<PAGE>
KINETIC VENTURES LTD.
1095 West Pender Street - Suite 850
Vancouver, British Columbia, Canada V6E 2M6
Information Statement Pursuant to Section 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
This Information Statement (the "Information Statement") relates to the
issuance by Kinetic Ventures Ltd., a Delaware corporation (the "Company"),
pursuant to an agreement effective October 30, 1998 (the "Agreement"), of
3,405,622 shares of its common stock (after reflecting a one-for-six reverse
stock split of the Company's outstanding common stock effective on November 25,
1998) in consideration for the purchase of all of the outstanding common stock
of i5ive communications inc., a British Columbia corporation ("i5ive") and the
election, pursuant to the terms of the Agreement, of three persons to the
Company's Board of Directors in replacement of the Company's existing three
Directors who will resign. The purchase by the Company of the outstanding
common stock of i5ive (the "Transaction") is scheduled to be completed on
December 8, 1998, or as soon thereafter as possible. In addition, at or
immediately before the closing of the Transaction, the name of the corporation
will be changed to Suite101.com, Inc., in accordance with the authorization
given by stockholders at the Annual Meeting of Stockholders held on July 14,
1998. No action is required by the stockholders of the Company with respect to
the election of the Directors. Nevertheless, we urge you to read this
Information Statement carefully.
This Information Statement is being mailed on or about November 27, 1998 to
the holders of record of the Company's common stock at the close of business on
November 23, 1998, pursuant to the requirements of Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
adopted thereunder. On November 23, 1998, there were 6,655,622 shares (after
reflecting the one-for-six reverse stock split) of the Company's common stock,
par value $0.001 per share (the "Common Stock") outstanding. Each share is
entitled to one vote.
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS REQUIRED IN
CONNECTION WITH THIS INFORMATION STATEMENT. WE ARE NOT ASKING FOR A PROXY AND
REQUEST THAT YOU NOT SEND US A PROXY.
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THE TRANSACTION
Effective October 30, 1998, the Company entered into a share purchase
agreement with Northfield Capital Corporation and 284085 B.C. Ltd. (herein
collectively referred to as the "Vendors") and i5ive pursuant to which the
Company will purchase and the Vendors will sell all of the issued and
outstanding common shares (the "Shares") of i5ive. Under the terms of the
Agreement, the purchase price for the Shares is the issuance of 3,405,622
shares of Common Stock (after reflecting a one-for-six reverse stock split of
the Company's outstanding shares (the "Reverse Stock Split")*).
The closing of the purchase by the Vendors is subject to the fulfillment of
a number of conditions, including, among others, the filing of a Certificate of
Amendment to the Company's Certificate of Incorporation changing its name to
Suite101.com, Inc., the resignation of the Company's existing three Directors
and the election of Peter L. Bradshaw, President and a Director of i5ive, Julie
M. Bradshaw, Secretary and a Director of i5ive, and Sunny H. Hirai, Chief
Technical Officer and Director of i5ive, or their nominees, as the three members
of the Company's Board of Directors, the mailing of this Information Statement
to the stockholders of the Company within the required time period prior to the
closing the notice required by Rule 14f-1 under Section 14(f) of the Securities
Exchange Act of 1934, as amended, the acquisition by Sunny H. Hirai, Dean
Minamimaye, Jason Pamer and Julie M. Bradshaw, who are management employees of
i5ive, and by Northfield Capital Corporation of an aggregate of 2.5 million
shares* of the Company's currently issued and outstanding Common Stock. The
amendment of the Company's Certificate of Incorporation to change the Company's
name and to effect the Reverse Stock Split was approved by the Company's
stockholders at a meeting held on July 14, 1998.
The closing of the purchase by the Company is subject to the fulfillment
of a number of conditions, including, among others, the forgiveness or
conversion into Shares to be purchased in the transaction of all of the
indebtedness of i5ive to its shareholders and affiliated companies
outstanding as of June 30, 1998 in the amount of up to approximately
(US)$466,500, and auditors independent of i5ive having confirmed to the
Company that i5ive's financial statements required to be filed by the Company
with the Securities and Exchange Commission as required by Item 7(a) of Form
8-K can be prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis and audited for filing
within the required time period.
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* For clarity, all references herein to numbers of shares of Common Stock
are after reflecting the effectuation on November 25, 1998 of a one-for-six
reverse stock split of the Company's outstanding Common Stock that was
approved by stockholders at a meeting held on June 14, 1998.
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The Agreement contains representations and warranties of the Company, the
Vendors and i5ive as are customary in such transactions. The Shares will be
issued to the Vendors in reliance upon the exemption from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon Section 4(2) thereof. Each of the Vendors will represent to
the Company at the closing that it is an "accredited investor" as defined in
Regulation D under the Securities Act, that it is acquiring the Shares for its
own account, not as nominee or agent, and not with a view to the distribution of
the Shares. Reference is made to the Agreement, which is filed as an exhibit to
the Company's Current Report on Form 8-K dated October 30, 1998 filed with the
Securities and Exchange Commission, for the complete terms of the Agreement.
The description herein of the terms of the Agreement is qualified in all
respects by reference to the exhibit.
Effective November 18, 1998, the Company and the Vendors entered into an
amendment to the Agreement which, among other things, provides that the closing
of the Transaction will be held on December 8, 1998, or as soon thereafter as
possible, rather than on or before January 29, 1999 and eliminated the
conditions to the closing which required that the Company had completed the
private sale of securities resulting in the Company having working capital and
net assets of not less than US$3.0 million as of the closing date and that
quotations for the Company's common stock had appeared on the OTC Bulletin Board
for at least five consecutive trading days prior to the closing. It is intended
that promptly after the closing of the Transaction, the Company will make a
private offering of shares of its common stock. It is intended that this
offering will result in the Company having working capital and net assets after
completion of the sale of securities of not less than US$3.0 million. The
securities offered will not be registered under the Securities Act, and may not
be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act.
i5ive is an Internet media company engaged in the creation, operation and
maintenance of a World Wide Web based community for Internet users to express
themselves, share ideas, interests and expertise, and publish content accessible
to other users with common interests. i5ive's community includes its members
who are Internet users who create their own personal Web sites organized
topically into twelve major communities of interest. These communities provide
a context for Web users to publish content and to share experiences and ideas
with other users. i5ive's revenues to date have been insignificant and it has
incurred losses from its operations since inception. The principal office of
i5ive is located in Vancouver, British Columbia, Canada. It is intended that
promptly after the closing of the Transaction, the Company will make available
to its stockholders additional information relating to i5ive, including
financial statements of i5ive.
This Information Statement may contain statements which constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including
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statements regarding the plans, intentions, beliefs and current expectations of
the Company, its directors, or its officers with respect to the future business
activities and operating performance of the Company and its acquisition of
i5ive. Investors are cautioned that any such forward-looking statements are not
guarantees of future business activities or performance and involve risks and
uncertainties, and that the Company's future business activities may differ
materially from those in the forward-looking statements as a result of various
factors, including, among others, the inability of the Company to raise
additional capital and its inability and the inability of the parties to fulfill
the conditions necessary to complete the acquisition of i5ive by the Company.
Additional important factors that could cause such differences are described in
the Company's periodic filings with the Securities and Exchange Commission,
including the Company's annual report on Form 10-KSB, quarterly reports on Form
10-QSB and current reports on Form 8-K.
LEGAL PROCEEDINGS
No Director, officer, affiliate or person known to the Company to be the
record or beneficial owner of in excess of 5% of the shares of the Company's
common stock, or any person known to the Company to be an associate of any of
the foregoing, is a party adverse to the Company or has a material interest
adverse to the Company in any material pending legal proceedings.
ELECTION OF DIRECTORS
The Agreement provides that at the closing of the Transaction, Peter L.
Bradshaw, Julie M. Bradshaw, and Sunny H. Hirai will become the Directors of the
Company. Such persons will constitute all of the members of the Company's Board
of Directors and will serve until the annual meeting of stockholders in 1999 and
their successors are duly elected and qualified. The delivery of this
Information Statement and the election of such persons as Directors are
conditions to the closing of the Transaction.
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I5IVE'S BOARD DESIGNEES
The following table sets forth the name, present principal occupation or
employment, five-year employment history and certain other information
concerning the individuals whom will be elected to the Company's Board of
Directors at the closing of the Transaction. This information was provided to
the Company by i5ive.
<TABLE>
<CAPTION>
NAME AGE EMPLOYMENT HISTORY
- --------------------- -------- ----------------------------------------------
<S> <C> <C>
Peter L. Bradshaw 64 Mr. Bradshaw has been the Chairman of the
Board, chief executive officer and a Director
of i5ive since April 1996. From April 1993
to April 1996, he was a Director of Mobile
Data Solutions, Inc. (MDSI), including
Chairman of the Board from April 1993 to
December 1995. MDSI develops and markets
computer aided mobile (wireless) resource
management software. Its shares of common
stock are traded on the Nasdaq SmallCap
Market. From May 1998 to August 1998, he was
chief executive officer and from July 1997 to
the present, he has been Chairman of the
Board of InStep Mobile Communications, Inc.
(Instep), which also develops and markets
computer aided mobile (wireless) resource
management software. The shares of common
stock of Instep are listed on the Vancouver
Stock Exchange. Commencing in 1992 through
December 1995, he was Chairman of the Board
and chief executive officer of TeleSoft
Mobile Data, Inc., a venture capital firm
investing in enterprises utilizing wireless
data protocol. Mr. Bradshaw has a B.Com.
degree in Commerce and a major in History
from the University of British Columbia. Mr.
Bradshaw is the father of Julie M. Bradshaw.
</TABLE>
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<TABLE>
<CAPTION>
NAME AGE EMPLOYMENT HISTORY
- --------------------- -------- ----------------------------------------------
<S> <C> <C>
Julie M. Bradshaw 35 Ms. Bradshaw has been a Director of i5ive
since April 1996. Prior thereto she attended
the University of Paris, Sorbonne and the
University of British Columbia. In 1992, Ms.
Bradshaw earned her B.A. degree from the
University of British Columbia with a major
in French Literature. Ms. Bradshaw is the
daughter of Peter L. Bradshaw.
Sunny H. Hirai 26 Mr. Hirai has been a Director and the chief
technical officer of i5ive since April 1996.
Prior thereto, he was, from June 1993 to
April 1996, the owner of Salt and Pepper
Graphix, a graphic design group, and from
June 1994 to April 1995 he was the head of
marketing at Artel Educational Resources.
From June 1993 to June 1994, he was engaged
in marketing with Sunny Marketing, Inc., a
seafood brokerage firm. Mr. Hirai is a
graduate from the British Columbia Institute
of Technology, specializing in Small
Business: Marketing Management.
</TABLE>
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<PAGE>
CURRENT DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The Company's Board of Directors currently has three members, elected at
the Company's Annual Meeting of Stockholders held on July 2, 1998. Such
Directors were elected to serve until the Company's next Annual Meeting of
Stockholders, to be held in 1999, and the election and qualification of their
successors.
<TABLE>
<CAPTION>
Name Age
---- ---
<S> <C>
Brian Bayley 44
A. Murray Sinclair, Jr. 37
Jennine M. Ballard 47
</TABLE>
BRIAN BAYLEY has served as Director and President of the Company since
February 1995 and was appointed President in March 1997. He is also President
and director of Quest Management Corp., a private management company.
Previously, Mr. Bayley held the positions of director, President, Chief
Executive Officer, Secretary and Vice-President, Corporate Administration of
Quest Oil & Gas, Inc. (formerly Quest Capital Corporation). Quest Oil & Gas,
Inc. was a publicly-traded oil and gas company whose shares traded on The
Toronto Stock Exchange. On April 22, 1997, substantially all the assets of
Quest Oil & Gas Inc. were acquired by EnerMark Income Fund. Prior to that, he
worked with the Vancouver Stock Exchange and a private management company. Mr.
Bayley holds an MBA from Queen's University, Kingston, Ontario. Mr. Bayley
currently serves as Director of Arlington Ventures Ltd., Belvedere Resources,
Ltd., Brandale Food Services Inc., Brimstone Gold Corp., Ella Resources Inc.,
Gothic Energy Corporation, Greystar Resources Ltd., Leigh Resource Corporation,
Marchwell Capital Corp., Neary Resources Corporation, Neutrino Resources Inc.,
New Candela Resources Ltd., Rhodelta Software, Inc., Roseland Resources Ltd. and
Ventel, Inc.
MR. SINCLAIR was elected a director of the Company on March 21, 1997. He
is also President and a director of Quest Ventures Ltd., a private merchant
banking company. Previously he was Managing Director of Quest Oil & Gas Inc.
(formerly Quest Capital Corporation). Quest Oil & Gas Inc. was a
publicly-traded oil and gas company whose shares traded on The Toronto Stock
Exchange. Prior to that, he was President and director of Noramco Capital
Corp., a private investment company. Mr. Sinclair holds a B.Comm. from Queen's
University, Kingston, Ontario. Mr. Sinclair currently serves as Director of
Arlington Ventures Ltd., Belevedere Resources Ltd., Brandale Food Services Inc.,
Breakwater Resources Ltd., Brimstone Gold Corp., Habanero Resources Inc.,
Magnifoam Technology Inc., Marchwell
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Capital Corp., Neutrino Resources Inc., New Inca Gold Ltd., Roseland Resources
Ltd., RTO Enterprises Inc., Santa Cruz Minerals Inc., Sextant Enterprise Corp.
and Ventel, Inc.
MS. BALLARD was elected a Director of the Company on March 21, 1997. She
has, since April 1994, been employed as a consultant to publicly traded
companies on Canadian securities regulatory matters. From April 1991 to April
1994, she was employed by Quest Capital Corporation (formerly known as Noramco
Mining Corporation) in a corporate administrative capacity.
There is no family relationship between any of the directors or executive
officers of the Company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company's Board of Directors has not appointed either a Compensation
Committee or an Audit Committee. The Board of Directors does not have a
nominating committee.
The Company's Board of Directors held one (1) meeting during the year ended
December 31, 1997.
RELATIONSHIP WITH PUBLIC ACCOUNTANTS
The firm of Raimondo, Pettit & Glassman has been selected to serve as the
independent auditors for the Company for the fiscal year ending December 31,
1998. The Company's former independent accountants, Coopers & Lybrand L.L.P.
("Coopers") resigned from that capacity on November 8, 1996.
The report by Coopers on the financial statements of the Company dated
March 1, 1996, including consolidated balance sheets as of December 31, 1995 and
1994, and the related consolidated statements of operations, cash flows and
statement of stockholders' equity (deficit) for the years then ended did not
contain an adverse opinion or a disclaimer of opinion, and was not qualified or
modified as to uncertainty, audit scope or accounting principles except that the
report contained a going concern qualification.
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The former independent accountants resigned from their position on November
8, 1996. The resignation was not presented to or considered by the Board of
Directors or any audit or similar committee of the Board and, therefore, the
decision was not recommended or approved by the Board or any such committee.
During the period covered by the financial statements through the date of
resignation of the former accountants, there were no disagreements with the
former accountants on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
A letter from the former independent accountants for the Company is
attached as an Exhibit to the Company's Form 10-QSB for the quarter ended
September 30, 1996.
SUBMISSION OF SHAREHOLDERS' PROPOSALS FOR 1999 ANNUAL MEETING
Any proposals which shareholders intend to present for a vote of
shareholders at the Company's 1999 Annual Meeting and which such shareholders
desire to have included in the Company's proxy statement and form of proxy
relating to that meeting must be sent to the Company's executive office and
received by the Company not later than January 29, 1999.
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<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following table sets forth all compensation paid by the Company during
the fiscal year ended December 31, 1997 to the Chief Executive Officers of the
Company who served during any portion of that year. No other executive officer
total annual compensation in such year exceeded $100,000. All dollar amounts
are provided in U.S. dollars.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------
ANNUAL COMPENSATION
--------------------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SARS (#)
- -------------------------------- -------- ------------ ----------- -----------------
<S> <C> <C> <C> <C>
Brian Bayley, President and 1997 -0- -0- -0-
Chief Executive Officer (1)
William J. Worthen, President 1997 $ 37,159 -0- -0-
And Chief Executive 1996 $ 140,000 -0- -0-
Officer (2) 1995 $ 140,000 -0- -0-
</TABLE>
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(1) Mr. Bayley was elected President and Chief Executive Officer of the Company
on March 20, 1997.
(2) Mr. Worth resigned as President and Chief Executive Officer of the Company
on March 20, 1997.
No options were granted or exercised during the year ended December 31,
1997.
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PRINCIPAL STOCKHOLDERS
The following table sets forth, as of November 23, 1998, after reflecting
the one-for-six reverse stock split effective November 25, 1998, both before
reflecting the completion of the Transaction and on a pro forma basis after
reflecting the completion of the Transaction as if the Transaction had been
completed on November 23, 1998, information regarding the beneficial ownership
of the Company's common stock, by (i) each stockholder known by the Company to
be or that will become the beneficial owner of more than 5% of the Company's
outstanding shares of capital stock, (ii) each existing Director and each
Director to be elected, (iii) the Named Executive Officers, and (iv) all
Directors and executive officers of the Company as a group before and after the
Transaction. After the closing of the Transaction, the Company will have
10,061,244 shares of common stock outstanding. The following table does not
reflect the proposed issuance of shares of the Company's common stock in a
proposed private offering to occur subsequent to the closing of the Transaction.
<TABLE>
<CAPTION>
PRO FORMA
BEFORE COMPLETION OF AFTER COMPLETION OF THE
THE TRANSACTION TRANSACTION
---------------------------------------------------------
NUMBER OF NUMBER OF
SHARES PERCENTAGE OF SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING BENEFICIALLY OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OWNED (2) COMMON STOCK OWNED COMMON STOCK
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Brian Bayley (3) 210,262 3.1% 210,262 2.1%
A. Murray Sinclair, Jr. (3) 210,262 3.1% 210,262 2.1%
Peter L. Bradshaw -0- -0- 1,436,565 (4) 14.3%
Julie M. Bradshaw -0- -0- 807,571 8.0%
Sunny Hirai -0- -0- 1,122,068 11.2%
Benitz & Partners Limited (5) 5,000,000 75.0% 2,500,000 24.8%
94 Mount Street - First Floor
London, England W1Y 5H5
Northfield Capital Corporation -0- -0- 2,244,136 22.3%
350 Bay Street - Suite 1100
Toronto, Ontario, Canada M5H 2S6
284085 B.C. Ltd. (4) -0- -0- 1,436,565 14.3%
1122 Mainland Street - Suite 390
Vancouver, BC, Canada V6B 5L1
All officers and directors as a group 210,262 3.1% 3,366,204 33.5%
(3persons)
</TABLE>
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(1) Unless otherwise indicated, the address of such person is c/o the Company.
(2) For purposes of the above table, a person is considered to "beneficially
own" any shares with respect to which he or she exercises sole or shared
voting or investment power or of which he or she has the right to acquire
the beneficial ownership within 60 days following the Record Date.
(3) Consists of 210,262 shares of Common Stock owned by Quest Ventures Ltd. of
which Mr. Sinclair is President and Mr. Bayley is a Director and of which
each holds 50% of the outstanding capital stock.
(4) Shares held by 284085 B.C. Ltd. of which Mr. Bradshaw is an officer,
Director and principal shareholder.
(5) Benitz & Partners Limited is an investment dealer regulated in England by
the Securities and Futures Authority and holds the shares as a portfolio
manager as an agent for accounts fully managed by it. Benitz & Partners
Limited disclaims a beneficial interest in such shares.
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DIRECTOR AND OFFICER SECURITIES REPORTS
U.S. Federal securities laws require the Company's Directors and executive
officers, and persons who own more than ten percent (10%) of a registered class
of the Company's equity securities to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
any equity securities of the Company. Copies of such reports are required to be
furnished to the Company. To the Company's knowledge, based solely on a review
of the copies of such reports and other information furnished to the Company,
all persons subject to these reporting requirements filed the required reports
on a timely basis with respect to the Company's year ended December 31, 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 12, 1997, the Company sold 30,000,000 shares of Common Stock to
clients of Benitz & Partners Limited for an aggregate purchase price of
$211,275. Benitz & Partners Limited is a United Kingdom based investment dealer
and holds the shares of record only as a portfolio manager as an agent for
accounts fully managed by it. The proceeds were used by the Company to pay
outstanding payables and for general corporate purposes. Benitz & Partners
Limited disclaims a beneficial interest in the shares.
On November 13, 1995, the Company sold to Ballard Medical Products
("Ballard") 200,000 shares of Series A Preferred Stock which upon conversion
represented 19.5% of the Company's capital stock for US$2 million. Under the
agreement, Ballard paid to the Company US$500,000 as nonrefundable consideration
for an option to acquire all of the assets of the Company during the 24 month
period following the closing of the sale of the Preferred Stock. On February 28,
1997, the Company received notice from a wholly owned subsidiary of Ballard of
Ballard's exercise of the option and on March 20, 1997, the sale of
substantially all the Company's assets to Ballard was completed. The purchase
price for the assets was $4,245,422, plus an adjustment for prepaid rent of
$2,233. Deducted from the purchase price were the $500,000 consideration paid
for the option under the option, $198,631 of liabilities assumed, $3,671,471
principal and interest owing by the Company to Ballard and liquid assets of
$11,695, or a net purchase price deficiency of $134,142. The Company's 200,000
shares of Series A Preferred Stock were redeemed and retired. The deficiency of
$134,142 in the payment of the purchase price is represented by the Company's
promissory note due on demand which was assigned to a third party and paid
subsequent to December 31, 1997. The Company agreed to indemnify Ballard
against certain losses in connection with the transaction.
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The agreement with Ballard also provided for a line of credit up to
$500,000 commencing eight months after the closing of the sale of Preferred
Stock to finance operating expenses. The commencement date for this line of
credit anticipated an eight month period beginning in July 1995 when the
agreement was signed. The agreement was approved by shareholders in November
1995, four months later. The Company began borrowings against this credit
facility in January 1996 and as of March 20, 1997 the Company has borrowed
$500,000 and an additional $3,040,000 in addition to the line of credit for a
total of $3,540,000.
Under the agreement with Ballard two nominees of Ballard served on the
Company's Board of Directors through March 20, 1997, and the Company's conduct
of its business was subject to certain restrictions, during the option term. Mr.
Harold Wolcott and Kenneth Sorenson joined the Board as Ballard's nominees and
resigned on March 20, 1997.
By Order of the Board of Directors,
Kinetic Ventures Ltd.
By: /s/ Sandra Lee
----------------------------------------------
Sandra Lee, Secretary
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