-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OUNZGkQiVGKzzKKT18/aMbHDfCkKrmUqrVkzeaN78K5KJ/xZrN6PgtEQXxd3ws+U RkNL262tMaRNAbgaIVyCCA== 0000950124-99-006137.txt : 19991117 0000950124-99-006137.hdr.sgml : 19991117 ACCESSION NUMBER: 0000950124-99-006137 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990916 ITEM INFORMATION: FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POPMAIL COM INC CENTRAL INDEX KEY: 0001044738 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 00023243 STATE OF INCORPORATION: MN FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-23243 FILM NUMBER: 99755739 BUSINESS ADDRESS: STREET 1: 4801 WEST 81 STREET STREET 2: SUITE 112 CITY: BLOOMINGTON STATE: MN ZIP: 55437 BUSINESS PHONE: 6128379917 MAIL ADDRESS: STREET 1: 4801 WEST 81 STREET STREET 2: SUITE 112 CITY: BLOOMINGTON STATE: MN ZIP: 55437 FORMER COMPANY: FORMER CONFORMED NAME: CAFE ODYSSEY INC DATE OF NAME CHANGE: 19980526 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL DISCOVERY INC DATE OF NAME CHANGE: 19970821 8-K/A 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): September 16, 1999 PopMail.com, inc. (Exact name of registrant as specified in its charter) Minnesota 0-23243 31-1487885 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 4801 West 81st Street, Suite 112, Bloomington, MN 55437 (Address of principal executive offices) (Zip Code) (Former Name or Former Address, if Changed Since Last Report) Registrant's telephone number, including area code: (612) 837-9917 2 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Business Acquired INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders Popmail.com, Inc. We have audited the accompanying balance sheet of Popmail.com, Inc. (a Delaware corporation and a development stage company) as of December 31, 1998 and 1997, and the related statements of income, stockholders' deficit and cash flows for the year ended December 31, 1998, the month ended December 31, 1997 and for the period from December 2, 1997 (inception) to December 31, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 financial statements referred to above present fairly, in all material respects, the financial position of Popmail.com, Inc. as of December 31, 1998 and 1997, and the results of its operations and its cash flows for the year ended December 31, 1998, the month ended December 31, 1997 and for the period from December 2, 1997 (inception) to December 31, 1998 in conformity with generally accepted accounting principles. /s/ Barry Morgan & Company, P.C. Dallas, Texas June 1, 1999 3 POPMAIL.COM, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS
December 31, --------------------- August 31, ASSETS 1997 1998 1999 -------- ---------- ---------- (unaudited) CURRENT ASSETS Cash $ -- $ 25,253 $ 95,021 Accounts receivable - trade 1,000 20,681 163,463 Accounts receivable - affiliate - net of reserve of $600,000 -- -- -- Prepaid expenses -- 3,250 13,412 -------- ---------- ---------- Total current assets 1,000 49,184 271,896 PROPERTY AND EQUIPMENT Computer hardware 243,063 723,395 724,248 Computer software 99,856 184,718 184,719 Furniture and fixtures 3,997 52,376 51,127 -------- ---------- ---------- 346,916 960,489 960,094 Less accumulated depreciation 774 131,980 259,791 -------- ---------- ---------- 346,142 828,509 700,303 OTHER ASSETS Domain names - net 52,566 25,525 38,715 Organization costs - net 6,523 5,197 5,197 Deposits -- 11,412 -- -------- ---------- ---------- 59,089 42,134 43,912 -------- ---------- ---------- $406,231 $ 919,827 $1,016,111 ======== ========== ==========
The accompanying notes are an integral part of these financial statements. 4
LIABILITIES AND December 31, STOCKHOLDERS' DEFICIT -------------------------- August 31, 1997 1998 1999 ----------- ----------- ----------- (unaudited) CURRENT LIABILITIES Accounts payable $ -- $ 331,283 $ 211,729 Accrued expenses -- 69,027 -- Note payable - affiliate 554,087 3,154,259 5,019,387 ----------- ----------- ----------- Total current liabilities 554,087 3,554,569 5,231,116 COMMITMENTS AND CONTINGENCIES -- -- -- STOCKHOLDERS' DEFICIT Class A common stock, $.01 par value, 1,000 shares authorized, 10 shares issued and outstanding -- -- -- Class B common stock, $.01 par value, 999,000 shares authorized; 990, 1,990, and 1,990 shares issued and outstanding at December 31, 1997, December 31, 1998 and August 31, 1999 10 20 20 Additional paid-in capital 990 1,980 251,980 Retained deficit, including deficit accumulated through the development stage of $2,593,334 (148,856) (2,636,742) (4,467,005) ----------- ----------- ----------- (147,856) (2,634,742) (4,215,005) ----------- ----------- ----------- $ 406,231 $ 919,827 $ 1,016,111 =========== =========== ===========
5 POPMAIL.COM, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF INCOME
December 2, 1997 December 2, (inception) to Eight months 1997 Years ended December 31, December 31, ended August 31, (inception) to -------------------------- -------------------------- August 31, 1997 1998 1998 1998 1999 1999 ----------- ----------- ----------- ----------- ----------- ----------- (unaudited) (unaudited) (unaudited) Revenues $ -- $ 49,235 $ 49,235 $ 1,024 $ 12,518 $ 61,753 Selling, general and administrative 17,134 1,953,345 1,970,479 956,995 1,673,551 3,644,030 Research and development 131,722 378,464 510,186 -- -- 510,186 ----------- ----------- ----------- ----------- ----------- ----------- 148,856 2,331,809 2,480,665 956,995 1,673,551 4,154,216 ----------- ----------- ----------- ----------- ----------- ----------- Operating loss (148,856) (2,282,574) (2,431,430) (955,971) (1,661,033) (4,092,463) Interest expense -- (161,904) (161,904) (100,000) (169,230) (331,134) ----------- ----------- ----------- ----------- ----------- ----------- Net loss $ (148,856) $(2,444,478) $(2,593,334) $(1,055,971) $(1,830,263) $(4,423,597) =========== =========== =========== =========== =========== =========== Loss per share $ (148.86) $ (1,923.27) $ (1,055.97) $ (915.13) =========== =========== =========== =========== Weighted average shares outstanding 1,000 1,271 1,000 2,000
The accompanying notes are an integral part of these financial statements. 6 POPMAIL.COM, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDERS' DEFICIT FOR THE PERIOD FROM DECEMBER 2, 1997 (INCEPTION) THROUGH AUGUST 31, 1999
Common A Common B --------------- -------------- Additional Shares Amount Shares Amount capital Deficit Total ------ ------ ------ ------ --------- ------- ----- Balance at December 2, 1997 -- $ -- -- $10 $ -- $ -- $ -- Stock issue 10 -- 990 10 990 -- 1,000 Net loss -- -- -- -- -- (148,856) (148,856) -- -------- ----- --- -------- ----------- ----------- Balance at December 31, 1997 10 -- 990 10 990 (148,856) (147,856) Stock issue -- -- 1,000 10 990 -- 1,000 Distribution -- -- -- -- -- (43,408) (43,408) Net loss -- -- -- -- -- (2,444,478) (2,444,478) -- -------- ----- --- -------- ----------- ----------- Balance at December 31, 1998 10 -- 1,990 20 1,980 (2,636,742) (2,634,742) Contributions by shareholder (unaudited) -- -- -- -- 250,000 -- 250,000 Net loss (unaudited) -- -- -- -- -- (1,830,263) (1,830,263) -- -------- ----- --- -------- ----------- ----------- Balance at August 31, 1999 (unaudited) 10 $ -- 1,990 $20 $251,980 $ 4,467,005 $ 4,215,005 == ======== ===== === ======== =========== ===========
The accompanying notes are an integral part of these financial statements. 7 POPMAIL.COM, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS
December 2, 1997 Years ended December 31, (inception) to ------------------------ December 31, 1997 1998 1998 --------- ----------- ----------- Cash flows from operating activities: Net loss $(148,856) $(2,444,478) $(2,593,334) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,398 190,025 201,423 (Increase) decrease in: Accounts receivable -- (18,681) (18,681) Prepaid expenses -- (3,250) (3,250) Other assets (69,713) (85,272) (154,985) Increase (decrease) in: Accounts payable -- 331,283 331,283 Accrued expenses -- 69,027 69,027 --------- ----------- ----------- Net cash used by operating activities (207,171) (1,961,346) (2,168,517) Cash flows from investing activities: Purchase of property and equipment (346,916) (613,573) (960,489) --------- ----------- ----------- Net cash used by investing activities (346,916) (613,573) (960,489) Cash flows from financing activities: Proceeds from notes payable - affiliate 554,087 3,150,172 3,704,259 Payments on note payable - affiliate -- (550,000) (550,000) --------- ----------- ----------- Net cash provided by financing activities 554,087 2,600,172 3,154,259 Net increase in cash -- 25,253 25,253 Cash at beginning of period -- -- -- --------- ----------- ----------- Cash at end of period $ -- $ 25,253 $ 25,253 ========= =========== =========== Supplemental disclosures Noncash distributions to stockholders $ -- $ 43,408 $ 43,408 =========== =========== =========== Noncash stock subscriptions $ 1,000 $ 1,000 $ 2,000 =========== =========== =========== December 2, Eight months 1997 ended August 31, (inception) to -------------------------- August 31, 1998 1999 1999 ----------- ----------- -------------- (unaudited) (unaudited) (unaudited) Cash flows from operating activities: Net loss $(1,055,971) $(1,830,263) $(4,423,597) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 87,000 127,811 329,234 (Increase) decrease in: Accounts receivable (3,266) (142,782) (161,463) Prepaid expenses -- (10,162) (13,412) Other assets (262,736) (1,778) (156,763) Increase (decrease) in: Accounts payable 112,101 (119,554) 211,729 Accrued expenses 7,500 (69,027) -- ----------- ----------- ----------- Net cash used by operating activities (1,115,372) (2,045,755) (4,214,272) Cash flows from investing activities: Purchase of property and equipment (363,416) -- (960,489) Proceeds from sale of property and equipment -- 395 395 ----------- ----------- ----------- Net cash provided by (used by) investing activities (363,416) 395 (960,094) Cash flows from financing activities: Proceeds from notes payable - affiliate 1,478,788 1,865,128 5,569,387 Payments on note payable - affiliate -- -- (550,000) Contributions by stockholders -- 250,000 250,000 ----------- ----------- ----------- Net cash provided by financing activities 1,478,788 2,115,128 5,269,387 Net increase in cash -- 69,768 95,021 Cash at beginning of period -- 25,253 -- ----------- ----------- ----------- Cash at end of period $ -- $ 95,021 $ 95,021 =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 8 POPMAIL.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE A - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Statements as of August 31, 1999, for the eight months ended August 31, 1999 and 1998, and for the period from December 2, 1997 (inception) to August 31, 1999 are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation thereof. The results of operations for the eight months ended August 31, 1999 and 1998 are not necessarily indicative of the results for the full year. Nature of Business Popmail.com, Inc. (the "Company"), a Delaware Corporation, was incorporated on December 2, 1997. The Company has devoted substantially all of its resources from inception to present to developing and implementing web-based e-mail messaging systems for the radio industry. The Company substantially completed developing its e-mail system in June 1998 and started its first implementation in July 1998. To date the Company has approximately 550 radio stations under contract and has implemented its system in approximately 190 stations. The e-mail messaging systems "Popmail" was developed in association with equitymedia.com, an affiliate. Equitymedia.com is the owner of the entire right, title and interest in and to all programs, applications and computer codes, including but not limited to all source and object codes, which relate to or are incorporated in "Popmail". (See note F). As of December 31, 1998, the Company had not received any revenue from this service. Cash Equivalents For the purpose of the statement of cash flows, liquid investments with a maturity of 90 days or less are treated as cash equivalents. Income Taxes The Company, with the consent of its shareholders, has elected under the Internal Revenue Code to be an S corporation. In lieu of corporation income taxes, the shareholders of an S corporation are taxed on their proportionate share of the Company's taxable income. Therefore, no provision for federal income taxes has been included in the accompanying financial statements. Property, Equipment and Depreciation Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is being provided for by the straight-line method over an estimated useful life of five years. Domain names are amortized over a life of two years. Organization costs are amortized over a five year period. 9 POPMAIL.COM, INC. NOTES TO FINANCIAL STATEMENTS - CONTINUED NOTE A - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Use of 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 may differ from those estimates. Research and Development Research and development costs are charged to the statement of operations as incurred. Statement of Financial Accounting Standards Board No. 86 "Accounting for the Costs of Computer Software to be Sold. Leased or Otherwise Marketed", requires capitalization of certain software development costs subsequent to establishment of technological feasibility. Based on the Company's product development process, technological feasibility is established on completion of a working model. Costs incurred by the Company between completion of the working model and the point at which the products are ready for general release have been insignificant. Therefore, all research and development costs have been expensed. Concentrations of Credit Rick Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and receivables. The Company places its cash investments with financial institutions and limits the amount of credit exposure to any one financial institution. The Company to date has not generated significant receivables from trade customers. Fair Value The carrying amounts in the balance sheets for cash, receivables, and notes payable approximate the respective fair values due to the short maturities of those instruments. Loss Per Share The computation of loss per share is based on the weighted average number of outstanding common shares during the period. 10 POPMAIL.COM, INC. NOTES TO FINANCIAL STATEMENTS -- CONTINUED NOTE B - NOTE PAYABLE - AFFILIATE Note payable to affiliate is an 8% demand note payable to an entity controlled by the Company's controlling shareholder. (See note D). NOTE C - LEASE COMMITMENTS The Company conducts its operations in leased facilities. Rental expense was $46,086 for the year ended December 31, 1998. Minimum future lease payments required under this lease are as follows: 1999 $136,944 2000 136,944 2001 136,944 -------- $410,832 ========
NOTE D - RELATED PARTY TRANSACTIONS During 1997 and 1998 all of the Company's operations were funded by the Company's controlling shareholder or by companies owned by or under his control. This includes amounts paid by these entities and billed to the Company as well as cash advances made directly to the Company. These advances were typically represented by demand notes payable to these entities. In addition, the Company incurred costs on behalf of these affiliates which were subsequently billed to these entities. At December 31, 1998 all of these amounts were consolidated into one note payable to the principal affiliate. (See note B). During 1998 the Company provided product development and other services to an affiliate and billed the affiliate $600,000 for these service. On April 30, 1999 this receivable was written off. This receivable was reserved at December 31, 1998 and for purposes of financial statement presentation, the provision was netted against revenues. On December 31, 1998 the Company distributed Domain Names with a book value of $43,408 to its shareholders. See also note F. 11 POPMAIL.COM, INC. NOTES TO FINANCIAL STATEMENTS -- CONTINUED NOTE E - COMMON STOCK The Company is authorized to issue 1,000,000 shares of common stock of which 1,000 has been designated as Class A and 999,000 has been designated as Class B. Class A shares are entitled to one vote per share. Class B shares are non-voting. NOTE F - SUBSEQUENT EVENTS On January 1, 1999 the Company entered into a License Agreement with equitymedia.com, an affiliate. The agreement grants the Company the right to use the "Popmail" software in connection with the operation of radio stations in the United States and the right to sub-license "Popmail" in connection with English language radio stations in the United States. The agreement is for a period of one year with successive one-year renewal terms unless terminated by the Company. In May 1999 the Company entered into a definitive agreement to merge with Cafe Odyssey, Inc. a public company. 12 (b) Pro Forma Financial Information PRO FORMA UNAUDITED FINANCIAL STATEMENTS The following pro forma unaudited condensed combined financial statements are prepared to reflect the merger effective September 1, 1999 between the Registrant, Popmail.com, Inc. (formerly Cafe Odyssey, Inc.) (Cafe Odyssey) and popmail.com, Inc. (Popmail) accounted for as a purchase. The pro forma unaudited condensed combined financial information consists of pro forma unaudited condensed combined statements of operations for the year ended January 3, 1999 and for the thirty four weeks ended August 29, 1999 and a pro forma unaudited condensed combined balance sheet as of August 29, 1999. The pro forma unaudited condensed combined statements of operations give effect to the merger as if the transaction had occurred on December 29, 1997. The pro forma unaudited condensed combined balance sheet gives effect to the merger as if had occurred on August 29, 1999. The pro forma unaudited condensed combined financial tatements give effect to certain adjustments, including: (1) the issuance of 2,024 Cafe Odyssey Series D Preferred Shares which are convertible into 8,635,902 Cafe Odyssey common shares; (2) the issuance of a warrant to shareholders of popmail.com, Inc.; (3) the issuance of convertible debt and Series B convertible Preferred Shares as well as proceeds from the exercise of the warrant, used to pay off a portion of the Legacy Maker note payable; (4) and a step-up of net assets and resulting goodwill created by the acquisition as well as related amortization expense. The periods presented conform to the fiscal year of the registrant. 13 PRO FORMA UNAUDITED CONDENSED COMBINED BALANCE SHEET AUGUST 29, 1999
CAFE PRO FORMA PRO FORMA ODYSSEY POPMAIL ADJUSTMENTS COMBINED ------------ ------------ ------------ ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 952,765 $ 95,021 4,950,000 (3) $ 1,528,399 (4,469,387)(4) Accounts receivable -- 163,463 -- 163,463 Inventories 166,827 -- -- 166,827 Other current assets 383,828 13,412 -- 397,240 ------------ ------------ ------------ ------------ Total current assets 1,503,420 271,896 480,613 2,255,929 PROPERTY AND EQUIPMENT, NET 15,080,030 700,303 -- 15,780,333 OTHER ASSETS 1,028,973 43,912 -- 1,072,885 GOODWILL -- -- 25,371,510 (1) 29,586,515 4,215,005 (2) ------------ ------------ ------------ ------------ $ 17,612,423 $ 1,016,111 $ 30,067,128 $ 48,695,662 ============ ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term notes payable $ 1,025,000 $ -- $ -- $ 1,025,000 Accounts payable 889,931 211,729 -- 1,101,660 Convertible promissory notes payable 150,000 -- 2,000,000 (3) 2,150,000 Note payable-Legacy Maker -- 5,019,387 (4,469,387)(4) 550,000 Current portion of long-term debt 197,488 -- -- 197,488 Accrued expenses 393,902 -- -- 393,902 ------------ ------------ ------------ ------------ Total current liabilities 2,656,321 5,231,116 (2,469,387) 5,418,050 DEFERRED RENT 3,695,607 -- -- 3,695,607 LONG-TERM DEBT, less current portion 3,643,694 -- -- 3,643,694 ------------ ------------ ------------ ------------ Total liabilities 9,995,622 5,231,116 (2,469,387) 12,757,351 ------------ ------------ ------------ ------------ COMMITMENTS AND CONTINGENCIES -- -- -- -- SHAREHOLDERS' EQUITY Preferred Stock 3,700,000 -- 2,200,000 (3) 26,952,554 21,052,554 (1) Common stock 87,996 20 (20)(2) 92,996 5,000 (3) Additional paid-in capital 24,110,290 251,980 4,318,956 (1) 29,174,246 (251,980)(2) 745,000 (3) Less: common stock subscribed (400,000) -- -- (400,000) Accumulated deficit (19,881,485) (4,467,005) 4,467,005 (2) (19,881,485) ------------ ------------ ------------ ------------ Total shareholders' equity 7,616,801 (4,215,005) 32,536,515 35,938,311 ------------ ------------ ------------ ------------ $ 17,612,423 $ 1,016,111 $ 30,067,128 $ 48,695,662 ============ ============ ============ ============
14 NOTES TO PRO FORMA UNAUDITED CONDENSED COMBINED BALANCE SHEET (1) Reflects the issuance of additional shares and warrant and transaction expenses to effect the merger as follows:
Common Stock Warrant TOTAL ----------- ----------- ----------- Cafe Odyssey Series B preferred stock and warrant issued 2,024 4,407,098 4,409,122 Price per share/fair value per warrant a) $ 2.34 b) $ 0.98 ----------- ----------- ----------- Total c) $20,242,554 $ 4,318,956 $24,561,510 Plus transaction expenses 810,000 810,000 ----------- ----------- ----------- $21,052,554 $ 4,318,956 $25,371,510 =========== =========== ===========
a) The price per share is based on the closing price of the Cafe Odyssey Common Stock on August 29, 1999. The conversion rate used to convert the Cafe Odyssey Preferred Shares into Common Shares is based on the price of an outstanding common share of Cafe Odyssey on August 29, 1999. b) The fair value per warrant was calculated using the Black Scholes option pricing model on the date of grant, August 29, 1999. c) The total common stock value reflects the number of outstanding common shares at August 29, 1999 (8,635,902) multiplied by the closing price per common share at August 29, 1999 ($2.34). (2) Reflects the elimination of the shareholders' equity accounts of Popmail. The increase in goodwill is a result of cost exceeding the identifiable assets acquired of Popmail. (3) As a condition of the merger, Cafe Odyssey was required to raise enough funds to payoff a portion of the Legacy Maker note payable. The company raised these funds as follows: Issuance of convertible promissory notes payable $ 2,000,000 Issuance of Series D convertible preferred stock 2,200,000 Proceeds from exercise of warrants 750,000 ----------- $ 4,950,000 ===========
(4) Reflects the repayment of outstanding indebtedness to Legacy Maker, Inc. (an affiliate of Popmail) 15 PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE THIRTY FOUR WEEKS ENDED AUGUST 29, 1999
CAFE PRO FORMA PRO FORMA ODYSSEY POPMAIL ADJUSTMENTS COMBINED ------------ ----------- ----------- ----------- Net Sales $ 8,459,030 $ 12,518 $ -- $ 8,471,548 ------------ ----------- ----------- ------------- Costs and Expenses: Food, beverage and retail costs 2,170,503 -- -- 2,170,503 Restaurant operating expenses 5,876,806 -- -- 5,876,806 Depreciation and amortization 839,296 111,834 6,574,781 (1) 7,525,911 Pre-opening expenses 572,932 -- -- 572,932 Creative -- 67,734 -- 67,734 Sales -- 297,010 -- 297,010 Technical -- 303,750 -- 303,750 General, administrative and development expenses 2,074,778 893,223 -- 2,968,001 ------------ ----------- ----------- ------------- Total costs and expenses 11,534,315 1,673,551 6,574,781 19,782,647 ------------ ----------- ----------- ------------- LOSS FROM OPERATIONS (3,075,285) (1,661,033) (6,574,781) (11,311,099) INTEREST EXPENSE, net (529,459) (169,230) -- (698,689) ------------ ----------- ----------- ------------- NET LOSS (3,604,744) (1,830,263) (6,574,781) (12,009,788) PREFERRED STOCK DIVIDENDS AND ACCRETION (2,153,846) -- -- (2,153,846) ------------ ----------- ----------- ------------- LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (5,758,590) $(1,830,263) $(6,574,781) $ (14,163,634) ============ =========== =========== ============= BASIC AND DILUTED NET LOSS PER SHARE NET LOSS $ (0.43) -- -- $ (0.70) LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (0.68) -- -- $ (0.83) BASIC AND DILUTED WEIGHTED AVERAGE OUTSTANDING SHARES 8,432,293 -- 8,635,902 17,068,195 ============ =========== =========== ============
16 PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JANUARY 3, 1999
CAFE PRO FORMA PRO FORMA ODYSSEY POPMAIL ADJUSTMENTS COMBINED ------------ ----------- ----------- ------------ Net Sales/revenues $ 6,932,891 $ 49,235 $ -- $ 6,982,126 ------------ ----------- ----------- ------------ Costs and Expenses: Food, beverage and retail costs 1,897,492 -- -- 1,897,492 Restaurant operating expenses 5,038,104 -- -- 5,038,104 Depreciation and amortization 940,186 -- 9,862,172(1) 10,802,358 Pre-opening expenses 732,851 -- -- 732,851 Loss on impairment of restaurant related assets 2,000,000 -- -- 2,000,000 Selling, general, administrative and development expenses 3,081,213 2,331,809 -- 5,413,022 ------------ ----------- ----------- ------------ Total costs and expenses 13,689,846 2,331,809 9,862,172 25,883,827 ------------ ----------- ----------- ------------ LOSS FROM OPERATIONS (6,756,955) (2,282,574) (9,862,172) (18,901,701) OTHER INCOME (EXPENSE): Interest expense (130,625) (161,904) -- (292,529) Interest income 180,999 -- -- 180,999 ------------ ----------- ----------- ------------ Total other income (expense) 50,374 (161,904) -- (111,530) ------------ ----------- ----------- ------------ NET LOSS $ (6,706,581) $(2,444,478) ($9,862,172) $(19,013,231) ============ =========== =========== ============ BASIC AND DILUTED NET LOSS PER SHARE $ (0.84) #DIV/0! $ (1.14) ============ =========== =========== ============ BASIC AND DILUTED WEIGHTED AVERAGE OUTSTANDING SHARES 8,000,131 -- 8,635,902 16,636,033 ============ =========== =========== ============
17 NOTES TO PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JANUARY 3, 1999 AND THE THIRTY FOUR WEEKS ENDED AUGUST 29, 1999 The pro forma unaudited condensed combined statements of operations reflect amortization of goodwill associated with the transaction. (1) Reflects goodwill arising from the Merger of $29,586,515 amortized on a straight-line basis over three years. 18 (c) EXHIBITS. The following documents are filed as an exhibit to this Form 8-K/A and are incorporated herein by reference: Exhibit No. Description 23.1 Consent of Barry Morgan and Company, P.C. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. POPMAIL.COM, INC. Date: November 15, 1999 By: Thomas W. Orr ------------------------------------- Name: Thomas W. Orr Title: Chief Financial Officer EX-23.1 2 CONSENT OF BARRY MORGAN & CO. 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report dated June 1, 1999 in this form 8-K, and into the Company's previously filed Registration Statement file Nos. 333-62729, 333-62747, 333-80241, 333-85243, and 333-88199. BARRY MORGAN & COMPANY, P.C. Dallas, Texas November 15, 1999 -----END PRIVACY-ENHANCED MESSAGE-----