U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4/A
(Amendment No. 2)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TheInternetCorp.net, Inc.
(Name of Small Business Issuer in its charter)
Nevada 454390 88-0424430
(State or jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization Industrial Identification No.)
Classification Code
Number)
3158 Redhill Avenue, Suite 240, Costa Mesa, California 92626;
(949) 770-2578
(Address and telephone number of Registrant's principal
executive offices and principal place of business)
Brian F. Faulkner, Esq., 3900 Birch Street, Suite 113, Newport
Beach, California 92660 (949) 975-0544
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
number of the earlier effective registration statement for the same
offering.
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
each class registered maximum maximum registration
of offering aggregate
securities price per offering
to be unit price
Common stock 14,670,000 $0.016 $234,720 $66.08
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Pursuant to SEC Rule 416, there will be a change in the amount of
securities being issued to prevent dilution resulting from stock
splits, stock dividends, or similar transaction.
The Offering Price is used solely for purposes of estimating the
registration fee pursuant to Rules 457(f) and 457(g) promulgated
under the Securities Act of 1933.
PROSPECTUS
TheInternetCorp.net, Inc.
14,670,000 Shares
common stock
TheInternetCorp.net, Inc., a Nevada corporation, is hereby
offering 14,660,000 shares of its $0.001 par value common stock
on a delayed basis under Rule 415 pursuant to the terms of this
Prospectus for the purpose of registering all the outstanding
shares of TheInternetCorp.net, Inc., as well as shares underlying
warrants to purchase 2,000,000 of TheInternetCorp.net, Inc.'s
common stock, all in connection with the acquisition of Cycle-
Parts.com, Inc. by TheInternetCorp.net, Inc. A selling
shareholder of TheInternetCorp.net, Inc. is also offering 10,000
of his shares under this offering.
The Shares offered hereby are highly speculative and involve a
high degree of risk to public investors and should be purchased
only by persons who can afford to lose their entire investment
(See "Risk Factors" on page 5).
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities, or passed upon the adequacy or accuracy of the
prospectus. Any representation to the contrary is a criminal
offense.
Information contained herein is subject to completion or
amendment. The registration statement relating to the securities
has been filed with the Securities and Exchange Commission. The
securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective.
This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
Subject to Completion, Dated ________________, 1999
Table of Contents
Part I - Information Required in the Prospectus
A. Information about the Transaction
Prospectus Summary 1
Risk Factors 3
Terms of the Transaction 10
Pro Forma Financial Information 11
Material Contracts with the Company Being Acquired 12
Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters 13
Interests of Named Experts and Counsel 14
Disclosure of Commission Postion on Indemnification
for Securities Act Liabilities 15
B. Information about the Registrant 18
C. Information about the Company Being Acquired 18
D. Voting and Management Information 30
Part II - Information not Required in the Prospectus
Indemnification of Officers and Directors 32
Exhibits and Financial Statement Schedules 33
Undertakings 34
The shares are offered by TheInternetCorp.net, Inc. are subject
to prior sale, acceptance of the subscriptions by the company and
approval of certain legal matters by counsel to the company.
This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy the shares in a state in which,
or to a person who, it is unlawful to make such offer or
solicitation. Neither the delivery of this prospectus nor any
sale hereunder shall under any circumstances imply that there has
been no change in the information contained herein subsequent to
the date thereof. However, if a material change occurs, this
Prospectus will be amended or supplemented accordingly.
This Prospectus does not intentionally omit any material fact or
contain any untrue statement of material fact. You should rely
only on the information contained in this document or that the
company has referred you to. TheInternetCorp.net, Inc. has not
authorized anyone to provide you with information that is
different.
TheInternetCorp.net, Inc. is a reporting company. Each person
who receives a Prospectus will have an opportunity to meet with
representatives of the company, during normal business hours upon
written or oral request to the company, in order to verify any of
the information included in this prospectus and to obtain
additional information regarding the company. In addition, each
such person will be provided without charge, upon written or oral
request, a copy of any of the information that is incorporated by
reference in the prospectus and the address (including title or
department) and telephone number to which such request is to be
directed.
All offerees and subscribers will be asked to acknowledge in
writing that they have read this Prospectus carefully and
thoroughly, and understood the contents thereof; they were given
the opportunity to obtain additional information; and they did so
to their satisfaction.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by detailed
information appearing elsewhere in this Prospectus. Each
prospective investor is urged to read this Prospectus, and the
attached Exhibits, in their entirety.
The Companies to be Merged.
TheInternetCorp.net, Inc. was organized under the laws of the
State of Nevada on April 28, 1999. TheInternetCorp.net, Inc.'s
principal executive offices are located at 3158 Redhill Avenue,
Suite 240, Costa Mesa, California 92626; its telephone number is
(949) 770-2578. Since inception, the primary activity of
TheInternetCorp.net, Inc. has been directed to organizational
efforts. TheInternetCorp.net, Inc. was formed as a vehicle to
acquire a private company desiring to become an SEC reporting
company in order thereafter to secure a listing on the Over the
Counter Bulletin Board.
The company to be acquired is Cycle-Parts.com, Inc., which was
incorporated in the State of Florida on March 15, 1999. Cycle-
Part's executive offices are located at 2950 S.W. Archer Road,
Suite C, Gainesville, Florida 32608; its telephone number is
(352) 378-2274. On March 16, 1999, Cycle-Parts.com, Inc.
acquired the domain name Cycle-Parts.com, the website and related
software for the on-line e-commerce motorcycle parts sales
business. Cycle-Parts.com, Inc. sells original manufacturer
equipment motorcycle parts exclusively through the internet.
The Offering.
TheInternetCorp.net, Inc. has entered into an Agreement and
Plan of Reorganization with Cycle-Parts.com, Inc. At some time
after the effective date of this Registration Statement, Cycle-
Parts.com, Inc. is to be acquired by TheInternetCorp.net, Inc. in
an exchange of shares with Cycle-Parts.com, Inc., which will
become a wholly owned subsidiary of TheInternetCorp.net, Inc. (he
shareholders of TheInternetCorp.net, Inc. and Cycle-Parts.com,
Inc. will vote on this Reorganization at a special meeting at a
time and place to be determined).
This reorganization requires Company to issue 12,660,000 shares
of common stock, $.001 par value, to the existing shareholders of
Cycle-Parts.com, Inc. for 12,660,000 shares of common stock of
Cycle-Parts.com, Inc., $0.01 par value. In addition,
TheInternetCorp.net, Inc. will issue a warrant to purchase
2,000,000 shares of TheInternetCorp.net, Inc.'s common stock at
an exercise price of $0.10 per share to existing warrantholders
of Cycle-Parts.com, Inc. to replace the existing warrant
previously under the same terms issued by Cycle-Parts.com, Inc.,
which will be cancelled.
There are 1,000,000 common shares of TheInternetCorp.net, Inc.
outstanding prior to the effective date of the Reorganization
Agreement, owned by Vincent van den Brink, the current sole
officer and director of this company. Thereafter,
TheInternetCorp.net, Inc. will a 100 to 1 reverse split, which
will result in the sole shareholder of TheInternetCorp.net, Inc.
holding 10,000 shares. These shares will be registered by this
selling shareholder under this offering. This shareholder will
own 10,000 shares of TheInternetCopr.net, Inc. after this
offering. After the offering, there will be a total of
12,670,000 shares of common stock of TheInternetCorp.net, Inc.
issued and outstanding, and another 2,000,000 shares registered
and available for the exercise of the warrants.
RISK FACTORS
The securities offered hereby are highly speculative in nature
and involve a high degree of risk. they should be purchased only
by persons who can afford to lose their entire investment.
therefore, each prospective investor should, prior to purchase,
consider very carefully the following risk factors among other
things, as well as all other information set forth in this
Prospectus.
Losses Have Been Incurred Since Inception.
TheInternetCorp.net, Inc. is in its initial stages of development
with no revenues or income and is subject to all the risks
inherent in the creation of a new business. Since
TheInternetCorp.net, Inc.'s principal activities to date have
been limited to organizational activities and prospect
development, it has no record of any revenue-producing
operations. Consequently, there is no operating history upon
which to base an assumption that TheInternetCorp.net, Inc. will
be able to achieve its business plans. In addition,
TheInternetCorp.net, Inc. has only limited assets. As a result,
there can be no assurance that TheInternetCorp.net, Inc. will
generate significant revenues in the future; and there can be no
assurance that TheInternetCorp.net, Inc. will operate at a
profitable level. If TheInternetCorp.net, Inc. is unable to
obtain customers and generate sufficient revenues so that it can
profitably operate, TheInternetCorp.net, Inc.'s business will not
succeed.
Although the firm to be acquired by TheInternetCorp.net,
Inc. does have an operating and financial history, it is limited.
Therefore, this firm may not be able to generate sufficient
revenues for TheInternetCorp.net, Inc. to make it successful.
Available Funds Not Adequate for Company to be Competitive.
The funds available to TheInternetCorp.net, Inc. from its
principals will not be adequate for it to be competitive in the
areas in which it intends to operate. Therefore,
TheInternetCorp.net, Inc. will need to raise additional funds in
order to implement its business plan. TheInternetCorp.net,
Inc.'s continued operations therefore will depend upon its
ability to raise additional funds through bank borrowings, equity
or debt financing, or asset sales. There is no assurance that
TheInternetCorp.net, Inc. will be able to obtain additional
funding when needed, or that such funding, if available, can be
obtained on terms acceptable to TheInternetCorp.net, Inc.. If
TheInternetCorp.net, Inc. cannot obtain needed funds, it may be
forced to curtail or cease its activities. If additional shares
were issued to obtain financing, current shareholders may suffer
a dilutive effect on their percentage of stock ownership in
TheInternetCorp.net, Inc..
Control of TheInternetCorp.net, Inc. by Officers and Directors.
TheInternetCorp.net, Inc.'s officers and directors,
after the acquisition is completed, will beneficially own,
directly or indirectly, approximately 44% of the outstanding
shares of TheInternetCorp.net, Inc.'s common stock. As a result,
such persons, acting together, have the ability to exercise
significant influence over all matters requiring stockholder
approval. Accordingly, it could be difficult for the investors
hereunder to effectuate control over the affairs of
TheInternetCorp.net, Inc. Therefore, it should be assumed that
the officers, directors, and principal common shareholders who
control the majority of voting rights will be able, by virtue of
their stock holdings, to control the affairs and policies of
TheInternetCorp.net, Inc..
Limitations on Liability, and Indemnification, of Directors and
Officers.
TheInternetCorp.net, Inc.'s articles of incorporation
include provisions to eliminate, to the fullest extent permitted
by the Nevada Revised Statutes as in effect from time to time,
the personal liability of directors of TheInternetCorp.net, Inc.
for monetary damages arising from a breach of their fiduciary
duties as directors. The articles of incorporation and bylaws
also include provisions to the effect that TheInternetCorp.net,
Inc. may, to the maximum extent permitted from time to time under
applicable law, indemnify any director or officer for any amounts
which he becomes legally obligated to pay in connection with any
claim against him based upon any action or inaction which he may
commit, omit or suffer while acting in his capacity as a director
and/or officer of TheInternetCorp.net, Inc. Such limitation of
liability and indemnification may result in TheInternetCorp.net,
Inc. paying significant sums based on the actions of its officer
and directors, and the company may not have a recourse against
these individuals.
Potential Status as a Pseudo California Corporation.
Section 2115 of the California General Corporation Law
subjects certain foreign corporations doing business in
California to various substantive provisions of the California
General Corporation Law in the event that the average of its
property, payroll and sales is more than 50% in California and
more than one-half of its outstanding voting securities are held
of record by persons residing in the State of California. Some
of the substantive provisions include laws relating to annual
election of directors, removal of directors without cause,
removal of directors by court proceedings, indemnification of
officers and directors, directors standard of care and liability
of directors for unlawful distributions. The aforesaid Section
does not apply to any corporation which, among other things, has
outstanding securities designated as qualified for trading as a
national market security on NASDAQ if such corporation has at
least eight hundred holders of its equity securities as of the
record date of its most recent annual meeting of shareholders.
It is currently anticipated that TheInternetCorp.net, Inc. may be
subject to Section 2115 of the California General Corporation Law
which, in addition to other areas of the law, will subject
TheInternetCorp.net, Inc. to Section 708 of the California
General Corporation Law which mandates that shareholders have the
right of cumulative voting at the election of directors.
No Public Market for Company's Securities.
Prior to the filing of this Registration Statement, no public
trading market existed for the common stock of
TheInternetCorp.net, Inc. There can be no assurances that a
public trading market for the common stock will develop or that a
public trading market, if developed, will be sustained. If an
active trading market does in fact develop for the common
stock, there can be no assurance that it will be maintained. If
for any reason public trading market does not develop, holders of
such securities may have difficulty in selling their securities
should they desire to do so.
Penny Stock Regulations.
In view of the fact that no broker will be involved in the
Offering, it is likely to be difficult to find a broker who is
willing to make an active market in the stock. The SEC has
adopted regulations which generally define "penny stock" to be
any equity security that has a market price less than $5.00 per
share. TheInternetCorp.net, Inc.'s shares will become subject to
rules that impose additional sales practice requirements on
broker-dealers who sell penny stocks to persons other than
established customers and accredited investors (generally those
with assets in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse). For
transactions covered by these rules, broker-dealers must make a
special suitability determination for the purpose of such
securities and must have received the purchaser's written consent
to the transaction prior to the purchase.
Additionally, for any transaction effected involving a penny
stock, unless exempt, the rules require the delivery, prior to
the transaction, of a disclosure schedule prepared by the SEC
relating to the penny stock market. A broker-dealer also must
disclose the commissions payable to both the broker-dealer and
the registered representative, and current quotations for the
securities. Finally, monthly statements must be sent disclosing
recent price information for the penny stock held in the account
and information on the limited market in penny stocks.
Consequently, these rules may restrict the ability of broker-
dealers to sell TheInternetCorp.net, Inc.'s Shares and may affect
the ability of purchasers in this offering to sell the Shares in
the secondary market. There is no assurance that a market will
develop for TheInternetCorp.net, Inc.'s Shares.
Failure to Obtain or Maintain a Market Maker Could Affect
Liquidity of the Common Stock.
TheInternetCorp.net, Inc. is seeking National
Association of Securities Dealers, Inc. member broker/dealers to
be authorized market makers for its common stock. If
TheInternetCorp.net, Inc. is unable to obtain market makers for
the common stock or, once obtained, unable to maintain such
market makers, the liquidity of the common stock could be
impaired, not only in the number of shares of common stock which
could be bought and sold, but also through possible delays in the
timing of transactions, and lower prices for the common stock
than might otherwise prevail. Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares
of the common stock on any secondary market. There can be no
assurance TheInternetCorp.net, Inc. will be able to obtain market
makers for the common stock or, once obtained, be able to
maintain such market makers.
No Tax Opinion Provided.
An opinion of tax counsel will not be provided to shareholders in
connection with the transaction discussed in this Prospectus.
Therefore, TheInternetCorp.net, Inc. urges shareholders to
consult their own tax advisor concerning the effect of the
acquisition upon them, including the effect of any state, local
or other tax to which they may be subject.
Uncertainty Due to Year 2000 Problem.
The Year 2000 issue arises because many computerized systems
use two digits rather than four to identify a year. Date
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using the year
2000 date is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent
something other than a date. The effects of the Year 2000 issue
may be experienced before, on, or after January 1, 2000, and if
not addressed, the impact on operations and financial reporting
may range from minor errors to significant system failure which
could affect TheInternetCorp.net, Inc.'s ability to conduct normal
business operations. This creates potential risk for all
companies, even if their own computer systems are Year 2000
compliant. It is not possible to be certain that all aspects of
the Year 2000 issue affecting TheInternetCorp.net, Inc., including
those related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.
TheInternetCorp.net, Inc. currently believes that its systems are
Year 2000 compliant in all material respects. Although
management is not aware of any material operational issues or
costs associated with preparing its internal systems for the Year
2000, TheInternetCorp.net, Inc. may experience serious
unanticipated negative consequences (such as significant
downtime for one or more of its web site properties) or material
costs caused by undetected errors or defects in the technology
used in its internal systems. TheInternetCorp.net, Inc.'s Year
2000 plans are based on management's best estimates.
TERMS OF TRANSACTION
The Transaction.
In accordance with the Reorganization Agreement (which will be
attached to the Proxy Statement to be forwarded to all
shareholder in connection with meeting to vote on the merger in
question), on its effective date (when Articles of Exchange are
filed with the Nevada Secretary of State), the officers and
directors of TheInternetCorp.net, Inc. shall resign, and will be
replaced by Karen Bohringer, Terry Cuthbertson, and Gerald I.
Quinn, who will remain as officers and directors of both Cycle-
Parts.com, Inc. and TheInternetCorp.net, Inc.
This reorganization requires TheInternetCorp.net, Inc. to issue
12,660,000 shares of common stock, $.001 par value, to the
existing shareholders of Cycle-Parts.com, Inc. for 12,660,000
shares of common stock of Cycle-Parts.com, Inc., $0.01 par value.
In addition, TheInternetCorp.net, Inc. will issue a warrant to
purchase 2,000,000 shares of TheInternetCorp.net, Inc. common
stock at an exercise price of $0.10 per share to existing
warrantholders of Cycle-Parts.com, Inc. to replace the existing
warrant previously under the same terms issued by Cycle-
Parts.com, Inc., which will be cancelled (five year warrants
granted to Wizard Financial Services, Inc., Stevens & Lee Inv.
Co., Ltd., Terry Cuthbertson, and Gerry I. Quinn (500,000 each)).
This warrants are to be issued under the exemption from the
registration requirements of Section 5 of the Securities Act of
1933 as provided by Rule 506 of Regulation D under Section 4(2)
of that act in that they were offered and sold only to
sophisticated investors.
There are 1,000,000 common shares of TheInternetCorp.net, Inc.
outstanding prior to the effective date of the Reorganization
Agreement, owned by Vincent van den Brink, the current sole
officer and director of this company. Thereafter,
TheInternetCorp.net, Inc. will a 100 to 1 reverse split, which
will result in the sole shareholder of TheInternetCorp.net, Inc.
holding 10,000 shares. These shares will be registered by this
selling shareholder under this offering. This shareholder will
own 10,000 shares of TheInternetCopr.net, Inc. after this
offering. After the offering, there will be a total of
12,670,000 shares of common stock of TheInternetCorp.net, Inc.
issued and outstanding, and another 2,000,000 shares registered
and available for the exercise of the warrants.
Reasons for the Acquisition.
TheInternetCorp.net, Inc. is engaging in this transaction so that
it can acquire and operate an on-going company with an
established reputation. Cycle-Parts.com, Inc. is engaging in
this transaction so that it shareholders can obtain free trading
shares in TheInternetCorp.net, Inc. and hopefully increase the
value of their shares in the future.
Conditions to Consummation of the Acquisition.
The acquisition will not be completed unless, among other things,
the following conditions are satisfied or, if allowed by law,
waived:
The acquisition is approved by the requisite vote of shareholders
of Cycle-Parts.com, Inc.
None of the parties to the Reorganization Agreement is subject to
any decree, order or injunction that prohibits the consummation
of the acquisition
TheInternetCorp.net, Inc. shares to be issued pursuant to the
acquisition are authorized for listing on the Over the Counter
Bulletin Board, subject to official notice of issuance.
Amendment or Termination.
If the closing of the acquisition has not occurred by December
31, 1999, subject to a 30 day extension by Cycle-Parts.com, Inc.,
any of the parties may terminate this Agreement at any time by
giving written notice of termination. However, such notice
cannot be given is this party has willfully or materially
breached any of the terms and conditions. Under certain
circumstances the Reorganization Agreement may be canceled prior
to this time. In addition, the Reorganization Agreement cannot
be changed except by written agreement duly executed by all of
the parties.
Effective Time.
TheInternetCorp.net, Inc. anticipates that the acquisition will
become effective promptly following the special meeting, as
discussed above. The acquisition, if approved by Cycle-
Parts.com, Inc. shareholders and not terminated by its Board of
Directors, will become effective upon the filing of Articles of
Exchange with the Nevada Secretary of State, unless a later
effective time is specified in this filing.
Required Vote.
A special meeting of the shareholders of TheInternetCorp.net,
Inc. and Cycle-Parts.com, Inc. will be held at a time and place
to be determined. The purpose of this meeting will be to
consider and vote upon:
A proposal to adopt the Reorganization attached as Schedule A to
this Prospectus ("Reorganization Agreement") providing for Cycle-
Parts.com, Inc. to become a wholly owned subsidiary of
TheInternetCorp.net, Inc., and the issuance to Cycle-Parts.com,
Inc. shareholders of one share of the common stock of
TheInternetCorp.net, Inc. for each share of Cycle-Parts.com, Inc.
common stock (totaling 12,660,000)
For the election of new officers and directors of
TheInternetCorp.net, Inc.
Any other matters that may properly come before the special
meeting.
The affirmative vote of the holders of a majority of the
outstanding shares of TheInternetCorp.net, Inc. and Cycle-
Parts.com, Inc. common stock entitled to vote thereon is required
to adopt the Reorganization Agreement. All shares of
TheInternetCorp.net, Inc. and Cycle-Parts.com, Inc. common stock
represented at the special meeting by properly executed proxies
received prior to or at the special meeting, and not revoked,
will be voted in accordance with the instructions indicated on
such proxies. If no instructions are indicated, such proxies
will be voted for the adoption of the Reorganization Agreement.
Any proxy given may be revoked by the person giving it at any
time, without affecting any vote previously taken, by:
Giving notice to the Secretary of Cycle-Parts.com, Inc. in
writing or in open meeting
Duly executing a later dated proxy relating to the same shares
and delivering it to the Secretary of Cycle-Parts.com, Inc.
before the taking of the vote at the special meeting.
Any written notice of revocation or subsequent proxy should be
sent and delivered to Cycle-Parts.com, Inc., Attention:
Secretary, or hand delivered to the Corporate Secretary at or
before the taking of the vote at the special meeting.
Federal Income Tax Consequences and Accounting Treatment.
The reorganization contemplated by the Reorganization Agreement
is intended to qualify as a tax-free reorganization, as
contemplated by Section 368(A) of the Internal Revenue Code of
1986, as amended.
Shareholders of Cycle-Parts.com, Inc. will not, under Section 354
of the Internal Revenue Code, recognize gain or loss when they
receive shares of TheInternetCorp.net, Inc.'s common stock in
exchange for an equal number of shares of Cycle-Parts.com, Inc.'s
common stock in the acquisition; a stockholder's aggregate basis
of the shares in TheInternetCorp.net, Inc. common stock received
in the acquisition will be the same as the aggregate basis of the
shares of Cycle-Parts.com, Inc.'s common stock surrendered in
exchange for those shares. A stockholder's holding period in the
shares of TheInternetCorp.net, Inc.'s common stock received in
the acquisition will include the holding period of the shares of
Cycle-Parts.com, Inc. common stock surrendered in exchange for
those shares, provided that such stockholder holds those shares
of Cycle-Parts.com, Inc.' common stock as capital assets when the
acquisition occurs.
TheInternetCorp.net, Inc. believes that the foregoing addresses
the material United States federal income tax consequences of the
acquisition to shareholders. The opinion is based upon the Code,
applicable Treasury Regulations, judicial decisions and current
administrative rulings, all of which are subject to change with
retroactive effect.
The tax consequences to shareholders of the acquisition may be
affected by their particular circumstances and by the
applicability to them of one or more special rules like those
which apply to dealers in securities, foreign persons, mutual
funds, insurance companies and persons who do not hold their
shares as capital assets. Therefore, TheInternetCorp.net, Inc.
urges shareholders to consult their own tax advisor concerning
the effect of the acquisition upon them, including the effect of
any state, local or other tax to which they may be subject. An
opinion of tax counsel will not be provided to shareholders in
connection with this Registration Statement.
Comparative Rights of Shareholders.
When the acquisition is completed, the rights of shareholders of
Cycle-Parts.com, Inc. will be governed by TheInternetCorp.net,
Inc.'s certificate of incorporation and bylaws and the Nevada
Revised Statutes. Shareholders should consider the following
comparison of the Nevada Revised Statutes and
TheInternetCorp.net, Inc.'s articles of incorporation and bylaws,
on the one hand, and the 1999 Florida Statutes and Cycle-
Parts.com, Inc.' existing articles of incorporation and bylaws,
on the other. This comparison is not intended to be complete and
is qualified in its entirety by reference to the Nevada Revised
Statutes and TheInternetCorp.net, Inc.'s articles of
incorporation and bylaws and the 1999 Florida Statutes and Cycle-
Parts.com, Inc.'s articles of incorporation and bylaws.
TheInternetCorp.net, Inc.'s articles of incorporation and its
bylaws are available for inspection and copying upon request by
any shareholder. Cycle-Parts.com, Inc.'s existing articles of
incorporation and bylaws are also available for inspection and
copying upon request by any shareholder. The Nevada Revised
Statutes and TheInternetCorp.net, Inc.'s articles of
incorporation and bylaws contain provisions that could have an
anti-takeover effect. The provisions included in
TheInternetCorp.net, Inc.'s articles of incorporation and bylaws
are intended to enhance the likelihood of continuity and
stability in the composition of the board of directors and in the
policies formulated by the board of directors and to discourage
transactions that may involve an actual or threatened change of
control of TheInternetCorp.net, Inc. that the Board of Directors
does not believe is in the best interests of shareholders.
Under both the Nevada Revised Statutes and the 1999 Florida
Statutes, a shareholder of a corporation participating in an
acquisition may receive cash in the amount of the fair market
value of his shares, as determined by a court, in lieu of the
consideration he would otherwise receive in the acquisition,
unless the transaction falls within a specified exception.
Neither the Nevada Revised Statutes nor the 1999 Florida Statutes
requires that dissenters' rights of appraisal be afforded to
shareholders with respect to an exchange by a corporation if its
shares are either listed on a national securities exchange or
designated as a national market security on an interdealer
quotation system by the National Association of Securities
Dealers, Inc. or held by at least 2,000 shareholders, if the
shareholders of the corporation receive only shares of the
surviving corporation or of a corporation so listed or widely
held; those shareholders who are the shareholders of a
corporation surviving an acquisition if no vote of those
shareholders is required, as set forth above. A corporation's
articles of incorporation may provide that these exceptions to
dissenters' rights of appraisal do not apply to that corporation.
Cycle-Parts.com, Inc. has not made such provision in its
articles of incorporation, whereas TheInternetCorp.net, Inc. has
in its articles of incorporation provisions that to the maximum
extent permissible under the Nevada Revised Statutes,
shareholders are entitled to the statutory appraisal rights
provided with respect to any business combination involving the
corporation and any shareholder (or any affiliate or associate of
any shareholder), which requires the affirmative vote of the
shareholders.
Under the Nevada Revised Statutes and the 1999 Florida Statutes,
unless the articles of incorporation of a corporation otherwise
provides, amendments of its articles of incorporation generally
require the approval of the holders of a majority of the
outstanding stock entitled to vote on the amendment, and if the
amendment would increase or decrease the number of authorized
shares of any class or series or the par value of shares of that
class or series or would adversely affect the rights, powers or
preferences of that class or series, a majority of the
outstanding stock of that class or series also would be required
to approve the amendment.
Under the 1999 Florida Statutes, directors can amend the bylaws
of a corporation, unless
The articles of incorporation or this act reserves the power to
amend the bylaws generally or a particular bylaw provision
exclusively to the shareholders
The shareholders, in amending or repealing the bylaws generally
or a particular bylaw provision, provide expressly that the board
of directors may not amend or repeal the bylaws or that bylaw
provision.
In contrast, under Nevada Revised Statutes the directors are free
to amend the bylaws. Under both the 1999 Florida Statutes and
the Nevada Revised Statutes, a corporation's shareholders may
amend or repeal the corporation's bylaws even though the bylaws
may also be amended or repealed by its board of directors.
Under the Nevada Revised Statutes and the 1999 Florida Statutes,
a special meeting of shareholders can be called by the
corporation's board of directors or by any person or persons as
may be authorized by the corporation's articles of incorporation
or bylaws. Under TheInternetCorp.net, Inc.'s bylaws special
meetings of the shareholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the President
or by the Board of Directors, and shall be called by the
President at the request of the holders of not less than ten
percent (10%) of all the outstanding shares of the Corporation
entitled to vote at the meeting. Under Cycle-Parts.com, Inc.'
bylaws the difference is that the special meeting may be called
only by a majority in interest of the shareholders.
Both the Nevada Revised Statutes and the 1999 Florida Statutes
permit corporate action without a meeting of shareholders upon
the written consent of the holders of that number of shares
necessary to authorize the proposed corporate action being taken,
unless the certificate of incorporation or bylaws expressly
provide otherwise. If proposed corporate action is taken without
a meeting by less than the unanimous written consent of
shareholders, the 1999 Florida Statutes requires that prompt
notice of the taking of the action be sent to those shareholders
who have not consented in writing (the Nevada Revised Statutes
does not requires this). TheInternetCorp.net, Inc.'s bylaws
provide that unanimous consent of the shareholders must be given.
The bylaws of Cycle-Parts.com, Inc. provide that the number of
directors shall be determined by the shareholders at the annual
meeting (no set number given); TheInternetCorp.net, Inc.'s bylaws
specify not less than one. As of the date of this Prospectus, the
board of directors of both TheInternetCorp.net, Inc. and Cycle-
Parts.com, Inc. consisted of one person. Under both bylaws, the
directors are to serve until the next annual meeting of the
shareholders.
No holder of TheInternetCorp.net, Inc.'s common stock or Cycle-
Parts.com, Inc. common stock has the right to vote cumulatively
in the election of directors.
Under the 1999 Florida Statutes, any director or the entire board
of directors may be removed, with or without cause, by the
holders of a majority of the shares entitled to vote in an
election of directors unless provided otherwise by the
corporation's articles of incorporation. Under the Nevada Revised
Statutes, any director may be removed by the vote of shareholders
representing not less than two-thirds of the voting power
entitled to vote. The bylaws of Cycle-Parts.com, Inc. follow the
provisions in the 1999 Florida Statutes; TheInternetCorp.net,
Inc.'s bylaws are silent on the removal of directors, therefore
the Nevada Revised Statutes would control. Under both
TheInternetCorp.net, Inc. and Cycle-Parts.com, Inc. bylaws, newly
created directorships resulting from any increase in the number
of directors or any vacancies on the board of directors may be
filled by the affirmative vote of a majority of the directors
then in office. In addition, both bylaws provide that the
directors elected to fill vacancies on the board of directors
will hold office until the annual meeting of the shareholders.
The Nevada Revised Statutes and the 1999 Florida Statutes both
have provisions and limitations regarding directors' liability.
The Nevada Revised Statutes and the 1999 Florida Statutes permit
a corporation to include in its articles of incorporation a
provision that eliminates or limits the personal liability of a
director to the corporation or its shareholders for monetary
damages for breach of fiduciary duties as a director. However,
under the 1999 Florida Statutes this provision may not eliminate
or limit the liability of a director:
If the director breached or failed to perform his or her duties
as a director
The director's breach of, or failure to perform, those duties
constitutes:
A violation of the criminal law, unless the director had
reasonable cause to believe his or her conduct was lawful or had
no reasonable cause to believe his or her conduct was unlawful
A transaction from which the director derived an improper
personal benefit, either directly or indirectly
A circumstance under which the liability provisions of Section
607.0834 (unlawful distributions) are applicable
In a proceeding by or in the right of the corporation to procure
a judgment in its favor or by or in the right of a shareholder,
conscious disregard for the best interest of the corporation, or
willful misconduct
In a proceeding by or in the right of someone other than the
corporation or a shareholder, recklessness or an act or omission
which was committed in bad faith or with malicious purpose or in
a manner exhibiting wanton and willful disregard of human rights,
safety, or property.
Under the Nevada Revised Statutes, the limitation of liability is
for other than acts or omissions which involve intentional
misconduct, fraud, or a knowing violation of law, or unlawful
distributions. The articles of incorporation of
TheInternetCorp.net, Inc. contains provisions which follow the
Nevada Revised Statutes; the articles of incorporation of Cycle-
Parts.com, Inc. are silent on this matter. While these
provisions provide directors with protection from awards for
monetary damages for breaches of their duty of care, it does not
eliminate that duty. Accordingly, these provisions have no
effect on the availability of equitable remedies like an
injunction or rescission based on a director's breach of his duty
of care. These provisions apply to an officer only if he/she is
also a director and is acting in the capacity as a director, and
does not apply to officers who are not directors.
Both the Nevada Revised Statutes and the 1999 Florida Statutes
generally permit a corporation to indemnify its directors and
officers against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with a
third-party action, other than a derivative action, and against
expenses actually and reasonably incurred in the defense or
settlement of a derivative action, provided that there is a
determination that the individual acted in good faith and in a
manner reasonably believed to be in or not opposed to the best
interests of the corporation. That determination must be made, in
the case of an individual who is a director or officer at the
time of the determination: By a majority of the disinterested
directors, even though less than a quorum; by independent legal
counsel, regardless of whether a quorum of disinterested
directors exists; or by a majority vote of the shareholders, at a
meeting at which a quorum is present. Both the Nevada Revised
Statutes and the 1999 Florida Statutes require indemnification of
directors and officers for expenses relating to a successful
defense on the merits or otherwise of a derivative or third-party
action. Also, both the Nevada Revised Statutes and the 1999
Florida Statutes permit a corporation to advance expenses
relating to the defense of any proceeding to directors and
officers contingent upon those individuals' commitment to repay
any advances unless it is determined ultimately that those
individuals are entitled to be indemnified. TheInternetCorp.net,
Inc.'s bylaws make indemnification of directors and officers
mandatory to the fullest extent permitted by law; Cycle-
Parts.com, Inc.' bylaws have provisions which follow the 1999
Florida Statutes with regard to indemnification.
TheInternetCorp.net, Inc.'s bylaws and Cycle-Parts.com, Inc.'
articles of incorporation provide for the advancement of expenses
to defend claims and establish procedures for determining whether
a director or officer is entitled to indemnification and
enforcing rights to indemnification and advancement of expenses.
Both the Nevada Revised Statutes and the 1999 Florida Statutes
permit corporations to purchase or redeem their own shares of
capital stock.
No holder of TheInternetCorp.net, Inc.'s common stock or Cycle-
Parts.com, Inc. common stock has a preemptive right to subscribe
to any or all additional issues of the stock of
TheInternetCorp.net, Inc. or Cycle-Parts.com, Inc., respectively.
Under both the Nevada Revised Statutes and the 1999 Florida
Statutes, any stockholder with a proper purpose may inspect and
copy the books, records and stockholder lists of the corporation.
PRO-FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined condensed
financial statements include the historical and pro forma effects
of the acquisition of Cycle-Parts.com, Inc. by TheInternetCorp.net, Inc.
The following unaudited pro forma combined condensed financial
statements have been prepared by the management of
TheInternetCorp.net, Inc. from its audited financial statements
and the audited financial statements of Cycle-Parts.com, Inc..
The unaudited pro forma combined condensed statements of reflect
the combined operations of these companies as if the acquisition
transaction had occurred on August 31, 1999. See "Note 1- Basis
of Presentation."
The Internet Corp.Net, Inc.
Pro Forma Combined Balance Sheet
August 31, 1999
(unaudited)
TheInternet
Corp.net,
TheInternet Cycle Pro Forma Inc.
Corp.net, Inc. Parts.com, Combined
Inc. Adjustment Pro Forma
Assets:
Current Assets
Cash $ 0 $ 52,081 $ $ 52,081
Accrued Interest
Receivable 0 667 667
Note Receivable 0 50,000 50,000
Total Current
Assets 0 102,748 102,748
Organizational
costs, net 219 0 219
Total Assets $ 219 $ 102,748 $ $ 102 967
Liabilities And
Shareholders
Equity:
Current
Liabilities
Accounts
Payable $ 0 0 $ $ 0
Total Current
Liabilities 0 0 0
Shareholders'
Equity:
Common Stock 1,000 126,600 127,600
Stock
Subscription
Receivable (765) 0 (765)
Additional
Paid-In Capital 0 173,400 173,400
Accumulated
Deficit (16) (197,252) (197,268)
Total
Shareholders'
Equity 219 102,748 102,967
Total Liabilities
and Shareholders'
Equity $ 219 $ 102,748 $ $ 102,967
See accompanying Notes to Financial Statements
The Internet corp.Net,
Inc.
Pro Forma Combined
Condensed Statement of
Operations
August 31, 1999
(Unaudited)
TheInternet
Corp.net,
Inc.
TheInternet Cycle- Pro Forma Combined
Corp.net, Parts.com,
Inc. Inc.
Adjustment Pro Forma
Sales $ 0 $ 61,219 $ $ 61,219
Cost of Sales 0 52,696 52,696
Gross Profit 0 8,523 8,523
Operating
Expenses 16 207,494 207,510
Interest
Income 0 1,719 1,719
Net Loss $ (16) $ (197,252) $ $(197,268)
Net Loss Per
Share $ nil $ nil $ $ nil
Weighted
Average Shares
Outstanding 1,000,000 12,660,000 12,670,000
See accompanying Notes to Financial Statement
The InternetCorp.Net,
Inc.
Pro Forma Combined Condensed
Statement of Cash Flows
August 31, 1999
(unaudited)
TheInternet
Corp.net,
Inc.
TheInternet Cycle ProForma Combined
Corp.net, Parts.com,
Inc. Inc.
Adjustment Pro Forma
Cash Flows from
Operating
Activities
Net Income (Loss) $ (16) $ (197,252) $ $(197,268)
Depreciation and
Amortization 16 0 16
Accrued Interest
Receivable 0 (667) (667)
Net Cash Used in
Operations 0 (197,919) (197,919)
Cash Flows from
Investing
Activities
Organizational
Costs (235) 0 (235)
Purchase of Note
Receivable 0 (50,000) (50,000)
Net Cash Used in
Investing (235) (50,000) (50,235)
Cash Flows from
Financing
Activities
Issuance of Common
Stock 235 300,000 300,235
Net Cash Provided
by Financing 235 300,000 300,235
Net Increase in
Cash 0 52,081 52,081
Cash, April 29, 1999
(TheInternetCorp.net,
Inc.) 0 -
Cash March 16, 1999
(Cycle-Parts) - 307,856
Cash August 31, 1999 0 52,081 52,081
See accompanying Notes to Financial Statement
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION.
The accompanying pro forma unaudited condensed financial
statements ("pro forma statements") of TheInternetCorp.net, Inc.
have been prepared from the audited financial statements of
TheInternetCorp.net, Inc. and Cycle-Parts.com, Inc. as at and for
the four and five month periods, respectively, ended on August
31, 1999, together with other information made available to the
companies. In the opinion of management, these pro forma
statements include all adjustments necessary for a fair
presentation. These entities are not related to each other.
NOTE 2. PRO FORMA ASSUMPTIONS.
The pro forma unaudited condensed balance sheet gives effect to
an acquisition agreement dated May of 1999 between
TheInternetCorp.net, Inc. and Cycle-Parts.com, Inc.. Under the
terms of this agreement, TheInternetCorp.net, Inc. will issue
12,660,000 shares of common stock, $.001 par value, to the
existing shareholders of Cycle-Parts.com, Inc. for 12,660,000
shares of common stock of Cycle-Parts.com, Inc., $0.01 par value.
In addition, TheInternetCorp.net, Inc. will issue a warrant to
purchase 2,000,000 shares of TheInternetCorp.net, Inc. common
stock at an exercise price of $0.10 per share to existing
warrantholders of Cycle-Parts.com, Inc. to replace the existing
warrant previously under the same terms issued by Cycle-
Parts.com, Inc., which will be cancelled. In addition, of the
1,000,000 common shares of TheInternetCorp.net, Inc. outstanding
prior to the effective date of the acquisition agreement, this
company will do a 100 to 1 reverse split, leaving 10,000 shares
(which will be registered under this offering).
The pro forma unaudited consolidated condensed balance sheet is
compiled as if the transaction had occurred on August 31, 1999.
The pro forma condensed consolidated statements of income and
cash flows for the five month period ended August 31, 1999 also
give effect as if the acquisition had occurred on April 29, 1999
(inception date).
NOTE 3. PER SHARE INFORMATION.
Pro forma net income (loss) per common share have been calculated
using the weighted average number of TheInternetCorp.net, Inc.'s
common shares outstanding during the period ended August 31, 1999
plus the common shares to be issued under the acquisition
agreement as if the additional shares were outstanding throughout
the period.
NOTE 4. ACQUISITION ACCOUNTING METHOD.
The pro forma statements have been compiled using the pooling of
interests method as the accounting principle applied to the
acquisition agreement.
NOTE 5. YEAR END.
The year ends of TheInternetCorp.net, Inc. is the calendar year
ending on December 31.
MATERIAL CONTACTS WITH COMPANY BEING ACQUIRED
Pursuant to the Reorganization Agreement with Cycle-Parts.com,
Inc., the outstanding common stock of Cycle-Parts.com, Inc. shall
be exchanged for shares of our common stock on a one for one
basis as provided for in the Reorganization Agreement Also
warrants granted to Wizard Financial Services, Inc., Stevens &
Lee Inv. Co., Ltd., Terry Cuthbertson, and Gerry I. Quinn
(500,000 each) to acquire shares of Cycle-Parts.com, Inc. shall
be exchanged for warrants to acquire TheInternetCorp.net, Inc.'s
stock.
REOFFERING BY PERSONS DEEMED UNDERWRITERS
Not Applicable.
INTEREST OF NAMED EXPERTS AND COUNSEL
No named expert or counsel was hired on a contingent basis, will
receive a direct or indirect interest in the small business
issuer, or was a promoter, underwriter, voting trustee, director,
officer, or employee of the registrant.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
No director of TheInternetCorp.net, Inc. will have personal
liability to the company or any of its stockholders for monetary
damages for breach of fiduciary duty as a director involving any
act or omission of any such director since provisions have been
made in the articles of incorporation limiting such liability.
The foregoing provisions shall not eliminate or limit the
liability of a director
For any breach of the director's duty of loyalty to
TheInternetCorp.net, Inc. or its stockholders
For acts or omissions not in good faith or, which involve
intentional misconduct or a knowing violation of law
Under applicable Sections of the Nevada Revised Statutes
The payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes
For any transaction from which the director derived an improper
personal benefit.
The bylaws provide for indemnification of the directors,
officers, and employees of TheInternetCorp.net, Inc. in most
cases for any liability suffered by them or arising out of their
activities as directors, officers, and employees of
TheInternetCorp.net, Inc. if they were not engaged in willful
misfeasance or malfeasance in the performance of his or her
duties; provided that in the event of a settlement the
indemnification will apply only when the Board of Directors
approves such settlement and reimbursement as being for the best
interests of the Corporation. The bylaws, therefore, limit the
liability of directors to the maximum extent permitted by Nevada
law (Section 78.751).
The officers and directors of TheInternetCorp.net, Inc. are
accountable to TheInternetCorp.net, Inc. as fiduciaries, which
means they are required to exercise good faith and fairness in
all dealings affecting TheInternetCorp.net, Inc.. In the event
that a shareholder believes the officers and/or directors have
violated their fiduciary duties to TheInternetCorp.net, Inc., the
shareholder may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce the
shareholder's rights, including rights under certain federal and
state securities laws and regulations to recover damages from and
require an accounting by management.. Shareholders who have
suffered losses in connection with the purchase or sale of their
interest in TheInternetCorp.net, Inc. in connection with such
sale or purchase, including the misapplication by any such
officer or director of the proceeds from the sale of these
securities, may be able to recover such losses from
TheInternetCorp.net, Inc.
The registrant undertakes the following:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable.
INFORMATION ABOUT THE REGISTRANT
Description of Business.
TheInternetCorp.net, Inc. was organized under the laws of the
State of Nevada on April 29, 1999, and has December 31 as its
fiscal year end. Since inception, the primary activity of
TheInternetCorp.net, Inc. has been directed to organizational
efforts. TheInternetCorp.net, Inc. was formed as a vehicle to
acquire a private company desiring to become an SEC reporting
company in order thereafter to secure a listing on the Over the
Counter Bulletin Board.
TheInternetCorp.net, Inc. plans to capitalize on current
technology and the internet to develop a direct-to-customer
relationship in the motor cycle parts industry. To date,
TheInternetCorp.net, Inc. is not aware of any other business
that has developed similar direct-to-customer discount parts
sales in the online parts industry. This could be due to the
fact that until recently no medium existed that could accommodate
both a high volume of traffic in the logistical infrastructure
necessary to provide information and target customers in an
efficient and economical manner.
Description of Property.
None.
Legal Proceedings.
TheInternetCorp.net, Inc. is not a party to any material pending
legal proceedings and, to the best of its knowledge, no such
action by or against the company has been threatened.
Market Price for Common Equity and Related Stockholder Matters.
(a) Market Information.
The Shares have not previously been traded on any securities
exchange. There is no common stock of TheInternetCorp.net, Inc.
that is subject to outstanding options or warrants to purchase,
or securities convertible into that stock. There are 1,000,000
common shares of TheInternetCorp.net, Inc. outstanding prior to
the effective date of the Reorganization Agreement. These shares
of common stock were issued on April 29, 1999 (date of
incorporation) under the exemption from the registrations
requirements of Section 5 of the Securities Act of 1933 as
provided by Rule 506 of Regulation D under Section 4(2) of that
act in that they were offered and sold only to sophisticated
investors. These shares were issued in exchange for
organizational services rendered to this company.
After the effective date of the Reorganization Agreement,
TheInternetCorp.net, Inc. will do a 100 to 1 reverse split, which
will result in the sole shareholder of TheInternetCorp.net, Inc.
holding 10,000 shares. These shares will be registered by this
selling shareholder under this offering.
(b) Holders of Common Equity.
As of October 25, 1999, there was 1 shareholder of record of
TheInternetCorp.net, Inc.'s common stock.
(c) Dividends.
TheInternetCorp.net, Inc. has not declared or paid a cash
dividend to stockholders since it became a "C" corporation. The
Board of Directors presently intends to retain any earnings to
finance Company operations and does not expect to authorize cash
dividends in the foreseeable future. Any payment of cash
dividends in the future will depend upon TheInternetCorp.net,
Inc.'s earnings, capital requirements and other factors.
Financial Statements.
INDEPENDENT AUDITORS' REPORT
Board of Directors
TheInternetCorp.net, Inc.
I have audited the accompanying balance sheet of
TheInternetCorp.net, Inc. (a development stage company), as of
August 31, 1999, and the related statements of operations,
stockholders' equity and cash flows for the period from inception
(April 29, 1999) to August 31, 1999. These financial statements
are the responsibility of the company's management. My
responsibility is to express an opinion on these financial
statements based on my audit in accordance with standards
established by the American Institute of Certified Public
Accountants.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
TheInternetCorp.net, Inc. as of August 31, 1999 and the results
of its operations and its cash flows for the period from
inception (April 29, 1999 ) to August 31, 1999 in conformity with
generally accepted accounting principles.
Kurt D. Saliger C.P.A. (Nevada State License No. 2335)
Las Vegas, Nevada
October 6, 1999
TheInternetCorp.net, Inc.
(A Development Stage Company)
BALANCE SHEET
August 31, 1999
ASSETS
CURRENT ASSETS:
Cash $0
Accounts Receivable $0
TOTAL CURRENT ASSETS $0
ORGANIZATIONAL COSTS, NET $219
TOTAL ASSETS $219
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $0
TOTAL CURRENT LIABILITIES $0
LONG-TERM DEBT $0
STOCKHOLDERS' EQUITY:
common stock, $.001 par value
authorized 50,000,000 shares issued
and outstanding at August 31, 1999,
1,000,000 shares $1,000
Stock Subscription Receivable $(765)
Additional paid in Capital $0
Deficit Accumulated During Development Stage $(16)
TOTAL STOCKHOLDERS' EQUITY $219
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $219
See accompanying Notes to Financial Statements & Audit Report
TheInternetCorp.net, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
INCOME:
Revenue $0
TOTAL INCOME $0
EXPENSES:
General, and Administrative $0
Amortization $16
Total Expenses $16
Net Profit/Loss(-)From Operations $(16)
Interest Income $0
INCOME (LOSS) BEFORE INCOME TAXES $(16)
Provision for income tax $0
NET INCOME (LOSS) $0
NET INCOME (LOSS)PER SHARE-BASIC AND
DILUTED $0.0000
AVERAGE NUMBER OF SHARES OF COMMON
STOCK OUTSTANDING 1,000,000
See accompanying Notes to Financial Statements & Audit Report
TheInternetCorp.net, Inc.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(Deficit)
Accumulated
Additional During
Common Stock paid-in Development
Shares Amount capital Stage
Issued for
cash and
organizational
costs
April 29, 1999 1,000,000 $1,000 $0
Stock Subscription
Receivable $ (765)
Net Income
April 29, 1999
(inception) to
August 31, 1999 $ (16)
Balance
August 31, 1999
1,000,000 $ 235 $0 $ (16)
See accompanying Notes to Financial Statements & Audit Report
TheInternetCorp.net, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Cash Flows from Operating Activities:
Net Income $ (16)
(Increase) Amortization $ 16
Net Cash (Used) In Operating Activities $ 0
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of organizational costs $(235)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash $ 235
Net Increase in Cash $ 0
Cash, April 29, 1999 $ 0
Cash, August 31, 1999 $ 0
See accompanying Notes to Financial Statements & Audit Report
TheInternetCorp.net, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY.
The Company was incorporated on April 29, 1999 under the laws of
the State of Nevada. The company was organized to engage in any
lawful activity. The Company currently has no operations and, in
accordance with SFAS #7, is considered a development stage
company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Accounting Method.
The Company records income and expenses on the accrual method.
Estimates.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Organizational Costs.
Organizational costs are stated at cost. Amortization is
recorded using the straight-line method over a sixty (60) month
period.
Income Taxes.
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109, (SFAS #109), "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Loss Per Share.
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128, (SFAS #128), "Earnings
Per Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of August 31, 1999, the Company had no dilative common
stock equivalents such as stock options.
NOTE 3- INCOME TAXES.
There is no provision for income taxes for the period ended April
29, 1999 (inception) to April 30, 1999 due to the zero net income
and no Nevada state Income tax in the state of the Company's
domicile
NOTE 4- SHAREHOLDERS' EQUITY.
Common Stock.
The authorized common stock of the Company consists of 50,000,000
shares with a par value of $0.001 per share.
Preferred Stock.
The authorized Preferred Stock of the Company consists of
10,000,000 shares with a par value of $0.001 per share.
NOTE 5 - MERGER AGREEMENT.
In May of 1999, Cycle-Parts.com, Inc. entered into a merger
agreement with TheInternetCorp.net, Inc. Pursuant to terms of
the agreement, Cycle-Parts.com, Inc.'s shareholders will be
issued one share of TheInternetCorp.net, Inc.'s common stock in
exchange for each share of their common stock in Cycle-Parts.com,
Inc..
NOTE 6 - RELATED PARTY TRANSACTIONS.
TheInternetCorp.net, Inc. neither owns nor leases any real or
personal property. Office services are provided without charge
by the sole director of this company. Such costs are immaterial
to the financial statements and accordingly have not been
reflected therein. The sole director of TheInternetCorp.net,
Inc. is involved in other business activities and may, in the
future, become involved in other business opportunities. If a
specific business opportunity becomes available, such person may
face a conflict in selecting between TheInternetCorp.net, Inc.
and the other business interests. TheInternetCorp.net, Inc. has
not formulated a policy for the resolution of such conflicts.
Plan of Operation.
Up to the present time, the Company has only been in the
organizational phase. Over the next 12 months, after the
effective date of this Registration Statement, the Company
intends to concentrate its efforts into further development and
enhancement of the Cycle-Parts.com, Inc. website (www.cycle-
parts.com). These changes will include additional information
and articles of interest to the motorcycle enthusiast. The
Company will also be seeking to enhance its advertising revenues
by the placement of additional advertising on the website.
The Company purchases motorcycle parts directly from
distributors, and based on rapid delivery times, its is not
necessary for it to keep parts on stock at its offices in order
for it to complete the sale of motorcycle parts over its website.
However, the Company will seek to make this operation more
efficient by reviewing all phases of the ordering and delivery
process.
The current cash in Cycle-Parts.com, Inc. will satisfy the
cash needs of the Company to implement the plan of operations, as
set forth above, for a period of approximately six months. The
Company will need to raise additional capital in order to
continue its operations beyond that point. Such financing will
probably take the form of a combination of debt and equity
financing. However, there is no guarantee that such financing
will be available at all or on such terms as will be acceptable
to the Company. See "Risk Factors - Adequacy of Funding."
Currently, the Company does not plan to make significant
equipment purchases in the next 12 months in order to implement
its plan of operation. Also, it does not plan over such period
to significantly change the number of employees.
Competition.
The market for the distribution and sale of motorcycle
parts, accessories and other related products is intensely
competitive. TheInternetCorp.net, Inc. faces strong existing
competition for similar products and expects to face significant
competition from new companies or existing companies with new
products. There are a number of larger companies which will
directly compete with TheInternetCorp.net, Inc.. In addition,
many of these companies may be better financed, have better name
recognition and consumer goodwill, have more marketing expertise
and capabilities, have a large and loyal customer base, along
with other attributes that may enable them to compete more
effectively. Thus, TheInternetCorp.net, Inc. may experience
substantial competition in its efforts to locate and attract
customers for its motorcycle parts. Such competition could have
a material adverse effect on TheInternetCorp.net, Inc.'s
profitability.
Influence of Other External Factors.
The motorcycle parts industry is a speculative venture necessarily
involving some substantial risk. There is no certainty that the
expenditures to be made by TheInternetCorp.net, Inc. will result
in commercially profitable business. The marketability of its
motorcycle parts will be affected by numerous factors beyond the
control of TheInternetCorp.net, Inc. These factors include market
fluctuations, and the general state of the economy (including the
rate of inflation, and local economic conditions), which can
affect peoples' discretionary spending. Factors which leave less
money in the hands of potential customers of TheInternetCorp.net,
Inc. will likely have an adverse effect on TheInternetCorp.net,
Inc. The exact effect of these factors cannot be accurately
predicted, but the combination of these factors may result in
TheInternetCorp.net, Inc. not receiving an adequate return on
invested capital.
Regulatory Factors.
Possible future consumer legislation, regulations and actions
could cause additional expense, capital expenditures, restrictions
and delays in the activities undertaken in connection with the
motor cycle parts business, the extent of which cannot be
predicted. The exact affect of such legislation cannot be
predicted until it is proposed.
Dependence on the Motorcycle Parts Industry.
TheInternetCorp.net, Inc.'s business is influenced by the rate of
use and expansion in the motorcycle parts industry. Although
this industry has been expanding at a rapid rate in recent years,
there is no guarantee that it will continue to do so in the
future. Declines in this industry may influence
TheInternetCorp.net, Inc.'s revenues adversely.
Reliance on Management.
TheInternetCorp.net, Inc.'s success is dependent on its key
management, the loss of whose services could significantly impede
the achievement of TheInternetCorp.net, Inc.'s planned
development objectives. TheInternetCorp.net, Inc. currently does
not maintain key man life insurance. In addition, none of the
officers or directors, or any of the other key personnel has any
employment agreement with TheInternetCorp.net, Inc. Therefore,
there can be no assurance that these personnel will remain
employed by TheInternetCorp.net, Inc. The success of
TheInternetCorp.net, Inc.'s business objectives will require
substantial additional expertise in such areas as finance,
manufacturing and marketing, among others. Competition for
qualified personnel among companies is intense, and the loss of
key personnel, or the inability to attract and retain the
additional, highly skilled personnel required for the expansion
of TheInternetCorp.net, Inc.'s activities, could have a material
adverse effect on TheInternetCorp.net, Inc.'s business and
results of operations.
In addition, all decisions with respect to the management of
TheInternetCorp.net, Inc. will be made exclusively by the
officers and directors of TheInternetCorp.net, Inc. Shareholders
will only have rights associated with minority ownership interest
rights to make decision which effect TheInternetCorp.net, Inc.
The success of TheInternetCorp.net, Inc., to a large extent, will
depend on the quality of the directors and officers of
TheInternetCorp.net, Inc.
Forward-Looking Statements.
This Prospectus, and in particular this section dealing with
the Plan of Operation, contains "forward looking statements"
within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Act of 1934, as
amended, and as contemplated under the Private Securities
Litigation Reform Act of 1995, including statements regarding,
among other items, TheInternetCorp.net, Inc.'s business
strategies, continued growth in the company's markets,
projections, and anticipated trends in company's business and the
industry in which it operates. The words "believe," "expect,"
"anticipate," "intends," "forecast," "project," and similar
expressions identify forward-looking statements. These forward-
looking statements are based largely on TheInternetCorp.net,
Inc.'s expectations and are subject to a number of risks and
uncertainties, certain of which are beyond TheInternetCorp.net,
Inc.'s control. TheInternetCorp.net, Inc. cautions that these
statements are further qualified by important factors that could
cause actual results to differ materially from those in the
forward looking statements, including those factors described
under "Risk Factors" and elsewhere herein. In light of these
risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Prospectus will in
fact transpire or prove to be accurate. All subsequent written
and oral forward-looking statements attributable to
TheInternetCorp.net, Inc. or persons acting on its behalf are
expressly qualified in their entirety by this section.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
From the formation of TheInternetCorp.net, Inc. in Apri1 1999 and
up to the present time, the principal independent accountant for
TheInternetCorp.net, Inc. has neither resigned (or declined to
stand for reelection) nor been dismissed. The independent
accountant for TheInternetCorp.net, Inc. is Kurt D. Saliger, 5000
West Oakey Boulevard, Suite A-4, Las Vegas, Nevada 89146.
TheInternetCorp.net, Inc. and its current accountant have had no
disagreements.
INFORMATION ABOUT THE
COMPANY BEING ACQUIRED
Description of Business.
Cycle-Parts.com, Inc. sells original manufacturer equipment
motorcycle parts exclusively through the internet. From the
start of its website under the name of
InternetMotorcycleParts.com in May, 1996 through March, 1999, the
business was operated as a sole proprietorship by Mr. Robert
Rill, the President of Cycle-Parts.com, Inc.. The main operating
activities consisted of recruiting personnel, developing the
technological structure necessary to operate the website and
process orders, building operating structure, and establishing
distributor relationships necessary to fulfill the parts orders.
Cycle-Parts.com, Inc. was incorporated on March 16, 1999 in
Florida. On this date, Cycle-Parts.com, Inc..com acquired the
domain name, the website and related software for the on-line e-
commerce motorcycle parts sales business. The former website is
linked to this new website.
Cycle-Parts.com, Inc. is a leading e-commerce provider of
original equipment manufacturer ("OEM") motorcycle parts.
Original equipment manufacturer motorcycle parts are those made
by the original manufacturer of a motorcycle. Cycle-Parts.com,
Inc. offers these parts at a discount of from 10% to 45% below
the retail price. Cycle-Parts.com, Inc. now can supply parts for
motorcycle for Honda, Suzuki, Yamaha, and Kawasaki motorcycles.
Cycle-Parts.com, Inc. is in the process of adding more models of
motorcycles so as to increase the parts coverage; the company
also plans to make available parts for other brands of
motorcycles.
Cycle-Parts.com, Inc.'s customers are either present owners of
the model motorcycles carried by Cycle-Parts.com, Inc. or they
are small parts shop or repair shop owners who repair these
motorcycles. To date, Cycle-Parts.com, Inc. is not aware of any
other business that has developed similar direct-to-customer
discount parts sales in the online parts industry. This could be
because, until recently, no medium existed that could accommodate
both a high volume of traffic in the logistical infrastructure
necessary to provide information and target customers in an
efficient and economical manner. After the acquisition, Cycle-
Parts.com, Inc. will operate as a wholly owned subsidiary of
TheInternetCorp.net, Inc.
Market Price for Common Equity and Related Stockholder Matters.
(a) Market Information.
Cycle-Parts.com, Inc.'s common stock has not previously been
traded on any securities exchange. All of the outstanding shares
of common stock, as well as the warrants, were issued on March
16, 1999 (date of incorporation) under the exemption from the
registrations requirements of Section 5 of the Securities Act of
1933 as provided by Rule 506 of Regulation D under Section 4(2)
of that act in that they were offered and sold only to
sophisticated investors. The shares were issued for a total
consideration of $300,000 in cash; the warrants were issued to
certain consultants to this company in exchange for services
rendered. These services entailed organizational activities of
this company, as well as development of its website. Since this
company was new at this time, there is no set method of valuation
of these services. Instead, the exercise price of the warrants
($0.10 per share) was set above the book value of the shares at
that time ($0.024) based on the fact that they are exercisable
over a five year period.
There is no common stock of Cycle-Parts.com, Inc. that is subject
to outstanding options or warrants to purchase, or securities
convertible into that stock, as except as follows: Warrants
granted to Wizard Financial Services, Inc., Stevens & Lee Inv.
Co., Ltd., Terry Cuthbertson, and Gerry I. Quinn (500,000 each)
to purchase 2,000,000 shares of Cycle-Parts.com, Inc. common
stock at an exercise price of $0.10 per share; such warrants
must be exercised not later than five years from the date of
issuance at an exercise price of $0.10 per share.
(b) Holders of Common Equity.
As of October 25, 1999, there were 27 shareholders of record of
Cycle-Parts.com, Inc.' common stock.
(c) Dividends.
Cycle-Parts.com, Inc. has not declared or paid a cash dividend to
stockholders since it became a "C" corporation. The Board of
Directors presently intends to retain any earnings to finance
Cycle-Parts.com, Inc.' operations and does not expect to
authorize cash dividends in the foreseeable future. Any payment
of cash dividends in the future will depend upon Cycle-Parts.com,
Inc.' earnings, capital requirements and other factors.
Financial Statements.
INDEPENDENT AUDITORS' REPORT
Board of Directors
Cycle-Parts.com, Inc.
I have audited the accompanying balance sheet of Cycle-Parts.com,
Inc. (a development stage company), as of August 31, 1999, and
the related statements of operations, stockholders' equity and
cash flows for the period from inception (March 16, 1999) to
August 31, 1999. These financial statements are the
responsibility of the company's management. My responsibility is
to express an opinion on these financial statements based on my
audit in accordance with standards established by the American
Institute of Certified Public Accountants.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Cycle-Parts.com, Inc. as of August 31, 1999 and the results of
its operations and its cash flows for the period from inception
(March 16, 1999 ) to August 31, 1999 in conformity with generally
accepted accounting principles.
Kurt D. Saliger C.P.A. (Nevada State License No. 2335)
Las Vegas, Nevada
October 22, 1999
Cycle-Parts.com, Inc.
(A Development Stage Company)
BALANCE SHEET
ASSETS
CURRENT ASSETS
Cash $ 52,081
Note Receivable $ 50,000
Accrued Interest Receivable $ 667
TOTAL CURRENT ASSETS $ 102,748
TOTAL ASSSETS $ 102,748
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 0
TOTAL CURRENT LIABILITIES $ 0
LONG-TERM DEBT $ 0
STOCKHOLDERS' EQUITY
Common Stock, $0.01 par value
Authorized 100,000,000 shares, issued
And outstanding at August 31, 1999
12,660,000 shares $ 126,600
Additional Paid In Capital 173,400
Deficit Accumulated During Development
Stage (197,252)
TOTAL STOCKHOLDERS' EQUITY $ 102,748
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 102,748
See accompanying Notes to Financial Statements.
Cycle-Parts.com, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
REVENUES $ 61,219
COSTS OF REVENUES 52,696
GROSS PROFIT $ 8,523
OPERATING EXPENSES
Selling, general and administrative $ 207,494
Depreciation 0
TOTAL OPERATING EXPENSES $ 207,494
INCOME (LOSS) FROM OPERATIONS $ (207,494)
OTHER INCOME (EXPENSES)
Interest income $ 1,719
Interest expense 0
INCOME (LOSS) BEFORE INCOME TAXES $ (197,252)
Income Taxes 0
NET PROFIT (LOSS) $ (197,252)
NET PROFIT (LOSS) PER SHARE
- BASIC AND DILUTED $ (0.0016)
AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING 12,660,000
See accompanying Notes to Financial Statements.
Cycle-Parts.com, Inc.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
COMMON STOCK
Number Additional Deficit)
Of Paid In Accumulated
Shares Amount Capital During
Development
Stage
Issued for cash
March 16, 1999 12,660,000 $126,600 $173,400
(Net Loss) March 16,
1999 (Inception) to
August 31,1999 _________ _________ _________ ($197,252)
Balance
August 31, 1999 12,660,000 $126,600 $173,400 ($197,252)
See accompanying Notes to Financial Statements.
Cycle-Parts.com, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES
(Net Loss) ($197,252)
Accrued Interest Receivable ($ 667)
Net Cash (Used) In Operating Activity ($197,919)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Note Receivable ( $50,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash $ 300,000
Net increase in cash $ 52,081
Cash, March 16, 1999 $ 307,856
Cash, August 31, 1999 $ 52,081
See accompanying Notes to Financial Statements.
Cycle-Parts.com, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS.
Cycle-Parts.com, Inc., which was previously a sole proprietorship
known as Internet Motorcycle Parts.Com and Ameril Sport Bikes,
was incorporated under the laws of the state of Florida on March
16, 1999. The Company is engaged in the business of selling
original equipment manufacturer ("OEM") motorcycle parts through
the Internet. All revenue is received electronically and all
related inventories are drop shipped directly from Cycle-
Parts.com, Inc.'s suppliers.
On March 16, 1999, Cycle-Parts.com, Inc. issued 12,660,000 shares
of its one cent ($.01) par value common stock for $300,000 in
cash and certain services.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Accounting Method.
Cycle-Parts.com, Inc. records income and expenses on the accrual
method of accounting.
Cash and Cash Equivalents.
Cycle-Parts.com, Inc. maintains a cash balance in an interest
bearing bank that currently does not exceed federally insured
limits. For the purpose of the statement of cash flows, all
highly liquid investments with the maturity of three months or
less are considered to be cash equivalents. There are no cash
equivalents as of August 31, 1999.
Income Taxes.
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes." A
deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Estimates.
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and
liabilities, and the reported amounts of revenue and expenses
during the reporting period Actual results could differ from
those estimates.
Organizational Costs.
Costs incurred to organize Cycle-Parts.com, Inc. are being
amortized on a straight line basis over a sixty month period.
Revenue Recognition.
Cycle-Parts.com, Inc. recognizes revenue at the point of sale
when the part is availabel and the customer's credit card is
approved.
Loss Per Share.
Net Loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share." Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average of
number of common shares outstanding during the period. Diluted
loss per share reflects per share amounts that would result if
dilutive common stock equivalents had been converted to common
stock. As of August 31, 1999, warrants have been excluded form
the loss per share calculations because they would not be
dilutive.
NOTE 3 - NOTE RECEIVABLE.
The Company issued a note receivable to OTC Dreamwerks, Inc. on
April 20, 1999 in the amount of $50,000. The note receivable
bears interest at the rate of 4% simple interest per annum. The
principal and interest is payable anytime upon demand from the
Company 24 months after the date of issue. The note receivable
is unsecured.
NOTE 4 - STOCKHOLDERS' EQUITY.
Common Stock.
The authorized common stock of the Company consists of
100,000,000 shares of its $0.01 par value common stock.
Preferred Stock.
The Company is not authorized to issue preferred stock.
Stock Warrants.
The Company issued stock warrants to purchase 2,000,000 shares of
common stock for $0.10 to various consultants.
NOTE 5 - MERGER AGREEMENT.
In May of 1999, Cycle-Parts.com, Inc. entered into a merger
agreement with TheInternetCorp.net, Inc. Pursuant to terms of
the agreement, Cycle-Parts.com, Inc.'s shareholders will be
issued one share of TheInternetCorp.net, Inc.'s common stock in
exchange for each share of their common stock in Cycle-Parts.com,
Inc..
NOTE 6 - RELATED PARTY TRANSACTIONS.
Cycle-Parts.com, Inc. neither owns nor leases any real or
personal property. Office services are provided without charge
by the sole director of this company. Such costs are immaterial
to the financial statements and accordingly have not been
reflected therein. The sole director of Cycle-Parts.com, Inc. is
involved in other business activities and may, in the future,
become involved in other business opportunities. If a specific
business opportunity becomes available, such person may face a
conflict in selecting between Cycle-Parts.com, Inc. and the other
business interests. Cycle-Parts.com, Inc. has not formulated a
policy for the resolution of such conflicts.
NOTE 7 - STOCK WARRANTS.
Cycle-Parts.com, Inc. issued stock warrants to purchase 2,000,000
shares of common stock for $0.10 to various consultants. This
company applies APB Opinion No. 25 in accounting for its stock
warrants, and, accordingly, no compensation costs has been
recognized in the financial statements. The pro forma impact of
recognizing compensation costs based on the fair value at the
grant date for stock options under SFAS No. 123 on Cycle-
Parts.com, Inc.'s reported operations was zero for the period
ended August 31, 1999. Accordingly, the pro forma impact of
recognizing compensation costs under SFAS No. 123 on basic and
diluted loss per share was immaterial for the period ended August
31, 1999.
Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion should be read in conjunction with the
financial statements of Cycle-Parts.com, Inc. and the notes
thereto.
(a) Results of Operations.
Although Cycle-Parts.com, Inc. is newly formed as a
corporation, having been incorporated on March 16, 1999, it did
operate as a sole proprietorship prior to that date. It has had
limited operations after the time of incorporation, with revenues
of $61,219 for the period of March 16, 1999 (date of inception)
through August 31, 1999.
(b) Liquidity and Capital Resources.
Net cash used in operating activities was $197,919 for the period
of March 16, 199 through August 31, 1999. This use of cash
results largely from a net loss of $197,252 during this period
(resulting from administrative expenses of $207,494 during this
period). Based upon the issuance of common stock in Cycle-
Parts.com, Inc. on the date of inception, the company received a
total of $300,000.
(c) Capital Expenditures.
There have been no material capital expenditures since the
formation of Cycle-Parts.com, Inc. in March 1999.
(d) Year 2000 Issue.
Cycle-Parts.com, Inc. currently believes that its systems
are Year 2000 compliant in all material respects. Although
management is not aware of any material operational issues or
costs associated with preparing its internal systems for the Year
2000, Cycle-Parts.com, Inc. may experience serious unanticipated
negative consequences or material costs caused by undetected
errors or defects in the technology used in its internal systems.
Cycle-Parts.com, Inc.'s Year 2000 plans are based on management's
best estimates.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
From the formation of Cycle-Parts.com, Inc. in March 1999, and up
to the present time, the principal independent accountant for
Cycle-Parts.com, Inc. has neither resigned (or declined to stand
for reelection) nor been dismissed. The independent accountant
for Cycle-Parts.com, Inc. Kurt D. Saliger, 5000 West Oakey
Boulevard, Suite A-4, Las Vegas, Nevada 89146. Cycle-Parts.com,
Inc. and its current accountant have had no disagreements.
VOTING AND MANAGEMENT INFORMATION
General Information.
The approval of the shareholders of Cycle-Parts.com, Inc. for the
acquisition by TheInternetCorp.net, Inc. will be sought in a
special meeting of shareholders. The date, time and place of
this meeting are to be determined. When such information is
determined, a proxy statement will be furnished to shareholders
at the direction and on behalf of the Board of Directors of
Cycle-Parts.com, Inc. for the purpose of soliciting proxies for
use at the special meeting. The shares represented by the proxy
will be voted in the manner specified in the proxy. To the extent
that no specification is made as to the proposals set forth in
the notice of meeting accompanying the proxy statement, the proxy
will be voted in favor of such proposals. However, any proxy
given pursuant to this solicitation may be revoked at any time
before it is exercised by giving written notice of such
revocation to the Secretary of Cycle-Parts.com, Inc., by
appearing at the meeting and voting in person, or by submitting a
later dated proxy. Neither attendance at the meeting nor voting
at the meeting will revoke the proxy. A revocation that is not
timely received shall not be taken into account, and the original
proxy shall be counted.
Since there is only one shareholder of TheInternetCorp.net, Inc.,
his approval for the transaction and election of new directors
will be give by unanimous written consent. Such consent is
permitted under the bylaws of that company.
Voting Securities.
The record date of shareholders entitled to notice of and to vote
at the special meeting of the shareholders are to be determined.
Each share is entitled to one vote per share on any matter which
may properly come before the meeting and there will be no
cumulative voting right on any shares. The presence at the
meeting, in person or by proxy, of the holders of a majority of
the shares of common stock outstanding on the record date will
constitute a quorum at the meeting. Votes withheld and
abstentions will be counted in determining the presence of a
quorum but will not be voted. Broker non-votes will not be
counted in determining the presence of a quorum and will not be
voted. Pursuant to applicable state law, there are no
dissenter's or appraisal rights relating to the matters to be
voted. All matters to be voted on require an affirmative vote of
a majority of the votes present at the meeting.
The following tables sets forth information regarding the
beneficial ownership of shares of TheInternetCorp.net, Inc. and
Cycle-Parts.com, Inc. common stock as of October 1, 1999
(1,000,000 and 12,660,000 total issued and outstanding,
respectively) by:
All stockholders known to each company to be beneficial owners of
more than 5% of the outstanding common stock;
Each director; and
All officers and directors of TheInternetCorp.net, Inc. as a
group (each person has sole voting power and sole dispositive
power as to all of the shares shown as beneficially owned by
them):
TheInternetCorp.net, Inc.
Title of Name and Address of Amount of Percent of
Class Beneficial Owner Beneficial Ownership Class
Common Stock Vincent van den Brink
3158 Redhill Avenue
Suite 240
Costa Mesa, CA 92626 1,000,000 100.00%
Cycle-Parts.com, Inc.
Title of Name and Address of Amount of Percent of
Class Beneficial Owner Beneficial Ownership Class
Common Stock Goldenvale (1) 5,250,000 41.47%
Investment
Holdings, Ltd.
Suite 1A
Hirzel Court
Hirzel Street
St. Peter Port
Guernsey GY1
2NN, Channel
Islands
Common Stock Robert Rill (2), 1,645,000 11.41%
2950 S.W.
Archer Road
Suite C
Gainesville
Florida 32608
Common Stock Terry Cuthberson 100,000 0.79%
211 Tooronga Road
Terrey Hills
New South Wales
2084 Australia
Common Stock Gerald I. Quinn 100,000 0.79%
5210 East Williams
Circle, Suite 200
Tucson, Arizona 85711
Common Stock Shares of all 1,645,000 11.41%
directors and
executive
officers as a
group (1 person)
(1) Karen Bohringer (to be an officer and director of
TheInternetCorp.net, Inc. after the acquisition), and her husband
John Bohringer, along with other family members, own Goldenvale
Investment Holdings, Ltd.
(2) Robert Rill owns 1,225,000 shares along with his wife, Tara
Rill (who individually owns 220,000 shares). Also included here
are 200,000 shares owned by Strategic Capital Advisors, which is
owned by Mr.Rill.
Management (Pre-Acquisition).
(a) Vincent van den Brink, President/Secretary/Director -
TheInternetCorp.net, Inc..
Mr. van den Brink, age 58, has been President, Secretary and
Director of the Issuer since April 29, 1999. Since October 1997
to present, he has been a Financial Consultant with Airway
Capital, Costa Mesa, California, providing asset based lending,
factoring, equipment leasing, and export financing for various
businesses. From June 1985 until May 1997, he was a Business
Consultant writing business plans and business development plans
for companies across the country. Since 1978 to present, in
addition to working for the above companies, he has been
operating an export business providing export consulting,
exporting products and sourcing products for international
clients. He holds degrees in automotive engineering, business
administration, and small business management. He is fluent in
English, Dutch, German and Afrikaans.
(b) Robert A. Rill, President/Director - Cycle-Parts.com, Inc..
Mr. Robert A. Rill, 28 is the President/Director and founder of
Cycle-Parts.com, Inc.. He started this internet company which
specializes in the distribution of OEM motorcycle parts using
internet as its exclusive method of distribution in March of
1999, under the domain name Cycle-Parts.com, Inc..com. Prior to
starting the company Mr. Rill had been developing this internet
site over a three year period operating under the name "Internet
Motorcycle Parts" from July 1996 to March 1999. Mr. Rill is
also the President and founder of Strategic Funding Group Inc. He
started this company in July 1996 which specializes in
automobile title loans. Since inception the company has
successfully loaned over $1,000,000 in micro cap loans to
customers of a broad demographic and credit background. Mr. Rill
has successfully expanded the company into 3 cities which
currently include Gainesville, Jacksonville, and Miami, Florida.
Prior to this, Mr. Rill was a property finance manager for
College Park Properties. Mr. Rill received an M.B.A. from the
University of Florida in May 1996.
Management (Post-Acquisition).
The following directors (officers) will be a nominee for
election to Board of Directors of both Cycle-Parts.com, Inc. and
TheInternetCorp.net, Inc. at the special meeting of the
shareholders of each company to be held after the declaration of
effectiveness of this Form S-4:
(a) Terry Cuthberston, President/Director.
Mr. Cuthbertson, age 49, will serve as the President and a
Director of TheInternetCorp.net, Inc. and Cycle-Parts.com, Inc..
From 1995 to 1999, Mr. Cuthbertson was the Director of Finance
of Tech Pacific Group, the largest distributors of information
technology and telecommunications products in the Asia-Pacific
region. Tech Pacific is part of the worldwide Hagemeyer Group of
the Netherlands. Hegemeyer is publicly listed on the Amsterdam
Stock Exchange with worldwide revenues exceeding US $7 billion.
Prior to joining Tech Pacific, he spent the previous 25 years
with KPMG Peat Marwick, Sidney, Australia. While at KPMG, Mr.
Cuthberston worked as a partner in both Audit Services and KPMG
Corporate Services, where he was involved in company refinancing,
public offerings, acquisition reviews, and company restructuring.
He was made a director of KPMG Corporate (NSW) Pty. Ltd. in
1989. Mr. Cuthberston received a Bachelor of Business degree in
1981 from the New South Wales University of Technology, an
Accounting Procedures Certificate from St. George Technical
College, and is an Associate of the Institute of Chartered
Accountants in Australia.
(b) Gerald I. Quinn, Vice President/Secretary/Director.
Mr. Quinn, age 56, will be Vice-President, Secretary and a
Director of TheInternetCorp.net, Inc. and Cycle-Parts.com, Inc..
From May, 1996 to the present, Mr. Quinn has served as Chief
Executive Officer and a Director of Wavetech International, Inc.,
a reporting public company. Prior to this, he was President of
Interpretel (Canada) Inc., a subsidiary of Wavetech, from 1995 to
1996. From 1986 to 1994, Mr. Quinn was Vice President of
University Affairs and Development at the University of Guelph,
one of Canada's leading teaching and research universities, where
he was responsible for marketing, image development, constituent
relations and media relations, including systems development,
telemarketing and the development of affinity programs. Since
1984, Mr. Quinn has served as a consultant to Cableshare
Interactive Technology, Inc., a Canadian Toronto Securities
Exchange listed public company that operates in the interactive
television industry and became a director in 1993. In 1997, Mr.
Quinn negotiated the acquisition of Cableshare by Source Media,
Inc. (NASDAQ: SRCM).
(c) Karen Bohringer, Director.
Ms. Bohringer, age 39, will serve as a Director of
TheInternetCorp.net, Inc. and Cycle-Parts.com, Inc.. From 1990
to present, she has been the owner of Bohringer & Associates, a
computer training company in Queensland, Australia. In 1983 Ms.
Bohringer moved to the United States to undertake computer
programming studies. In 1986 she received a Certificate with
Honors from Harvard University, Boston, MA in Advanced Cobol
Programming and a Diploma in 1985 from the American Institute of
Computer Programming in Atlanta, GA. Upon returning to
Australia, Ms. Bohringer lectured on programming languages at
Hales Private College, Melbourne, for 18 months. From 1987 to
1989, she was employed as the Australian Training Manager for MAI
Basic Four, an American computer hardware/software company, and
traveled extensive completing software installations and staff
training. In 1990, Ms. Bohringer formed Bohringer & Associates,
to do contract computer training for such companies as the
Australian Securities Commission, Australian Wool Corporation,
B.H.P., Shell Oil, the Supreme Court, the Premiers Department,
Director of Public Prosecutions, Department of Health, and the
Department of Housing. Ms. Bohringer has lectured as the Royal
Melbourne Institute of Technology on Pascal Programming.
Executive Compensation.
No officer or director of TheInternetCorp.net, Inc. after the
acquisition will initially be receiving any remuneration. There
will be no annuity, profit sharing, pension or retirement
benefits proposed to be paid to officers, directors, or employees
of TheInternetCorp.net, Inc. in the event of retirement at normal
retirement date as there is no existing plan provided or
contributed to by TheInternetCorp.net, Inc.. No stock options
are proposed to be paid in the future directly or indirectly by
TheInternetCorp.net, Inc. to any officer or director as there is
no such plan which is presently existing.
Certain Relationships and Related Transactions.
None.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Information on this item is set forth in Propsectus under the
heading "Disclosure of Commission Position on Indemnification for
Securities Act Liabilities."
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The Exhibits required by Item 601 of Regulation S-B, and an index
thereto, are attached.
UNDERTAKINGS
A. The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and Notwithstanding
the forgoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospects filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at
that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(d) Provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the small business issuer
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
B. The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one (1) business day of receipt of such request, and
to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
C. The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the
registrant has caused this registration statement to be signed by
the undersigned, thereunto duly authorized, in the City of Costa
Mesa, State of California, on November 30, 1999.
TheInternetCorp.net, Inc.
By: /s/ Vincent van den Brink
Vincent van den Brink, President
Special Power of Attorney
The undersigned constitute and appoint Vincent van den Brink
their true and lawful attorney-in-fact and agent with full power
of substitution, for him and in his name, place, and stead, in
any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Form S-4 Registration
Statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and
Exchange Commission, granting such attorney-in-fact the full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Vincent van den Brink
Vincent van den Brink President, November 30, 1999
Chief Executive Officer,
Director
EXHIBIT INDEX
Exhibit Method of
Number Description Filing
2 Agreement and Plan of Reorganization See Below
3.1 Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to the Registration
Statement on Form 10-SB/A filed on May 28,
1999) Incorporated
by Reference
3.2 Bylaws (incorporated by reference to Exhibit
3.2 to the Registration Statement on Form 10-
SB/A filed on May 28, 1999) Incorporated
by Reference
4 Form of Warrant See Below
5 Opinion Re: Legality See Below
13 Form 10-QSB (Registrant) See Below
23.1 Consent of Counsel See Below
23.2 Consent of Accountant (Registrant and Cycle-
Parts.com, Inc.) See Below
24 Special Power of Attorney See Signature
Page
27.1 Financial Data Schedule (Registrant) See Below
27.2 Financial Data Schedule (Cycle-Parts.com, Inc.)See Below
99 Consents of Persons Named as New Directors See Below