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As filed with the Securities and Exchange Commission on October ____ , 2001
Registration No. 333-55534
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2 TO
FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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SYNDICATIONNET.COM, INC.
(Name of small business issuer in its charter)
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Delaware 57-2218873 8742
(State or other jurisdiction (I.R.S. Employer (Industrial Classification
of incorporation or Identification Number) Code Number)
organization)
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SyndicationNet.com, Inc.
The Hartke Building
7637 Leesburg Pike
Falls Church, Virginia 22043
703/748-3480
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices and principal place of business)
Vance Hartke, President
The Hartke Building
7637 Leesburg Pike
Falls Church, Virginia 22043
703/748-3480
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Cassidy & Associates
1504 R Street N.W.
Washington, D.C. 20009
202/387-5400
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Approximate Date of Commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
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 statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier 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 number of the earlier effective registration statement for the same
offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to be Offering Price Aggregate Registration
Securities to be Registered Registered Per Share Offering Price Fee(2)
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Common stock held by
selling securityholders 561,500 $.0001(1) $56.15 $1.00
Total 561,500 $.0001 $56.15 $1.00
(1) There is no current market for the securities and the price at which the
shares held by the selling securityholders will be sold{is unknown.
The book value of the registrant is a negative number and, as such,
pursuant to Rule 457(f)(2) the registration fee is based upon the par
value, $.0001 per share, of the registrant's common stock.}
(2) Paid by electronic transfer.
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, as amended, or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
PROSPECTUS Subject to Completion, Dated ______ , 2001
The information contained in this prospectus is subject to completion or
amendment. A registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These 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 an offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of that state.
SYNDICATIONNET.COM, INC.
561,500 shares of common stock to be sold by selling securityholders
This prospectus relates to the offer and sale of 561,500 shares of common
stock of SyndicationNet.com, Inc., a Delaware company, ("SyndicationNet"), par
value $.0001 per share, by 35 of its securityholders. All the shares are being
sold by the selling securityholders in separate transactions at prices to be
negotiated at that time.
There is no public market for SyndicationNet's common stock and a public
market may not develop. If a public market is developed, it may not be
sustained.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" CONTAINED IN
THIS PROSPECTUS BEGINNING ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Prospectus dated October ____, 2001
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and, if given or made, such information or representations may not
be relied on as having been authorized by SyndicationNet. Neither the delivery
of this prospectus nor any sale made hereunder shall under any circumstances
create an implication that there has been no change in the affairs of
SyndicationNet since the date of this prospectus. This prospectus does not
constitute an offer to sell, or solicitation of any offer to buy, by any person
in any jurisdiction in which it is unlawful for any such person to make such an
offer or solicitation. Neither the delivery of this prospectus nor any offer,
solicitation or sale made hereunder, shall under any circumstances create any
implication that the information herein is correct as of any time subsequent to
the date of the prospectus.
TABLE OF CONTENTS
Page
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Prospectus Summary 1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1. SYNDICATIONNET DOES NOT HAVE FUNDS CURRENTLY AVAILABLE FOR ACQUISITIONS AND
IF SYNDICATIONNET IS UNABLE TO OBTAIN FUNDING SYNDICATIONNET'S ACTIVITIES MAY
BE LIMITED TO CONSULTING ACTIVITIES. . . . . . . . . . . . . . . . . . . . . . . 3
2. SYNDICATIONNET HAS INCURRED SIGNIFICANT LOSSES FOR THE YEAR ENDED DECEMBER
31, 2000 WHICH RAISES SUBSTANTIAL DOUBTS ABOUT SYNDICATIONNET'S ABILITY
TO CONTINUE AS A GOING CONCERN. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. SYNDICATIONNET WILL NEED TO RAISE ADDITIONAL FUNDS IN THE FUTURE FOR ITS
OPERATIONS AND IF IT IS UNABLE TO RAISE ADDITIONAL FINANCING, SYNDICATIONNET MAY
NOT BE ABLE TO SUPPORT ITS OPERATIONS. . . . . . . . . . . . . . . . . . . . . 3
4. SYNDICATIONNET MAY OBTAIN ADDITIONAL CAPITAL PRIMARILY THROUGH THE ISSUANCE
OF PREFERRED STOCK WHICH MAY LIMIT THE RIGHTS OF CURRENT HOLDERS OF
SYNDICATIONNET COMMON STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. SYNDICATIONNET HAS A LIMITED OPERATING HISTORY AND INVESTORS MAY NOT BE ABLE
TO BASE AN INVESTMENT DECISION ON SYNDICATIONNET'S OPERATING HISTORY. . . . 4
6. BECAUSE SYNDICATIONS MANAGEMNT TEAM DEVOTES A LIMITED AMOUNT OF THEIR TIME
TO THE AFFAIRS OF SYNDICATIONNET, SYNDICATIONNET'S BUSINESS MAY NOT BE
SUCCESSFUL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. SYNDICATIONNET'S LIMITED EXPERIENCE MAY DIMINISH APPEAL TO POTENTIAL
AFFILIATED COMPANIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
8. SYNDICATIONNET'S STRATEGY MAY INVOLVE SPECULATIVE INVESTMENTS WHICH COULD
CAUSE SYNDICATIONNET TO LOSE SOME OR ALL OF ITS INVESTED FUNDS AND COULD CAUSE
THE PRICE OF SYNDICATIONNET'S STOCK TO DECLINE. . . . . . . . . . . . . . . 4
9. THERE IS NO CURRENT TRADING MARKET FOR SYNDICATIONNET'S SECURITIES.
WITHOUT A TRADING MARKET, PURCHASERS OF THE SECURITIES MAY HAVE
DIFFICULTY SELLING THEIR SHARES. . . . . . . . . . . . . . . . . . . . . . . . . 4
10. POTENTIAL MARKET MAKERS MAY SIGNIFICANTLY INFLUENCE THE PRICE OF
SYNDICATIONNET'S SECURITIES WHICH COULD CAUSE INVESTORS IN
SYNDCATIONNET TO LOSE THEIR INVESTMENT. . . . . . . . . . . . . . . . . . . . 5
11. SYNDICATIONNET MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK WHICH COULD
DILUTE ITS CURRENT SHAREHOLDER'S SHARE VALUE. . . . . . . . . . . . . . . . 5
12. THERE ARE 10,220,250 SHARES OF SYNDICATIONNET'S TOTAL OUTSTANDING SHARES
THAT ARE RESTRICTED FROM IMMEDIATE RESALE BUT MAY BE SOLD INTO THE MARKET IN THE
NEAR FUTURE. THIS COULD CAUSE THE MARKET PRICE OF THE COMMON STOCK TO
DROP SIGNIFICANTLY, EVEN IF THE BUSINESS IS DOING WELL. . . . . . . . . . . 5
13. THE POSSIBILITY OF SYNDICATIONNET ISSUING PREFERRED STOCK WITH
PREFERENCES MAY DEPRESS THE MARKET PRICE OF THE COMMON STOCK
EVEN WITHOUT ISSUANCE OF THE PREFERRED STOCK. . . . . . . . . . . . . . . . . . . 5
14. SELLING SECURITYHOLDERS MAY SELL SECURITIES AT ANY PRICE OR
TIME WHICH COULD CAUSE THE PRICE OF SYNDICATIONNET'S COMMON
STOCK, IF PUBLICLY TRADED, TO DECLINE . . . . . . . . . . . . . . . . . . . . . . . 5
15. SINCE SYNDICATIONNET HAS NOT PAID ANY DIVIDENDS ON ITS COMMON STOCK AND DOES
NOT INTEND DO SO IN THE NEAR FUTURE. A PURCHASER OF ITS SECURITIES
WILL ONLY REALIZE AN ECONOMIC GAIN ON HIS OR HER INVESTMENT FROM
APPRECIATION, IF ANY, IN THE MARKET PRICE OF SYNDICATIONNET'S COMMON STOCK. . . 6
16. PENNY STOCK REGULATIONS MAY IMPAIR SHAREHOLDERS' ABILITY
TO SELL SYNDICATIONNET'S STOCK AND MAY LIMIT THE LIQUIDITY OF
SYNDICATIONNET'S COMMON STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
17. MANAGEMENT AND AFFILIATES OWN ENOUGH SHARES TO CONTROL SHAREHOLDER
VOTE WHICH COULD LIMIT THE RIGHTS OF EXISTING OR FUTURE SHAREHOLDERS. . . . 6
18. SYNDICATIONNET'S OFFICERS AND DIRECTORS MAY HAVE DEFENSES AVAILABLE TO THEM
AND HAVE INDEMNITY RIGHTS WHICH MAY LIMIT THE SUCCESS OF INVESTORS WHO BRING
CLAIMS AGAINST SYNDICATIONNET'S OFFICERS AND DIRECTORS. . . . . . . . . . . . . 6
19 SYNDICATIONNET DOES NOT HAVE EMPLOYMENT AGREEMENTS WITH ANY OF ITS OFFICERS
OR EMPLOYEES AND IF SYNDICATIONNET IS UNABLE TO RETAIN ITS MANAGEMENT TEAM
SYNDICATIONNET'S BUSINESS OPERATIONS MAY NOT BE ABLE TO CONTINUE TO OPERATE. . . 6
20 BECAUSE MANY OF SYNDICATIONNET'S COMPETITORS ARE LARGER AND HAVE
GREATER FINANCIAL AND OTHER RESOURCES THAN SYNDICATIONNET, IT MAY
NOT BE ABLE TO SUCCESSFULLY COMPETE WITH THEM. . . . . . . . . . . . . . . . . . 7
21 IF SYNDICATIONNET IS REQUIRED TO COMPLY WITH THE INVESTMENT COMPANY
ACT THEN SYNIDCATIONNET WILL INCUR SUBSTANTIAL ADDITIONAL EXPENSES AND
IF SYNDICATIONNET DOES NOT COMPLY WITH THE INVESTMENT COMPANY ACT,
THEN SYNDICATIONNET COULD BE SUBJECT TO LIABILITIES. . . . . . . . . . . . . . 7
22 THE LACK OF AVAILABILITY OF LUMBER MAY PREVENT SYNDICATIONNET
FROM OPERATING AS A RETAILER OF LUMBER. . . . . . . . . . . . . . . . . . . . . 7
23 BECAUSE LUMBER IS AFFECTED BY CYCLICAL SUPPLY AND DEMAND FACTORS OF THE
FOREST PRODUCTS INDUSTRY, SYNDICATION MAY NOT RECEIVE ORDERS FOR LUMBER
AND/OR MAY NOT BE ABLE TO FULFILL SUCH ORDERS. . . . . . . . . . . . . . . . 7
24 KEMPER ONLY HAS ONE CUSTOMER AND IF KEMPER LOOSES THIS
CUSTOMER IT MAY NOT BE ABLE TO CONTINUE TO OPERATE. . . . . . . . . . . . . . 8
Disclosure Regarding Forward Looking Statements 8
Business 8
Use of Proceeds 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Management 14
Security Ownership of Certain Beneficial Owners and Management 16
Selling Securityholders 20
Certain Relationships and Related Transactions 20
Description of Securities 23
Plan of Distribution 24
Legal Matters 25
Experts 27
Additional Information 28
Index to Financial Statements F-1 - F-24
___________________
Dealer Prospectus Delivery Obligation
Until _______, 2001, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PROSPECTUS SUMMARY
The following is a summary of information found elsewhere in this
prospectus. Reference is made to, and this summary is qualified by, the more
detailed information set forth in this prospectus, which should be read in its
entirety.
SyndicationNet
SyndicationNet is a holding company formed to acquire controlling interests
in or to participate in the creation of development stage businesses.
SyndicationNet intends to provide financial, management and technical support to
both Internet and brick-and-mortar businesses that demonstrate growth potential.
SyndicationNet's strategy is to integrate affiliated businesses into a network
and to actively develop the business strategies, operations and management teams
of the affiliated entities. SyndicationNet has acquired as a wholly-owned
subsidiary, Kemper Pressure Treated Forest Products, Inc., a business engaged in
the retail brokerage of treated lumber such as utility poles, bridge pilings,
and guardrail posts. Kemper is also developing computer software applications
to manage on-line bidding for the treatment, sale and shipment of processed
wood.
SyndicationNet is headquartered in the Hartke Building located at 7637
Leesburg Pike, Falls Church, Virginia 22043. SyndicationNet's telephone number
is 703/748-3480 and its fax number is 703/790-5435.
Selling Securityholders
This prospectus relates to the registration for sale of the securities held
by thirty-five securityholders of SyndicationNet. These shareholders are
referred to throughout this prospectus as "selling securityholders". These
securityholders will be able to sell their shares on terms to be determined at
the time of sale, directly or through agents, dealers or representatives to be
designated from time to time. SyndicationNet will not receive any proceeds from
the sale of the securities by the selling securityholders. The shares are being
sold by the selling securityholders and SyndicationNet has no agreements or
understandings with any broker or dealer for the sales of the shares. A selling
securityholder may determine to use a broker-dealer in the sale of its
securities and the commission paid to that broker-dealer, if any, will be
determined at that time. SyndicationNet will not receive any proceeds from the
sale of the shares.
Trading Market
There is currently no trading market for the securities of SyndicationNet.
SyndicationNet intends to apply initially for its securities to be traded in the
Over-the-counter market on the OTC Bulletin Board. If at some future time
SyndicationNet becomes qualified, it will apply for qualification of its
securities on the Nasdaq SmallCap Market. SyndicationNet may not now or ever
qualify for listing of its securities on the OTC Bulletin Board and may not now
or at any time in the future qualify for quotation on the Nasdaq SmallCap
Market.
-1-
The Offering
Number of shares of
common stock outstanding prior
to this offering 10,781,750 shares
Common stock offered by
selling securityholders 561,500 shares
Use of Proceeds SyndicationNet will not receive any
proceeds from the sale of the
shares of common stock included in
the registration statement of which
this prospectus is a part.
Plan of Distribution The offering of SyndicationNet shares
of common stock is being made by
the shareholders who wish to sell
their shares. Sales of
SyndicationNet common stock may be
made by the selling securityholders
in the open market or in privately
negotiated transactions and at
prices, fixed prices or negotiated
prices.
Risk Factors There are substantial risk factors
Involved in investing in
SyndicationNet. For a discussion of
certain factors you should consider
before buying shares of our common
stock, see the section entitled
"Risk Factors".
Selected Financial Data
The following table sets forth the selected consolidated financial data for
SyndicationNet. The financial information below is summary only. The financial
information should be read in conjunction with the more detailed financial
statements and financial notes appearing elsewhere in this prospectus in the
Company's 10-Q for the three months ended March 31, 2001 and in the Company's
10-K for the years ended December 31, 2000 and 1999.
-2-
Year Ended Year Ended
Six Months Ended December 31, December 31,
June 30, 2001 1999 2000
Income Statement Items:
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Sales $ 4,467,577 $ 5,597,676 $ 7,315,093
Cost of sales 4,439,708 $5,526,429 7,267,571
Gross margin 27,869 71,147 47,522
Operating Loss (45,200) (186,318) (523,722)
Balance Sheet Items
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Total current asset $ 919,613 493,420 571,761
Total assets 920,977 496,150 573,581
Current liabilities 1,264,368 962,524 998,257
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND INVOLVE A HIGH
DEGREE OF RISK AND 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, AS WELL AS ALL OF
THE OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS AND THE INFORMATION
CONTAINED IN THE FINANCIAL STATEMENTS.
GENERAL RISK FACTORS
SYNDICATIONNET DOES NOT HAVE FUNDS CURRENTLY AVAILABLE FOR ACQUISITIONS AND IF
SYNDICATIONNET IS UNABLE TO OBTAIN FUNDING SYNDICATIONNET'S ACTIVITIES MAY BE
LIMITED TO CONSULTING ACTIVITIES.
SyndicationNet does not currently have funds reserved or available for the
acquisition of interests in or for the creation of Internet or brick-and-mortar
businesses. SyndicationNet's business plan is to integrate affiliated companies
into a network and to actively develop the business strategies, operations and
management teams of the affiliated entities. SyndicationNet owns Kemper as a
wholly-owned subsidiary, but SyndicationNet will need to raise funds or issue
its securities in order for it to acquire or invest in additional companies.
SYNDICATIONNET HAS INCURRED SIGNIFICANT LOSSES FOR THE YEAR ENDED DECEMBER 31,
2000 WHICH RAISES SUBSTANTIAL DOUBTS ABOUT SYNDICATIONNET'S ABILITY TO CONTINUE
AS A GOING CONCERN.
SyndicationNet has historically incurred significant losses which have
resulted in an accumulated deficit of $1,217,503 at December 31, 2000 which
raises substantial doubt by SyndicationNet's auditors about SyndicationNet's
ability to continue as a going concern.
SYNDICATIONNET WILL NEED TO RAISE ADDITIONAL FUNDS IN THE FUTURE FOR ITS
OPERATIONS AND IF IT IS UNABLE TO RAISE ADDITIONAL FINANCING, SYNDICATIONNET MAY
NOT BE ABLE TO SUPPORT ITS OPERATIONS.
SyndicationNet may need additional funds to develop its operations.
SyndicationNet may seek additional capital through
an offering of its equity securities,
an offering of debt securities, or
by obtaining financing through a bank or other entity.
SyndicationNet has not established a limit as to the amount of debt it may incur
and it has not adopted a ratio of its equity to a debt allowance. If
SyndicationNet needs to obtain additional financing, the financing may not be
available from any source, or may not be available on terms acceptable to
SyndicationNet. Any future offering of securities may not be successful.
SyndicationNet could suffer adverse consequences if it is unable to obtain
additional capital when needed.
-3-
SYNDICATIONNET MAY OBTAIN ADDITIONAL CAPITAL PRIMARILY THROUGH THE ISSUANCE OF
PREFERRED STOCK WHICH MAY LIMIT THE RIGHTS OF CURRENT HOLDERS OF
SYNDICATIONNET COMMON STOCK.
Without any shareholder vote or action, SyndicationNet may designate and
issue additional shares of its preferred stock. The terms of any preferred stock
may include priority claims to assets and dividends and special voting rights
which could limit the rights of current shareholders of SyndicationNet common
stock. The designation and issuance of preferred stock favorable to current
management or shareholders could make any possible takeover of SyndicationNet or
the removal of its management more difficult. It could defeat hostile bids for
control of SyndicationNet which bids might have provided shareholders with
premiums for their shares.
SYNDICATIONNET HAS A LIMITED OPERATING HISTORY AND INVESTORS MAY NOT BE ABLE TO
BASE AN INVESTMENT DECISION ON SYNDICATIONNET'S OPERATING HISTORY.
SyndicationNet has a limited operating history upon which an investor may
evaluate making an investment in SyndicationNet. Accordingly, in reviewing the
actual operating results of SyndicationNet, an investor will only be able to
examine the operating results of SyndicationNet's wholly-owned subsidiary in
making an investment decision. While SyndicationNet intends to acquire Internet
related businesses in exchange for cash or the issuance of securities, no
acquisitions have been consummated and no future acquisitions may be
consummated.
BECAUSE SYNDICATIONS MANAGEMNT TEAM DEVOTES A LIMITED AMOUNT OF THEIR TIME TO
THE AFFAIRS OF SYNDICATIONNET, SYNDICATIONNET'S BUSINESS MAY NOT BE SUCCESSFUL.
SyndicationNet's management team consists of individuals who are
concurrently involved in other activities and careers and will be spending only
a limited amount of time on the affairs of SyndicationNet. SyndicationNet may
not be able to successfully implement its business plan or continue its
operations if its management team is unable to devote the time required.
SYNDICATIONNET'S LIMITED EXPERIENCE MAY DIMINISH APPEAL TO POTENTIAL AFFILIATED
COMPANIES.
SyndicationNet has limited experience in assisting development stage
Internet, brick-and-mortar or e-commerce businesses and limited experience in
establishing a network of affiliated development growth companies. This lack of
experience may diminish the appeal of the services offered by SyndicationNet to
potential development stage companies.
SYNDICATIONNET'S STRATEGY MAY INVOLVE SPECULATIVE INVESTMENTS WHICH COULD
CAUSE SYNDICATIONNET TO LOSE SOME OR ALL OF ITS INVESTED FUNDS AND COULD CAUSE
THE PRICE OF SYNDICATIONNET'S STOCK TO DECLINE.
SyndicationNet's success depends on its ability to develop or select
companies that will be ultimately successful. There may be factors outside
SyndicationNet's control which could affect the success of the acquired
companies. SyndicationNet intends to seek out companies in the early stages of
development with limited operating history, little revenue and possible losses.
If SyndicationNet becomes affiliated with such entities and they do not succeed,
the value of SyndicationNet's assets, its results of operations, and the price
of SyndicationNet's common stock could decline.
THERE IS NO CURRENT TRADING MARKET FOR SYNDICATIONNET'S SECURITIES. WITHOUT A
TRADING MARKET, PURCHASERS OF THE SECURITIES MAY HAVE DIFFICULTY SELLING THEIR
SHARES.
There is currently no established public trading market for
SyndicationNet's securities. A trading market in SyndicationNet's securities may
never develop. If a trading market does develop, it may not be sustained for any
significant time. SyndicationNet intends to apply for admission to quotation of
its securities on the OTC Bulletin Board. If in the future SyndicationNet meets
the qualifications for admission to quotation on the Nasdaq SmallCap Market, it
may apply for admission. If for any reason SyndicationNet's common stock is not
listed on the OTC Bulletin Board or a public trading market does not develop,
purchasers of the shares may have difficulty selling their common stock.
-4-
POTENTIAL MARKET MAKERS MAY SIGNIFICANTLY INFLUENCE THE PRICE OF
SYNDICATIONNET'S SECURITIES WHICH COULD CAUSE INVESTORS IN SYNDCATIONNET
TO LOSE THEIR INVESTMENT.
One or more broker-dealers may be the principal market makers for the
shares being offered. Under these circumstances, the market bid and asked prices
for the securities may be significantly influenced, positively or negatively, by
decisions of the market makers to buy or sell the securities for their own
account. The market making activities of any market makers, if commenced, may
subsequently be discontinued. Various factors, such as SyndicationNet's
operating results, changes in laws, rules or regulations, general market
fluctuations, changes in financial estimates by securities analysts and other
factors may have a significant impact on the market price of SyndicationNet's
securities.
SYNDICATIONNET MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK WHICH COULD DILUTE
ITS CURRENT SHAREHOLDER'S SHARE VALUE.
If additional funds are raised through the issuance of common stock, there
may be a significant dilution in the value of SyndicationNet's outstanding
common stock. SyndicationNet's Certificate of Incorporation authorizes the
issuance of 100,000,000 shares of common stock. The issuance of all or part of
SyndicationNet's remaining authorized common stock may result in substantial
dilution in the percentage of the common stock held by SyndicationNet's then
shareholders. The issuance of common stock for future services or acquisitions
or other corporate actions may have the effect of diluting the value of the
shares held by SyndicationNet's investors.
THERE ARE 10,220,250 SHARES OF SYNDICATIONNET'S TOTAL OUTSTANDING SHARES THAT
ARE RESTRICTED FROM IMMEDIATE RESALE BUT MAY BE SOLD INTO THE MARKET IN THE NEAR
FUTURE. THIS COULD CAUSE THE MARKET PRICE OF THE COMMON STOCK TO DROP
SIGNIFICANTLY, EVEN IF THE BUSINESS IS DOING WELL.
There are 10,781,750 shares of common stock currently outstanding which
includes the 561,500 shares registered in this registration statement, which
shares may be resold in the public market immediately when this registration
statement is effective. The remaining shares will become available for resale
after a one-year holding period from the date of issuance pursuant to Rule 144
of the General Rules and Regulations of the Securities and Exchange Commission.
An increase in the number of shares of SyndicationNet available for public
sale without any increase to its capitalization could decrease the market price
of its shares.
An aggregate of 8,655,290 of the outstanding shares of SyndicationNet are
held by officers, directors, affiliates and entities controlled by them and are
subject to the trading volume limitations of Rule 144 including the shares held
by affiliates being registered in this registration statement. See "Plan of
Distribution-Sales by Affiliates".
THE POSSIBILITY OF SYNDICATIONNET ISSUING PREFERRED STOCK WITH PREFERENCES MAY
DEPRESS THE MARKET PRICE OF THE COMMON STOCK EVEN WITHOUT ISSUANCE OF THE
PREFERRED STOCK.
The authority of the board of directors to designate preferences and issue
preferred stock without shareholder consent may have a depressive effect on the
market price of SyndicationNet's common stock even prior to any designation or
issuance of the preferred stock.
SELLING SECURITYHOLDERS MAY SELL SECURITIES AT ANY PRICE OR TIME WHICH
COULD CAUSE THE PRICE OF SYNDICATIONNET'S COMMON STOCK, IF PUBLICLY TRADED, TO
DECLINE.
After effectiveness of this registration statement, the non-affiliated
selling securityholders may offer and sell their shares at a price and at any
time determined by them without being subject to Rule 144. The timing of sales
and the price at which the shares are sold by the selling securityholders could
cause the price of SyndicationNet's securities, if publicly traded, to decline.
-5-
SINCE SYNDICATIONNET HAS NOT PAID ANY DIVIDENDS ON ITS COMMON STOCK AND DOES NOT
INTEND DO SO IN THE NEAR FUTURE. A PURCHASER OF ITS SECURITIES WILL ONLY
REALIZE AN ECONOMIC GAIN ON HIS OR HER INVESTMENT FROM APPRECIATION, IF ANY, IN
THE MARKET PRICE OF SYNDICATIONNET'S COMMON STOCK.
Investors can not expect to receive a return on their stock investment in
the form of a dividend. SyndicationNet has never paid cash dividends on its
common stock and does not expect to in the future. SyndicationNet anticipates
that its cash resources and earnings, if any, will be retained for the operation
and expansion of its business.
PENNY STOCK REGULATIONS MAY IMPAIR SHAREHOLDERS' ABILITY TO SELL
SYNDICATIONNET'S STOCK AND MAY LIMIT THE LIQUIDITY OF SYNDICATIONNET'S COMMON
STOCK.
If trading in SyndicationNet's stock begins, its common stock may be deemed
a penny stock. Penny stocks generally are equity securities with a price of
less than $5.00 per share, other than securities registered on national
securities exchanges. Penny stocks are subject to "penny stock rules" that
impose additional sales practice requirements on broker-dealers who sell the
securities to persons other than established customers and accredited investors.
These additional requirements may restrict the ability of broker-dealers to sell
SyndicationNet's common stock and may limit the liquidity of its common stock.
See "Description of Securities-Penny Stock Regulation".
MANAGEMENT AND AFFILIATES OWN ENOUGH SHARES TO CONTROL SHAREHOLDER VOTE
WHICH COULD LIMIT THE RIGHTS OF EXISTING OR FUTURE SHAREHOLDERS.
SyndicationNet's executive officers, directors, affiliates and entities
controlled by them own approximately 80.2% of the outstanding common stock. As
a result, these executive officers and directors will control the vote on
matters that require stockholder approval such as election of directors,
approval of a corporate merger, increasing or decreasing the number of
authorized shares, adopting corporate benefit plans, effecting a stock split,
amending SyndicationNet's Certificate of Incorporation or other material
corporate actions.
SYNDICATIONNET'S OFFICERS AND DIRECTORS MAY HAVE DEFENSES AVAILABLE TO THEM
AND HAVE INDEMNITY RIGHTS WHICH MAY LIMIT THE SUCCESS OF INVESTORS WHO BRING
CLAIMS AGAINST SYNDICATIONNET'S OFFICERS AND DIRECTORS.
The Certificate of Incorporation and by-laws of SyndicationNet provide that
SyndicationNet indemnify its officers and directors against losses or
liabilities which arise from any transaction in that person's managerial
capacity unless that person:
violated a duty of loyalty,
did not act in good faith,
engaged in intentional misconduct or knowingly violated the law,
approved an improper dividend, or
derived an improper benefit from the transaction.
SyndicationNet's Certificate of Incorporation and by-laws also provide for the
indemnification of its officers and directors against any losses or liabilities
incurred as a result of the operation of SyndicationNet's business, provided
that its officers and directors acted in good faith and in the best interests of
SyndicationNet and that their conduct did not constitute gross negligence,
misconduct or breach of fiduciary obligations.
SYNDICATIONNET DOES NOT HAVE EMPLOYMENT AGREEMENTS WITH ANY OF ITS OFFICERS OR
EMPLOYEES AND IF SYNDICATIONNET IS UNABLE TO RETAIN ITS MANAGEMENT TEAM
SYNDICATIONNET'S BUSINESS OPERATIONS MAY NOT BE ABLE TO CONTINUE TO OPERATE.
SyndicationNet's success in achieving its growth objectives is dependant to
a substantial extent upon the continuing efforts and abilities of its key
management personnel, including the efforts of retired United States Senator
Vance Hartke, SyndicationNet's President, as well as other executive officers
and management. SyndicationNet does not have employment agreements with any of
its executive officers and the loss of their services would deprive
SyndicationNet of their needed legal and business contacts and experiences.
SyndicationNet may not be able to maintain and achieve its growth objectives
should SyndicationNet lose any or all of these individuals' services.
SyndicationNet does not maintain key-man life insurance for any of its officers.
-6-
BECAUSE MANY OF SYNDICATIONNET'S COMPETITORS ARE LARGER AND HAVE GREATER
FINANCIAL AND OTHER RESOURCES THAN SYNDICATIONNET, IT MAY NOT BE ABLE TO
SUCCESSFULLY COMPETE WITH THEM.
SyndicationNet is significantly smaller than many competitors in the
market. The financial strength of these competitors could prevent
SyndicationNet from acquiring development stage companies or prevent development
companies from using SyndicationNet's consulting, management skills and
networking services.
IF SYNDICATIONNET IS REQUIRED TO COMPLY WITH THE INVESTMENT COMPANY ACT THEN
SYNIDCATIONNET WILL INCUR SUBSTANTIAL ADDITIONAL EXPENSES AND IF SYNDICATIONNET
DOES NOT COMPLY WITH THE INVESTMENT COMPANY ACT, THEN SYNDICATIONNET COULD BE
SUBJECT TO LIABILITIES.
SyndicationNet's ownership interest in companies that it seeks to consult
with and/or acquire could result in SyndicationNet being classified as an
investment company under the Investment Company Act of 1940. If SyndicationNet
is required to register as an investment company, then it will incur substantial
additional expenses as the result of the Investment Company Act of 1940's record
keeping, reporting, voting, proxy disclosure and other legal requirements.
SyndicationNet has obtained no formal determination from the Securities and
Exchange Commission as to its status under the Investment Company Act of 1940.
Any violation of the Investment Company Act of 1940 could subject SyndicationNet
to civil or criminal liabilities. In the event SyndicationNet engages in
business combinations which result in it holding passive investment interests in
a number of entities, SyndicationNet could be subject to regulation under the
Investment Company Act of 1940. Passive investment interests, as used in the
Investment Company Act, essentially means investments held by entities which do
not provide management or consulting services or are not involved in the
businesses whose securities are held. In such event, SyndicationNet would be
required to register as an investment company and could be expected to incur
significant registration and compliance costs. Restrictions on transactions
between an investment company and its affiliates under the Investment Company
Act of 1940 would make it difficult, if not impossible, for SyndicationNet to
implement its business strategy of actively managing, operating and promoting
collaboration among SyndicationNet's to be acquired network of affiliated
entities.
SPECIAL RISK FACTORS INVOLVING SUBSIDIARY
THE LACK OF AVAILABILITY OF LUMBER MAY PREVENT SYNDICATIONNET FROM OPERATING AS
A RETAILER OF LUMBER.
The availability and costs of obtaining softwood and hardwood lumber are
critical elements for the SyndicationNet's subsidiary, Kemper, to continue to
operate. The supply of trees of acceptable size for the production of utility
poles has decreased in recent years in relation to the demand and prices have
increased. The supply of timber is significantly affected by its availability
from public lands, particularly in the Pacific Northwest. In response to
environmental concerns, the United States government has, over recent years,
reduced the amount of timber offered for sale. SyndicationNet may not be able to
obtain wood raw materials at economic prices in the future.
BECAUSE LUMBER IS AFECTED BY CYCLICAL SUPPLY AND DEMAND FACTORS OF THE
FOREST PRODUCTS INDUSTRY, SYNDICATION MAY NOT RECEIVE ORDERS FOR LUMBER AND/OR
MAY NOT BE ABLE TO FULFILL SUCH ORDERS.
The demand for, and prices of, timber and manufactured wood products,
including lumber, are affected primarily by the cyclical supply and demand
factors of the forest products industry. The factors that may affect the price
of timber that are outside the control of Kemper include general economic
conditions, interest rates, residential construction activities and the weather
conditions for harvesting timber.
-7-
KEMPER ONLY HAS ONE CUSTOMER AND IF KEMPER LOOSES THIS CUSTOMER
IT MAY NOT BE ABLE TO CONTINUE TO OPERATE.
Kemper currently has one major customer which accounts for 100% of its
revenues. Although Kemper is continually negotiating contracts with potential
customers, a loss of its only customer would greatly affect the operating
results of Kemper and of SyndicationNet.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. For example, statements included in this prospectus
regarding SyndicationNet's financial position, business strategy and other plans
and objectives for future operations, and assumptions and predictions about
future demand for SyndicationNet's services, products, marketing and pricing
factors are all forward-looking statements. When SyndicationNet uses words like
"intend," "anticipate," "believe," "estimate," "plan" or "expect,"
SyndicationNet is making forward-looking statements. SyndicationNet believes
that the assumptions and expectations reflected in such forward-looking
statements are reasonable, based on information available to it on the date of
this prospectus, but these assumptions and expectations may not be correct and
SyndicationNet may not take any action that it may presently be planning.
SyndicationNet has disclosed some important factors that could cause its actual
results to differ materially from its current expectations under "Risk Factors"
and elsewhere in this prospectus. SyndicationNet is not undertaking to publicly
update or revise any forward-looking statement if it obtains new information or
upon the occurrence of future events or otherwise.
SYNDICATIONNET.COM, INC.
BUSINESS
SyndicationNet.com, Inc., a Delaware corporation, is a holding company
formed to acquire controlling interests in or to participate in the creation of,
and to provide financial, management and technical support to, development stage
Internet business to business ("B2B"), e-commerce businesses and/or traditional
brick-and-mortar businesses. SyndicationNet has no restrictions or limitations
in terms of the type of industry that it intends to focus its activities on.
SyndicationNet's strategy is to integrate affiliated companies into a network
and to actively develop the business strategies, operations and management teams
of the affiliated entities. SyndicationNet has enogh cash on hand to operate for
the next twelve months assuming it does not make and acquisitions or
investments.
Business of SyndicationNet's subsidiary, Kemper
SyndicationNet currently has one wholly-owned subsidiary, Kemper Pressure
Treated Forest Products, Inc. Kemper is engaged in the retail brokerage
business of preservative treated lumber such as utility poles, bridge pilings,
timber and guardrail posts. Kemper is also developing computer software
applications that will enable Kemper to manage on-line bidding for the
treatment, sale and shipment of processed wood.
-8-
BACKGROUND
In preparation for this offering of its securities, SyndicationNet.com,
Inc. effected two reorganizations.
Kemper Pressure Treated Forest Products, Inc. is an operating Mississippi
corporation formed in 1987. On August 16, 1999, the shareholders of Kemper
Pressure Treated Forest Products exchanged all their outstanding stock,
16,200,000 shares, on a one-for-one basis for shares of stock of Life2K.com,
Inc., a Delaware corporation which had been incorporated in Delaware on March
24, 1999 as Algonquin Acquisition Corporation and which had no operations, no
revenues and one shareholder, TPG Capital Corporation. On August 12, 1999, in
anticipation of the share exchange with Kemper Pressure Treated Forest Products,
Inc., Algonquin Acquisition Corporation changed its name to Life2K.com, Inc. As
a result of the share exchange Kemper Pressure Treated Forest Products, Inc.
became a wholly-owned subsidiary of Life2K.com, Inc.
On October 13, 2000 the shareholders of Life2K.com, Inc. exchanged all
their outstanding stock for shares of Generation Acquisition Corporation.
Generation Acquisition Corporation, a Delaware corporation, had filed with the
Securities and Exchange Commission a registration statement on Form 10-SB, had
become a reporting company under the Securities Exchange Act of 1934, had no
revenues or operations and had one shareholder. At the time of the exchange, the
officers and directors of Life2K.com, Inc. became the officers and directors of
Generation Acquisition Corporation. Simultaneously, Life2K.com, Inc. merged with
and into Generation Acquisition Corporation and changed its name to
SyndicationNet.com, Inc.
At the time of the transactions described above, the control persons of
Kemper Pressure Treated Forest Products were Dale Hill who owned approximately
66% of Kemper and Brian Sorrentino, who owned approximately 34% of Kemper. The
controlling person of Algonquin Acquisition Corporation was its sole
shareholder, TPG Capital Corporation, and its controlling shareholder, James M.
Cassidy. The controlling persons of Life2K.com, Inc. were its directors Vance
Hartke, Mark Griffith, Cynthia White, Mark Solomon, Wayne Hartke and Howard
Siegel and its controlling shareholders Dale Hill and Brian Sorrentino. The
controlling person of Generation Acquisition Corporation was its sole
shareholder, TPG Capital Corporation, and its controlling shareholder, James M.
Cassidy.
The terms of the transaction between Algonquin Acquisition Corporation and
Kemper Pressure Treated Forest Products and the transaction between Generation
Acquisition Corporation and Life2K.com, Inc. were negotiated between
unaffiliated parties with the intention of making SyndicationNet.com, Inc. a
reporting company and filing this public offering of its securities. Both
reorganizations consisted of an exchange of stock. While there was shareholder
approval, there were no fairness opinions issued for either of the
reorganizations.
THE MARKET
SyndicationNet believes that the Internet's substantial growth has created
a market opportunity to facilitate the activities of electronic commerce. As
Internet-based network reliability, speed and security continue to improve, and
as more businesses are connected to and familiar with the Internet, traditional
brick-and-mortar businesses are beginning to use the Internet to conduct
e-commerce and to create new revenue opportunities by enhancing their
interactions with new and existing customers. Businesses are also using the
Internet to increase efficiency in their operations through improved
communications, both internally and with suppliers and other business partners.
SyndicationNet's management team believes that it can offer development
stage Internet companies strategic guidance regarding business model
development, market positioning, management selection, day-to-day operational
support and the introduction to investors that start-up companies often need to
fulfill their business objectives.
-9-
MARKETING
SyndicationNet, primarily through the marketing efforts of its executive
officers, directors and consultants, intends to locate B2B Internet-related
companies and/or traditional brick and mortar businesses for which
SyndicationNet will act as a general corporate consultant and intends to locate
development stage companies as acquisition candidates. SyndicationNet does not
intend to concentrate its efforts on any particular industry. SyndicationNet's
management team, led by retired United States Senator Vance Hartke, hopes to
take advantage of the resources of its directors, specifically in the areas of
accounting, e-commerce, finance and politics, to enable SyndicationNet to
consult with, acquire and integrate B2B e-commerce companies and/or traditional
brick and mortar businesses. SyndicationNet intends to actively explore
synergistic opportunities such as cross marketing efforts within the network of
companies it will consult with or acquire.
STRATEGY AND OBJECTIVES
Investment and development activities
----------------------------------------
SyndicationNet believes that it can add value to development stage B2B
e-commerce Internet-related companies and/or traditional brick and mortar
businesses by providing seed-capital and SyndicationNet may take advantage of
various potential business acquisition opportunities through the issuance of
SyndicationNet's securities. SyndicationNet believes it can further assist them
in the following areas:
- to develop and implement business models that capitalize on the Internet's
ability to provide solutions to traditional companies;
- to build a corporate infrastructure including a management team, a
qualified sales and marketing department, information technology, finance
and business development;
- to assist them in their ability to manage rapid growth and flexibility to
adopt to the changing Internet marketplace and technology;
- to assist them in evaluating, structuring and negotiating joint ventures,
strategic alliances, joint marketing agreements and other corporate
transactions; and
- to advise them in matters related to corporate finance, financial reporting
and accounting operations.
SyndicationNet believes that its management team is qualified to identify
companies that are positioned to succeed. SyndicationNet intends to structure
its acquisitions to permit the acquired company's management and key personnel
to retain an equity stake in the company. SyndicationNet believes that it has
the ability to complete acquisitions and investments quickly and efficiently.
SyndicationNet intends that after acquiring an interest in a development
company, it will participate in follow-on financing if needed.
Management and consulting activities
---------------------------------------
In evaluating whether to act as a consultant with a particular company,
SyndicationNet intends to apply an analysis which includes, but is not limited
to, the following factors:
1. Industry evaluation to determine inefficiencies that may be alleviated
through Internet or e-commerce use and will evaluate the profit potential, the
size of the market opportunity and the competition that exists for that
particular industry.
2. Target company evaluation to determine if the target company has the
products, services and skills to become successful in its industry.
-10-
3. Overall quality and industry expertise evaluation of a potential
acquisition candidate in deciding whether to acquire a target company. If the
target company's management skills are lacking, a determination will be made as
to whether a restructuring of its corporate infrastructure is feasible and, if
done so, whether it would be successful.
4. Evaluation of SyndicationNet's equity position in a target company and
extent that SyndicationNet will be able to exert influence over the direction
and operations of the development stage company.
5. As a condition to any acquisition or development agreement,
SyndicationNet intends to require representation on the company's board of
directors to ensure its ability to provide active guidance to the acquired
company.
Consulting service customers
------------------------------
On September 19, 2000, SyndicationNet entered into a Services and
Consulting Agreement with Tri-State Metro Territories LLC, a Delaware limited
liability corporation ("Tri-State") in the business of selling franchised hair
coloring salon units. SyndicationNet was retained as Tri-State's consultant to
assist in the management, development, sales, and marketing of haircolorxpress
("HCX"), its franchised hair coloring salon units, in the District of Columbia,
Virginia, Maryland and Delaware. SyndicationNet was to be compensated from
Tri-State at an hourly rate of $150 to $250. SyndicationNet received an initial
retainer of $50,000 to be applied toward its hourly fees.SyndicationNet is not
currently providing any consulting services to Tri-State.
SyndicationNet's consulting services rendered to Tri-State included, but
was not limited to, assisting Tri-State to draft its Uniform Franchise Offering
Circular, Franchise state registration statements, master development
agreements, franchise territory agreements, and to assist Tri-State to
development and negotiate its franchise store locations for HCX.
SyndicationNet's officers and directors, Mark Solomon and Wayne Hartke assisted
Tri-State in the drafting of the above stated legal documents and the ancillary
legal requirements of setting up a franchise. SyndicationNet's consultant, Brian
Sorrentino, assisted Tri-State in its day-to-day development and business
planning in connection with HCX.
Mr. Sorrentino, a consultant and 10% shareholder of SyndicationNet, owns
63.5% of the outstanding shares of Tri-State and is a development agent and
general partner of Tri-State. Tri-State owns the development contract to sell
franchises of HCX salons in the territory of Maryland, Virginia, Washongton and
Delaware. Mark Solomon, a director of SyndicationNet, owns 8.3% of the
outstanding shares of Tri-State. Robert Green, a less than 5% shareholder of
SyndicationNet owns 9% of tri-State. The investments in Tri-State made by the
above stated individuals were after September 19, 2000 which is when
SyndicationNet entered into its consulting agreement with Tri-State Metro
Territories.
COMPETITION
The market to acquire interests in development stage growth companies,
Internet or brick-and-mortar, is highly competitive. Many of SyndicationNet's
competitors may have more experience identifying and acquiring equity interests
in development stage companies and have greater financial, research and
management resources than SyndicationNet. In addition, SyndicationNet may
encounter substantial competition from new market entrants. Some of
SyndicationNet's current and future competitors may be significantly larger and
have greater name recognition than SyndicationNet. Many investment oriented
entities have significant financial resources which may be more attractive to
entrepreneurs of development stage companies than obtaining the SyndicationNet's
consulting, management skills and networking services. SyndicationNet may not be
able to compete effectively against such competitors in the future.
-11-
KEMPER PRESSURE TREATED FOREST PRODUCTS, INC.
--------------------------------------------------
Background
SyndicationNet's wholly owned subsidiary, Kemper Pressure Treated Forest
Products, Inc. ("Kemper") was incorporated on December 28, 1987 under the state
laws of Mississippi. Kemper was organized to procure, buy, sell and harvest
products for treating poles, conventional lumber and wood products, as well as
preserve and treat wood and forest products for sale in wholesale and retail
markets. On October 9, 1997, Kemper entered into an asset purchase agreement and
lease assignment with Electric Mills Wood Preserving, Inc., a Mississippi
company, under which it sold all of its assets and reassigned its lease related
to its manufacturing enterprise. Currently Kemper acts as a retail broker of
treated timber, having eliminated virtually all of its manufacturing capacities.
Market
Kemper markets, distributes and arranges transportation for its treated
pine and hardwood lumber products which are used for utility poles, transmission
poles, pilings, bridge timbers, mining ties and guardrail posts. Kemper, in
working with the utility industry, procures two classifications of lumber poles:
(i) distribution poles which are typically used for electricity, cable,
telephone and other wires and (ii) transmission poles capable of carrying high
voltage electricity.
Kemper typically receives a monthly request from a buyer for wood products.
Kemper then contacts a supplier and requests a quote for the specified wood
products. Kemper adds a mark-up to the price quoted from the supplier, typically
a mark-up of between $0.02 to $0.065 cents per cubic foot of treated wood, and
submits the aggregate price for acceptance by the buyer. If accepted by the
buyer, Kemper will then finalize a purchase order to buy the wood products from
the supplier and an invoice reflecting the negotiated mark-up to is buyer.
Kemper's arrangement with its buyer states that the wood is FOB the treatment
plant which places the risk of loss or damage associated with shipping the wood
product on the buyer. Kemper, as a wholesale supplier of finished treated wood
products, does not wish to engage in the shipping industry which Kemper regards
as expensive and prone to uncontrolled shipping losses and breakage as a result
of loading and unloading finished products.
-12-
Strategy
Kemper believes that its prices are competitive within the industry and
Kemper's management believes that if it is able to provide consistent on time
large volume orders it will be able to convince large utility and communication
companies and municipalities to award Kemper with multi year supply contracts
which Kemper believes can be lucrative. Kemper is currently in the process of
bidding for several large multi year supply contracts. Large utility,
communication or municipalities sometimes take up to two years or longer before
deciding to whom they will award their contracts to. Kemper believes that if it
is able to gain a reputation for being able to handle large supply demands on a
consistent basis with quality wood products then its chances of winning large
contracts of this type will be enhanced.
Suppliers
Kemper currently engages the services of a third party supplier, Electric
Mills Wood Preserving, Mississippi, which provides 100% of Kemper's wood
treating and procurement services on a purchase order basis. There is no
contractual relationship between Kemper and Electric Mills Wood Preserving that
prevents Kemper from working with other suppliers. Management believes that, if
needed, other suppliers could provide similar services on comparable terms. A
change in suppliers could, however, cause a delay in manufacturing and a
possible loss of sales, which would adversely affect Kemper's results of
operations.
Customers
Kemper currently has one customer, Shelby County Forest Products, Inc.
("Shelby"), Tacoma, Washington, which accounts for 100% of Kemper's revenues.
Kemper typically receives a monthly request from Shelby for wood products.
Kemper then contacts a supplier for an estimated costs of filling Shelby's
requested purchase order. Although Kemper's management team is continually
negotiating contracts with potential customers, a loss of its current customer
could have a material adverse affect on Kemper's results of operations.
EMPLOYEES
As of September 1, 2001 SyndicationNet and Kemper had an aggregate of three
full time employees and one consultant. SyndicationNet's success depends to a
large extent upon the continued services of SyndicationNet's and Kemper's key
managerial and technical employees. The loss of such personnel could have a
material adverse effect on SyndicationNet's business and its results of
operations. See "Risk Factors".
-13-
PHYSICAL FACILITIES AND OFFICES
Both SyndicationNet and its subsidiary, Kemper, are headquartered in the
Hartke Building located at 7637 Leesburg Pike, Falls Church, Virginia 22043.
Retired United States Senator Vance Hartke, the president of SyndicationNet and
the owner of the Hartke Building, has granted SyndicationNet and Kemper the use
of office space in the Hartke Building on a rent-free basis. SyndicationNet and
Kemper project that such office space should be sufficient for their anticipated
needs for the foreseeable future.
SyndicationNet's telephone number is 703/748-3480 and its fax number is
703/790-5435.
TRANSFER AGENT
SyndicationNet's uses an internal transfer agent, Karen Lee.
USE OF PROCEEDS
The shares of common stock covered by this prospectus are to be sold by
SyndicationNet's shareholders and SyndicationNet will not receive any proceeds
from such sales.
DIVIDEND POLICY
SyndicationNet has not paid any cash dividends on its common stock since
inception and SyndicationNet does not anticipate paying any cash dividends on
its common stock in the foreseeable future. SyndicationNet intends to retain
future earnings, if any, to finance the expansion and development of its
business. SyndicationNet's board of directors will determine, in its sole
discretion, whether to declare any dividends on SyndicationNet's common stock in
the future, based on its earnings, capital requirements, financial position,
general economic conditions, and other relevant factors then existing.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to provide an analysis of
SyndicationNet's financial condition and plan of operation and should be read in
conjunction with SyndicationNet's financial statements and its related notes.
The matters discussed in this section that are not historical or current facts
deal with potential future circumstances and developments. Such forward-looking
statements include, but are not limited to, the development plans for the growth
of SyndicationNet, trends in the results of SyndicationNet's development,
anticipated development plans, operating expenses and SyndicationNet's
anticipated capital requirements and capital resources. SyndicationNet's actual
results could differ materially from the results discussed in the
forward-looking statements.
Although SyndicationNet believes that the expectations reflected in the
forward-looking statements and the assumptions upon which the forward-looking
statements are based are reasonable, these expectations and assumptions may not
prove to be correct.
General
SyndicationNet.com, Inc., a Delaware corporation, is a holding company
which was formed to acquire controlling interests in or to participate in the
creation of, and to provide financial, management and technical support to,
development stage businesses. SyndicationNet's strategy is to integrate
affiliated companies into a network and to actively develop the business
strategies, operations and management teams of the affiliated entities.
SyndicationNet currently has one wholly owned subsidiary, Kemper Pressure
Treated Forest Products, Inc. Kemper is engaged in the retail brokerage
business of preservative treated lumber such as utility poles, bridge pilings,
timber and guardrail posts. Kemper is also developing computer software
applications that will enable Kemper to manage on-line bidding for the
treatment, sale and shipment of processed wood.
-14-
Plan of Operation
SyndicationNet believes that it currently has enough cash on hand to enable
it to operate for the next twelve months. SyndicationNet's revenues and profits,
if any, will depend upon various factors, including whether SyndicationNet will
be able to effectively evaluate the overall quality and industry expertise of
potential acquisition candidates, whether SyndicationNet will have the funds to
provide seed capital and mezzanine financing to brick-and-mortar, e-commerce
and/or Internet-related companies and whether SyndicationNet can develop and
implement business models that will enable growth companies to develop.
SyndicationNet may not be able to effect any acquisitions of or investments in
development stage companies if it is unable to secure sufficient funds to
finance its proposed acquisitions costs.
SyndicationNet has no plans, proposal, arrangements or understandings with
any representatives of the owners of any business or company regarding an
acquisition or merger transaction, contemplated in the registration statement.
SyndicationNet intends for its management team to identify companies that
are positioned to succeed and to assist those companies with financial,
managerial and technical support. Over the next 12 months SyndicationNet intends
to increase revenue and gross profit margin by focusing and expanding its
consulting services. It is management's belief that potential acquisition
targets can be better identified and assessed for risk if SyndicationNet first
becomes involved with various companies on a consulting capacity.
SyndicationNet's strategy is to integrate affiliated companies into a network
and to actively develop the business strategies, operations and management teams
of the affiliated entities.
On September 19, 2000, SyndicationNet entered into a Services and
Consulting Agreement with Tri-State Metro Territories LLC, a Delaware limited
liability corporation ("Tri-State") in the business of selling franchised hair
coloring salon units under the copy right name of "haircolorxpress".
SyndicationNet was retained as Tri-State's consultant to assist in the
development of management, sales, and marketing of "haircolorxpress", franchised
hair coloring salon units in the District of Columbia, Virginia, Maryland and
Delaware. SyndicationNet will be compensated from Tri-State at an hourly rate of
$150 to $250. On November 29, 2000, SyndicationNet received an initial retainer
of $50,000 to be applied toward its hourly fees. The agreement which was for5 an
unspecified period of time is on a month to month basis or project oriented
basis; however, SyndicationNet is not currently providing any consulting
services to Tri-State. SyndicationNet hopes that it will enter into several
agreements over the next 12 months that will increase consulting fees as well as
open dialog for acquisition considerations.
SyndicationNet has generated internal sources of liquidity through its wood
brokerage services and by collecting consulting fees for services rendered.
SyndicationNet has generated liquidity from external sources through the sale of
its securities in private transactions.
YEAR ENDED DECEMBER 31, 2000 COMPARED TO DECEMBER 31, 1999 FOR SYNDICATIONNET
TOGETHER WITH ITS WHOLLY OWNED SUBSIDIARY, KEMPER PRESSURE TREATED FOREST
PRODUCTS, INC.
For the year ended December 31, 2000, SyndicationNet's revenues increased
by 30.7% to $7,315,093 from $5,597,576 for the year ended December 31, 1999. The
increase is primarily attributed to the growth of SyndicationNet's wholly owned
subsidiary, Kemper Pressure Treated Forest Products, Inc. It is the position of
management that the client base of the subsidiary should expand over the next
year and the trend should continue.
The general operation and management expenses for the period ended December
31, 2000 increased 122% to $570,334 up from $256,555 for the period ending
December 31, 1999. It is management's belief that the increase is primarily
attributed to the one time expenses related to SyndicationNet's recent merger,
filing of its registration statement and public offering efforts. The cost of
audits, legal fees, and project consulting fees attributed to the merger process
and public offering efforts have been extensive, but are expected to decrease
over the next 12 months.
Cost of sales were $7,267,571 for the year ended December 31, 2000,
compared to $5,526,429 for the year ended December 31, 1999. This increase in
cost of sales was primarily attributable to an increase in SyndicationNet's
revenue.
The net losses for the year ended December 31, 2000 were $(485,439)
compared to net losses of $(212,220) for the year ended December 31, 1999. The
primary reasons for the increase in the current period loss were the costs
attributed to the merger and registration process.
-15-
Total current assets increased to $571,761 at December 31, 2000 from
$496,150 at December 31, 1999, due primarily to the increase of SyndicationNet's
accounts receivable. Total current liabilities increased to $998,257 at
December 31, 2000 from $962,524 at December 31, 1999.
PERIOD ENDED JUNE 30, 2001 COMPARED TO JUNE 30, 2000 FOR SYNDICATIONNET TOGETHER
WITH ITS WHOLLY OWNED SUBSIDIARY, KEMPER PRESSURE TREATED FOREST PRODUCTS, INC.
For the period ended June 30, 2001, SyndicationNet's revenues increased to
$4,467,577 from $3,380,538 for the period ended June 30, 2000. The increase is
primarily attributed to the growth of SyndicationNet's wholly owned subsidiary,
Kemper Pressure Treated Forest Products, Inc.
Cost of sales were $4,439,708 for the period ended June 30, 2001, compared
to $3,357,920 for the period ended June 30, 2000. This increase in cost of sales
was primarily attributable to an increase in SyndicationNet's revenue.
The net income for the period ended June 30, 2001 was $81,285 compared to
net losses of $256,656 for the period ended June 30, 2000.
Total current assets increased to $920,977 at June 30, 2001 from $573,581
at December 31, 2000, due primarily to the increase of SyndicationNet's accounts
receivable. Total current liabilities increased from $998,257 at December 31,
2000 to $1,264,368 at June 30, 2001. SyndicationNet's accounts receivable
increased over the last two fiscal years due to SyndicationNet's increase in the
sale of its wood products through its
subsidiary, Kemper.
SyndicationNet has not paid dividends on its common stock, and intends to
reinvest its earnings to support its working capital and expansion requirements.
SyndicationNet intends to continue to utilize its earnings in the development
and expansion of the business and does not expect to pay cash dividends in the
foreseeable future. It is the belief of management that as SyndicationNet moves
toward an active trading status the ability to raise capital by stock issuance
to effect its business plan is enhanced.
SyndicationNet does not expect to purchase or sell any manufacturing
facilities or significant equipment over the next twelve months.
SyndicationNet's material commitments for capital expenditures are limited
to normal operating costs which may include legal, accounting and payroll fees.
SyndicationNet does not foresee having any capital expenditure commitments
except in the event that it seeks to make an acquisition, in which case,
SyndicationNet intends to issue shares of its common stock to raise funds to
facilitate such acquisition. At this time, SyndicationNet has not identified any
acquisition candidates.
SyndicationNet does not foresee any significant changes in the number of
its employees over the next twelve months.
MANAGEMENT
The following table sets forth information regarding the members of
SyndicationNet's board of directors and its executive officers:
Name Age Position
Vance Hartke 81 President and Director
Mark Griffith 41 Treasurer, Secretary and Director
Cynthia White 32 Chief Financial Officer
Mark Solomon 45 Director
Wayne Hartke 52 Director
Howard B. Siegel 57 Director
SyndicationNet's directors have been elected to serve until the next annual
meeting of the stockholders of SyndicationNet and until their respective
successors have been elected and qualified or until death, resignation, removal
or disqualification. SyndicationNet's Certificate of Incorporation provides
that the number of directors to serve on the Board of Directors may be
established, from time to time, by action of the Board of Directors. Vacancies
in the existing Board are filled by a majority vote of the remaining directors
on the Board. SyndicationNet's executive officers are appointed by and serve at
the discretion of the Board.
-16-
SENATOR VANCE HARTKE, ESQ. (retired) has served as the President and a
director of SyndicationNet and Kemper since August 1999. Retired Senator Hartke
received his Juris Doctor in 1948 from Indiana University Law School. From 1956
to 1958, Senator Hartke served as the Mayor of the City of Evansville, Indiana.
From 1958 to 1976, Vance Hartke served as the United States Senator from Indiana
for three terms. Senator Hartke was a member of the United States Senate Finance
Committee with jurisdiction over taxes, debt control, international trade,
social security, welfare, health and energy, and a member of the United States
Senate Commerce Committee with jurisdiction over trade and tourism, business,
communication and consumer affairs.
For at least the last five years, former Senator Vance Hartke is a
practicing attorney who currently heads "The Hartke Group", a full service
family-owned law firm located in Falls Church, Virginia. Over a period of 30
years, Mr. Hartke has been involved with the United Nation, the World Health
Organization, the Food and Agricultural Organization, the United Nations
Development Program, the World Bank, U.S. Aide, the Overseas Private Investment
Corporation, the Export-Import Bank, the Inter American Development Bank and
various agencies of the United States Administration, the United States Senate
and the United States House of Representatives.
Senator Hartke is the co-founder of the American Trial Lawyers Association
and the founder of the International Executive Service Corps. Senator Hartke
currently serves as a director of Neptune Pharmaceuticals USA, Inc., a privately
held company that imports and exports pharmaceutical products, and also serves
as a director of Wood Holdings, Inc. and Wood Sales, Inc., privately held
companies in the wood preservative industry.
MARK SOLOMON, ESQ. has served as Chairman of the Board of Directors of
SyndicationNet and of Kemper since August 1999. Mr. Solomon received a Bachelor
of Science Degree from Nova University in 1976 and received his Juris Doctor
from Nova University Law School in 1979. For at least the last five years Mr.
Solomon has been a practicing attorney for Mark Solomon, P.A., located in
Florida, specializing in criminal law.
CYNTHIA WHITE has served as the Chief Financial Officer of SyndicationNet
and of Kemper since August 1999. Since October, 1991, Ms. White has owned The
Accelerated Group, Inc., an accounting firm located in Florida which specializes
in corporate and individual taxes, audits, financial reporting and business
consultation. From 1992 to 1993, Ms. White also served as the Comptroller for
Optoelectronics, Inc. and prior to that she served as an accountant for Florida
Business Services, Inc. and the accounting firm of James and Surman, CPA. In
1992, Ms. White received her B.A. from Florida Atlantic University with a major
in accounting. Ms. White also serves as the treasurer for the Boca Raton
Society for the Disabled, Inc.
MARK GRIFFITH has served as the Treasurer, Secretary and a director of
SyndicationNet and of Kemper since August 1999. Mr. Griffith received his
Bachelor of Arts degree in History and in Education from Salisbury State
University in 1984. From December 2000 to the present, Mr. Griffith has served
as the senior compliance examiner for Sterling Financial Investment Group
located in Florida. From September 2000 to December 2000, Mr. Griffith worked as
a registered securities principal with National Securities, Inc., a Florida
based securities firm. From 1997 to September, 2000, Mr. Griffith served as the
Chief Compliance Officer for the Agean Group, a Florida based securities firm.
Prior to 1997, Mr. Griffith worked as a stockbroker for J.W. Grant and
Associates.
WAYNE HARTKE, ESQ. has served as a director of SyndicationNet and of
Kemper since August 1999. Mr. Hartke received his Bachelor of Arts degree from
the University of Pennsylvania in 1970 and received his Juris Doctor in 1973
from the California Western School of Law. Mr. Hartke, for at least the last
five years has been a partner in the law firm of Hartke & Hartke located in
Falls Church, Virginia and is currently admitted to the bars of the District of
Columbia, Virginia and California. Mr. Hartke served as corporate counsel to
Norris Satellite Communications, Inc. where he participated in negotiations with
Sprint, Orbital Sciences Corporation, Harris Corporation and Echostar regarding
satellite launch contracts. Mr. Hartke also has experience in Federal
Communications Commission license applications, the development and sale of coal
properties, international crude oil purchases and the acquisition and marketing
of Internet domain names.
-17-
Mr. Hartke currently serves as a director of Tong-1 Pharmaceuticals, Inc.,
a privately held retail chain of drug stores operating in China. Mr. Hartke
also serves as a director of Wood Holdings, Inc. and Wood Sales, Inc., privately
held companies in the wood preservative industry. Mr. Wayne Hartke is the son
of Senator Vance Hartke, the President and a director of SyndicationNet.
HOWARD S. SIEGEL has served as a director of SyndicationNet and of Kemper
since August 1999. Mr. Siegel received his Juris Doctor in 1969 from St. Mary's
University Law School. Since 1969, Mr. Siegel has been a practicing attorney.
For the past five years, Mr. Siegel has worked with the law office of Yuen &
Associates, located in Houston, Texas. Prior to working for Yuen & Associates,
Mr. Siegel was employed with the Internal Revenue Service, Tenneco, Inc.,
Superior Oil Company and Braswell & Paterson. Mr. Siegel serves as a director
of Golden Triangle Industries, Inc. (GTII), a public company traded on the
Nasdaq exchange, and serves as a director for Signature Motor Cars, Inc, a
privately-held company.
DIRECTOR COMPENSATION
Directors receive an annual issuance of 10,000 shares of SyndicationNet's
common stock for serving as directors of SyndicationNet and are repaid for their
expenses incurred for serving as directors.
SyndicationNet pays accounting fees to the Accelerated Group, Inc., a
private accounting firm owned by Cynthia White, SyndicationNet's Chief Financial
Officer. SyndicationNet believes that it has paid less than $5,000 annually for
the past three years as compensation for such accounting services.
EXECUTIVE COMPENSATION
Neither the officers nor directors of SyndicationNet have received any cash
compensation or cash bonus for services rendered during 1999 or 2000.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
-----------------------------
Annual Compensation Awards Payouts
--------------------- ------ -------
Name and Restricted
Principal Stock
Position(s) Year Salary($) Bonus($) Other($) Awards(# shares)
Compensation
-------------- ---- ------- ---------------------------------------
Vance Hartke 2000 0 10,000 shares*
1999 0 10,000 shares*
1998 0
* Such shares were issued to Mr. Hartke for his service as a director of
SyndicationNet.
SyndicstionNet does not have any long term compensation plans or stock
option plans.
EMPLOYMENT AGREEMENTS
SyndicationNet has not entered into employment agreements with any of its
officers or employees. All key employees serve in their positions until further
action of the President of SyndicationNet or its Board of Directors.
The officers and directors of SyndicationNet intend to devote time to
matters related to SyndicationNet approximately as follows:
Vance Hartke - 5% of his time Mark Griffith - 5% of his time
Cynthia White - 5% of her time Mark Solomon - 15% of his time
Wayne Hartke - 15% of his time Howard B. Siegel - 5% of his time
-18-
CONSULTING AGREEMENT
SyndicationNet ratified a corporate services consulting agreement that
Kemper had with Source Management Services ("Source Management") Brian
Sorrentino, a significant shareholder of SyndicationNet, is the president and
sole director and shareholder of Source Management. Source Management is to
oversee the general activities of SyndicationNet and Kemper on a day to day
basis, develop and execute SyndicationNet's and Kemper's business plan, assist
in the preparation of audits, registration statements and for SyndicationNet the
listing of its securities on the OTC Bulletin Board. For the fiscal year 2000,
SyndicationNet has agreed to compensate Source Management the greater of $150
per hour or $17,500 per month. Mr. Sorrentino has waived any claims for
consulting fees owed to him for the first nine months of the fiscal year ended
December 31, 2001. If and when SyndicationNet's securities are traded on any
United States securities market, Source Management will receive 5% of the
then outstanding shares of SyndicationNet's common stock.
FAMILY RELATIONSHIPS
Wayne Hartke, a member of SyndicationNet's Board of Directors, is the son
of Vance Hartke. There are no other family relationships among SyndicationNet's
directors, executive officers or other persons nominated or chosen to become
officers or executive officers.
LEGAL PROCEEDINGS
SyndicationNet is not a party to any litigation and management has no
knowledge of any threatened or pending litigation against it.
Management has received a request from an individual who owns shares of
common stock in a company claiming that he is entitled to have such shares
converted into shares of common stock of SyndicationNet. Management believes
that the claim is without merit and, if pursued, will contest it vigorously.
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
SyndicationNet's Certificate of Incorporation and bylaws provide that
SyndicationNet shall, to the fullest extent permitted by applicable law, as
amended from time to time, indemnify its directors, as well as any of
SyndicationNet's officers or employees to whom SyndicationNet has agreed to
grant indemnification.
Section 145 of the Delaware General Corporation Law ("DCL") empowers a
corporation to indemnify its directors and officers and to purchase insurance
with respect to liability arising out of their capacity or status as directors
and officers provided that this provision shall not eliminate or limit the
liability of a director:
- for breach of the director's duty of loyalty to the corporation or its
stockholders;
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- under Section 174 (relating to the liability for unauthorized acquisitions
or redemptions of, or dividends on, capital stock) of the Delaware General
Corporation Law; or
- for any transaction from which the director derived an improper
personal benefit.
The Delaware General Corporation Law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's by laws, any agreement, vote of shareholder or otherwise.
The effect of the foregoing is to require SyndicationNet to indemnify its
officers and directors for any claim arising against such person in their
official capacities if such person acted in good faith and in a manner that he
reasonably believed to be in or not opposed to SyndicationNet's best interests,
and, with respect to any criminal actions or proceedings, had no reasonable
cause to believe his conduct was unlawful.
-19-
SyndicationNet has adopted a charter provision that requires it to
indemnify all of the present and former directors, officers, agents and
employees of SyndicationNet to the fullest extent permitted by Delaware law. In
connection with SyndicationNet's indemnification obligations to such persons,
SyndicationNet may make advances to cover a person's expenses provided that
SyndicationNet receives an undertaking from such person to repay the advances
unless the person is ultimately determined to be entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to SyndicationNet's directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, SyndicationNet has
been advised that in the opinion of the Securities and Exchange Commission
indemnification for such liabilities is against public policy as expressed in
the Securities Act and is therefore unenforceable.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the date of this
prospectus regarding the beneficial ownership of SyndicationNet's common stock
by each of its executive officers and directors, individually and as a group and
by each person who beneficially owns in excess of five percent of the common
stock after giving effect to the exercise of warrants or options held by the
named securityholder.
Number of
Shares Percent of Class
------ ------------------
Vance Hartke 20,000 (*)
President and director
7637 Leesburg Pike
Falls Church, Virginia 22043
Mark Griffith 20,000 (*)
Secretary, Treasurer
and director
465 NE 3rd Street
Boca Raton, Florida 33432
Cynthia White 30,000 (*)
Chief Financial Officer
7637 Leesburg Pike
Falls Church, Virginia 22043
Mark Solomon 104,000 (*)
Director
901 South Federal Highway
Fort Lauderdale, Florida
22216
Wayne Hartke 20,000 (*)
Director
7637 Leesburg Pike
Falls Church, Virginia 22043
Howard B. Siegel 20,000 (*)
Director
15902 South Barker Landing
Houston, Texas 77079
Dale Hill 4,708,366 43.6%
5056 West grove Drive
Dallas, Texas 75248
Brian Sorrentino 3,732,924 34.6%
Consultant
PO Box 484
Damascus, MD 20872
All Officers and Directors 214,000 1.98%
as a group (6 persons)
____________________
* Represent less than 1% of the outstanding shares of SyndicationNet
(1) Based upon 10,781,750 shares of SyndicationNet's common stock issued and
outstanding as of September 1, 2001.
-20-
SELLING SECURITYHOLDERS
SyndicationNet is registering for offer and sale by the holders thereof
561,500 shares of common stock held by securityholders. The selling
securityholders may offer their shares for sale on a continuous basis pursuant
to Rule 415 under the 1933 Act. See "Risk Factors".
SyndicationNet intends to apply to have its common stock quoted on the OTC
Bulletin Board; however SyndicationNet's securities may not be accepted for
quotation on the OTC Bulletin Board.
All of the selling securityholders' shares registered hereby will become
tradeable on the effective date of the registration statement of which this
prospectus is a part.
The following table sets forth ownership of the Securities of
SyndicationNet held by each person who is a selling securityholder.
Number of Number of Percent of Stock Owned (1)(2)
Shares Shares Prior to After
Name and Address Owned Offered Herein Offering Offering
------------------ ---------- --------------- ---------------- -------------
Frank Caravel 10,000 10,000 (*) (*)
13357 J.W. 42nd Street
Davie, Florida 33330
Barry Carded 8,000 8,000 (*) (*)
1821 J.W. 11th Street
Ft. Lauderdale, Florida 33312
Commercial Roofing(3) 30,000 30,000 (*) (*)
Analyst Profit Sharing Plan
3 Chapel Hill Road
Oakland, New Jersey 07436
Lisa Carrier 1,000 1,000 (*) (*)
725 SE 23rd Street
Ft Lauderdale, Florida 33316
Kim Dickinson 10,000 10,000 (*) (*)
5641 Vayln Rd.
Baltimore, Maryland 21228
Allen Martin Dubow 10,000 10,000 (*) (*)
100 Main Street
White Plains, New York 10601
Allen and Marjorie Dubow 25,000 25,000 (*) (*)
100 Main Street
White Plains, New York 10601
Dr. Ratti Kenta Duta 38,000 10,000 (*) (*)
304 West Michigan
Urbana, Illinois 61801
Alex Fenik 1,000 1,000 (*) (*)
1070 NE 2nd Terrace
Boca Raton, Florida 33432
Steve Framer 1,000 1,000 (*) (*)
1400 SW 72nd Avenue
Plantation, Florida 33316
Joanne Framer 750 750 (*) (*)
1400 SW 72nd Avenue
Plantation, Florida 33316
Robert L. Green, Jr. 200,000 200,000 1.8% (*)
3115 Foxhall Road N.W.
Washington, D.C. 20016
Mark Griffith(4) 20,000 5,000 (*) (*)
465 NE 3rd Street
Boca Raton, Florida 33432
Vance Hartke (4) 20,000 5,000 (*) (*)
7637 Leesburg Pike
Falls Church, Virginia 22043
Wayne Hartke(4) 20,000 5,000 (*) (*)
7637 Leesburg Pike
Falls Church, Virginia 22043
-21-
Janet L. Hender 1,250 1,250 (*) (*)
1618 Willow Run
Brookshire, Texas 77423
HTRG Consulting, LLC(5) 150,000 100,000 1.39% (*)
1712 Featherwood Street
Silver Spring, Maryland 20904
Robert Lancy 10,000 10,000 (*) (*)
1570 NE 131st Street
North Miami, Florida 33161
Crieg D. Mahlberg 15,000 15,000 (*) (*)
428 140th Avenue NE
Hamlake, Minnesota 55304
Robert Marks 750 750 (*) (*)
12883 Peters Rd
Hemstead, Texas 77445
Paul and Linda Merson 12,500 12,500 (*) (*)
4431 E. Country Club Circle
Plantation, Florida 33161
Howard Siegel (4) 20,000 5,000 (*) (*)
15902 South Barker Landing
Houston, Texas 77079
Donald Sinclair 1,000 1,000 (*) (*)
2180 N.W. 93rd Avenue
Pembroke Pines, Florida 33024
Donald L. Siebenmorgen 500 500 (*) (*)
7623 Breas Glen
Houston, Texas 77071
Mark Solomon (4) 104,000 30,000 (*) (*)
901 S. Federal Highway
Fort. Lauderdale, Florida 33316
Brian Sorrentino (6) 3,732,924 40,000 34.6% 34.2%
PO Box 484
Damascus, Maryland 20872
Steven J. Sprechman 1,000 1,000 (*) (*)
18305 Biscayne Blvd. #213
Miami, Florida 333160
Susan Stickley 1,250 1,250 (*) (*)
823 Montery Street
Coral Gables, Florida 33134
Jennifer Thompson 500 500 (*) (*)
2910 Washington St
Coconut Grove, Florida 33133
David Tiralla 2,500 2,500 (*) (*)
1410 Armacost Rd.
Pankton, Maryland 21120
Catherin Anne Tiralla 2,500 2,500 (*) (*)
1410 Armacost Rd.
Pankton, Maryland 21120
Frank Vopitta 5,000 5,000 (*) (*)
18691 Middletown Rd
Parkton, Maryland 21120
Gregory Volpitta 5,000 5,000 (*) (*)
1220 Monkton Rd.
Monkton, Maryland 21111
Cynthia White (4) 30,000 5,000 (*) (*)
7637 Leesburg Pike
Falls Church, Virginia 22043
Helly White 1,000 1,000 (*) (*)
9300 SW 60th Avenue
Miami, Florida 33156
-----------------
* Represents less than 1% of SyndicationNet's outstanding shares of common stock
(1) The figure is based upon 10,781,750 shares of common stock outstanding as of
the date of this prospectus.
-22-
(2) The figure assumes the sale of all of the shares offered by the selling
securityholders.
(3) The principal of the named shareholder is Mr. Rainer Gerbatch.
(4) The named selling securityholder is an officer and/or director of
SyndicationNet.
(5) The named shareholder entered into a consulting agreement with
SyndicationNet to provide web design, internet and research services. Its
principal is Thomas Gibbs.
(6) The named shareholder is a consultant to SyndicationNet and is an owner of
more than 10% of SyndicationNet's shares of common stock outstanding.
In the event a selling securityholder receives payment from sales of their
shares, SyndicationNet will not receive any of the proceeds from those sales.
SyndicationNet is bearing all expenses in connection with the registration of
the selling security holder's shares offered by this prospectus.
The shares owned by the selling securityholders are being registered
pursuant to Rule 415 of the General Rules and Regulations of the Securities and
Exchange Commission which Rules pertain to delayed and continuous offerings and
sales of securities. In regard to the selling securityholder's shares offered
under Rule 415, SyndicationNet has made undertakings in Part II of the
registration statement of which this prospectus is a part pursuant to which, in
general, SyndicationNet has committed to keep this prospectus current during any
period in which offers or sales are made pursuant to Rule 415.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SyndicationNet.com ratified a corporate service consulting agreement that
Kemper had with Source Management Services. Source Management is to oversee the
general activities of Kemper and SyndicationNet on a day to day basis, develop
and execute Kemper's and SyndicationNet's business plan, assist in the
preparation of audits, registration statements and assist SyndicationNet in the
listing of its securities on the OTC Bulletin Board. For the fiscal year 2000,
SyndicationNet.com has agreed to compensate Source Management the greater of
$150 per hour or $17,500 per month. Mr. Sorrentino has waived any claims for
consulting fees owed to him for the first nine months of the fiscal
year ended December 31, 2001. If and when SyndicationNet.com's securities
are traded on any stock exchange, Source Management will receive
5% of the outstanding shares of SyndicationNet.com's common stock.
Mr. Sorrentino, the sole officer and director of Source Management
Services and has a material interest in the transaction in that he is
compensated on a monthly basis and may, subject to the trading of
SyndicationNet's securities, receive 5% of the outstanding common shares of
SyndicationNet.
In 1999 SyndicationNet borrowed an aggregate of $105,000 from Brian
Sorrentino, a greater than 5% shareholder of SyndicationNet's common stock and
the principal of Source Management Services. SyndicationNet executed a
promissory note for the loan amount at an interest rate of 12% per annum. The
loan, due March 3, 2000, has not been paid as of the date of this filing.
In September 1999, SyndicationNet borrowed $25,000 from Dr. Ratti Kenta
Dutta, a selling securityholder. Dr. Dutta agreed to cancel his loan together
with any accrued interest in exchange for an aggregate of 38,000 shares of
SyndicationNet's common stock which shares were issued to Dr. Dutta in August
2000.
The control persons of Kemper Pressure Treated Forest Products, Inc. were
Dale Hill who owned approximately 66% of Kemper and Brian Sorrentino who owned
approximately 34% of Kemper. The controlling person of Algonquin Acquisition
Corporation was its sole shareholder, TPG Capital Corporation, and its
controlling shareholder, James M. Cassidy. The controlling persons of
Life2K.com, Inc. were its directors Vance Hartke, Mark Griffith, Cynthia White,
Mark Solomon, Wayne Hartke and Howard Siegel and its controlling shareholders
Dale Hill and Brian Sorrentino. The controlling person of Generation Acquisition
Corporation was its sole shareholder, TPG Capital Corporation, and its
controlling shareholder, James M. Cassidy.
SyndicationNet pays accounting fees to the Accelerated Group, Inc., a
private accounting firm owned by Cynthia White, SyndicationNet's Chief Financial
Officer. SyndicationNet believes that it has paid less than $5,000 annually for
the past three years as compensation for such accounting services.
Mr. Sorrentino, a consultant and 10% shareholder of SyndicationNet, owns
63.5% of the outstanding shares of Tri-State and is a development agent and
general partner of Tri-State. Mark Solomon, a director of SyndicationNet, owns
8.3% of the outstanding shares of Tri-State. Robert Green, a less than 5%
shareholder of SyndicationNet owns 9% of tri-State. The investments in Tri-State
made by the above stated individuals were after September 19, 2000 which is when
SyndicationNet entered into its consulting agreement with Tri-State Metro
Territories.
-22-
DESCRIPTION OF SECURITIES
COMMON STOCK
SyndicationNet is authorized to issue 100,000,000 shares of common stock,
$.0001 par value per share, of which 10,781,750 shares were outstanding as of
the date of this report. All of SyndicationNet's outstanding shares have been
held in excess of one year. Rule 144 provides, in essence, that a person holding
"restricted securities" for a period of one year may sell only an amount every
three months equal to the greater of (a) one percent of a company's issued and
outstanding shares, or (b) the average weekly volume of sales during the four
calendar weeks preceding the sale.
Holders of shares of common stock are entitled to one vote for each share
on all matters to be voted on by the stockholders. Holders of common stock do
not have cumulative voting rights. Holders of common stock are entitled to
share ratably in dividends, if any, as may be declared from time to time by the
board of directors in its discretion from funds legally available therefor. In
the event of a liquidation, dissolution or winding up of SyndicationNet, the
holders of common stock are entitled to share pro rata all assets remaining
after payment in full of all liabilities.
Holders of common stock have no preemptive rights to purchase
SyndicationNet's common stock. There are no conversion or redemption rights or
sinking fund provisions with respect to the common stock.
No Trading Market
There is currently no established public trading market for
SyndicationNet's securities. A trading market in SyndicationNet's securities may
never develop. SyndicationNet intends to apply for admission to quotation of its
securities on the OTC Bulletin Board. If in the future SyndicationNet meets the
qualifications for admission to quotation on the Nasdaq SmallCap Market, it may
apply for admission. If for any reason SyndicationNet's common stock is not
listed on the OTC Bulletin Board or a public trading market does not develop,
purchasers of the shares may have difficulty selling their common stock.
PREFERRED STOCK
SyndicationNet is authorized to issue 20,000,000 shares of preferred stock,
$.0001 par value per share. As of the date of this prospectus, there were no
shares of preferred stock outstanding. The board of directors is authorized to
provide for the issuance of shares of preferred stock in series and, by filing a
certificate pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each series,
and to fix the designation, powers, preferences and rights of the shares of each
such series and the qualifications, limitations or restrictions thereof without
any further vote or action by the shareholders. Any shares of preferred stock
so issued would have priority over the common stock with respect to dividend or
liquidation rights. Any future issuance of preferred stock may have the effect
of delaying, deferring or preventing a change in control of SyndicationNet
without further action by the shareholders and may adversely affect the voting
and other rights of the holders of common stock. At present, SyndicationNet has
no plans to issue any preferred stock nor adopt any series, preferences or other
classification of preferred stock.
Additional Information Describing Securities
Reference is made to applicable statutes of the state of Delaware for a
description concerning statutory rights and liabilities of shareholders.
-24-
Trading of Shares
There are no outstanding options, options to purchase, or securities
convertible into shares of SyndicationNet's common stock other than the
securities described herein. SyndicationNet has not agreed with any
shareholders, to register their shares for sale, other than for this
registration. SyndicationNet does not have any other public offerings in process
or proposed.
Admission to Quotation on Nasdaq SmallCap Market or OTC Bulletin Board
If SyndicationNet meets the qualifications, it intends to apply for
quotation of its securities on the OTC Bulletin Board or the Nasdaq SmallCap
Market. If SyndicationNet's securities are not quoted on the OTC Bulletin Board,
a securityholder may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, SyndicationNet's securities. The OTC
Bulletin Board differs from national and regional stock exchanges in that it (1)
is not situated in a single location but operates through communication of bids,
offers and confirmations between broker-dealers and (2) securities admitted to
quotation are offered by one or more broker-dealers rather than the "specialist"
common to stock exchanges. To qualify for quotation on the OTC Bulletin Board,
an equity security must have one registered broker-dealer, known as the market
maker, willing to list bid or sale quotations and to sponsor the company
listing. If it meets the qualifications for trading securities on the OTC
Bulletin Board SyndicationNet's securities will trade on the OTC Bulletin Board
until a future time, if at all, that SyndicationNet applies and qualifies for
admission to quotation on the Nasdaq SmallCap Market. SyndicationNet may not now
and it may never qualify for quotation on the OTC Bulletin Board or accepted for
listing of its securities on the Nasdaq SmallCap Market.
To qualify for admission to quotation on the Nasdaq SmallCap Market, an
equity security must, in relevant summary,
(1) be registered under the Exchange Act;
(2) have at least three registered and active market makers, one of
which may be a market maker entering a stabilizing bid;
(3) for initial inclusion, be issued by a company with $4,000,000
in net tangible assets, or $50,000,0000 in market capitalization, or $750,000 in
net income in two of the last three years (if operating history is less than one
year then market capitalization must be at least $50,000,000);
(4) have at a public float of at least 1,000,000 shares with a value of
at least $5,000,000;
(5) have a minimum bid price of $4.00 per share; and
(6) have at least 300 beneficial shareholders.
Penny Stock Regulation
Penny stocks generally are equity securities with a price of less than
$5.00 per share other than securities registered on national securities
exchanges or listed on the Nasdaq Stock Market, provided that current price and
volume information with respect to transactions in such securities are provided
by the exchange or system. The penny stock rules impose additional sales
practice requirements on broker-dealers who sell such securities 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, the
broker-dealer must make a special suitability determination for the purchase of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a disclosure schedule prescribed by the SEC relating to the
penny stock market. The 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 on the limited market in penny stocks.
Because of these penny stock rules, broker-dealers may be restricted in their
ability to sell SyndicationNet's common stock. The foregoing required penny
stock restrictions will not apply to SyndicationNet's common stock if such stock
reaches and maintains a market price of $5.00 or greater.
-25-
Reports to Shareholders
SyndicationNet will furnish to holders of its common stock annual reports
containing audited financial statements examined and reported upon, and with an
opinion expressed by, an independent certified public accountant. SyndicationNet
may issue other unaudited interim reports to its shareholders as it deems
appropriate.
PLAN OF DISTRIBUTION
Sales by Selling Securityholders
After effectiveness of this prospectus, the non-affiliated selling
securityholders may offer and sell their shares at a price and time determined
by them without regard to Rule 144. Of the 561,500 shares of common stock
registered in this prospectus, 95,000 shares of common stock are held by
officers, directors or affiliates of SyndicationNet.
The common stock offered by this prospectus may be sold from time to time
directly by the selling securityholders. Alternatively, the selling
securityholders may from time to time offer those shares through underwriters,
brokers, dealers, agents or other intermediaries. The distribution of the common
stock by the selling securityholders may be effected in one or more transactions
that may take place through customary brokerage channels, either through brokers
acting as agents for the selling securityholders, or through market makers,
dealers or underwriters acting as principals who may resell these shares on the
OTC Bulletin Board (if the Company achieves listing on the OTCBB); in
privately-negotiated sales; by a combination of these methods; or by other
means. These transactions may be effected at market prices prevailing at the
time of sale, at prices related to the prevailing market prices or at other
negotiated prices. Usual and customary or specifically negotiated brokerage fees
or commissions may be paid by the selling securityholders in connection with
sales of the common stock.
-26-
The selling securityholder may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with the selling securityholder. The
selling securityholder also may sell shares short and redeliver the shares to
close out their short positions. The selling securityholder may enter into
option or other transactions with broker-dealers which require the delivery to
the broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer the shares pursuant to this prospectus.
The selling securityholders also may loan or pledge the shares to a
broker-dealer. The broker-dealer may sell the shares so loaned, or upon a
default the broker-dealer may sell the pledged shares pursuant to this
prospectus. Any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 promulgated under the Securities Act may be sold under Rule
144 rather than pursuant to this prospectus.
Sales by Affiliates
Sales of the securities by affiliates of SyndicationNet are subject to
the volume limitations imposed by Rule 144 even after registration of such
securities. An affiliate who holds unrestricted securities may sell, within any
three month period, a number of the shares of SyndicationNet that does not
exceed the greater of one percent of the then outstanding shares of the class of
securities being sold or, if SyndicationNet's securities are trading on the
Nasdaq Stock Market or an exchange at some time in the future, the average
weekly trading volume during the four calendar weeks prior to such sale.
Resales of the Securities under State Securities Laws
The National Securities Market Improvement Act of 1996 ("NSMIA") limits
the authority of states to impose restrictions upon sales of securities made
pursuant to Sections 4(1) and 4(3) of the Securities Act of companies which file
reports under Sections 13 or 15(d) of the Securities Exchange Act. Sales of the
securities in the secondary market will be made pursuant to Section 4(1) of the
Securities Act (sales other than by an issuer, underwriter or broker). It is
anticipated that following the effective date the selling securityholders'
securities will be eligible for resale in the secondary market in each state.
If SyndicationNet meets the requirements of the OTC Bulletin Board it
will apply for listing thereon. When and if it should qualify, if ever, it
intends to apply for quotation of its securities on the Nasdaq SmallCap Market.
SyndicationNet may not qualify for listing of its securities on the OTC Bulletin
Board or may never satisfy the qualifications to be quoted on the Nasdaq
SmallCap Market. If it should be accepted for listing thereon, then the
underwriters may engage in passive market making transactions in
SyndicationNet's common stock in accordance with Rule 103 of Regulation M.
Following the completion of this offering, one or more broker-dealers
may act as the principal market makers for the securities offered hereby. A
broker-dealer acting as a market maker for a particular security will purchase
and sell such securities for its own account, will maintain an inventory of such
securities and may actively assist in the sale of these securities by producing
research reports, recommending the security to its clients or otherwise. Under
these circumstances, the market bid and asked prices for the securities may be
significantly influenced by decisions of the market makers to buy or sell the
securities for their own account. The market making activities of any market
maker, if commenced, may subsequently be discontinued.
By Rule 101 of Regulation M, participants in a distribution, including
underwriters acting as market makers, are prohibited from bidding for,
purchasing, or inducing the purchase of the distributed security during an
applicable restricted period. Rule 103 provides an exemption to such restriction
and certain distribution participants, including market makers, may engage in
passive market making transactions provided the conditions of Rule 103 are met.
Some of these conditions include, among other conditions including price and
volume limitations, that market maker must be acting in its capacity as a market
maker and the security is one quoted on Nasdaq.
-27-
LEGAL MATTERS
LEGAL PROCEEDINGS
SyndicationNet is not a party to any litigation and management has no
knowledge of any threatened or pending litigation against it.
SyndicationNet has received a letter from an attorney whose client claims
that he has rights to shares of common stock of SyndicationNet by virtue of his
ownership of shares in certain companies that he believes entitles him to stock
conversion rights. Management of SyndicationNet has responded to the letter and
believes the claim to be without merit.
LEGAL OPINION
Cassidy & Associates, Washington, D.C., has given its opinion as
attorneys-at-law that the shares of common stock offered by the selling
securityholders will be fully paid, validly issued and non-assessable. Cassidy &
Associates has passed on the validity of the common stock offered by the selling
securityholders but purchasers of the common stock should not rely on Cassidy &
Associates with respect to any other matters. James M. Cassidy, a principal of
Cassidy & Associates, is the beneficial shareholder of 250,000 shares of the
common stock of SyndicationNet.
EXPERTS
The audited financial statements for the periods ended December 31, 1999
and 2000 included in this prospectus have been so included in reliance on the
report of HJ & Associates LLC, independent accountants, given on the authority
of HJ & Associates LLC as experts in auditing and accounting.
AVAILABLE INFORMATION
SyndicationNet is subject to the informational reporting requirements of
the Securities Exchange Act of 1934 and intends to file reports and other
information with the Commission. Reports, proxy statements and other
information filed by SyndicationNet, including its registration statement, can
be inspected and copied on the Commission's home page on the World Wide Web at
http://www.sec.gov or at the public reference facilities of the Commission,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies can be
obtained from the Commission by mail at prescribed rates. Requests should be
directed to the Commission's Public Reference Section, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549.
SyndicationNet will provide without charge to each person who receives a
copy of the prospectus which is part of this registration statement, upon
written or oral request, a copy of any of the information incorporated herein by
reference, not including exhibits. All requests should be made in writing to
Vance Hartke, President, The Hartke Building, 7637 Leesburg Pike, Falls Church,
Virginia 22043 or by telephone at 703/748-3480.
INDEX TO FINANCIAL STATEMENTS
The unaudited financial statement for the period ended June 30, 2001 and the
audited financial statements for the periods ended December 31, 1999 and 2000
are included herein.
-28-
SYNDICATION NET.COM, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2001 AND DECEMBER 31, 2000
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Consolidated Balance Sheets
ASSETS
------
June 30, December 31,
2001 2000
---- ----
(Unaudited)
CURRENT ASSETS
Cash $ 47,244 $ 45
Accounts receivable (Note 1) 872,369 571,716
------------ ----------
Total Current Assets 919,613 571,761
------------ ------------
PROPERTY AND EQUIPMENT - NET (Note 2) 1,364 1,820
------------ ------------
TOTAL ASSETS $ 920,977 $ 573,581
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 1,130,755 $ 870,644
Notes payable - related party (Note 6) 105,000 105,000
Accrued expenses (Note 3) 28,613 22,613
------------ ------------
Total Current Liabilities 1,264,368 998,257
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 20,000,000 shares authorized of
$0.0001 par value, no shares issued or outstanding. - -
Common stock: 100,000,000 shares authorized of
$0.0001 par value, 10,781,750 shares issued and
outstanding 1,078 1,078
Additional paid-in capital 791,749 791,749
Accumulated deficit (1,136,218) (1,217,503)
------------ ------------
Total Stockholders' Equity (Deficit) (343,391) (424,676)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 920,977 $ 573,581
============ ============
The accompanying notes are an integral part of these consolidated financial statements.
-F1-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
NET SALES $ 2,198,581 $ 1,742,043 $ 4,467,577 $ 3,380,538
COST OF SALES 2,184,910 1,730,793 4,439,708 3,357,920
------------ ------------ ------------ ------------
GROSS MARGIN 13,671 11,250 27,869 22,618
------------ ------------ ------------ ------------
OPERATING EXPENSES
Depreciation 228 227 456 455
General and administrative. 7,297 197,675 72,613 272,148
------------ ------------ ------------ ------------
Total Operating
Expenses 7,525 197,902 73,069 272,603
------------ ------------ ------------ ------------
INCOME (LOSS) FROM
OPERATIONS 6,146 (186,652) (45,200) (249,985)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Other income 47,000 - 132,485 -
Interest expense (3,000) (4,471) (6,000) (6,671)
------------ ------------ ------------ ------------
Total Other Income
(Expense) 44,000 (4,471) 126,485 (6,671)
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 50,146 $ (191,123) $ 81,285 $ (256,656)
============ ============ ============ ============
BASIC INCOME (LOSS)
PER SHARE $ 0.00 $ (0.01) $ 0.01 $ (0.01)
============ ============ ============ ============
WEIGHTED AVERAGE
NUMBER OF SHARES 10,781,750 17,180,975 10,781,750 17,180,975
============ ============ ============ ============
The accompanying notes are an integral part of these consolidated financial statements.
-F2-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficit)
Preferred Stock Common Stock Additional
------------------- ------------------- Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 1998 - $ - 9,813,916 $ 981 $192,209 $ (519,844)
Recapitalization 60,000 6 189,312 19 59,975 -
Common stock issued for cash at
$1.65 per share - - 7,572 1 12,499 -
Net loss for the year ended
December 31, 1999 - - - - - (212,220)
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 1999 60,000 6 10,010,800 1,001 264,683 (732,064)
Conversion of preferred shares
to common stock (60,000) (6) 36,000 4 2 -
Common stock issued for cash at
prices ranging from $0.83 to $2.50
per share - - 193,500 19 227,482 -
Common stock issued for cash and
services at $1.67 per share - - 50,400 5 83,995 -
Common stock issued for services
at $1.67 per share - - 78,000 8 129,992 -
Common stock issued for conversion
of debt at $1.64 per share - - 19,050 2 31,248 -
Recapitalization - - 250,000 25 (25) -
Common stock issued for cash at
$0.047 per share - - 94,000 9 4,377 -
Common stock issued for services
at $1.00 per share - - 50,000 5 49,995 -
Net loss for the year ended
December 31, 2000 - - - - - (485,439)
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 2000 - - 10,781,750 1,078 791,749 (1,217,503)
Net income for the six months ended
June 30, 2001 (unaudited) - - - - - 81,285
-------- -------- ---------- ------- --------- ------------
Balance, June 30, 2001 (unaudited) - $ - 10,781,750 $ 1,078 $791,749 $(1,136,218)
======== ======== ========== ======= ========= ============
The accompanying notes are an integral part of these consolidated financial statements.
-F3-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months Ended
June 30,
----------------------------
2001 2000
------------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 81,285 $(256,656)
Adjustments to reconcile net income (loss) to
net cash provided (used) by operating activities:
Depreciation 456 455
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (300,653) (110,988)
Increase (decrease) in accrued expenses 6,000 (5,829)
Increase (decrease) in accounts payable 260,111 33,508
------------ -----------
Net Cash Provided (Used) by Operating Activities 47,199 (339,510)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES - -
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment on notes payable - related party - (50,000)
Proceeds from issuance of common stock - 393,251
----------- ------------
Net Cash Provided by Financing Activities - 343,251
----------- ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 47,199 3,741
CASH AT BEGINNING OF PERIOD 45 5,580
----------- -----------
CASH AT END OF PERIOD $ 47,244 $ 9,321
============ ===========
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash Paid For:
Interest $ - $ -
Income taxes $ - $ -
-F4-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The consolidated financial statements presented are those
of Syndication Net.com, Inc. (formerly Life2K.com, Inc.) (Syndication)
and its wholly-owned subsidiary, Kemper Pressure Treated Forest
Products, Inc. (Kemper). Collectively, they are referred to herein as
the "Company". Syndication was incorporated under the name of
Generation Acquisition Corporation (Generation) on March 25, 1999
under the laws of the State of Delaware to engage in any lawful act or
activity. Effective August 16, 1999, Life2K.com, Inc. (Life2K) issued
16,200,000 shares of its common stock and 60,000 shares of its
preferred stock in exchange for the issued and outstanding stock of
Kemper. Costs associated with the recapitalization totaling $60,000
were expensed during the year ended December 31, 1999 as a result of
the 60,0000 preferred shares issued. Effective
October 13, 2000, pursuant to an Agreement and Plan of Organization
between Generation Acquisition Corporation and Life2K, Generation
Acquisition Corporation issued 10,387,750 shares of its
outstanding common stock for 100% of the outstanding shares of Life2K.
As part of the transaction, Life2K was merged with and into Generation
Acquisition Corporation, Life2K was dissolved and Generation
Acquisition Corporation changed its name to Syndication Net.com, Inc.
Kemper was incorporated on December 28, 1987 under the State laws of
Mississippi. Kemper was organized to procure, buy, sell and harvest
forest products for treating poles, conventional lumber and wood
products, as well as preserve and treat wood and forest products for
sale in wholesale and retail markets.
On October 9, 1997, Kemper entered into an asset purchase agreement
and lease assignment under which it conditionally sold all of its
assets as well as reassigned its lease related to its manufacturing
enterprise. From that time, Kemper has acted as a retail broker,
having eliminated virtually all of its manufacturing capacity.
At the time of the acquisition of Kemper, Life2K was essentially
inactive, with no operations and minimal assets. Additionally, the
exchange of Life2K's common stock for the common stock of Kemper
resulted in the former stockholders of Kemper obtaining control of
Life2K. Accordingly, Kemper became the continuing entity for
accounting purposes, and the transaction was accounted for as a
recapitalization of Kemper with no adjustment to the basis of Kemper's
assets acquired or liabilities assumed. For legal purposes, Life2K was
the surviving entity.
At the time of the acquisition of Life2K, Syndication was essentially
inactive, with no operations and minimal assets. Additionally, the
exchange of Syndication's common stock for the common stock of Life2K
resulted in the former stockholders of Life2K obtaining control of
Syndication. Accordingly, Life2K became the continuing entity for
accounting purposes, and the transaction was accounted for as a
recapitalization of Life2K with no adjustment to the basis of Life2K's
assets acquired or liabilities assumed. For legal purposes,
Syndication was the surviving entity.
-F5-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial statements
June 30, 2001 and December 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
b. Accounting Method
The Company's consolidated financial statements are prepared using the
accrual method of accounting. The Company has elected a December 31
year end.
c. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Accounts Receivable
Accounts receivable consist entirely of an amount due from one
customer. As management of the Company believes the amount to be fully
collectible, no allowance for doubtful accounts has been recorded at
June 30, 2001 and December 31, 2000.
e. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of common shares outstanding during the
period of the consolidated financial statements as follows:
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- --------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Income (loss) (numerator) . $ 50,146 $ (191,123) $ 81,285 $ (256,656)
Weighted average shares
outstanding (denominator) 10,781,750 17,180,975 10,781,750 17,180,975
------------ ------------ ------------ ------------
Basic income (loss) per
share. . . . . . . . . . . $ 0.00 $ (0.01) $ 0.01 $ (0.01)
============ ============ ============ ============
f. Change in Accounting Principle
The Company has adopted the provisions of FASB Statement No. 138
"Accounting for Certain Derivative Instruments and Hedging Activities,
(an amendment of FASB Statement No. 133.)" Because the Company had
adopted the provisions of FASB Statement No. 133, prior to June 15,
2000, this statement is effective for all fiscal quarters beginning
after June 15, 2000. The adoption of this principle had no material
effect on the Company's consolidated financial statements.
-F6-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial statements
June 30, 2001 and December 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
f. Change in Accounting Principle (Continued)
The Company has adopted the provisions of FASB Statement No. 140
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities (a replacement of FASB Statement No.
125.)" This statement provides accounting and reporting standard for
transfers and servicing of financial assets and extinguishments of
liabilities. Those standards are based on consistent application of a
financial-components approach that focuses on control. Under that
approach, the transfer of financial assets, the Company recognized the
financial and servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been
surrendered, and derecognizes liabilities when extinguished. This
statement provides consistent standards for distinguishing transfers
of financial assets that are sales from transfers that are secured
borrowings. This statement is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after
March 31, 2001. This statement is effective for recognition and
reclassification of collateral and for disclosures relating to
securitization transactions and collateral for fiscal years ending
after December 15, 2000. The adoption of this principle had no
material effect on the Company's consolidated financial statements.
The Company has adopted the provisions of FIN 44 "Accounting for
Certain Transactions Involving Stock Compensation (an interpretation
of APB Opinion No. 25.)". This interpretation is effective July 1,
2000. FIN 44 clarifies the application of Opinion No. 25 for only
certain issues. It does not address any issues related to the
application of the fair value method in Statement No. 123. Among other
issues, FIN 44 clarifies the definition of employee for purposes of
applying Opinion 25, the criteria for determining whether a plan
qualifies as a noncompensatory plan, the accounting consequence of
various modifications to the terms of a previously fixed stock option
or award, and accounting for an exchange of stock compensation awards
in a business combination. The adoption of this principle had no
material effect on the Company's consolidated financial statements.
g. Property and Equipment
Property and equipment is recorded at cost. Major additions and
improvements are capitalized. The cost and related accumulated
depreciation of equipment retired or sold are removed from the
accounts and any differences between the undepreciated amount and the
proceeds from the sale are recorded as gain or loss on sale of
equipment. Depreciation is computed using the straight-line method
over a period of five years.
-F7-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
h. Provision for Taxes
At December 31, 2000, the Company had net operating loss carryforwards
of approximately $1,217,000 that may be offset against future taxable
income through 2020. No tax benefit has been reported in the
consolidated financial statements because the potential tax benefits
of the net operating loss carryforwards are offset by a valuation
allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of
1986, net operating loss carryforwards for Federal income tax
reporting purposes are subject to annual limitations. Should a change
in ownership occur, net operating loss carryforwards may be limited as
to use in future years.
i. Principles of Consolidation
The consolidated financial statements include those of Syndication and
its wholly-owned subsidiary, Kemper.
Any material intercompany accounts and transactions have been
eliminated.
j. 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 revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
k. Advertising
The Company follows the policy of charging the costs of advertising to
expense as incurred.
l. Revenue Recognition Policy
Revenue is recognized upon shipment of goods to the customer.
-F8-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
m. Concentrations of Risk
Concentration in the Volume of Business Transacted with a Particular
----------------------------------------------------------------------
Supplier
--------
The Company currently engages the services of only one supplier, which
provides 100% of its wood treating and procurement services. Although
there are a limited number of manufacturers which provide wood
treating and procurement services, management believes that other
suppliers could provide these services on comparable terms. A change
in suppliers, however, could cause a delay in manufacturing and a
possible loss of sales, which would affect operating results
adversely.
Concentration in the Volume of Business Transacted with a Particular
----------------------------------------------------------------------
Customer
--------
The Company currently has one major customer which accounts for 100%
of its revenues. Although the Company is continually negotiating
contracts with potential customers, a loss of this customer could
greatly affect the operating results of the Company.
n. Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements include
all of the adjustments which, in the opinion of management, are
necessary for a fair presentation. Such adjustments are of a normal
recurring nature.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
June 30, December 31,
2001 2000
---------- -------------
(Unaudited)
Office equipment $ 4,550 $ 4,550
Accumulated depreciation (3,186) (2,730)
----------- ------------
Net property and equipment $ 1,364 $ 1,820
============ ============
-F9-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 3 - ACCRUED EXPENSES
At June 30, 2001 and December 31, 2000, accrued expenses consist of
$28,613 and $22,613, respectively, of interest payable associated with
the related party - notes payable (Note 6).
NOTE 4 - COMMITMENTS AND CONTINGENCIES
On May 18, 1999, the Company entered into an agreement to acquire a
reporting United States corporation with audited financial statements
showing no material assets or liabilities. The Company agreed to pay
$100,000 for its services in regard to the transaction. Payment of
this amount is to be made as follows:
$10,000 on execution of the agreement, $30,000 on delivery of offering
materials under rules 504 and/or 506, $35,000 on the business
combination and $25,000 on the filing of a Form 8-K with the
Securities and Exchange Commission. If the Company does not elect to
make any offerings under rules 504 or 506, then the payment due on the
business combination will be $60,000.
On April 7, 1999, the Company ratified its corporate service
consulting agreement with Source Management Services (Source), a
related company owned by a significant shareholder. Source is to
oversee the general activities of the Company on a day-to-day basis,
develop and execute a business plan, and assist in other ongoing
administrative issues. For the year ended December 31, 2000, the
Company agreed to pay Source the greater of $150 per hour or $17,500
per month. The Company has also agreed to award Source a bonus of
5% of the outstanding shares of stock when SyndicationNet's
securities are traded on any United States stock exchange.
On September 19, 2000, the Company entered into a Services and
Consulting Agreement with Tri-State Metro Territories, Inc.
(Tri-State), a business that sells franchised hair coloring salon
units under the copyright name of "haircolorxpress." The Company was
retained as Tri-State's consultant to assist in the development of
management, sales and marketing of "haircolorxpress" franchised hair
coloring salon units. The Company received a total of $51,300 during
2000 as a result of the consulting agreement with Tri-State. The
Company received an additional $132,485 during the six months ended
June 30, 2001 under the consulting agreement. The agreement is for a
term of twenty years with up to four, five-year extensions. The
Company is currently in negotiations with a number of companies that
are interested in entering into similar consulting agreements.
NOTE 5 - PREFERRED STOCK
The shareholders of the Company have authorized 20,000,000 shares of
preferred stock with a par value of $0.0001. The terms of the
preferred stock are to be determined when issued by the board of
directors of the Company.
On January 1, 2000, the remaining 60,000 Series A preferred shares
were converted into common shares, thus, at December 31, 2000, no
preferred shares were outstanding.
-F10-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 6 - NOTES PAYABLE - RELATED PARTY
Notes payable to related parties consisted of the following:
June 30, December 31,
<BTB> 2001 2000
--------- -------------
(Unaudited)
Note payable to a related party, due on demand,
plus interest at 12% per annum, unsecured. $ 105,000 $ 105,000
Less: Current Portion (105,000) (105,000)
------------ -------------
Long-Term Notes Payable to Related Parties $ - $ -
============ =============
NOTE 7 - GOING CONCERN
The Company's consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has
historically incurred significant losses which have resulted in an
accumulated deficit of $1,217,503 at December 31, 2000 which raises
substantial doubt about the Company's ability to continue as a going
concern. The accompanying consolidated financial statements do not
include any adjustments relating to the recoverability and
classification of liabilities that might result from the outcome of
this uncertainty.
It is management's intent to acquire Internet and E-commerce companies
as well as develop a software for online bidding services. Management
believes this bidding service process will allow the Company to bid
and package contracts online for the treatment, sale and shipment of
processed wood. In addition, management believes that being a publicly
traded company will enhance their negotiating leverage as well as
provide a source of additional funding if needed.
-F11-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(FORMERLY LIFE2K.COM, INC.)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
-F12-
C O N T E N T S
Independent Auditors' Report
Consolidated Balance Sheet
Consolidated Statements of Operations
Consolidated Statements of Stockholders' Equity (Deficit)
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
-F13-
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Syndication Net.com, Inc. and Subsidiary
(Formerly Life2K.com, Inc.)
Falls Church, Virginia
We have audited the accompanying consolidated balance sheet of Syndication
Net.com, Inc. and Subsidiary (formerly Life2K.com, Inc.) at December 31, 2000
and the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the years ended December 31, 2000 and 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Syndication Net.com, Inc. and Subsidiary (formerly Life2K.com, Inc.) as of
December 31, 2000 and the consolidated results of their operations and their
cash flows for the years ended December 31, 2000 and 1999 in conformity with
generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 7 to the
consolidated financial statements, the Company has incurred significant losses
which have resulted in an accumulated deficit and a deficit in stockholders'
equity, raising substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 7. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
HJ & Associates, LLC
Salt Lake City, Utah
March 27, 2001
-F14-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Consolidated Balance Sheet
ASSETS
------
December 31,
2000
--------------
CURRENT ASSETS
Cash $ 45
Accounts receivable (Note 1) 571,716
--------------
Total Current Assets 571,761
--------------
PROPERTY AND EQUIPMENT - NET (Note 2) 1,820
--------------
TOTAL ASSETS $ 573,581
==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 870,644
Accrued expenses (Note 3) 22,613
Notes payable - related party (Note 6) 105,000
--------------
Total Current Liabilities 998,257
--------------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 20,000,000 shares authorized of
$0.0001 par value, no shares issued and outstanding -
Common stock: 100,000,000 shares authorized of $0.0001
par value, 10,781,750 shares issued and outstanding 1,078
Additional paid-in capital 791,749
Accumulated deficit (1,217,503)
--------------
Total Stockholders' Equity (Deficit) (424,676)
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 573,581
==============
The accompanying notes are an integral part of these consolidated financial statements.
-F15-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Consolidated Statements of Operations
For the Years Ended
December 31,
------------------------
2000 1999
----------- -----------
SALES $7,315,093 $5,597,576
COST OF GOODS SOLD 7,267,571 5,526,429
----------- -----------
GROSS MARGIN 47,522 71,147
----------- -----------
OPERATING EXPENSES
Depreciation 910 910
General and administrative 570,334 256,555
----------- -----------
Total Operating Expenses 571,244 257,465
----------- -----------
OPERATING LOSS (523,722) (186,318)
----------- -----------
OTHER INCOME (EXPENSES)
Other income 51,300 -
Interest expense (13,017) (26,179)
Interest income - 277
----------- -----------
Total Other Income (Expenses) 38,283 (25,902)
----------- -----------
NET LOSS $ (485,439) $ (212,220)
=========== ===========
BASIC LOSS PER SHARE $ (0.05) $ (0.02)
=========== ===========
The accompanying notes are an integral part of these consolidated financial statements.
-F16-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Consolidated Statements of Stockholders' Equity (Deficit)
Preferred Stock Common Stock Additional
------------------ ------------------- Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 1998 - $ - 9,813,916 $ 981 $192,209 $ (519,844)
Recapitalization 60,000 6 189,312 19 59,975 -
Common stock issued for cash at
$1.65 per share - - 7,572 1 12,499 -
Net loss for the year ended
December 31, 1999 - - - - - (212,220)
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 1999 60,000 6 10,010,800 1,001 264,683 (732,064)
Conversion of preferred shares
to common stock (60,000) (6) 36,000 4 2 -
Common stock issued for cash at
prices ranging from $0.83 to $2.50
per share - - 193,500 19 227,482 -
Common stock issued for cash and
services at $1.67 per share - - 50,400 5 83,995 -
Common stock issued for services
at $1.67 per share - - 78,000 8 129,992 -
Common stock issued for conversion
of debt at $1.64 per share - - 19,050 2 31,248 -
Recapitalization - - 250,000 25 (25) -
Common stock issued for cash at
$0.047 per share - - 94,000 9 4,377 -
Common stock issued for services
at $1.00 per share - - 50,000 5 49,995 -
Net loss for the year ended
December 31, 2000 - - - - - (485,439)
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 2000 - $ - 10,781,750 $ 1,078 $791,749 $(1,217,503)
======== ======== ========== ======= ========= ============
The accompanying notes are an integral part of these consolidated financial statements.
-F17-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Consolidated Statements of Cash Flows
For the Years Ended
December 31,
-------------------------
2000 1999
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(485,439) $(212,220)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 910 910
Common and preferred stock issued for services 249,000 60,000
Changes in operating assets and liabilities:
(Increase) in accounts receivable (83,876) (50,633)
Increase in accounts payable 85,255 17,786
Increase in accrued expenses 6,728 22,135
---------- ----------
Net Cash Used in Operating Activities (227,422) (162,022)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES - -
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - related party - 155,000
Payments on notes payable - related party (25,000) -
Proceeds from issuance of common stock 246,887 12,500
---------- ----------
Net Cash Provided by Financing Activities 221,887 167,500
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (5,535) 5,478
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 5,580 102
---------- ----------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 45 $ 5,580
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash Payments For:
Income taxes $ - $ -
Interest $ 12,539 $ 4,044
Non-Cash Financing Activities
Stock issued for services $ 249,000 $ 60,000
Stock issued for outstanding debt $ 31,250 $ -
The accompanying notes are an integral part of these consolidated financial statements.
-F18-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Notes to the Consolidated Financial Statements
December 31, 2000 and 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The consolidated financial statements presented are those of Syndication
Net.com, Inc. (formerly Life2K.com, Inc.) (Syndication) and its wholly-owned
subsidiary, Kemper Pressure Treated Forest Products, Inc. (Kemper).
Collectively, they are referred to herein as the "Company". Syndication was
incorporated under the name of Generation Acquisition Corporation (Generation)
on March 25, 1999 under the laws of the State of Delaware to engage in any
lawful act or activity. Effective August 16, 1999, Life2K.com, Inc. (Life2K)
issued 16,200,000 shares of its common stock and 60,000 shares of its preferred
stock in exchange for the issued and outstanding stock of Kemper. Costs
associated with the recapitalization totaling $60,000 were expensed during the
year ended December 31, 1999 as a result of the 60,0000 preferred shares issued.
Effective October 13, 2000, pursuant to an Agreement and Plan of Organization
Between Generation Acquisition Corporation and Life2K, Generation
Acquisition Corporation issued 10,387,750 shares of its outstanding common
stock for 100% of the outstanding shares of Life2K. As part of the transaction,
Life2K was merged with and into Generation Acquisition Corporation,
Life2K was dissolved and Generation Acquisition Corporation changed its name to
SyndicationNet.com, Inc.
Kemper was incorporated on December 28, 1987 under the State laws of
Mississippi. Kemper was organized to procure, buy, sell and harvest forest
products for treating poles, conventional lumber and wood products, as well as
preserve and treat wood and forest products for sale in wholesale and retail
markets.
On October 9, 1997, Kemper entered into an asset purchase agreement and lease
assignment under which it conditionally sold all of its assets as well as
reassigned its lease related to its manufacturing enterprise. From that time,
Kemper has acted as a retail broker, having eliminated virtually all of its
manufacturing capacity.
At the time of the acquisition of Kemper, Life2K was essentially inactive, with
no operations and minimal assets. Additionally, the exchange of Life2K's common
stock for the common stock of Kemper resulted in the former stockholders of
Kemper obtaining control of Life2K. Accordingly, Kemper became the continuing
entity for accounting purposes, and the transaction was accounted for as a
recapitalization of Kemper with no adjustment to the basis of Kemper's assets
acquired or liabilities assumed. For legal purposes, Life2K was the surviving
entity.
At the time of the acquisition of Life2K, Syndication was essentially inactive,
with no operations and minimal assets. Additionally, the exchange of
Syndication's common stock for the common stock of Life2K resulted in the former
stockholders of Life2K obtaining control of Syndication. Accordingly, Life2K
became the continuing entity for accounting purposes, and the transaction was
accounted for as a recapitalization of Life2K with no adjustment to the basis of
Life2K's assets acquired or liabilities assumed. For legal purposes,
Syndication was the surviving entity.
-F19-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Notes to the Consolidated Financial Statements
December 31, 2000 and 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
b. Accounting Method
The Company's consolidated financial statements are prepared using the accrual
method of accounting. The Company has elected a December 31 year end.
c. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
d. Accounts Receivable
Accounts receivable consist entirely of an amount due from one customer. As
management of the Company believes the amount to be fully collectible, no
allowance for doubtful accounts has been recorded at December 31, 2000.
e. Basic Loss Per Share
The computations of basic loss per share of common stock are based on the
weighted average number of common shares outstanding during the period of the
consolidated financial statements as follows:
For the Years Ended
December 31,
--------------------------
2000 1999
--------- --------
Loss (numerator) $ (485,439) $ (212,220)
Shares (denominator) 10,396,192 9,886,570
Per share amount (0.05) $ (0.02)
f. Change in Accounting Principle
The Company has adopted the provisions of FASB Statement No. 138 "Accounting for
Certain Derivative Instruments and Hedging Activities, (an amendment of FASB
Statement No. 133.)" Because the Company had adopted the provisions of FASB
Statement No. 133, prior to June 15, 2000, this statement is effective for all
fiscal quarters beginning after June 15, 2000. The adoption of this principle
had no material effect on the Company's consolidated financial statements.
-F20-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Notes to the Consolidated Financial Statements
December 31, 2000 and 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
f. Change in Accounting Principle (Continued)
The Company has adopted the provisions of FASB Statement No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities
(a replacement of FASB Statement No. 125.)" This statement provides accounting
and reporting standard for transfers and servicing of financial assets and
extinguishments of liabilities. Those standards are based on consistent
application of a financial-components approach that focuses on control. Under
that approach, the transfer of financial assets, the Company recognized the
financial and servicing assets it controls and the liabilities it has incurred,
derecognizes financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. This statement provides consistent
standards for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. This statement is effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001. This statement is effective for recognition and
reclassification of collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000.
The adoption of this principle had no material effect on the Company's
consolidated financial statements.
The Company has adopted the provisions of FIN 44 "Accounting for Certain
Transactions Involving Stock Compensation (an interpretation of APB Opinion No.
25.)". This interpretation is effective July 1, 2000. FIN 44 clarifies the
application of Opinion No. 25 for only certain issues. It does not address any
issues related to the application of the fair value method in Statement No. 123.
Among other issues, FIN 44 clarifies the definition of employee for purposes of
applying Opinion 25, the criteria for determining whether a plan qualifies as a
noncompensatory plan, the accounting consequence of various modifications to the
terms of a previously fixed stock option or award, and accounting for an
exchange of stock compensation awards in a business combination. The adoption
of this principle had no material effect on the Company's consolidated financial
statements.
g. Property and Equipment
Property and equipment is recorded at cost. Major additions and improvements
are capitalized. The cost and related accumulated depreciation of equipment
retired or sold are removed form the accounts and any differences between the
undepreciated amount and the proceeds from the sale are recorded as gain or loss
on sale of equipment. Depreciation is computed using the straight-line method
over a period of five years.
-F21-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Notes to the Consolidated Financial Statements
December 31, 2000 and 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
h. Provision for Taxes
At December 31, 2000, the Company had net operating loss carryforwards of
approximately $1,217,000 that may be offset against future taxable income
through 2020. No tax benefit has been reported in the consolidated financial
statements because the potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance of the same amount.
The income tax benefit differs from the amount computed at federal statutory
rates of approximately 38% as follows:
For the Years Ended
December 31,
-------------
2000 1999
---- ----
Income tax benefit at statutory rate $ 184,460 $ 80,644
Change in valuation allowance (184,460) (80,644)
-------- -------
$ - $ -
======== =======
Deferred tax assets (liabilities) are comprised of the following:
For the Years Ended
December 31,
-------------
2000 1999
---- ----
Income tax benefit at statutory rate $ 462,460 $ 278,000
Change in valuation allowance (462,460) (278,000)
-------- --------
$ - $ -
========= =========
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carryforwards for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur, net
operating loss carryforwards may be limited as to use in future years.
i. Principles of Consolidation
The consolidated financial statements include those of Syndication and its
wholly-owned subsidiary, Kemper.
All material intercompany accounts and transactions have been eliminated.
-F22-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Notes to the Consolidated Financial Statements
December 31, 2000 and 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
j. 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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
k. Advertising
The Company follows the policy of charging the costs of advertising to expense
as incurred.
l. Revenue Recognition Policy
Revenue is recognized upon shipment of goods to the customer.
m. Concentrations of Risk
Concentration in the Volume of Business Transacted with a Particular
Supplier
The Company currently engages the services of only one supplier, which provides
100% of its wood treating and procurement services. Although there are a
limited number of manufacturers which provide wood treating and procurement
services, management believes that other suppliers could provide these services
on comparable terms. A change in suppliers, however, could cause a delay in
manufacturing and a possible loss of sales, which would affect operating results
adversely.
Concentration in the Volume of Business Transacted with a Particular
Customer
The Company currently has one major customer which accounts for 100% of its
revenues. Although the Company is continually negotiating contracts with
potential customers, a loss of this customer could greatly affect the operating
results of the Company.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following at December 31, 2000:
Office equipment $ 4,550
Accumulated depreciation (2,730)
------------
Net property and equipment $ 1,820
============
-F23-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Notes to the Consolidated Financial Statements
December 31, 2000 and 1999
NOTE 2 - PROPERTY AND EQUIPMENT (Continued)
Depreciation expense for the years ended December 31, 2000 and 1999 was $910 and
$910, respectively.
NOTE 3 - ACCRUED EXPENSES
At December 31, 2000, accrued expenses consist of $22,613 of interest payable
associated with the related party - notes payable (Note 6).
NOTE 4 - COMMITMENTS AND CONTINGENCIES
On May 18, 1999, the Company entered into an agreement to acquire a reporting
United States corporation with audited financial statements showing no material
assets or liabilities. The Company agreed to pay $100,000 for its services in
regard to the transaction. Payment of this amount is to be made as follows:
$10,000 on execution of the agreement, $30,000 on delivery of offering materials
under rules 504 and/or 506, $35,000 on the business combination and $25,000 on
the filing of a Form 8-K with the Securities and Exchange Commission. If the
Company does not elect to make any offerings under rules 504 or 506, then the
payment due on the business combination will be $60,000.
On April 7, 1999, the Company ratified its corporate service consulting
agreement with Source Management Services(Source), a related company owned by a
significant shareholder. Source is to oversee the general activities of the
Company on a day-to-day basis, develop and execute a business plan, and assist
in other ongoing administrative issues. For the year ended December 31, 2000,
the Company agreed to pay Source the greater of $150 per hour or $17,500 per
month. For the fiscal year 2001, Mr. Sorrentino has not yet received any
consulting fees owed to him. The Company has also agreed to award Source a bonus
of 5% of the outstanding shares of stock when the Company's securities are
traded on any United States stock exchange.
On September 19, 2000, the Company entered into a Services and Consulting
Agreement with Tri-State Metro Territories, Inc. (Tri-State), a business that
sells franchised hair coloring salon units under the copyright name of
"haircolorxpress." The Company was retained as Tri-State's consultant to assist
in the development of management, sales and marketing of "haircolorxpress"
franchised hair coloring salon units. The Company received a total of $51,300
during 2000 as a result of the consulting agreement with Tri-State. The
agreement is for a term of twenty years with up to four, five-year extensions.
The Company is currently in negotiations with a number of companies that are
interested in entering into similar consulting agreements.
NOTE 5 - PREFERRED STOCK
The shareholders of the Company have authorized 20,000,000 shares of preferred
stock with a par value of $0.0001. The terms of the preferred stock are to be
determined when issued by the board of directors of the Company.
On January 1, 2000, the remaining 60,000 Series A preferred shares were
converted into common shares, thus, at December 31, 2000, no preferred shares
were outstanding.
-F24-
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(Formerly Life2K.com, Inc.)
Notes to the Consolidated Financial Statements
December 31, 2000 and 1999
NOTE 6 - NOTES PAYABLE - RELATED PARTY
Notes payable to related parties consisted of the following at December 31,
2000:
Note payable to a related party, due on demand,
plus interest at 12% per annum, unsecured. $ 105,000
Less: Current Portion (105,000)
--------------
Long-Term Notes Payable to Related Parties $ -
==============
The aggregate principal maturities of notes payable to related parties are
as follows:
Year Ended
December 31, Amount
------------- ------
2001 $ 105,000
2002 -
2003 -
2004 -
2005 and thereafter -
--------------
Total $ 105,000
==============
NOTE 7 - GOING CONCERN
The Company's consolidated financial statements are prepared using generally
accepted accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. The Company has historically incurred significant losses which have
resulted in an accumulated deficit of $1,217,503 at December 31, 2000 which
raises substantial doubt about the Company's ability to continue as a going
concern. The accompanying consolidated financial statements do not include any
adjustments relating to the recoverability and classification of liabilities
that might result from the outcome of this uncertainty.
It is management's intent to acquire Internet and E-commerce companies as well
as develop a software for online bidding services. Management believes this
bidding service process will allow the Company to bid and package contracts
online for the treatment, sale and shipment of processed wood. In addition,
management believes that being a publicly traded company will enhance their
negotiating leverage as well as provide a source of additional funding if
needed.
-F25-
SYNDICATIONNET.COM, INC.
561,500 shares of common stock to be sold by selling securityholders
----------------
PROSPECTUS
----------------
September ______, 2001
SyndicationNet has not authorized any dealer, salesperson or other person to
provide any information or make any representations other than the information
or representations contained in this prospectus. Purchasers of the securities
offered hereby should not rely on any additional information or representations
if made.
This prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy any securities:
. except the common stock offered by this prospectus;
. in any jurisdiction in which the offer or solicitation is not authorized;
. in any jurisdiction where the dealer or other salesperson is not qualified
to make the offer or solicitation;
. to any person to whom it is unlawful to make the offer or solicitation;
or
. to any person who is not a United States resident or who is outside the
jurisdiction of the United States.
The delivery of this prospectus or any accompanying sale does not imply that:
. there have been no changes in SyndicationNet's affairs after the date of
this prospectus; or
. the information contained in this prospectus is correct after the date of
this prospectus.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Company is incorporated in Delaware. Under Section 145 of the General
Corporation Law of the State of Delaware, a Delaware corporation has the power,
under specified circumstances, to indemnify its directors, officers, employees
and agents in connection with actions, suits or proceedings brought against them
by a third party or in the right of the corporation, by reason of the fact that
they were or are directors, officers, employees or agents, against expenses
incurred in any action, suit or proceeding. The Company's Certificate of
Incorporation and by-laws provide for indemnification of its directors and
officers to the fullest extent permitted by the General Corporation Law of the
State of Delaware.
The General Corporation Law of the State of Delaware provides that a
Certificate of Incorporation may contain a provision eliminating the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided that the provision
shall not eliminate or limit the liability of a director:
(1) for any breach of the director's duty of loyalty to the corporation or
its stockholders,
(2) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
(3) under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the General
Corporation Law of the State of Delaware, or
(4) for any transaction from which the director derived an improper
personal benefit.
SyndicationNet's Certificate of Incorporation contains such a provision.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers or control persons
pursuant to the foregoing provisions, it is the opinion of the Securities and
Exchange Commission that such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
Item 25. Other Expenses of Issuance and Distribution
The following table sets forth SyndicationNet's expenses in connection with
this registration statement. All of the listed expenses are estimates, other
than the filing fees payable to the Securities and Exchange Commission.
Filing Fee--Securities and Exchange Commission $ 1
Fees and Expenses of Accountants and legal counsel $ 115,000
Blue Sky Fees and Expenses $ 2,000
Printing and Engraving Expenses $ 5,000
Miscellaneous Expenses $ 1,000
-----------------
Total $ 123,001
Item 26. Recent Sales of Unregistered Securities
Within the past three years, the Company has issued the following shares of
its common stock, par value $.0001 (the "Shares"), for cash or services rendered
to the Company and has granted the following warrants to purchase its common
stock, absent registration under the Securities Act of 1933, as amended (the
"Securities Act") pursuant to the exemption provided in Section 4(2) of the
Securities Act for transactions by an issuer not involving a public offering
except shares of common stock issued by Generation Acquisition Corporation prior
to the stock exchange transaction and name change, which shares were issued in
reliance on Rule 506 of the Securities Act. The following information is
provided as calculated on a post-merger basis.
Some of the holders of the shares issued below may have subsequently
transferred or disposed of their shares and the list does not purport to be a
current listing of SyndicationNet's shareholders.
In August 1999, Life2K.com, Inc. ("Life 2K") issued 3,750 shares of its
common stock to one individual as payment for accrued interest as part of a loan
agreement in which the Company borrowed $25,000. The Company believes that this
issuance was exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933, as amended, as a transaction by an issuer not involving any public
offering.
In September 1999, Life2K issued 6,250 shares of its common stock to one
individual for accrued interest as part of a loan agreement in which the Company
borrowed $25,000. The Company believes that this issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended,
as a transaction by an issuer not involving any public offering.
On March 25, 1999, Algonquin Acquisition Corporation issued 5,000,000
(pre-merger) shares of its common stock to TPG Capital Corporation at par of
which 4,750,000 shares were later redeemed at par. The Company believes that
this issuance was exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, as amended, as a transaction by an issuer not involving
any public offering.
On March 25, 1999, Algonquin Acquisition Corporation issued 5,000,000
(pre-merger) shares of its common stock to TPG Capital Corporation at par of
which 4,750,000 shares were later redeemed and cancelled. The Company believes
that this issuance was exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, as amended, as a transaction by an issuer not involving
any public offering.
On August 16, 1999, Algonquin Acquisition Corporation issued 16,200,000
shares of its common stock in a one-for-one exchange for the common stock of
Kemper and changed its name to Life2K.com, Inc.
In October 1999, Life2K issued 7,500 shares of its common stock (pre-
merger) to one individual at a purchase price of $1.00 per share. The Company
also issued an aggregate of 50,000 shares of its common stock to five of its
directors as compensation for their services. The Company believes that these
issuances were exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, as amended, as transactions by an issuer not involving
any public offering.
In January 2000, Life2K issued (i) 20,000 shares of common stock to Cynthia
White as compensation for accounting services rendered to the Company; (ii)
6,000 shares of its common stock to one entity upon the exercise of an option
agreement to purchase 10,000 shares of the Company's common stock exercisable at
$1.00; and (iii) issued 36,000 shares of its common stock upon the conversion of
60,000 (pre-merger) shares of the Company's preferred stock issued to a
consultant to the Company in 1995. The Company believes that these issuances
were exempt from registration pursuant to Section 4(2) of the Securities Act of
1933, as amended, as transactions by an issuer not involving any public
offering.
In March 2000, SyndicationNet issued 100,000 shares of common stock to
HTRG Consulting LLC as compensation for web hosting, web design and research
services rendered to the Company. On March 21, 2000, the Company issued 84,000
shares of its common stock to Mark Solomon, a director of the Company, for a
purchase price of $42,000. The Company believes that these issuances were exempt
from registration pursuant to Section 4(2) of the Securities Act of 1933, as
amended, as transactions by an issuer not involving any public offering.
From February through August 2000, SyndicationNet issued an aggregate of
322,500 shares of its common stock to ten individuals for an aggregate purchase
price of $227,500. The Company believes that this issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended,
as a transaction by an issuer not involving any public offering.
On June 7, 2000, SyndicationNet issued 31,750 shares of common stock to one
individual in exchange for the cancellation of a $25,000 loan. The Company
believes that this issuance was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933, as amended, as a transaction by an issuer
not involving any public offering.
On October 13, 2000, Generation Acquisition Corporation issued 10,387,750
shares of its common stock in an exchange for shares of Life2K. Simultaneously,
Generation Acquisition Corporation changed its name to SyndicationNet.com, Inc.
On October 16, 2000, SyndicationNet issued an aggregate of 60,000 shares of
its common stock to five of its directors and its chief financial officer as
compensation for services rendered to the Company. The Company believes that
this issuance was exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, as amended, as a transaction by an issuer not involving
any public offering.
In November 2000, SyndicationNet issued 50,000 shares of common stock to
HTRG Consulting LLC as compensation for web hosting, web design and research
services rendered to the Company. The Company believes that this issuance was
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended, as a transaction by an issuer not involving any public offering.
In November and December 2000, SyndicationNet issued 34,000 shares of its
common stock to 15 individual investors for an aggregate purchase price of
$4,386. The Company believes that this issuance was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended, as a
transaction by an issuer not involving any public offering.
Item 27. Exhibits and Financial Statement Schedules
(a) Exhibits
3.1* Certificate of Incorporation, filed with the registration statement of
Generation Acquisition Corporation on Form 10-SB (file No. 000-29701) filed
with the Commission and incorporated herein by reference
3.2 Certificate of Ownership and Merger
3.3* By-Laws of the Company, filed with the registration statement of Generation
Acquisition Corporation on Form 10-SB (file No. 000-29701) filed with the
Commission and incorporated herein by reference
4.1* Agreement and Plan of Reorganization among Generation Acquisition
Corporation, Life2K, Inc., and the shareholders of Life2K, Inc. filed on
Form 8-K with the Commission on November 6, 2000 and incorporated herein by
reference
4.2* Agreement and Plan of Merger between Generation Acquisition Corporation and
Life2K Acquisition Corporation filed on Form 8-K with the Commission on
November 6, 2000 and incorporated herein by reference
4.3* Consulting agreement between SyndicationNet.com, Inc. and Tri-State Metro
Territories, LLC. dated September 19, 2000, filed with the Commission as
Exhibit 4.3 in a registration statement on Form SB-2 filed on February 13,
2001
5.1**Opinion of Cassidy & Associates
10.1 Consulting Agreement between Kemper Pressure Treated Forest Products Inc.
and Source Management Services
23.1 Consent of Accountants
23.2 Consent of Cassidy & Associates (included in Exhibit 5.1)
--------
* Previously filed
** To be filed
(b) Financial Statement Schedules
None
Item 28. Undertakings.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(1) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(2) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(3) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to the information in the registration statement.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that for the purpose of
determining any liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered in that prospectus,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
SyndicationNet.com, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form SB-2 and authorized
this registration statement to be signed on its behalf by the undersigned in
Falls Church, Virginia, on September 28, 2001.
SyndicationNet.com, Inc.
By: /s/ Vance Hartke
Vance Hartke, President and
Director
By: /s/ Cynthia White
Cynthia White, Chief Financial
Officer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
---------- ------ ----
/s/ Mark Griffith
-------------------
Mark Griffith Treasurer, Secretary and
Director September 28, 2001
/s/ Mark Solomon
------------------
Mark Solomon Director September 28, 2001
/s/ Wayne Hartke
------------------
Wayne Hartke Director September 28, 2001
/s/ Howard B. Siegel
-----------------------
Howard B. Siegel Director September 28, 2001