HLNT Networks (Formerly Healthnet International Inc.) (www.htnl.net, OTC BB: HLNT, Berlin: HEA) HLNT Networks recognized the opportunity to web-enable traditional brick and mortar businesses early on, to attain e-business efficiencies through the expertise of HLNT Networks, effectively converting traditional business into “click and mortar” hybrids, each with its own built-in regional customer base and brand name recognition.  The Company’s primary offerings are eHealthstores and eHealthstores Express.

HLNT Networks recently announced results for the three months ended August 31, 2000, and other developments. For the three months, HLNT generated revenues from its eHealthstores of $182,673, more than double the revenue produced in the previous quarter. Management believes the Company is on track to achieve similar revenue growth in the latest quarter that ended November 30, 2000. The Company also launched 5 additional eHealthstores, including one for General Nutrition Centers in the UK (www.gnc.co.uk), the World's largest Vitamin, Mineral and Supplement retailer. As well, the Company announced that the eHealthstores Express network had reached twenty-six licensees, bringing the total HLNT network (eHealthstores and eHealthstores Express products) to 37 licensees, and the total number of brick & mortar retail stores in the HLNT network to 72. This rapid growth is an indication that HLNT is moving closer to reaching critical mass. HLNT's strategy of Web-enabling brick & mortar businesses and generating revenue from multiple streams including licensing fees, product sales, advertising, Web design and marketing services is being implemented effectively. As HLNT is not bound to a single revenue source, but can capitalize on the multiple revenue streams intrinsic to its business model, we consider HLNT a strong, emerging e-commerce concern.

CORPORATE HISTORY

The company created MedicineCabinet.com, its prototype B2C, Vitamin, mineral, and summplement (VMS) online retail web site. Visitors to the site will find a wide range of health-related products and information. HLNT claims to offer at least four times the selection of a bricks and mortar store, and offers products at savings of up to 50 per cent of manufacturers suggested retail price. Under the guidance of the company’s Medical Advisory Board, continually updated information is available these include: an online health encyclopedia, as well as articles on homeopathy and natural products.

In early 2000, HLNT introduced eHealthstores.com to seize the true distribution power of the Internet by offering a comprehensive VMS online retail B2B solution. HLNT will supply online health stores to existing VMS retailers in exchange for licensing and royalty revenues. 

Key target prospects identified for this model are:
1.) Brick and Mortar VMS Retailers
2.) Health / Wellness Related Associations
3.) Fitness Sports and Health Clubs, Spas
4.) Health Information Sites
5.) Internet Entrepreneurs

In addition to its customized storefront, eHealthstores solution consists of two core components essential to operating an online nutraceutical retail business: back- end Internet technologies, and product fulfillment and shipment. The company has developed a back-end architecture specific to the eHealthstores model, inclusive of hardware and software. This framework is the integration of appli-cations of e-commerce / online shopping tools, database, web site development, customer relationship management and mar-keting metrics solutions. In addition to being infinitely replicable and scaleable, the back-end template is modular in nature. An eHealthstore begins the production cycle as this “cookie cutter” framework; the product database and customized store-front are then imported in. Once the customization and setup process is streamlined, an individual eHealthstore can be launched within weeks.

Product fulfillment and shipping are handled by Super-Nutrition Distributors, Inc. Super-Nutrition is a national VMS distributor servicing over 12,000 bricks and mortar retail clients, carrying over 14,000 nutraceutical SKUs in two regional ware-houses. Healthnet has partnered with Super-Nutrition in the United States and FSC in Europe. A subsequent Super-Nutrition and FSC also opens up this network of brick and motor retail clients to eHealthstores.

The eHealthstores model is mutually beneficial for the company and the licensee. An eHealthstore licensee is provided with a turnkey solution, for a quick and reasonably priced entry into the nutraceutical e-tail market – complete with regularly upgraded technology, and ongoing personal support. In return, not only does HLNT anticipate recuperating its upfront and ongoing costs from multiple operators, but also the royalties earned from the licensees’ gross margin translates into a significant indirect share of the end-user market.

EHealthstores Express is an affordable, turnkey e-commerce solution for retailers in the health vertical which enables HLNT clients to sell over 14,000 natural health products online 24/7.  HLNT has systems in place for content and store merchandising, maintenance, financials (credit card transactions and processing), inventory management, shipping and fulfilment.  HLNT’s supply chain model is superior as they do not incur overhead costs or distribution costs.  HLNT utilizes fulfilment partnership models to eliminate overhead and receive net terms on the products sold through their web sites.

• License 120 U.S. eHealthstores within year one, and 700 internationally within 3 years
• Approach $100 million in revenues within 3 years, with substantial cash flows and earnings
• Expand profit centers in the United Kingdom, Canada and Asia;
• Widen product offerings to related health segments by year two.
• Expand and establish revenues from additional Web products and services in marketing and development

Strategies

• Continue an aggressive eHealthstores sales campaign toward targeted licensee prospects
• Aggressively massmarket the eHealthstores network “super brand” to attract new customers, and assist eHealthstores licensees in their local marketing efforts to their existing customers
• Increase market share/market penetration of eHealthstores Express, a streamlined Web solution for eHealthstores smaller clients
• Aggressively roll out new kiosk program to build on current eHealthstores network of over 70 retail stores including GNC, the largest VMS retailer in the world
• Continue to implement an information and sales campaign to increase client acquisition for nject
• Negotiate acquisitions and partnerships with existing business component providers to build and rationalize the supply chain.

Why the Healthnet Business Model Makes Sense

The strength of Healthnet’s business model stems from the fact that the Company is a hybrid and not a pure play. Healthnet has exposure to multiple revenue streams, as the Company has multiple divisions that are revenue producing. Healthnet’s kiosk program effectively extends the reach of the eHealthstores network into the domain of its “bricks and mortar” licensee stores. In addition, Healthnet’s Internet kiosk pro-gram will enable the Company to leverage the existing client base of its licensee stores, and thereby develop a brand that is recognizable on the Internet and in the domain of the traditional bricks and mortar retailers. The company aims to derive revenue from the sale of VMS products through MedicineCabinet.com and through licensee eHealthtores in Canada, the United States and the UK. The company further expects to generate additional revenues through website development services (Nject), sponsorships and advertising on HLNT websites, and through providing Internet marketing services to licensees.

MANAGEMENT

Grant Johnson, President & CEO: Mr. Johnson brings over 15 years of experience in business management. He has considerable experience in both large corporations and entrepreneurial enterprises.

Bret Conkin, COO: Mr. Conkin brings over 13 years of management experience with companies like Procter and Gamble and the British Columbia Lottery Corporation.

Joseph Harkins CA, CFO: Mr. Harkins brings 16 years of financial management to the company. He performed senior management roles in finance and operations with organizations involved in computer software and real estate development.

Bill Rolston, VP InformationTechnology: Mr. Rolston brings over 12 years of management experience with companies like FreeRealTime.com, Valmet Automation, and the Canadian Naval Reserve.

David Hallonquist, VP Corporate Development: Mr. Hallonquist brings over 19 years experience in Business management to the company. He has been involved in the manufacturing, distribution and the retail business sectors.

David Thornley-Hall, VP European Operations: David Thornley-Hall brings 11 years business and management experience to the group with a focus from the financial markets.

Outside Board Members

S. Ross Johnson, Chairman of the Board, brings over 45 years of senior management experience in both large corporations and entrepreneurial ventures. Mr. Johnson career includes senior positions with New York Life, National Life of Canada and National Life.

Hartland M. MacDougall is a former Chairman of the Royal Trust Company and previously was Vice-Chairman and a Director of the Bank of Montreal, with which he was associated for more than thirty years.

Raymond George Harris was a partner with Deloitte & Touche and its predecessor firms from 1955 until his retirement in 1992.

Dr. R. Dean Linden is a graduate of Queen’s University and the University of Ottawa. His field of expertise is Neurosurgery and he has founded several medical specialty companies.

Roger Johnson is the past Executive Vice President of Corporate Marketing and Distribution Services at Aid Association for Lutherans (AAL), one of the nation’s leading fraternal benefit societies.

Richard O. Painter is the past President of Prudential Insurance and Financial Services, the largest sales unit of The Prudential Insurance Company of America.

Strong Management and a Seasoned Board, give the company a solid foundation for success.

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