes are classified as
current or non-current, depending on the classification of assets and
liabilities to which they relate. Deferred taxes arising from
temporary differences that are not related to an asset or liability are
classified as current or non-current depending on the periods in which
the temporary differences are expected to reverse.
The Company currently has net tax operating loss carryforwards
aggregating approximately $2,800,000 which expire beginning in 2008.
The principal difference between the Company's book operating losses
and income tax operating losses results from recognition of unrealized
gains or losses on securities owned for financial statement purposes.
The deferred tax asset resulting from the operating loss carryforward
described above (approximately $952,000) has been fully reserved. The
increase in the reserve during the year ended January 31, 1999 amounted
to approximately $665,000.
<PAGE>40
Note 8. Stock option plan
During 1995, the Company adopted the 1995 Non-Statutory Stock Option
Plan which provides for granting to the Company's officers, directors,
employees and certain other individuals who consult with or advise the
Company, options to acquire up to 750,000 shares of the Company's
common stock. The shares issuable under the 1995 plan are at a price
not less than 85% of the fair market value of the stock on the date of
grant. The exercise periods of the options are not to exceed ten
years. No options have been granted pursuant to the plan as of January
31, 1998.
In connection with the employment agreement disclosed in Note 6, the
Company's president was granted options to purchase 750,000 shares of
the Company's common stock at an exercise price of $.19 per share, the
fair value of the common stock at the date of the agreement. The
option is exercisable for a five year period. The Company has not
recorded compensation expense in connection with the option grant.
The fair value of the options at the date of grant was estimated using
the Black-Scholes model with assumptions as follows:
Market value $2.50
Expected life in years 5
Interest rate 6.5%
Volatility 10% 10.00%
Dividend yield 0.00% 0.00%
Stock based compensation costs would have increased pretax losses by
$23,340 ($.00 per share) 1999 if the fair value of the options granted
during the year had been recognized as compensation expense.
Note 9. Related Party Transactions.
During the years ended January 31, 1999 and 1998, the Company's former
president who is currently a major shareholder of the Company made working
capital advances to the Company of $108,119 and $86,819, respectively. The
shareholder has agreed to convert the balance due to him at January 31, 1999
into shares of the Company's restricted common at a conversion rate of $.19 per
share. The stock price represents the trading bid price of the Company's common
stock as of the date the conversion was approved by the Company's Board of
Directors.
<PAGE>41
PART II
INFORMATION NOT REQUIRED BY PROSPECTUS
Item 24. Indemnification of Officers and Directors.
The By-Laws of the Company provides that a director of the registrant
shall have no personal liability to the Registrant or its stockholders
for monetary damages for breach of a fiduciary duty as a director,
except for liability (a) for any breach of the director's duty of
loyalty to the Registrant or its stockholders, (b) for acts and
omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, and (c) pursuant to Nevada law for any
transaction from which the director derived an improper personal
benefit. Registrant's By-Laws exculpates and indemnifies the
directors, officers, employees, and agents of the registrant from and
against certain liabilities. Further the By-Laws also provides that
the Registrant shall indemnify to the full extent permitted under
Nevada law any director, officer employee or agent of Registrant who
has served as a director, officer, employee or agent or the Registrant
or, at the Registrant's request, has served as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE COMPANY FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
Item 25. Other Expenses of Issuance and Distribution.
Other expenses in connection with this offering which will be paid
by Immune Technologies, Inc. (hereinafter in this Part II referred to
as the "Company") are estimated to be substantially as follows:
<TABLE>
Amount
Payable
Item By Company
<S> <C>
S.E.C. Registration Fees 350.00
State Securities Laws (Blue Sky) Fees and Expenses .00
Printing and Engraving Fees 1,500.00
Legal Fees 15,000.00
Accounting Fees and Expenses 5,000.00
Transfer Agent's Fees 500.00
Miscellaneous 500.00
Total $22,850.00
</TABLE>
Item 26. Recent Sales of Unregistered Securities.
<TABLE>
<CAPTION>
Name Total Number cash
Date Issued of Common Shares payment
<S> <C> <C> <C>
Wilhelm Schleidt 5/20/96 1,000 2.75
Johnny Wong 7/19/96 3,000 2.625
Jared Mcgowan 8/29/96 1,000 2.812
Mark Mcalister 9/4/97 40,000 0.25
Mark Schklar 9/4/97 20,000 0.25
Michael Schklar 9/4/97 20,000 0.25
Johnny and Barbara Wong TTEES 9/4/97 20,000 0.25
U/A DTD 7/16/80 FBO Johnny and Barbara Wong
Paul Spiegler and Renee
Spiegler JT TN 9/4/97 40,000 0.25
James Yanai 9/4/97 16,000 0.25
Kazu Fujita 9/4/97 20,000 0.25
John Polli 9/4/97 25,000 0.25
Mark Schklar 10/9/97 20,000 0.25
Michael Schklar 10/9/97 15,000 0.25
Mark Mcalister 12/8/97 60,000 0.25
Itsuo Shiotani 12/8/97 8,000 0.25
Elizabeth Gheen 1/23/98 48,000 0.3125
Mitsuo Tatsugawa Defined
Benefit 2/25/98 28,674 0.3125
Pension Plan U/A DTD 9/1/88
James Yanai 2/25/98 15,000 0.3125
<PAGE>42
Johnny and Barbara
Wong TTEES 2/25/98 15,000 0.3125
U/A DTD 7/16/80 FBO
Johnny and Barbara Wong
Immune Technologies 5/8/98 2,000,000 22.12%
Marcorp, Inc. 6/26/98 6,200 0.25
Larry Zonner 9/24/98 1,500 0.156
Parool A Vyas 9/24/98 2,000 0.156
Larry Zonner 10/16/98 4,500 0.16
Kieth Gold 10/21/98 40,936 0.187
Peter Polakoff 11/4/98 10,000 0.25
Nick Davidge 11/4/98 40,000 0.25
Tomas and Susan Lanzaro
JT TEN 4/28/98 40,000 0.375
Ronald Conklin 4/28/98 60,000 0.375
Anthony Bertrami 4/28/98 40,000 0.375
Harvey Brice 4/28/98 60,000 0.375
Leon Ruchlamer 4/28/98 100,000 0.375
Harvey Brice 11/18/98 66,666 0.375
Nick Davidge 11/20/98 20,000 0.5
Cynthia Levine 11/23/98 40,000 0.5
Anthony Bertrami 11/23/98 20,000 0.5
Lionel Nakisher 11/23/98 20,000 0.5
Yochanan Ben-Ner 12/15/98 60,000 0.468
Ralph and Carol Lynn
Kingrey 12/28/98 20,000 0.218
Kingrey JT TEN
Theodore Kolbert 12/28/98 6,000 0.218
Peter Polakoff 12/28/98 10,000 0.218
Ronald Conklin 12/28/98 20,000 0.218
Timothy Miles 12/28/98 1,731,421 0.19
L. Alan Schafler 12/28/98 500,000 0.16
Ann B Anderson 12/29/98 12,500 0.218
Jarrod Ray Kingrey 1/13/99 2,850 0.937
Bruce E Winter DTD 3-20-92 3/30/99 27,778 0.687
Bruce E Winter TTEE
Elizabeth Gheen 3/29/99 275,000 0.45
Alan Filson 3/29/99 132,000 0.45
Mitsuo Tatsugawa 3/29/99 250,000 0.45
Timothy Miles 3/29/99 125,000 0.45
Kevin Tatsugawa 3/29/99 11,250 0.45
Laurie Tatsugawa 3/29/99 17,500 0.45
</TABLE>
These sales were made pursuant to an exemption from registration
pursuant to Section 504 of Regulation D. The offering was approved
and/or exempted by the required states and the appropriate Form D was
filed with the Securities and Exchange Commission.
<PAGE>43
Item 27. Exhibit Index.
<TABLE>
<S> <C>
The following of exhibits are filed with this report:
(1) Not Applicable
(2) Articles of Incorporation incorporated by reference to Form
10SB File Number 0-25792
(2.1) Articles of Merger incorporated by reference to Form 10SB,
File Number 0-25792
(2.2) Bylaws incorporated by reference to Form 10SB, File
Number 0-25792
(3) Common Stock Certificate incorporated by reference to Form
10SB, File Number 0-25792
(4) Not Applicable
(5) Not Applicable
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10.1) Purchase and Sale Agreement dated May, 1998 between the
Company and Immune Technologies, Inc. incorporated by
reference to Form SB-2 file No. 333-77461
(11) Not Applicable
(12) 1995 Non-Statutory Stock Option Plan incorporated by reference
to Amendment 3 to Form 10SB, File Number 0-25792
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of James E. Scheifley & Associates, P.C.
(25) Not Applicable
(26) Not Applicable
(27) Financial Data Schedule
(28) Not Applicable
</TABLE>
Item 28. Undertaking.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(I) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
<PAGE>44
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the formation set forth in the
Registration
Statement.
(iii) To include any additional or changed material information on the
plan of distribution.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) Delivery of Certificates. The undersigned registrant hereby
undertakes to provide to the Transfer Agent at the closing,
certificates in such denominations and registered in such names as are
required by the Transfer Agent to permit prompt delivery to each
purchaser.
(c) Indemnification. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
provisions set forth in the Company's Articles of Incorporation or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>45
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements of filing on Form SB-2 and authorized
this registration statement to be signed on its behalf by the
undersigned, in the City of Jupiter, State of Florida on the 6th day of
October, 1999.
BioNet Technologies, Inc.
/s/ L. Alan Schafler
-------------------------------
- -
By: L. Alan Schafler, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the
capacities
and on the dates stated.
<TABLE>
Signature Capacity Date
<S> <C> <C>
/s/L. Alan Schafler Principal Executive Officer October 6, 1999
- ------------------- Principal Financial Officer
L. Alan Schafler Controller/Director
/s/Erich Schmid Director October 6, 1999
- -------------------
Eerich Schmid
/s/James Yanai Director October 6, 1999
- -------------------
James Yanai
</TABLE>
<PAGE>46
Jody M. Walker
7841 South Garfield Way
Littleton, Colorado 80122
Telephone (303) 850-7637
Facsimile (303) 220-9902
October 6, 1999
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Dear Sirs:
Re: OPINION RE: LEGALITY AND CONSENT OF COUNSEL TO USE OF NAME IN THE
REGISTRATION STATEMENT ON FORM SB-2 OF BIONET TECHNOLOGIES, INC.
I am securities counsel for the above mentioned Company and I have
prepared the amendment to the registration statement on Form SB-2. I
hereby consent to the inclusion and reference to my name in the
Registration Statement on Form SB-2 for BioNet Technologies, Inc..
It is my opinion that the securities of BioNet Technologies, Inc. and
those which are registered with the Securities and Exchange Commission
pursuant to Form SB-2 Registration Statement of BioNet Technologies.
have been legally issued and will be, when sold, legally issued, fully
paid and non-assessable.
Yours very truly,
/s/ Jody M. Walker
---------------------
Jody M. Walker
<PAGE>47
INDEPENDENT AUDITOR'S CONSENT
We do hereby consent to the use of our report dated August 28, 1998 on
the financial statements of BioNet Technologies, Inc. included in
and made part of the registration statement of BioNet Technologies,
Inc. dated October 6, 1999.
October 6, 1999
/s/ James E. Scheifley & Associates, P.C.
Certified Public Accountant
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-END> JUL-31-1999
<CASH> 107,853
<SECURITIES> 138,750
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 11,890
<CURRENT-ASSETS> 258,493
<PP&E> 100,939
<DEPRECIATION> 25,049
<TOTAL-ASSETS> 390,785
<CURRENT-LIABILITIES> 118,947
<BONDS> 0
<COMMON> 9,041
0
0
<OTHER-SE> 262,792
<TOTAL-LIABILITY-AND-EQUITY> 390,785
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 573,330
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (628,317)
<INCOME-TAX> 0
<INCOME-CONTINUING> (628,317)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (628,317)
<EPS-BASIC> (.07)
<EPS-DILUTED> (.07)
</TABLE>
