-----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, K5XB7ibC6sCqqJpdOBRCRVd/MX2drqFHn5bR1lE05DaoVTaUAzVmx8uobR7GYozQ lbqUQ/25+ySKmvuzJI5Shw== 0000949353-04-000203.txt : 20040419 0000949353-04-000203.hdr.sgml : 20040419 20040419125357 ACCESSION NUMBER: 0000949353-04-000203 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031125 ITEM INFORMATION: Changes in control of registrant ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Changes in registrant's certifying accountant ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040419 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIROND CORP CENTRAL INDEX KEY: 0001132810 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 880469593 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-49763 FILM NUMBER: 04739919 BUSINESS ADDRESS: STREET 1: 4185 STILL CREEK DRIVE STREET 2: SUITE B-101 CITY: BURNABY STATE: A1 ZIP: V5C 6G9 BUSINESS PHONE: 6042055039 MAIL ADDRESS: STREET 1: 4185 STILL CREEK DR STREET 2: STE B-101 CITY: BURNABY STATE: A1 ZIP: V5C 6G9 FORMER COMPANY: FORMER CONFORMED NAME: EXMAILIT COM DATE OF NAME CHANGE: 20010118 8-K/A 1 f8ka1-112503.txt FORM 8-K/A NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) NOVEMBER 25, 2003 CIROND CORPORATION (Exact name of registrant as specified in its charter) NEVADA 0-49763 88-0469593 State or other jurisdiction of (Commission (IRS Employer incorporation) File Number) Identification No.) 4185 STILL CREEK DRIVE #B-101, BURNABY, BRITISH COLUMBIA, CANADA V5C 6G9 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (604) 205-5039 EXMAILIT.COM 530-999 WEST HASTINGS, VANCOUVER, B.C., CANADA V6C 2W2 (Former name or former address, if changed since last report) ITEM 1. CHANGES IN CONTROL OF REGISTRANT On November 25, 2003, pursuant to a Stock Exchange Agreement (the "Stock Exchange Agreement") by and between Cirond Corporation (formerly eXmailit.com), a Nevada corporation (the "Company"), and Seaside Holdings Inc. (f/k/a Cirond Technologies Inc.), a Colorado corporation ("CTI"), as amended by the First Amendment to the Stock Exchange Agreement dated November 13, 2003 (the "First Amendment") (the Exchange Agreement and the First Amendment and collectively referred to herein as the "Agreement"), the Company acquired all of the issued and outstanding capital stock of CTI's wholly owned subsidiary, Cirond Networks Inc., a Nevada corporation ("CNI"), in exchange for 17,000,000 post-Forward Split shares ("Shares") of the Company's common stock ("Common Stock"). As a result, CTI owns approximately 48.3% of the Company's issued and outstanding shares. In addition, pursuant to the terms of the Agreement, the Company issued an aggregate of 1,300,000 post-Forward Split shares of its Common Stock in exchange for $650,000 in indebtedness of CNI (the "CNI Indebtedness") which was held by Cirond Ventures Partners Inc., Stumdell Limited, and Steven Velardi. As a result of the Agreement, effective November 25, 2003, CNI became a wholly-owned subsidiary of the Company. In connection with the closing of the acquisition of CNI, all of the officers and directors of the Company resigned and Nicolas R. Miller was appointed as the sole officer and director of the Company. Mr. Miller was elected as the sole director of the Company at the Company's shareholder meeting on October 3, 2003; however, he did not accept his appointment until November 25, 2003, in connection with the acquisition of CNI. Mr. Miller is the sole officer and director of CTI and owns 7,266,667 shares (43.5%) of CTI's issued and outstanding stock. As a result, he may be deemed to be the beneficial owner of 17,000,000 shares (48.3%) of the Company's issued and outstanding shares. Except as disclosed in this Form 8-K, the Company is not aware of any arrangement that may in the future result in a change in control of the Company. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS As a result of the acquisition of CNI, as discussed above in "Item 1. Changes in Control of Registrant," the Company's principal office has been moved to the facilities of CNI in Burnaby, British Columbia. In addition, the Company now has an operating subsidiary. CNI is a developer of technologies designed to enhance the performance and security of wireless networking technologies, with an initial specific focus on 802.11b Wireless Local Area Network ("WLAN") technology. A WLAN is one in which a mobile user can connect to a local area network ("LAN") through a wireless (radio) connection. The 802.11b standard for WLANs - often called "WiFi" - is part of the 802.11 series of WLAN standards from the Institute of Electrical and Electronics Engineers ("IEEE"). 2 CNI manufacturers products incorporating its proprietary technology that are applicable to all segments of the WLAN marketplace. CNI's products are principally focused on WiFi network management and implementation, and enable WiFi networks to be installed easily, operated optimally, and managed more effectively and also offer improvements to network security by offering a robust security system suitable for most typical business environments. CNI's approach to WiFi security is to provide technologies that improve the overall security and implementation of the WEP security scheme, while buttressing it with a variety of propriety intrusion detection and location-enabled security and access technologies. CNI conducts its research and development activities through its subsidiary, Cirond Networks (Canada) Inc., a British Columbia corporation. As of December 5, 2003, CNI and Cirond Networks (Canada) Inc., collectively, had 8 employees, and one contract employee, all of which were full-time. No employees are represented by labor unions. The amount of consideration to be given and received under the Agreement was determined after negotiation between the Company and CTI. In connection with the Agreement, the Company cancelled 2,990,000 pre-Forward Split shares of Common Stock held by its founders (the "Share Cancellation"), and effected a 16-for-1 forward stock split ("Forward Split") of the remaining outstanding shares. In addition, the Company issued 750,000 post-Forward Split shares in a private placement financing, at a price of $0.50 per share for gross proceeds of $375,000. In anticipation of the closing of the acquisition, the proceeds of the offering were loaned to CNI pursuant to a promissory note dated November 14, 2003 (the "CNI Note"). ITEM 3. BANKRUPTCY OR RECEIVERSHIP Not applicable. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT Effective December 1, 2003, the board of directors of the Company dismissed the Company's independent auditor, Parker & Co. ("Parker"). The dismissal of Parker was unrelated to Parker's performance. The dismissal, which was approved by the Company's board of directors, was related to the acquisition of CNI and the appointment of CNI's independent auditor, KPMG, LLP, as the independent auditor for the Company. Parker's report on the Company's financial statements for either of the past two years did not contain an adverse opinion or disclaimer of opinion, and was not modified as to uncertainty, audit scope or accounting principles. During the Company's two most recent fiscal years and the subsequent interim period ending December 1, 2003, there were no disagreements between the Company and Parker on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the satisfaction of Parker, would have caused that firm to make reference to the subject matter of the disagreement in 3 connection with its audit report. During the Company's two most recent fiscal years and the subsequent interim period ending December 1, 2003, Parker did not advise the Company of any of the items listed any Item 304(a)(1)(iv)(B) of Regulation S-B. The Company has requested Parker to furnish it a letter addressed to the Commission stating whether it agrees with the above statements. A copy of that letter, dated December 3, 2003, is filed as Exhibit 16.1 to this Form 8-K. On December 1, 2003, the board of directors of the Company approved the engagement of KPMG, LLP to audit the financial statements for the fiscal year ended December 31, 2003. During the two most recent fiscal years and the subsequent interim period through December 1, 2003, neither the Company nor anyone on its behalf consulted KPMG, LLP regarding the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company's financial statements. ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE Pursuant to General Instruction F., the registrant incorporates by reference the information contained in the document filed as Exhibit 99.1 to this Form 8-K. Pursuant to General Instruction F., the registrant incorporates by reference the information contained in the document filed as Exhibit 99.2 to this Form 8-K. ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS Not applicable. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of businesses acquired: The following consolidated financial statements of CNI are filed as exhibits to this report: 1. The audited consolidated financial statements of CNI as at December 31, 2002 and 2001 and for the year ended December 31, 2002 and period from inception (March 7, 2001) to December 31, 2001. 2. The unaudited consolidated financial statements of CNI as at September 30, 2003 and for the three months, nine months and period from inception (March 7, 2001) then ended. (b) Pro forma financial information: The Unaudited Pro Forma Combined Financial Information for Cirond Corporation and its subsidiaries are filed as an exhibit to this report. 4 (c) Exhibits: REGULATION S-K NUMBER DOCUMENT 2.1 Stock Exchange Agreement by and between Cirond Corporation (f/k/a eXmailit.com) and Seaside Holdings Inc. (f/k/a Cirond Technologies Inc.) dated August 29, 2003* 2.2 First Amendment to Stock Exchange Agreement by and between Cirond Corporation and Seaside Holdings Inc. (f/k/a Cirond Technologies Inc.) dated November 13, 2003.* 16.1 Letter from Parker & Co. dated December 3, 2003.* 99.1 Press release dated December 1, 2003.* 99.2 Press release dated December 3, 2003.* 99.3 Promissory Note dated November 14, 2003 issued by Cirond Networks, Inc.* 99.4 Audited Consolidated Financial Statements of Cirond Networks, Inc. as at December 31, 2002 and 2001 and for the year ended December 31, 2002 and the period from inception (March 7, 2001) to December 31, 2001. 99.5 Unaudited Consolidated Financial Statements of Cirond Networks, Inc. as at September 30, 2003 and for the three months, nine months and period from inception (March 7, 2001) then ended. 99.6 Unaudited Pro Forma Combined Financial Information for Cirond Corporation. ----------------- * Previously filed with the Company's Form 8-K dated November 25, 2003, filed with the Securities and Exchange Commission on December 5, 2003. ITEM 8. CHANGE IN FISCAL YEAR Not applicable. 5 ITEM 9. REGULATION FD DISCLOSURE Not applicable. ITEM 10. AMENDMENTS TO THE REGISTRANT'S CODE OF ETHICS, OR WAIVER OF A PROVISION OF THE CODE OF ETHICS Not applicable. ITEM 11. TEMPORARY SUSPENSION OF TRADING UNDER REGISTRANT'S EMPLOYEE BENEFIT PLANS Not applicable. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION Not applicable. SIGNATURES 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 hereunto duly authorized. CIROND CORPORATION April 19, 2004 By: /s/ NICHOLAS MILLER ------------------------------------------ Nicholas Miller, President 6 EX-99 3 dec2002-financials.txt EXH 99-4 FINANCIALS EXHIBIT 99.4 AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CIROND NETWORKS, INC. AS AT DECEMBER 31, 2002 AND 2001 AND FOR THE YEAR ENDED DECEMBER 31, 2002 AND THE PERIOD FROM INCEPTION (MARCH 7, 2001) TO DECEMBER 31, 2001 Consolidated Financial Statements of CIROND NETWORKS, INC. (A Development Stage Enterprise) (Expressed in United States dollars) Year ended December 31, 2002 INDEPENDENT AUDITORS' REPORT To the stockholder of Cirond Networks, Inc. We have audited the accompanying consolidated balance sheets of Cirond Networks, Inc. (a Development Stage Enterprise) as at December 31, 2002 and 2001, and the related consolidated statements of loss and cash flows for the year ended December 31, 2002, the period from inception (March 7, 2001) to December 31, 2001 and the period from inception (March 7, 2001) to December 31, 2002 and the consolidated statements of stockholder's deficiency and comprehensive loss for the period from inception (March 7, 2001) to December 31, 2002. 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 auditing standards generally accepted in the United States of America. 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 financial position of Cirond Networks, Inc. as at December 31, 2002 and 2001, and the results of its operations and its cash flows for the periods then ended and for the period from inception to December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 2(a) to the financial statements, the Company has incurred a loss since inception and has a working capital deficiency, factors that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also discussed in note 2(a). The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. SIGNED "KPMG LLP" /s/ KPMG LLP Chartered Accountants Kelowna, Canada September 30, 2003 CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Balance Sheets (Expressed in United States dollars) December 31, 2002 and 2001
============================================================================================================= 2002 2001 - ------------------------------------------------------------------------------------------------------------- ASSETS Current assets: Cash $ 60,135 $ 1,434 Amounts receivable 3,513 - Prepaid expenses and deposits 412 - ---------------------------------------------------------------------------------------------------------- 64,060 1,434 Property, plant and equipment (note 3) 19,634 - Website development (note 4) 15,854 - - ------------------------------------------------------------------------------------------------------------- $ 99,548 $ 1,434 ============================================================================================================= LIABILITIES AND STOCKHOLDER'S DEFICIENCY Current liabilities: Accounts payable and accrued liabilities (note 5) $ 114,521 $ 5,466 Consulting fees payable 45,000 - Due to stockholder (note 6) 143,155 - ---------------------------------------------------------------------------------------------------------- 302,676 5,466 Stockholder's deficiency: Capital stock: 20,000,000 non-voting preferred shares with $0.0001 par value, issuable in series authorized, nil issued 80,000,000 voting common shares, with $0.0001 par value authorized, 14,740,250 issued (December 31, 2001 - 14,341,667) 1,474 1,434 Additional paid-in capital 298,898 - Deficit accumulated during the development stage (503,500) (5,466) ---------------------------------------------------------------------------------------------------------- (203,128) (4,032) Going concern (note 2(a)) Subsequent events (note 8) - ------------------------------------------------------------------------------------------------------------- $ 99,548 $ 1,434 =============================================================================================================
See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Statements of Loss (Expressed in United States dollars)
============================================================================================================== From inception From inception (March 7, 2001) Year ended (March 7, 2001) to December 31, December 31, to December 31, 2002 2002 2001 - -------------------------------------------------------------------------------------------------------------- Expenses: Advertising and promotion $ 42,603 $ 42,603 $ - Amortization 6,877 6,877 - Consulting fees (note 6) 224,068 224,068 - Foreign currency loss 3,506 3,506 - Interest 111 111 - Office and administrative 8,181 7,715 466 Professional fees 52,915 47,915 5,000 Rent 5,709 5,709 - Salaries and benefits 135,729 135,729 - Travel 24,063 24,063 - - -------------------------------------------------------------------------------------------------------------- 503,762 498,296 5,466 - -------------------------------------------------------------------------------------------------------------- Loss before interest income (503,762) (498,296) (5,466) Interest income 262 262 - - -------------------------------------------------------------------------------------------------------------- Loss $ (503,500) $ (498,034) $ (5,466) ============================================================================================================== Weighted average number of common shares outstanding, basic and diluted 14,528,055 14,680,739 14,341,667 Loss per share, basic and diluted $ (0.03) $ (0.03) $ (0.00) ==============================================================================================================
See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Statement of Stockholder's Deficiency and Comprehensive Loss (Expressed in United States dollars) From inception (March 7, 2001) to December 31, 2002
============================================================================================================== Deficit accumulated Total Additional during the stockholder's Common Stock paid-in development equity Shares Amount capital stage (deficiency) - -------------------------------------------------------------------------------------------------------------- Shares issued for cash 14,341,667 $ 1,434 $ - $ - $ 1,434 on March 7, 2001 Comprehensive loss: Loss - - - (5,466) (5,466) - -------------------------------------------------------------------------------------------------------------- Balance, December 31, 2001 14,341,667 1,434 - (5,466) (4,032) Shares issued for cash from February 12 to March 25, 2002 at $0.75 per share 398,583 40 298,898 - 298,938 Comprehensive loss: Loss - - - (498,034) (498,034) - -------------------------------------------------------------------------------------------------------------- Balance, December 31, 2002 14,740,250 $ 1,474 $ 298,898 $ (503,500) $ (203,128) ==============================================================================================================
See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Statements of Cash Flows (Expressed in United States dollars)
============================================================================================================== From inception From inception (March 7, 2001) Year ended, (March 7, 2001) to December 31, December 31, to December 31, 2002 2002 2001 - -------------------------------------------------------------------------------------------------------------- Cash provided by (used in): Operations: Loss $ (503,500) $ (498,034) $ (5,466) Item not involving cash: Amortization 6,877 6,877 - Changes in non-cash working capital: Amounts receivable (3,513) (3,513) - Prepaid expenses and deposits (412) (412) - Accounts payable and accrued liabilities 114,521 109,055 5,466 Consulting fees payable 45,000 45,000 - --------------------------------------------------------------------------------------------------------- (341,027) (341,027) - Financing: Common shares issued for cash 300,372 298,938 1,434 Advances from stockholder 143,155 143,155 - --------------------------------------------------------------------------------------------------------- 443,527 442,093 1,434 Investing: Expenditures on website development (19,025) (19,025) - Expenditures on fixed assets (23,340) (23,340) - --------------------------------------------------------------------------------------------------------- (42,365) (42,365) - - -------------------------------------------------------------------------------------------------------------- Increase in cash 60,135 58,701 1,434 Cash, beginning of period - 1,434 - - -------------------------------------------------------------------------------------------------------------- Cash, end of period $ 60,135 $ 60,135 $ 1,434 ============================================================================================================== Supplementary information: Interest paid $ - $ - $ - Income taxes paid $ - $ - $ - ==============================================================================================================
See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Year ended December 31, 2002, from inception (March 7, 2001) to December 31, 2001 and from inception (March 7, 2001) to December 31, 2002 ================================================================================ 1. OPERATIONS: Cirond Networks, Inc. (the "Company") is incorporated under the laws of the State of Nevada. The Company's principle business activities include the development and marketing of solutions for wireless networking designed to enhance the usability, performance, and security of 802.11b and 802.11a (WiFi) Wireless Local Area Networks (WLAN). The Company is primarily targeting enterprises and institutional customers requiring the use of wireless networks. To December 31, 2002, the Company has not generated revenues and is continuing to develop its business model. Accordingly, the Company is in the development stage for financial reporting purposes. 2. SIGNIFICANT ACCOUNTING POLICIES a) Going concern These financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities and commitments in the normal course of business for the foreseeable future. As shown in the consolidated financial statements, the Company has incurred a loss of $503,500 for the period from inception (March 7, 2001) to December 31, 2002, and has a working capital deficiency of $238,616 at December 31, 2002. These factors raise substantial doubt as to the Company's ability to continue as a going concern. The application of the going concern concept is dependent upon the Company's ability to receive continued financial support from its creditors, stockholder and external investors and attaining profitable operations through the sale of its software. These consolidated financial statements do not give effect to any adjustment should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts differing from those reflected in the consolidated financial statements. Management plans to rely on its stockholder to obtain equity and debt financing from external investors and to actively market its wireless technology applications. Management believes the plan described above will be sufficient to meet the Company's liabilities and commitments as they become payable over the next twelve months. There can be no assurance that management's plan will be successful. Failure to obtain the support of additional external investors to finance the development and marketing of the Company's wireless technology applications will cause the Company to curtail operations and impair the Company's ability to continue as a going concern. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Year ended December 31, 2002, from inception (March 7, 2001) to December 31, 2001 and from inception (March 7, 2001) to December 31, 2002 ================================================================================ 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) b) Basis of consolidation These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly-owned subsidiary Cirond Networks (Canada) Inc. All material intercompany balances and transactions have been eliminated. c) Property, plant and equipment Property, plant and equipment, consisting of computer hardware and software and office equipment, are recorded at cost. The Company monitors the recoverability of property, plant and equipment based on estimates using factors such as expected future asset utilization, business climate and future undiscounted cash flows expected to result from the use of the related assets or be realized on sale. The Company recognizes an impairment loss if the projected undiscounted future cash flows are less than the carrying amount. The amount of the impairment charge, if any, is measured equal to the excess of the carrying value over the expected future cash flows discounted using the Company's average cost of funds. To date no such impairment has been indicated. Amortization is provided on a straight-line basis at the following annual rates which is intended to amortize the cost of assets over their estimated useful life: ======================================================================= Rate ----------------------------------------------------------------------- Computer hardware 33% Computer software 50% Furniture and equipment 20% ======================================================================= A half-year of amortization is recorded in the year of purchase. d) Website development Website development costs incurred in the planning stage are expensed as incurred. The costs of application and infrastructure development incurred subsequent to the preliminary project stage, and that have received management approval for further development, are capitalized and amortized on the straight-line method over their estimated useful life (estimated to be three years). Once the website is developed, operating costs are expensed as incurred. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Year ended December 31, 2002, from inception (March 7, 2001) to December 31, 2001 and from inception (March 7, 2001) to December 31, 2002 ================================================================================ 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) e) Revenue recognition In accordance with the provisions of the American Institute of Certified Public Accountant's Statement of Position 97-2 "Software Revenue Recognition", revenue from one-time software license sales is generally recognized once delivery has occurred, evidence of an arrangement exists, the fee is fixed and determined and collection of the fee is probable, provided there are no significant vendor obligations remaining. f) Income taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. When it is not considered to be more likely than not that a deferred tax asset will be realized, a valuation allowance is provided for the excess. The Company has consolidated non-capital losses available to reduce future years' taxable income of approximately $500,000, expiring in the 2008 - 2009 taxation years. No amount has been reflected on the consolidated balance sheet for deferred income taxes as any deferred income tax asset has been fully offset by a valuation allowance. g) Loss per share Basic loss per share has been calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Income available to common shareholders is after deduction for dividends declared and cumulative dividends on preferred shares, if any. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Year ended December 31, 2002, from inception (March 7, 2001) to December 31, 2001 and from inception (March 7, 2001) to December 31, 2002 ================================================================================ 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): h) Translation of financial statements The Company's functional currency is the United States dollar. The Company's subsidiary, Cirond Networks (Canada) Inc. operates in Canada and incurs the majority of its expenses in Canadian dollars, however the United States dollar has been determined to be its functional currency, as it is entirely reliant upon the Company and the Company's stockholder to fund its operations. Accordingly the method of translation of Canadian dollar balances into the United States dollar is as follows: i) Monetary assets and liabilities are translated at the rate of exchange in effect at the balance sheet date. ii) Non-monetary assets and liabilities are translated at the rate of exchange in effect at the date the transaction occurred. iii) Revenues and expenses are translated at the exchange rate in effect at the transaction date. iv) The net adjustment arising from the translation is included in the consolidated statement of loss. i) Recent accounting pronouncements In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. Statement 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Statement 146 will supersede accounting guidance previously provided by EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). SFAS No. 146 will be applied prospectively to exit or disposal activities initiated after December 31, 2002. The provisions of this statement are not expected to have a material impact on the Company's financial position or results of operations. In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. Interpretation No. 45 elaborates on the existing disclosure requirements for most guarantees, including loan guarantees such as standby letters of credit. It also clarifies that at the time a company issues a guarantee, the company must recognize and record an initial liability for the fair value of the obligations it assumes under that guarantee and must disclose that information in its interim and annual financial statements. The disclosure provisions are CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Year ended December 31, 2002, from inception (March 7, 2001) to December 31, 2001 and from inception (March 7, 2001) to December 31, 2002 ================================================================================ 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): i) Recent accounting pronouncements (continued) effective for periods ending after December 15, 2002. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. Implementation of this interpretation is not expected to have a material effect on the Company's financial position or results of operations. During January 2003, the FASB issued and revised its Interpretation No. 46, Consolidation of Variable Interest Entities. The interpretation addresses consolidation of certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Company will be required to apply the consolidation provisions of the interpretation as of the beginning of its second quarter of fiscal 2004. Implementation of Interpretation No. 46, as revised, is not expected to have a material effect on the Company's financial position or results of operations. In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150 requires that certain financial instruments issued in the form of shares that are mandatorily redeemable as well as certain other financial instruments be classified as liabilities in the financial statements. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003. The provisions of this statement are not expected to have a material impact on the Company's consolidated financial position or results of operations. j) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results could differ from those estimates. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Year ended December 31, 2002, from inception (March 7, 2001) to December 31, 2001 and from inception (March 7, 2001) to December 31, 2002 ================================================================================ 3. PROPERTY, PLANT AND EQUIPMENT: =========================================================================== Cost Accumulated Net book amortization value ---------------------------------------------------------------------- Computer hardware 13,310 2,218 11,092 Computer software 3,235 808 2,427 Furniture and equipment 6,795 680 6,115 ---------------------------------------------------------------------- 23,340 3,706 19,634 =========================================================================== 4. WEBSITE DEVELOPMENT: =========================================================================== Cost Accumulated Net book amortization value ---------------------------------------------------------------------- Website development costs 19,025 3,171 15,854 =========================================================================== 5. RELATED PARTY TRANSACTIONS: During the year ended December 31, 2002, the Company incurred consulting fees from a company controlled by the president totaling $120,000 (from inception on March 7, 2001 to December 31, 2001 - $nil). At December 31, 2002, $20,000 of these consulting fees were included in accounts payable and accrued liabilities. The amounts were not subject to a written agreement but were incurred in the normal course of operations and are recorded at the exchange amount, which is the amount established and agreed to by the related parties. 6. DUE TO STOCKHOLDER: Due to stockholder is unsecured, non-interest bearing and has no fixed terms of repayment. 7. FINANCIAL INSTRUMENTS The fair values of cash, amounts receivable and accounts payable and accrued liabilities approximate their carrying values due to the relatively short periods to maturity of these instruments. It is not practical to determine the fair value for due to parent due to the related party nature of the amount and the absence of a market for such financial instruments. The maximum credit risk exposure for all financial assets is the carrying amount of that asset. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Year ended December 31, 2002, from inception (March 7, 2001) to December 31, 2001 and from inception (March 7, 2001) to December 31, 2002 ================================================================================ 8. SUBSEQUENT EVENTS: a) Subsequent to December 31, 2002, the Company received advances from related parties aggregating $410,000 net of financing costs. The related parties are shareholders of the Company's stockholder and associates of shareholders of the Company's stockholder. The advances are unsecured, do not bear interest and are not subject to a formal written agreement. b) On February 7, 2003, the Company signed an agreement with a third party to identify and secure potential sources of funding. The agreement requires the Company to pay a monthly retainer of $10,000, reimbursement of out-of-pocket expenses and payment of a fee of 2.5% of any funds secured by the third party. One half of the monthly retainer is payable upon the Company securing funding. The initial term of the agreement is six months and is cancelable by either party subsequent to expiry of this period. Certain sources of funding are exempt or limited by the agreement with respect to the 2.5% fee. c) On May 1, 2003, the Company entered an operating lease for office premises that requires the following annual minimum lease payments: ======================================================================= 2003 $ 13,581 2004 $ 19,617 2005 $ 21,630 2006 $ 5,533 ======================================================================= EX-99 4 sept2003-financials.txt EXH 99-5 FINANCIALS EXHIBIT 99.5 UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CIROND NETWORKS, INC. AS AT SEPTEMBER 30, 2003 AND FOR THE THREE MONTHS, NINE MONTHS AND PERIOD FROM INCEPTION (MARCH 7, 2001) THEN ENDED Consolidated Financial Statements of CIROND NETWORKS, INC. (A Development Stage Enterprise) (Expressed in United States dollars) Nine-months ended September 30, 2003 CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Balance Sheets (Expressed in United States dollars) September 30, 2003 and December 31 2002
=========================================================================================================== September 30, 2003 December 31, 2002 (unaudited) - ----------------------------------------------------------------------------------------------------------- ASSETS Current assets: Cash $ 1,882 $ 60,135 Amounts receivable 8,446 3,513 Prepaid expenses and deposits 11,964 412 -------------------------------------------------------------------------------------------------------- 22,292 64,060 Property, plant and equipment 50,213 19,634 Website development 13,476 15,854 - ----------------------------------------------------------------------------------------------------------- $ 85,981 $ 99,548 =========================================================================================================== LIABILITIES AND STOCKHOLDER'S DEFICIENCY Current liabilities: Accounts payable and accrued liabilities (note 3) $ 154,590 $ 114,521 Consulting fees payable 80,000 45,000 Deferred revenue 3,228 - Advances from related parties (note 3) 495,000 - Due to stockholder (note 4) 171,576 143,155 -------------------------------------------------------------------------------------------------------- 904,394 302,676 Stockholder's deficiency: Capital stock: 20,000,000 non-voting preferred shares with $0.0001 par value, issuable in series authorized, nil issued 80,000,000 voting common shares, with $0.0001 par value authorized, 14,740,250 issued (December 31, 2002 - 14,740,250) 1,474 1,474 Additional paid-in capital 298,898 298,898 Deficit accumulated during the development stage (1,118,785) (503,500) -------------------------------------------------------------------------------------------------------- (818,413) (203,128) Going concern (note 2(a)) Commitments (note 5) Subsequent events (notes 3(b) and 6) - ----------------------------------------------------------------------------------------------------------- $ 85,981 $ 99,548 ===========================================================================================================
See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Statements of Loss (Expressed in United States dollars) (Unaudited)
=============================================================================================================== From inception Nine months Nine months (March 7, 2001) ended ended to September 30, September 30, September 30, 2003 2003 2002 - --------------------------------------------------------------------------------------------------------------- Revenue: Sales $ 7,315 $ 7,315 $ - Expenses: Advertising and promotion 78,835 36,232 - Amortization 15,235 8,358 2,803 Consulting fees (note 3) 465,747 241,679 109,665 Foreign currency gain (2,731) (6,237) (1,965) Interest 923 812 - Office and administrative 23,432 15,251 26,781 Professional fees 81,149 28,234 25,952 Rent 31,825 26,116 4,111 Salaries and benefits 348,205 212,476 97,164 Travel 83,747 59,684 7,068 - --------------------------------------------------------------------------------------------------------------- 1,126,367 622,605 271,579 - --------------------------------------------------------------------------------------------------------------- Loss before interest income (1,119,052) (615,290) (271,579) Interest income 267 5 170 - --------------------------------------------------------------------------------------------------------------- Loss $ (1,118,785) $ (615,285) $ (271,409) =============================================================================================================== Weighted average number of common shares outstanding, basic and diluted 14,589,879 14,740,250 14,660,684 Loss per share, basic and diluted $ (0.08) $ (0.04) $ (0.02) ===============================================================================================================
See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Statements of Loss $ United States Three months ended September 30, 2003 and 2002 (Unaudited) ================================================================================ 2003 2002 - -------------------------------------------------------------------------------- Revenue: Sales $ 5,664 $ - Expenses: Advertising and promotion 8,306 - Amortization 4,180 1,328 Consulting fees 82,307 44,287 Foreign currency loss (gain) (6,205) 4,442 Interest 253 - Office and administrative 5,343 12,548 Professional fees 28,058 16,074 Rent 16,444 1,576 Salaries and benefits 47,603 40,997 Travel 14,418 408 - -------------------------------------------------------------------------------- 200,707 121,660 - -------------------------------------------------------------------------------- Loss before interest income (195,043) (121,660) Interest income - 170 - -------------------------------------------------------------------------------- Loss $ (195,043) $ (121,490) ================================================================================ Weighted average number of common shares outstanding, basic and diluted 14,740,250 14,740,250 Loss per share, basic and diluted $ (0.01) $ (0.01) ================================================================================ See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Statement of Stockholder's Deficiency and Comprehensive Loss (Expressed in United States dollars) From inception (March 7, 2001) to September 30, 2003 (Unaudited)
============================================================================================================== Deficit accumulated Total Additional during the stockholder's Common Stock paid-in development equity Shares Amount capital stage (deficiency) - -------------------------------------------------------------------------------------------------------------- Shares issued for cash 14,341,667 $ 1,434 $ - $ - $ 1,434 on March 7, 2001 Comprehensive loss: Loss - - - (5,466) (5,466) - -------------------------------------------------------------------------------------------------------------- Balance, December 31, 2001 14,341,667 1,434 - (5,466) (4,032) Shares issued for cash from February 12 to March 25, 2002 at $0.75 per share 398,583 40 298,898 - 298,938 Comprehensive loss: Loss - - - (498,034) (498,034) - -------------------------------------------------------------------------------------------------------------- Balance, December 31, 2002 14,740,250 1,474 298,898 (503,500) (203,128) Comprehensive loss: Loss - - - (615,285) (615,285) - -------------------------------------------------------------------------------------------------------------- Balance, September 30, 2003 14,740,250 $ 1,474 $ 298,898 $ (1,118,785) $ (818,413) ==============================================================================================================
See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Consolidated Statements of Cash Flows (Expressed in United States dollars) (Unaudited)
============================================================================================================== From inception Nine months Nine months (March 7, 2001) ended, ended to September 30, September 30, September 30, 2003 2003 2002 - -------------------------------------------------------------------------------------------------------------- Cash provided by (used in): Operations: Loss $ (1,118,785) $ (615,285) $ (271,409) Item not involving cash: Amortization 15,235 8,358 2,803 Changes in non-cash working capital: Amounts receivable (8,446) (4,933) - Prepaid expenses and deposits (11,964) (11,552) (412) Accounts payable and accrued liabilities 154,590 40,069 5,392 Consulting fees payable 80,000 35,000 - Deferred revenue 3,228 3,228 - ----------------------------------------------------------------------------------------------------------- (886,142) (545,115) (263,626) Financing: Common shares issued for cash 300,372 - 300,372 Advances from related parties 495,000 495,000 - Advances from stockholder 171,576 28,421 108,024 ----------------------------------------------------------------------------------------------------------- 966,948 523,421 408,396 Investing: Expenditures on website development (19,025) - - Expenditures on property, plant and equipment (59,899) (36,559) (15,788) ----------------------------------------------------------------------------------------------------------- (78,924) (36,559) (15,788) - -------------------------------------------------------------------------------------------------------------- Increase (decrease) in cash 1,882 (58,253) 128,982 Cash, beginning of period - 60,135 - - -------------------------------------------------------------------------------------------------------------- Cash, end of period $ 1,882 $ 1,882 $ 128,982 ============================================================================================================== Supplementary information: Interest paid $ - $ - $ - Income taxes paid $ - $ - $ - ==============================================================================================================
See accompanying notes to consolidated financial statements. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Nine months ended September 30, 2003 (Unaudited) ================================================================================ 1. OPERATIONS: Cirond Networks, Inc. (the "Company") is incorporated under the laws of the State of Nevada. The Company's principle business activities include the development and marketing of solutions for wireless networking designed to enhance the usability, performance, and security of 802.11b and 802.11a (WiFi) Wireless Local Area Networks (WLAN). The Company is primarily targeting enterprises and institutional customers requiring the use of wireless networks. To September 30, 2003, the Company has not generated substantial revenues and is continuing to develop its business model. Accordingly, the Company is in the development stage for financial reporting purposes. 2. SIGNIFICANT ACCOUNTING POLICIES a) Going concern These financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities and commitments in the normal course of business for the foreseeable future. As shown in the consolidated financial statements, the Company has incurred a loss of $1,118,785 for the period from inception (March 7, 2001) to September 30, 2003, and has a working capital deficiency of $882,102 at September 30, 2003. These factors raise substantial doubt as to the Company's ability to continue as a going concern. The application of the going concern concept is dependent upon the Company's ability to receive continued financial support from its creditors, stockholder and external investors and attaining profitable operations through the sale of its software. These consolidated financial statements do not give effect to any adjustment should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts differing from those reflected in the consolidated financial statements. Management plans to rely on its stockholder to obtain equity and debt financing from external investors and to actively market its wireless technology applications. Management believes the plan described above will be sufficient to meet the Company's liabilities and commitments as they become payable over the next twelve months. There can be no assurance that management's plan will be successful. Failure to obtain the support of additional external investors to finance the development and marketing of the Company's wireless technology applications will cause the Company to curtail operations and impair the Company's ability to continue as a going concern. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Nine months ended September 30, 2003 (Unaudited) ================================================================================ 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) b) Basis of consolidation These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly-owned subsidiary Cirond Networks (Canada) Inc. All material intercompany balances and transactions have been eliminated. c) Revenue recognition In accordance with the provisions of the American Institute of Certified Public Accountant's Statement of Position 97-2 "Software Revenue Recognition", revenue from one-time software license sales is generally recognized once delivery has occurred, the fee is fixed and determined and collection of the fee is probable, provided there are no significant vendor obligations remaining. d) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results could differ from those estimates. 3. RELATED PARTY TRANSACTIONS: a) During the nine months ended September 30, 2003, the Company incurred consulting fees from a company controlled by the president totaling $90,000 (2002 - $90,000). At September 30, 2003, $70,000 (December 31, 2002 - $20,000) of these consulting fees were included in accounts payable and accrued liabilities. The amounts were not subject to a written agreement but were incurred in the normal course of operations and are recorded at the exchange amount, which is the amount established and agreed to by the related parties. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Nine months ended September 30, 2003 (Unaudited) ================================================================================ 3. RELATED PARTY TRANSACTIONS (CONTINUED): b) During the nine months ended September 30, 2003, the Company received advances from related parties of $495,000 (refer to note 6). The related parties are shareholders of the Company's stockholder and associates of shareholders of the Company's stockholder. The advances are unsecured, do not bear interest and are not subject to a formal written agreement. On November 24, 2003, the Company issued promissory notes to the related parties for the advances. The promissory notes are unsecured, bear interest at 3% per annum commencing November 24, 2004 and are due November 24, 2006. 4. DUE TO STOCKHOLDER: Due to stockholder is unsecured, non-interest bearing and has no fixed terms of repayment. 5. COMMITMENTS: On May 1, 2003, the Company entered an operating lease for office premises that requires the following annual minimum lease payments: =========================================================================== 2003 $ 13,581 2004 $ 19,617 2005 $ 21,630 2006 $ 5,533 =========================================================================== 6. SUBSEQUENT EVENTS: a) Subsequent to September 30, 2003, the Company received additional advances from related parties of $155,000 with terms as disclosed in note 3(b). b) Effective November 25, 2003, pursuant to an amended stock exchange agreement, Cirond Corporation (formerly eXmailit.com) ("Cirond") acquired all of the issued and outstanding capital stock of the Company in exchange for 17,000,000 common shares of Cirond's common stock. In addition, pursuant to the terms of the agreement, Cirond issued 1,300,000 common shares in exchange for $650,000 of advances from related parties of the Company, $495,000 of which had been advanced as at September 30, 2003. As a result of the share exchange, the Company's former stockholder acquired control of Cirond. Accordingly, for accounting purposes, the acquisition of the Company has been accounted for using the purchase method as a recapitalization of the Company with the net tangible assets of Cirond. CIROND NETWORKS, INC. (A Development Stage Enterprise) Notes to Consolidated Financial Statements (Expressed in United States dollars) Nine months ended September 30, 2003 (Unaudited) ================================================================================ 6. SUBSEQUENT EVENTS (CONTINUED): c) In conjunction with the above share exchange, Cirond advanced bridge financing of $375,000 to the Company. The bridge financing is secured by a promissory note, which bears annual interest at 10% and is due on demand. EX-99 5 pro-formas.txt EXH 99-6 PRO FORMAS EXHIBIT 99.6 UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR CIROND CORPORATION Unaudited Pro Forma Combined Financial Information for CIROND CORPORATION (FORMERLY EXMAILIT.COM) and subsidiaries CIROND CORPORATION (FORMERLY EXMAILIT.COM) And subsidiaries Unaudited pro forma combined consolidated financial information The following unaudited pro forma combined consolidated financial information gives effect to the acquisition of Cirond Networks, Inc. ("CNI") by Cirond Corporation ("Cirond") on November 25, 2003. Under the terms of an Amended Share Exchange Agreement, the shareholder of CNI obtained control of Cirond through the exchange of shares. For accounting purposes, the acquisition of CNI has been accounted for in this unaudited pro forma combined consolidated financial information using the purchase method as a recapitalization of CNI with the net monetary assets of Cirond. Under recapitalization accounting, CNI is considered to have issued shares for consideration equal to the net monetary assets of Cirond with the results of Cirond operations included in the combined financial information from the date of recapitalization on November 25, 2003. The unaudited pro forma consolidated balance sheet as at September 30, 2003 gives effect to the transaction as if it occurred on September 30, 2003. The Cirond and CNI balance sheet information was derived from their unaudited September 30, 2003 balance sheets. The unaudited pro forma combined consolidated statement of loss gives pro forma effect as if the transaction was consummated as of January 1, 2002. The Cirond and CNI statement of loss information for the year ended December 31, 2002 was derived from their audited statements of loss for the year then ended. The Cirond and CNI statement of loss for the nine months ended September 30, 2003 was derived from their unaudited statements of loss for the period then ended. The unaudited pro forma combined consolidated financial information has been prepared by management and is not necessarily indicative of the combined results of operations in future periods or the results that actually would have been realized had Cirond and CNI been a combined company during the specified periods. The pro forma combined consolidated statement of loss does not include any material non-recurring charges or credits directly attributable to the transaction. The unaudited pro forma combined consolidated financial information, including the notes thereto, should be read in conjunction with, the historical financial statements of Cirond included in its December 31, 2002 Form 10-KSB and September 30, 2003 Form 10-QSB filed with the Securities and Exchange Commission and the historical financial statements of CNI attached to this amended Form 8-K. CIROND CORPORATION (FORMERLY EXMAILIT.COM) Unaudited Pro Forma Combined Consolidated Balance Sheet September 30, 2003 (Expressed in United States dollars)
================================================================================================================= Historical Pro Forma Cirond CNI Adjustments Combined - ----------------------------------------------------------------------------------------------------------------- (note 2) ASSETS Current assets: Cash $ 6,705 $ 1,882 $ 375,000 (d) $ 383,587 Amounts receivable - 8,446 - 8,446 Prepaid expenses and deposits - 11,964 - 11,964 -------------------------------------------------------------------------------------------------------------- 6,705 22,292 375,000 403,997 Property, plant and equipment 6,925 50,213 (6,925)(b) 50,213 Website development - 13,476 - 13,476 - ----------------------------------------------------------------------------------------------------------------- $ 13,630 $ 85,981 $ 368,075 $ 467,686 ================================================================================================================= LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current liabilities: Accounts payable and accrued liabilities $ 1,194 $ 154,590 $ - $ 155,784 Loans payable 75,000 - - 75,000 Consulting fees payable - 80,000 - 80,000 Deferred revenue - 3,228 - 3,228 Advances from related parties - 495,000 (495,000)(c) - Due to stockholder - 171,576 - 171,576 -------------------------------------------------------------------------------------------------------------- 76,194 904,394 (495,000) 485,588 Stockholders' deficiency: Capital stock 4,000 1,474 2,261 (a) 34,900 (4,000)(b) 990 (c) 750 (d) 29,425 (e) Additional paid-in capital 49,000 298,898 (49,000)(b) 1,137,733 494,010 (c) 374,250 (d) (29,425)(e) Currency translation adjustment 3,426 - (3,426)(b) - Deficit accumulated during the development stage (118,990) (1,118,785) (71,750)(a) (1,190,535) 118,990 (b) -------------------------------------------------------------------------------------------------------------- (62,564) (818,413) 863,075 (17,902) - ----------------------------------------------------------------------------------------------------------------- $ 13,630 $ 85,981 $ 368,075 $ 467,686 =================================================================================================================
See accompanying notes to financial information. CIROND CORPORATION (FORMERLY EXMAILIT.COM) Unaudited Pro Forma Combined Consolidated Statement of Loss Year ended December 31, 2002 (Expressed in United States dollars)
================================================================================================================= Historical Pro Forma Cirond CNI Adjustments Combined - ----------------------------------------------------------------------------------------------------------------- Expenses Advertising and promotion $ - $ 42,603 $ - $ 42,603 Amortization 2,785 6,877 - 9,662 Consulting fees - 224,068 - 224,068 Foreign currency loss 674 3,506 - 4,180 Interest 166 111 - 277 Office and administrative 2,489 7,715 - 10,204 Professional fees 24,064 47,915 - 71,979 Rent - 5,709 - 5,709 Salaries and benefits - 135,729 - 135,729 Travel - 24,063 - 24,063 -------------------------------------------------------------------------------------------------------------- 30,178 498,296 - 528,474 - ----------------------------------------------------------------------------------------------------------------- Loss before interest income (30,178) (498,296) - (528,474) Interest income - 262 - 262 - ----------------------------------------------------------------------------------------------------------------- Loss $ (30,178) $ (498,034) $ - $ (528,212) ================================================================================================================= Weighted average number of shares outstanding, basic and diluted 4,000,000 35,210,000 Loss per share (note 3) $ (0.01) $ $ (0.02) =================================================================================================================
See accompanying notes to financial information. CIROND CORPORATION (FORMERLY EXMAILIT.COM) Unaudited Pro Forma Combined Consolidated Statement of Loss Nine months ended September 30, 2003 (Expressed in United States dollars)
=============================================================================================================== Historical Pro Forma Cirond CNI Adjustments Combined - --------------------------------------------------------------------------------------------------------------- Revenue: Sales $ - $ 7,315 - $ 7,315 Expenses: Advertising and promotion - 36,232 - 36,232 Amortization 1,078 8,358 - 9,436 Consulting fees - 241,679 - 241,679 Foreign currency gain (10) (6,237) - (6,247) Interest 222 812 - 1,034 Office and administrative 584 15,251 - 15,835 Professional fees 12,473 28,234 - 40,707 Rent - 26,116 - 26,116 Salaries and benefits - 212,476 - 212,476 Travel - 59,684 - 59,684 ------------------------------------------------------------------------------------------------------------ 14,347 622,605 - 636,952 - --------------------------------------------------------------------------------------------------------------- Loss before interest income (14,347) (615,290) - (629,637) Interest income - 5 - 5 - --------------------------------------------------------------------------------------------------------------- Loss $ (14,347) $ (615,285) $ - $ (629,632) =============================================================================================================== Weighted average number of shares outstanding, basic and diluted 4,000,000 35,210,000 Loss per share (note 3) $ (0.00) $ (0.02) ===============================================================================================================
See accompanying notes to financial information. CIROND CORPORATION (FORMERLY EXMAILIT.COM) Notes to Unaudited Pro Forma Combined Consolidated Financial Information (Expressed in United States dollars) ================================================================================ 1. BASIS OF PRESENTATION: This pro forma combined financial information has been prepared in accordance with accounting principles generally accepted in the United States of America. On November 25, 2003, Cirond issued 17,000,000 shares of its common stock to CNI's stockholder for all of the issued and outstanding common stock of CNI. Immediately prior to issuing the 17,000,000 shares of its common stock, Cirond completed a 16 for 1 forward stock split followed by a cancellation of 47,840,000 common shares. As a result of the forward stock split and subsequent cancellation, Cirond had 16,160,000 common shares outstanding prior to the share exchange with CNI's stockholder. In conjunction with the share exchange, Cirond issued an additional 1,300,000 shares of its common stock in exchange for $650,000 of non-interest bearing advances from related parties of CNI, and 750,000 shares of its common stock for cash proceeds of $375,000. At November 25, 2003, Cirond was a shell company without substantial operations. As the former shareholder of CNI obtained control of Cirond through this share exchange, this transaction has been accounted for as a recapitalization transaction. Under recapitalization accounting, CNI is considered to have issued common shares for consideration equal to the net monetary assets of Cirond with the results of Cirond operations being included in the consolidated financial statements from the date of recapitalization on November 25, 2003. 2. PRO FORMA ADJUSTMENTS: a) To reflect the 16,160,000 common shares held by Cirond stockholders prior to the recapitalization of CNI and the 17,000,000 common shares issued to CNI stockholders for consideration equal to the net monetary assets of Cirond. b) To eliminate Cirond's stockholders' equity upon consolidation and recognize the fair value of property, plant and equipment held by Cirond at the acquisition date. c) To reflect the issuance of 990,000 common shares of Cirond upon conversion of $495,000 of non-interest bearing advances from related parties outstanding at September 30, 2003. Further advances, aggregating $155,000, were received from the related parties subsequent to September 30, 2003 and were converted into 310,000 common shares of Cirond. d) To reflect the issuance of 750,000 common shares of Cirond for cash proceeds of $375,000. e) To reallocate capital stock and additional paid-in capital to reflect the par value of Cirond's common stock. CIROND CORPORATION (FORMERLY EXMAILIT.COM) Notes to Unaudited Pro Forma Combined Consolidated Financial Information (Expressed in United States dollars) ================================================================================ 3. PRO FORMA LOSS PER SHARE: The unaudited pro forma combined loss per share is based upon the weighted average number of outstanding shares of common stock of Cirond during the periods presented, plus the number of shares issued to consummate the acquisition of CNI as if the acquisition occurred on January 1, 2002, as follows:
====================================================================================== Year ended 9 months ended December 31, 2002 September 30, 2003 -------------------------------------------------------------------------------------- Weighted average number of common shares of Cirond, basic and diluted 4,000,000 4,000,000 16 for 1 forward stock split and subsequent cancellation of 47,840,000 common shares 12,160,000 12,160,000 Common shares issued in exchange for all of the issued and outstanding common stock of CNI 17,000,000 17,000,000 Common shares issued in exchange for $650,000 of advances from related parties of CNI 1,300,000 1,300,000 Common shares issued for cash proceeds of $375,000 750,000 750,000 -------------------------------------------------------------------------------------- Pro forma weighted average number of common shares, basic and diluted 35,210,000 35,210,000 ======================================================================================
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