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EXHIBIT 99.2
This is a form of a material change report required under Section 85(1) of the
Securities Act and Section 151 of the Securities Rules.
FORM 27
SECURITIES ACT
MATERIAL CHANGE REPORT UNDER SECTION 85(1) OF THE ACT
NOTE: This form is intended as a guideline. A letter or other document may be
used if the substantive requirements of this form are complied with.
NOTE: Every report required to be filed under Section 85(1) of the Act shall
be sent to the Commission in an envelope addressed to the Commission
and marked "Continuous Disclosure".
NOTE: WHERE THIS REPORT IS FILED ON A CONFIDENTIAL BASIS PUT AT THE BEGINNING
OF THE REPORT IN BLOCK CAPITALS "CONFIDENTIAL - SECTION 85", AND
EVERYTHING THAT IS REQUIRED TO BE FILED SHALL BE PLACED IN AN ENVELOPE
ADDRESSED TO THE SECRETARY OF THE COMMISSION MARKED "CONFIDENTIAL".
Item 1. Reporting Issuer
WSI Interactive Corp.
Item 2. Date of Material Change
May 31, 2000
Item 3. Press Release
The press release was issued on May 31, 2000 and disseminated through
Canadian Corporate News.
Item 4. Summary of Material Change
WSi Interactive Corporation's 9 month revenues totaled $4.1 million. In
the 3rd quarter of WSi's first year as a public company, revenue
totaled $1.2 million. The year to date net loss of $217,000 is after a
charge for depreciation and amortization of $399,000. Assets grew from
$3.9 million to $8 million during the quarter.
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Item 5 Full Description of Material Change
WSi Interactive Corporation's 9 month revenues totaled $4.1 million. In
the 3rd quarter of WSi's first year as a public company, revenue
totaled $1.2 million. The year to date net loss of $217,000 is after a
charge for depreciation and amortization of $399,000. Assets grew from
$3.9 million to $8 million during the quarter.
With ongoing revenue from WSi's network of online businesses, as well
as revenue from web and marketing service activities, management is
confident that the fiscal year goal of revenue of $6 million will be
met by June 30, 2000. In the direct marketing division, the lottery
project is now fully underway and billings for this project are
expected to be a minimum of $1.5 million for the fourth quarter.
Shareholder Update
Since the beginning of this fiscal year, WSi has grown from less than
20 employees to its current 86 employees and eleven Internet businesses
in various stages of development. Not surprisingly, this rate of growth
was not without some pain.
The last quarter has been pivotal for WSi, and it is beginning to
mature as an organization. Management has recognized the need to ensure
clarity of vision and a culture to support such rapid growth.
Considerable time and effort have been devoted to corporate
restructuring and the creation of an environment that is conducive to
good communication; an environment in which every individual has the
ability to contribute fully to the growth of the organization. As part
of this process, all employees have contributed to the creation of
WSi's vision.
WSi's Vision
WSi will be recognized as the best "total solution" Internet business
incubation partner. WSi will strive to be the leading resource for
Internet entrepreneurs and their companies to find top quality
business, marketing and technological expertise, people and venture
capital.
While WSi is pursuing a strategy of steady profitable growth and
remains focused on the development of proprietary Internet businesses,
it is balancing this work with revenue-generating projects for third
parties.
WSi has spent significant amounts improving its infrastructure. Since
the beginning of the year, $300,000 has been invested in hardware and
software for the web development team. As part of WSi's physical
expansion, there are currently 32 workstations for programmers,
designers and other web development personnel. The production
department now operates as a stand-alone profit center. Approximately
$800,000 of improvements have been made to server hardware,
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strengthening WSi's ability to handle increasing traffic to its
businesses and facilitate WSi's convergence technology strategy.
In April, WSi also became a partner of IBM Canada. This alliance with
IBM allows WSi to take on business projects of virtually unlimited
scope using IBM's software solutions.
In the last quarter, WSi has made investments in Flashcandy.com and
Nurv Media, and formed a joint venture with RG Diamonds Inc. to build
two diamond e-commerce sites. WSi also started a new division, DNS
Media, which is a full-service media streaming solutions company to
service the broadcast markets in the United States and Canada. DNS
Media Inc. intends to launch a broadband video delivery network through
strategic relationships it is currently developing.
Seasoned teams have been assigned to Targetpacks.com,
Healthcreator.com, and the hospitality vertical. WSi plans to find
suitable public vehicles for Healthcreator.com and the hospitality
vertical to raise further development funding. It is anticipated that
investments in convergence technologies, a major priority for WSi, will
benefit the growth of Targetpacks.com.
InvestmentWorldNews.com's debut issue was a success and will continue
to be expanded and published, while at the same time serving to
significantly increase WSi's subscriber database.
The new corporate culture at WSi has also resulted in an increased
awareness of the financial objectives for the various projects WSi has,
and a more stringent process of due diligence has been implemented to
review the steadily increasing flow of Internet businesses and other
opportunities. In light of this new approach to managing growth, WSi's
involvement in certain projects is under review, and in some cases
projects have been terminated.
In March, WSi announced that it was selling its Stocksecrets.com
business to a US public company, Internetfinancialcorp.com, the shares
of which trade on the OTC Bulletin Board market with ticker symbol
"IFAN". It was a condition of the transaction that IFAN would conclude
a US$1 million financing which would be used to develop and run the
Stocksecrets.com business. IFAN has now advised WSi that its previously
announced US$1 million financing is not proceeding. Consequently, WSi
is not going forward with this sale. Despite IFAN's default, the
business of Stocksecrets is moving forward according to plan and
continues to generate revenue. WSi is currently considering alternative
options for the future spin off of Stocksecrets and will announce any
material information at the appropriate time.
Also in March, WSi announced that it had entered into letters of intent
for the exclusive rights to a broadband telecommunications system from
Global Communications Inc. for Washington State and Canada. It was
announced that the transactions were subject to various conditions in
favor of WSi, including due diligence reviews and the entering into
formal license agreements with Global
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Communications. To date, WSi has not received the necessary due
diligence information and no formal license agreements have been
entered into. Consequently, WSi is currently looking for other
opportunities in the broadband and wireless sectors.
In other news, the private placement previously announced on April 25th
at $C2.15 is not proceeding at this time due to the recent volatility
in the market. Walter Maughan has resigned as a director of the
Company. Management of WSi wishes to thank him for his contribution in
this past exciting year.
On behalf of the entire WSi team, we thank you, our shareholders, for
your continued support. We believe your company is taking the necessary
actions to continue our successful growth. We look forward to providing
you with our fourth quarter update and a copy of our first annual
report this fall.
Item 6. Reliance on Section 85(2) of the Act
Nothing in this form is required to be maintained on a confidential
basis.
Item 7. Omitted Information
Not applicable.
Item 8. Senior Officer
James L. Harris, Secretary
Telephone No. (604) 609-3068
Item 9. Statement of Senior Officer
The foregoing accurately discloses the material change referred to
herein.
DATED this 31st day of May, 2000 WSI Interactive Corp.
By: /s/ James L. Harris
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James L. Harris
Secretary
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(Official Capacity)
