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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ________)*
ImproveNet, Inc.
(Name of Issuer)
Common Stock, $0.001 Par Value
(Title of Class of Securities)
45321E106
(CUSIP Number)
Jeffrey Perry, Esq.
8930 E. Raintree Drive, Suite 300
Scottsdale, AZ 85260
Telephone 480-346-2014
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 23, 2002
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [ ]
CUSIP No. 45321E106
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1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only).
Jeffrey I. Rassas
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
[ ] (a)
[X] (b)
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3. SEC Use Only
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4. Source of Funds (See Instructions)
SC
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization
United States
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Number of 7. Sole Voting Power
Shares 10,103,580
Beneficially ------------------------------------------------------------
Owned by 8. Shared Voting Power
Each 0
Reporting ------------------------------------------------------------
Person With 9. Sole Dispositive Power
10,103,580
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10. Shared Dispositive Power
0
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,103,580
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
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13. Percent of Class Represented by Amount in Row (11)
19.0%
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14. Type of Reporting Person (See Instructions)
IN
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ITEM 1. Security and Issuer
State the title of the class of equity securities to which this statement
relates and the name and address of the principal executive offices of the
issuer of such securities.
This statement on Schedule 13D (this "Schedule 13D") relates to the common
stock, $0.001 par value (the "Common Stock"), of ImproveNet, Inc., a Delaware
corporation (the "Company"). The address of the Company's principal executive
offices is 8930 E. Raintree Drive, Suite 300, Scottsdale, Arizona 85260.
ITEM 2. Identity and Background
If the person filing this statement or any person enumerated in Instruction C of
this statement is a corporation, general partnership, limited partnership,
syndicate or other group of persons, state its name, the state or other place of
its organization, its principal business, the address of its principal office
and the information required by (d) and (e) of this Item. If the person filing
this statement or any person enumerated in Instruction C is a natural person,
provide the information specified in (a) through (f) of this Item with respect
to such person(s).
(a) Name;
Jeffrey I. Rassas
(b) Residence or business address;
8930 E. Raintree Drive, Suite 300, Scottsdale, AZ 85260
(c) Present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which
such employment is conducted;
Chief Executive Officer of ImproveNet, Inc.
(d) Whether or not, during the last five years, such person has been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) and, if so, give the dates, nature of
conviction, name and location of court, and penalty imposed, or other
disposition of the case;
Inapplicable.
(e) Whether or not, during the last five years, such person was a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws;
and, if so, identify and describe such proceedings and summarize the
terms of such judgment, decree or final order; and
Inapplicable.
(f) Citizenship.
A U.S. citizen and resident of the State of Arizona.
ITEM 3. Source and Amount of Funds or Other Consideration
State the source and the amount of funds or other consideration used or to be
used in making the purchases, and if any part of the purchase price is or will
be represented by funds or other consideration borrowed or otherwise obtained
for the purpose of acquiring, holding, trading or voting the securities, a
description of the transaction and the names of the parties thereto. Where
material, such information should also be provided with respect to prior
acquisitions not previously reported pursuant to this regulation. If the source
of all or any part of the funds is a loan made in the ordinary course of
business by a bank, as defined in Section 3(a)(6) of the Act, the name of the
bank shall not be made available to the public if the person at the time of
filing the statement so requests in writing and files such request, naming such
bank, with the Secretary of the Commission. If the securities were acquired
other than by purchase, describe the method of acquisition.
Jeffrey I. Rassas acquired beneficial ownership of the Common Stock reported on
hereunder on December 23, 2002 pursuant to the closing of the merger (the
"Merger") contemplated by the Agreement and Plan of Merger, as amend (the
"Merger Agreement"), dated July 30, 2002, by and among the Company, Etech
Acquisition, Inc., a wholly-owned subsidiary of the Company, and eTechLogix,
Inc., an Arizona corporation ("Etech"). Mr. Rassas was a common stockholder of
Etech, and pursuant to the Merger, all of the common stock holdings of Etech
were converted into shares of Common Stock of the Company. The Company was to
issue up to a total of 37,500,000 shares of Common Stock upon the closing of the
Merger.
Under the provisions of Section 2.1 of the Merger Agreement, as amended, five
directors of the Company's Board of Directors will submit letters of
resignation, to be effective at and upon condition of the Buyback Closing (as
defined in the Merger Agreement). At that time Jeffrey I. Rassas, Homayoon J.
Farsi and Naser Ahmad shall be appointed to fill the vacancies left by such
resignations. Under the provisions of Section 1.2 of the Merger Agreement, as
amended, the effectiveness of the letters of resignation and the reconstitution
of the Company's Board of Directors shall occur upon the completion of the
Buyback Closing. It is anticipated, but not assured, that the Buyback Closing
will be completed on or about January 2, 2003.
ITEM 4. Purpose of Transaction
State the purpose or purposes of the acquisition of securities of the issuer.
Describe any plans or proposals which the reporting persons may have which
relate to or would result in:
(a) The acquisition by any person of additional securities of the issuer,
or the disposition of securities of the issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the issuer or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the issuer or any
of its subsidiaries;
(d) Any change in the present board of directors or management of the
issuer, including any plans or proposals to change the number or term
of directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy
of the issuer;
(f) Any other material change in the issuer's business or corporate
structure including but not limited to, if the issuer is a registered
closed-end investment company, any plans or proposals to make any
changes in its investment policy for which a vote is required by
section 13 of the Investment Company Act of 1940;
(g) Changes in the issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control
of the issuer by any person;
(h) Causing a class of securities of the issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national
securities association;
(i) A class of equity securities of the issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Act;
or
(j) Any action similar to any of those enumerated above.
The purpose of the transaction was for the Company to acquire all of the
outstanding capital stock and equity interests of Etech by means of a merger of
a wholly owned subsidiary of the Company with and into Etech, with Etech as the
surviving corporation. The Company was to issue up to a total of 37,500,000
shares of Common Stock upon the closing of the Merger. Except as described in
Item 3 above, which is hereby incorporated by reference, the Reporting Person
has no other plans or proposals which relate to or would result in any of the
transactions described in subparagraphs (a) though (j) of Item 4 of Schedule
13D.
The Reporting Person intends to evaluate and review the Company and its
business, assets, corporate structure, capitalization, operations, properties,
polices, management and personnel with a view towards determining how to
optimally realize any potential benefits which arise from the Merger.
Accordingly, the Reporting Person reserves the right to change any plans and
intentions at any time, as such Reporting Person deem necessary and appropriate.
ITEM 5. Interest in Securities of the Issuer
(a) State the aggregate number and percentage of the class of securities
identified pursuant to Item 1 (which may be based on the number of
securities outstanding as contained in the most recently available
filing with the Commission by the issuer unless the filing person has
reason to believe such information is not current) beneficially owned
(identifying those shares which there is a right to acquire) by each
person named in Item 2. The above mentioned information should also be
furnished with respect to persons who, together with any of the
persons named in Item 2, comprise a group within the meaning of
Section 13(d)(3) of the Act;
10,103,580 shares of Common Stock representing 19% of the shares
outstanding.
(b) For each person named in response to paragraph (a), indicate the
number of shares as to which there is sole power to vote or to direct
the vote, shared power to vote or to direct the vote, sole power to
dispose or to direct the disposition, or shared power to dispose or to
direct the disposition. Provide the applicable information required by
Item 2 with respect to each person with whom the power to vote or to
direct the vote or to dispose or direct the disposition is shared;
10,103,580 shares as to which there is sole voting power and sole
dispositive power.
(c) Describe any transactions in the class of securities reported on that
were effected during the past sixty days or since the most recent
filing of Schedule 13D (ss.240.13d-191), whichever is less, by the
persons named in response to paragraph (a).
INSTRUCTION. The description of a transaction required by Item 5(c)
shall include, but not necessarily be limited to: (1) the identity of
the person covered by Item 5(c) who effected the transaction; (2) the
date of the transaction; (3) the amount of securities involved; (4)
the price per share or unit; and (5) where and how the transaction was
effected.
Within the past 60 days, the following transactions were effected: The
transactions described in Item 3.
(d) If any other person is known to have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale
of, such securities, a statement to that effect should be included in
response to this item and, if such interest relates to more than five
percent of the class, such person should be identified. A listing of
the shareholders of an investment company registered under the
Investment Company Act of 1940 or the beneficiaries of an employee
benefit plan, pension fund or endowment fund is not required.
Inapplicable.
(e) If applicable, state the date on which the reporting person ceased to
be the beneficial owner of more than five percent of the class of
securities.
INSTRUCTION. For computations regarding securities which represent a
right to acquire an underlying security, see Rule 13d-3(d)(1) and the
note thereto.
Inapplicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
Describe any contracts, arrangements, understandings or relationships (legal or
otherwise) among the persons named in Item 2 and between such persons and any
person with respect to any securities of the issuer, including but not limited
to transfer or voting of any of the securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies, naming the persons
with whom such contracts, arrangements, understandings or relationships have
been entered into. Include such information for any of the securities that are
pledged or otherwise subject to a contingency the occurrence of which would give
another person voting power or investment power over such securities except that
disclosure of standard default and similar provisions contained in loan
agreements need not be included.
None.
ITEM 7. Material to Be Filed as Exhibits
The following shall be filed as exhibits: copies of written agreements relating
to the filing of joint acquisition statements as required by ss.240.13d-1(k) and
copies of all written agreements, contracts, arrangements, understandings, plans
or proposals relating to: (1) the borrowing of funds to finance the acquisition
as disclosed in Item 3; (2) the acquisition of issuer control, liquidation, sale
of assets, merger, or change in business or corporate structure or any other
matter as disclosed in Item 4; and (3) the transfer or voting of the securities,
finder's fees, joint ventures, options, puts, calls, guarantees of loans,
guarantees against loss or of profit, or the giving or withholding of any proxy
as disclosed in Item 6.
Exhibit Description
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1(1) Agreement and Plan of Merger, dated July 30, 2002, by and among
ImproveNet, Inc., a Delaware corporation, eTechLogix, Inc., an Arizona
corporation, and Etech Acquisition, an Arizona corporation.
2 Amendment No. 1 to Agreement and Plan of Merger, dated October 1,
2002.
3 Amendment No. 2 to Agreement and Plan of Merger, dated November 12,
2002.
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(1) Incorporated by reference from ImproveNet, Inc.'s Form 8-K filed with the
Securities and Exchange Commission on August 6, 2002.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date January 2, 2003
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Signature /s/ Jeffrey I. Rassas
------------------------------------
Name/Title Jeffrey I. Rassas
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Exhibit 2
AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 to Agreement and Plan of Merger (this "Amendment')
dated as of October 1, 2002, is made by and among IMPROVENET, INC., a Delaware
corporation ("IMPV"), ETECHLOGIX, INC., an Arizona corporation ("ETECH"), ETECH
ACQUISITION, INC., an Arizona corporation and a wholly owned subsidiary of IMPV
("Merger Sub").
PRELIMINARY STATEMENT
A. This Amendment is made with reference to the Agreement and Plan of
Merger, dated as of July 30, 2002 (the "Merger Agreement"), between IMPV, ETECH
and Merger Sub (collectively, the "Parties"). Capitalized terms used herein
shall have the same meanings ascribed to them in the Merger Agreement.
B. In accordance with Section 9.1 of the Merger Agreement, the Parties have
agreed to amend and modify the Merger Agreement as set forth below.
AMENDMENT
In consideration of the premises, and of the mutual agreements made herein,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged by each Party, the Parties agree as follows:
Paragraph 1. Section 10.1(d) of the Merger Agreement is hereby amended and
restated to read in its entirety as follows:
"(d) by ETECH or IMPV if the Closing has not occurred by December 31,
2002."
THE NEXT PAGE IS THE SIGNATURE PAGE.
In witness whereof, this Amendment No. 1 to the Merger Agreement is
executed by IMPV, ETECH and Merger Sub as of the date first set forth above.
IMPV:
IMPROVENET, INC.
By: /s/ Ronald B. Cooper
------------------------------------
Ronald B. Cooper
Chairman
MERGER SUB:
ETECH ACQUISITION, INC.
By: /s/ Ronald B. Cooper
------------------------------------
Ronald B. Cooper, President
ETECH:
ETECHLOGIX, INC.
By: /s/ Jeffrey I. Rassas
------------------------------------
Jeffrey I. Rassas, CEO
By: /s/ Homey J. Farsi
------------------------------------
Homey J. Farsi, President
Exhibit 3
AMENDMENT NO. 2 TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 2 to Agreement and Plan of Merger (this "Amendment')
dated as of November 12, 2002, is made by and among IMPROVENET, INC., a Delaware
corporation ("IMPV"), ETECHLOGIX, INC., an Arizona corporation ("ETECH"), ETECH
ACQUISITION, INC., an Arizona corporation and a wholly owned subsidiary of IMPV
("Merger Sub").
PRELIMINARY STATEMENT
A. This Amendment is made with reference to the Agreement and Plan of
Merger, dated as of July 30, 2002, as amended on October 1, 2002 (the "Merger
Agreement"), between IMPV, ETECH and Merger Sub (collectively, the "Parties").
Capitalized terms used herein shall have the same meanings ascribed to them in
the Merger Agreement.
B. The Parties have agreed to change the terms of the Merger Agreement so
that the occurrence of the Effective Time prior to the expiration of the twenty
(20) business day period during which IMPV will offer to repurchase the
outstanding Buyback Interests of IMPV in connection with the Share Buyback is a
condition to the obligations of IMPV to purchase and pay for Buyback Interests
in the Share Buyback. The parties have further agreed that the current directors
of IMPV will remain on the Board of Directors of IMPV until the Buyback Price
has been paid to all holders of Buyback Interests who properly tender their
Buyback Interests in the Share Buyback so that the directors may personally
direct the fulfillment by IMPV of its obligations with respect to the Share
Buyback. In accordance with Section 9.1 of the Merger Agreement, the Parties
have agreed to amend and modify the Merger Agreement as set forth below.
AMENDMENT
In consideration of the premises, and of the mutual agreements made herein,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged by each Party, the Parties agree as follows:
1. Sections 1.2(b), 1.2(c), 1.2(d) and 1.2(e) of the Merger Agreement are
hereby amended and restated to read in their entirety as follows:
"(b) CLOSING DELIVERIES. At Closing, (i) IMPV and ETECH shall each deliver
any undelivered items of the items set forth in Section 8, (ii) ETECH shall
deliver the $250,000 balance of the New Capital (as defined below) and
those funds and the $250,000 previously deposited by ETECH pursuant to
Section 2.3(a) shall be paid to American Stock Transfer & Trust Company
1
(the "DEPOSITARY"), (iii) IMPV shall irrevocably pay cash in an amount
which, when added to the $500,000 referred to above, will equal the
aggregate Buyback Price which would be payable in the Share Buyback if all
Buyback Interests, other than those held by the New IMPV Shareholders (as
defined below), were tendered, and (iv) IMPV and ETECH shall have delivered
mutually acceptable instructions to the Depositary meeting the requirements
of this Section 1.2(b). The funds paid to the Depositary pursuant to items
(ii) and (iii) shall be referred to herein as the "ESCROWED FUNDS." ETECH
and IMPV shall give irrevocable instructions to the Depositary to hold the
Escrowed Funds in escrow for the exclusive benefit of tendering holders of
Buyback Interests and for the exclusive purpose of paying the Buyback Price
to such holders. Arrangements satisfactory to IMPV and ETECH shall be made
with the Depositary so that the Depositary is irrevocably bound to hold the
Escrowed Funds in escrow for the exclusive benefit of tendering holders of
Buyback Interests, to pay the Buyback Price to such holders from the
Escrowed Funds and to return to IMPV as soon as possible and in any event
within two (2) business days any portion or portions of the Escrowed Funds
which will not be required to fund the payment of the Buyback Price to
tendering holders of Buyback Interests whenever the Depositary is able to
determine that such portion or portions of the Escrowed Funds will not be
so required. The arrangements shall provide, for the benefit of tendering
holders of Buyback Interests, that the Depositary may not return any of the
Escrowed Funds to IMPV other than as required above unless the Depositary
is instructed to do so by a writing signed by both IMPV and Ronald B.
Cooper. IMPV shall become the owner of the funds transferred pursuant to
item (ii) above when the Articles of Merger are filed with the Arizona
Corporation Commission, but not before. If the Articles of Merger are not
filed with the Arizona Corporation Commission within 30 days from the date
of the Closing, ETECH and IMPV shall provide written instructions to the
Depositary, signed by them and by Ronald B. Cooper, directing the
Depositary to return the Escrowed Funds by wire to the bank accounts from
which they were transferred to the Depositary.
(c) EFFECTIVE TIME. Upon (i) confirmation of receipt by IMPV of the
$250,000 balance of the New Capital, and (ii) IMPV's receipt of evidence
reasonably satisfactory to it that the Escrowed Funds have been received by
the Depositary and escrow arrangements with the Depositary have been made
as required by Section 1.2(b), IMPV shall cause the Articles of Merger to
be filed with the Arizona Corporation Commission.
2
(d) SHARE BUYBACK. Once the Articles of Merger have been filed, IMPV shall
be irrevocably obligated to complete the Share Buyback and to pay the
BuyBack Price to all holders of Buyback Interests who tender their Buyback
Interests pursuant to the terms of the Share Buyback as such terms are in
effect immediately prior to the filing of the Articles of Merger. The
persons who hold Buyback Interests immediately prior to the filing of the
Articles of Merger are third party beneficiaries of this Agreement with
respect to the obligations of IMPV under the preceding sentence and may
exercise any and all remedies available under applicable law to enforce
such obligations.
(e) RECONSTITUTION OF THE BOARD OF DIRECTORS. Upon written confirmation to
IMPV and ETECH that (i) the Depositary has paid the Buyback Price to all
holders of Buyback Interests who have been determined to have properly
tendered Buyback Interests in the Share Buyback and (ii) with respect to
any holders of Buyback Interests with respect to which there is a dispute
concerning whether a proper tender has been made or with respect to which
the only condition to payment of the Buyback Price is the delivery of a
share certificate pursuant to a properly executed and tendered Notice of
Guaranteed Delivery, the Depositary is holding a sufficient amount of the
Escrowed Funds which is irrevocably dedicated to be applied to payment to
such holders to the extent that it may ultimately be determined that
payment should be made to them (the receipt of which confirmation shall be
referred to herein as the "BUYBACK CLOSING"), the letters of resignation
described in Section 2.1 shall become effective and the Board of Directors
shall be reconstituted as described in Section 2.1.
2. Section 2.2(d) of the Merger Agreement is hereby amended and restated to
read in its entirety as follows:
(d) Notwithstanding anything to the contrary contained herein, the Buyback
Closing is expressly conditioned upon the Closing of this Agreement having
occurred prior to the expiration of the tender offer related to the Share
Buyback, and the Closing of this Agreement is expressly conditioned upon
the commencement of such tender offer.
3
3. The second sentence of Section 2.3(b) of the Merger Agreement is hereby
amended and restated to read in its entirety as follows:
"Funding of the final $250,000 of the New Capital is expressly conditioned
upon the Closing of the Agreement."
4. Section 7.1(b) of the Merger Agreement is hereby amended and restated to
read in its entirety as follows:
"(d) The tender offer related to the Share Buyback shall have commenced;"
5. Section 7.1(o) of the Merger Agreement is hereby amended and restated to
read in its entirety as follows:
"(o) IMPV shall have immediately available for payment to the Depositary
the full amount of the Escrowed Funds, less the $250,000 balance of the New
Capital."
In witness whereof, this Amendment No. 2 to the Merger Agreement is
executed by IMPV, ETECH and Merger Sub as of the date first set forth above.
IMPV:
IMPROVENET, INC.
By: /s/ Ronald B. Cooper
------------------------------------
Ronald B. Cooper
Chairman
MERGER SUB:
ETECH ACQUISITION, INC.
By: /s/ Ronald B. Cooper
------------------------------------
Ronald B. Cooper, President
ETECH:
ETECHLOGIX, INC.
By: /s/ Jeffrey I. Rassas
------------------------------------
Jeffrey I. Rassas, CEO
By: /s/ Homey J. Farsi
------------------------------------
Homey J. Farsi, President
4