U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14(a)- 6(e)(2))
[x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to S 240.14a-11(c) or S 240.14a-12
ALTERNET SYSTEMS, INC.
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(Name of Small Business Issuer in its charter)
CD Farber Law Corporation,
Suite 2602 - 1111 Beach Ave Vancouver, BC V6E 1T9
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee Computed on table below per Exchange Act Rules 14a-
6(I)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4. Proposed aggregate offering price:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box is any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1. Amount previously paid:
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4. Date filed:
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Notes:
ALTERNET SYSTEMS, INC.
#610 - 815 West Hastings Street
Vancouver, BC V6C 1B4
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, MAY 12, 2003
Notice is hereby given that the Annual General Meeting of shareholders of
Alternet Systems, Inc., a Nevada corporation (the "Company") will be held on May
12, 2003, at the offices of the Company, Suite 610 - 815 West Hastings Street,
Vancouver, BC, V6C 1B4 at 2:00pm for the following purposes:
1. To elect the following six (6) nominees as Directors of the Company until
the next Annual Meeting of shareholders and until their respective successors
shall be elected and qualified: Michael Dearden, Griffin Jones, Patrick
Fitzsimmons, Brandon Douglas, Greg Protti and Karim Lakhani;
2. To approve the appointment of LaBonte & Company as the Company's
independent auditors for the new fiscal year commencing on January 1, 2003; and
3. To consider any other matter that properly may come before the meeting or
any adjournment thereof.
Shareholders of record as the close of business on April 28, 2002 will
be entitled to vote at the meeting or any postponement or adjournment thereof.
Please review the voting options on the attached proxy card and submit
your vote promptly. If you attend the Annual Meeting, you may revoke your Proxy
and vote in person if you desire to do so, but attendance at the Annual Meeting
does not itself serve to revoke your Proxy. A copy of the Company's Annual
Report for its fiscal year ended December 31, 2002 is enclosed herewith.
By order of the Board of Directors
April 28, 2003
/s/ Michael Dearden
Michael Dearden, President
PROXY STATEMENT
ALTERNET SYSTEMS, INC.
#610 - 815 West Hastings Street
Vancouver, BC V6C 1B4
This Proxy Statement is furnished to shareholders at the discretion and on
behalf of the Board of Directors of Alternet Systems, Inc., a Nevada corporation
(the "Company"), for the purpose of soliciting proxies for use at the Annual
Meeting of Shareholders of the Company to be held at the offices of the Company
at 610 - 815 West Hastings Street, Vancouver, BC, V6C 1B4 on Monday, May 12,
2003 at 10:00am. 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 this Proxy
Statement, the proxy will be voted in favour 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 the
Company, by appearing at the meeting and voting in person, or by submitting a
later dated proxy. A revocation that is not timely received shall not be taken
into account, and the original proxy shall be counted.
Shareholder proposals must be submitted to the Company not later than May
1, 2004 in order to be included in those matters considered at the next Annual
Meeting of this Company to be held in May 2004. The cost of preparing,
assembling and mailing this Proxy Statement, the Notice of Annual Meeting of
Shareholders and the accompanying Proxy is being borne by the Company. Brokers,
dealers, banks or voting trustees, and their nominees, are requested to forward
soliciting materials to the beneficial owners of shares and will be reimbursed
for their reasonable expenses. This Proxy Statement and accompanying proxy will
be mailed to shareholders on or before April 28, 2003.
VOTING SECURITIES
The record date of shareholders entitled to notice of and to vote at the
Annual Meeting of Shareholders is the close of business on April 28, 2003. On
such date, the Company will have 16,144,085 shares of $0.001 par value common
stock issued and outstanding. Each share is entitled to one vote per share on
any matter which may properly come before the meeting and there shall 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 out-
standing 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. As management and other major shareholders,
directly or indirectly, a majority of the outstanding shares as of the record
date and intend to vote in favour of all proposals, it is anticipated that all
proposals will pass.
STOCK OWNERSHIP
The following table sets forth information regarding the beneficial
ownership of shares of the Company's common stock as of April 28, 2003
(16,144,085 issued and outstanding) by (i) all shareholder's known to the
Company to be beneficial owners of more than 5% of the outstanding Common Stock;
(ii) each director; and (iii) all officers and directors of the Company as a
group. Except as may be otherwise indicated in the footnotes to the table, each
person has sole voting power and sole dispositive power as to all of the shares
shown as beneficially owned by them.
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Amount of
Title of Name and Address of Beneficial Percent
Class Beneficial Owner Ownership(1) of Class
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Common Stock Michael Dearden
c/o 610 - 815 West Hastings
Vancouver, BC V6C 1B4 2,611,000 16.17%
Common Stock Griffin Jones
1243 W. 20th Street
North Vancouver, BC V7P 2B8 2,550,000 15.80%
Common Stock Patrick Fitzsimmons
#1406-151 E. Keith Road
North Vancouver, BC V7L 4M3 1,001,000 6.20%
Common Stock Greg Protti
6405 Holly Park Drive
Ladner, BC V4K 4W6 481,000 2.98%
Common Stock Advanced Interactive Inc. 1,500,000 9.29%
718 - 1350 East Flamingo Rd.
Las Vegas, Nevada 89119
1,500,000 9.29%
Advanced Interactive (Canada) Inc.
2101 - 1177 West Hastings St.
Vancouver, BC V6E 2K3
Common Stock Brandon Douglas
8173 Southgate Boulevard
North Waterdale
Florida 33068-1023 330,000 2.04%
Common Stock Karim Lakhani
C/0 #2101 - 1177 W. Hastings
Vancouver, BC V6E 2K3 (2) (2)
Common Stock Shares of all directors and
Executive officers as a group
(7 people) 9,973,000 61.77%
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(1) Each person has sole voting power and sole dispositive power as to all
of the shares shown as beneficially owned by them. In the case of Michael
Dearden, the shares attributed to him are in the registered ownership of
Streamline Investment Inc. (a company of which he owns all of the issued and
outstanding common shares). In the case of Griffin Jones, the shares attributed
to him are in the registered ownership of Nahatlatch Capital Inc. (a company of
which he owns all of the issued and outstanding common shares).
(2) Karim Lakhani is the President and Director of Advanced Interactive Inc.
and Director of Advanced Interactive (Canada) Inc.
ELECTION OF DIRECTORS
EXECUTIVE OFFICERS
The Company's Board of Directors is currently composed of six members.
The Company's Bylaws provide that Directors are to serve only until the next
Annual Meeting of Shareholders or until their successors are elected and
qualified. All of the six directors currently comprising the Board of Directors
intend to stand for election again at the Meeting and Management recommends that
shareholder vote in favour of their election. Additional persons may be
nominated for the reasons outlined in (b) below.
The Directors and Executive Officers of the Company are not a party to any
material pending legal proceedings and, to the best of their knowledge, no such
action by or against them has been threatened.
(a) Officers and Directors.
Michael Dearden, President and Director
Michael Dearden, age 47. Mr. Dearden has 25 years experience in sales
and marketing, and for the past 15 years has focused specifically on corporate
marketing and venture capital financing. Mr. Dearden was formerly a director of
Americ Resources Corp., where he facilitated the company's merger with Rolland
Virtual Business Systems ("RVBS") and a concurrent financing of $1,800,000.
RVBS is a Montreal, Canada, based E-commerce software developer with
approximately 30 employees.
Griffin Jones, Secretary, Treasurer and Director
Griffin Jones, age 47. Mr. Jones has served as an Officer and Director
with both private and public trading companies. Over the past 7 years he has
assisted in securing financing of over $5,000,000 in industries such as high
technology, industrial products and mining. Mr. Jones has worked in marketing
management, finance and corporate relations for over 20 years.
Patrick Fitzsimmons, Director
Pat Fitzsimmons, age 50. Mr. Fitzsimmons brings to the Company sales
and management experience, gained from a 22-year career in the high-technology
marketplace. Mr. Fitzsimmons has represented firms such as NCR, Timeplex, Rogers
Cable, and Newbridge Networks, offering a wide range of technology solutions.
His most recent position was Manager, Major Accounts, AT&T Canada, Vancouver
B.C., Canada.
Greg Protti, Director
Greg Protti, age 45. Mr. Protti has 17 years experience in the high
technology sector. He has held sales and management positions in all segments of
the high tech sector from SHL Systemhouse consultants to Regional Sales Manager
for Merisel Canada, where he was responsible for running a $200 million in sales
revenue territory in Western Canada. Mr. Protti was previously Regional Manager
for Digidyne, Inc., in the VAR community, where he was responsible for hardware
sales as well as managing a staff of contract personnel. He is currently the
Vice President, Marketing for Sourcesmith Inc., a North Vancouver, B.C. software
development company.
Karim Lakhani, Director
Karim Lakhani, age 47. Mr. Lakhani is a co-founder of AII Multimedia
Corp. He holds a Bachelor of Applied Science in Electrical Engineering from
the University of British Columbia. From 1993 to 1996, Mr. Lakhani was Vice
President of Electronic Cottage International Inc. During this period he
developed a News Archival and Retrieval system as well as the Internet-based
U.S. Senate Proceedings Multimedia Archiving and Retrieval system. As President
of Orion Technologies Inc. he directed the development of a secure network for
electronic commerce and banking for 79 banks in 33 countries in Asia Pacific.
In addition, Mr. Lakhani has marketed technologies to giants such as McDonnel
Douglas, Groupe Videotron, Raytheon, and Samsung. Recognized within the
industry as one of the foremost minds in the fields of interactivity and
multimedia, Mr. Lakhani provides ingenuity and innovation in creating new
Aii technologies.
Brandon Douglas, Director
Brandon Douglas, age 49. Mr. Douglas is an attorney resident in the State
of Florida. He has been, for over five years, associated with the firm of
Vernis Bowling P.A. in Fort Lauderdale, Florida.
(b) Certain Relationships and Related Transactions
Other than as set forth below, there are no relationships, transactions, or
proposed transactions to which the Company was or is to be a party, in which any
of the named persons set forth previously had or is to have a direct or indirect
material interest.
(1) Other Business Activities
Certain of the officers and directors of the Company are engaged in other
businesses, either individually or through partnerships and corporations in
which they have an interest, hold an office, or serve on a board of directors.
As a result, certain conflicts of interest may arise between the Company and its
officers and directors. The Company will attempt to resolve such conflicts of
interest in favor of the Company. The officers and directors of the Company are
accountable to it and its shareholders as fiduciaries, which requires that such
officers and directors exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal action on
behalf of the Company or on behalf of itself and other similarly situated
shareholders to recover damages or for other relief in cases of the resolution
of conflicts is in any manner prejudicial to the Company.
(c) Compliance with Section 16(a) of the Exchange Act.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers and persons holding 10% or more of the Company's
common stock to file reports regarding their ownership and regarding their
acquisitions and dispositions of the Company's common stock with the Securities
and Exchange Commission. The Company is unaware that any required reports were
not timely filed.
(d) Committees of the Board of Directors.
The Company does not currently have standing audit, nominating, and
compensation committees.
However, the Company anticipates that the Securities Exchange Commission
and / or the NASD may, upon implementation of proposed BBX Exchange rules,
require the Company, which commenced trading on the NASD's OTCBB on March 14,
2003, to have a standing audit committee. Depending upon the final BBX Exchange
rules adopted and the continuing development of SEC rules relating to financial
statement and corporate accountability, together with SEC implementation of the
Sarbanes-Oxley Act, the Company may be required to have additional independent
directors and, possibly, independent directors with some level of financial and
accounting expertise.
In the event that the Company is required to have such additional
directors, additional directors may be elected at the Meeting or at some
subsequent time in an effort to meet evolving regulatory requirements.
(e) Meetings of the Board of Directors.
During the last fiscal year (ended December 31, 2002), the total number
of meetings of the Board of Directors which were held is two. None of the
incumbent directors of the Company attended less than 75 percent of the total
meetings.
EXECUTIVE COMPENSATION
(a) None of the officers and directors compensation exceeded $100,000 for
the last fiscal year (12 months ending December 31, 2002). All officers and
directors will be reimbursed for expenses incurred on behalf of the Company
including director expenses pertaining to attendance at meetings. It is
anticipated that additional management will be hired as the Company develops
and revenue is generated. The salaries paid to new employees will be consistent
with the salaries of others in similar positions in the industry.
Summary Compensation Table (6)
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Annual Compensation Long-term compensation
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Awards Payouts
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Other Restr- Securities All
annual icted underlying LTIP other
Name Compen- Stock options/ pay compen
Principal Salary Bonus sation award(s) SARs outs sation
Position Year ($) ($) ($) # $ $ $
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(a) (b) (c) (d) (e) (f) (g) (h) (i)
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Michael 2001 0 0 (1) 0 0 0 0
Dearden, 2002 0 0 18,515(2) 0 0 0 0
President&
Director
Griffin 2001 0 0 11,050 0 0 0 0
Jones, 2002 0 0 35,164(3) 0 0 0 0
Secretary,
Treasurer&
Director
Patrick 2001 40,000 0 0 0 0 0 0
Fitzsimmons 2002 33,660 0 (4) 0 0 0 0
Director
GregProtti 2001 0 0 0 0 0 0 0
Director 2002 0 0 0 0 0 0 0
2002
Karim 2001 0 0 0 0 0 0 0
Lakhani 2002 0 0 0 0 0 0 0
Director
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(1) Michael Dearden received $18,515 in consulting fees, paid to him
personally and to a company which he owns, Streamline Investments, Inc. in the
fiscal year ended December 31, 2002.
(2) See 1 above.
(3) Griffin Jones received $35,164 in consulting fees in the fiscal year ended
December 31, 2002. He received a total of $11,050 in compensation in the fiscal
year ended December 31, 2001.
(4) Patrick Fitzsimmons received $33,660 in marketing fees / salary from the
Company in the fiscal year ended December 31, 2002.
(5) Greg Protti received $21,775 in salary in the fiscal year ended December
31, 2002. He received no salary or other compensation in the fiscal year ended
December 31, 2001.
(6) Stephen Owst, an officer of the Company, received $10,431 in the fiscal
year ended December 31, 2002. He is not a senior officer of the Company and, as
a result, is not included in the table above but his compensation was included
in Note 6 to the December 31, 2002 financial statements enclosed herewith.
Alternet, at its annual meeting of shareholders held on December 20, 2001,
adopted a Stock Option Plan which would permit Alternet to grant up to 1,000,000
incentive stock options. This Stock Option Plan was approved by shareholders. No
stock options have yet been granted under this Stock Option Plan nor has it been
filed with the SEC using the S8 Registration Statement procedure. However, some
or all of the persons named above may be granted stock options in the future and
the Stock Option Plan may be filed using the S8 Registration Statement
procedure.
Equity Compensation Plan Information
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Number of Weighted
Securities average
to be issued exercise
Upon price of Number of
exercise of outstanding Securities
outstanding options remaining
options, warrants available
Plan warrants and for future
category and rights rights issuance
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Stock Option 200,000 $0.50 800,000
Incentive Plan (1) Common Shares
(1,000,000 common
Shares authorized
for issuance)
Stock Retainer Plan 5,000,000 $0.10 5,000,000
for Employees,
Officers, Directors
and Consultants
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Total 5,200,000 $0.20 5,800,000
Common Shares
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(1) The Stock Option Incentive Plan will be filed by way of S8 Registration
Statement with the SEC on or before April 30, 2003.
(2) The Stock Retainer Plan for Employees, Officers, Directors and Consultants
will be filed by way of S8 Registration Statement with the SEC on or before
April 30, 2003.
As of December 31, 2001, certain directors had provided cash loans to, or
incurred expenses on behalf of, the Company totaling $33,486. This amount
decreased (with the partial reimbursement of expenses and repayment of loans)
to $12,782 as of December 31, 2002. These amounts due from related parties are
non-interest bearing and have no specific terms of repayment.
A director of AI Systems Group Inc. received $32,607 in marketing fees in the
year ended December 31, 2001 (the director was Patrick Fitzsimmons and the
$32,607 is included in the $40,000 figure given in the Summary Compensation
Table above).
Other than as stated below, there is no known relationship between any of the
Directors and Control persons with major clients or providers of essential
products and technology, nor are there any other known related transactions
except as disclosed otherwise in this registration statement.
Karim Lakhani is Director and President of Advanced Interactive Inc. and
Director of Advanced Interactive Canada Inc., corporations which own a total
of 3,000,000 shares of common stock (approximately 21% of the issued and
outstanding shares of common stock) of Alternet. These corporations are also
party to the License Agreement and its amendments. As of August 10, 2002 AII
was owed $80,000 in arrears license payments by the Company which was debt
settled by the issuance to AII of 228,571 shares of common stock of the Company.
(b) A total of 200,000 incentive stock options have been granted to date
under the terms of the Stock Option Incentive Plan.
(c) There are no annuity, pension or retirement benefits proposed to be
paid to officers, directors, or employees of the corporation in the event of
retirement at normal retirement date pursuant to any presently existing plan
provided or contributed to by the corporation or any of its subsidiaries.
INDEPENDENT PUBLIC ACCOUNTANTS
(a) Ratification of Accountants.
LaBonte & Company of Vancouver, British Columbia issued the report for the
Company's audited financial statements for the fiscal year ended December 31,
2002. The Board of Directors has approved by resolution a proposal to retain
LaBonte & Company for the fiscal year that commenced on January 1, 2003. The
Board of Directors of the Company recommends a vote FOR the retention of LaBonte
& Company for the current fiscal year.
Representatives of LaBonte & Company are not expected to be present at the
Annual Meeting. However, such representatives will be available by telephone to
respond to appropriate questions at the meeting.
OTHER BUSINESS
As of the date of this proxy statement, the Company knows of no business
that will be presented for consideration at the Annual Meeting other than the
items referred to above. If any other matter is properly brought before the
meeting for action by the shareholders, proxies in the enclosed forms returned
to the Company will be voted in accordance with the recommendation of the Board
of Directors or, in the absence of such a recommendation, in accordance with the
judgment of the proxy holder.
By order of the Board of Directors
April 28, 2003
/s/ Michael Dearden
Michael Dearden, President
P R O X Y
SCHOOLWEB SYSTEMS INC.
Annual Meeting of Shareholders To Be Held Monday, May 12, 2003 at 10:00am
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Michael Dearden as proxy of the undersigned, with full power of
substitution, and hereby authorizes him to represent and to vote at the Annual
Meeting of Shareholder of Alternet Systems, Inc. (the "Company") to be held on
May 12, 2003, as designated below, all of the common stock of the Company held
of record by the undersigned on April 28, 2002 at Suite 610 - 815 West Hastings
Street, Vancouver, BC, V6T 2B4, at 10:00am for matters that properly may come
before the meeting or any adjournment thereof.
1. ELECTION OF DIRECTORS (circle one):
FOR WITHHOLD AUTHORITY
all nominees listed below to vote for all nominees listed below
Michael Dearden
Griffin Jones
Pat Fitzsimmons
Greg Protti
Karim Lakhani
Brandon Douglas
2. TO APPROVE THE SELECTION OF LABONTE & COMPANY AS THE COMPANY'S
INDEPENDENT ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR (circle one).
FOR AGAINST ABSTAIN
3. TO APPROVE THE COMPANY'S NAME CHANGE TO "ALTERNET SYSTEMS INC." (circle
one).
FOR AGAINST ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS GIVEN, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS SET FORTH ABOVE. The undersigned hereby
acknowledges receipt of the Notice of Annual Meeting of Shareholders of Alternet
Systems, Inc. to be held on May 12, 2003 and the Proxy Statement of such
meeting.
Dated: _________________, 2003 ____________________________________
(Print Name of Shareholder)
____________________________________
(Signature of Shareholder)
Note: Please sign exactly as name appears on stock certificate (as indicated
on reverse side). All joint owners should sign. When signing as personal
representative, executor, administrator, attorney, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporation name
by President or other authorized person. If a partnership, please sign in
partnership name by a partner.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<FN>