-----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, TpkHSN3QkXZArQf7MMBW6iPkO0qlHj77AHFMkoSKWbA9vkAmu/FQIHkChzW3rdHL QJztbvQzHQjBW03waXm06Q== 0000050471-00-000005.txt : 20000307 0000050471-00-000005.hdr.sgml : 20000307 ACCESSION NUMBER: 0000050471-00-000005 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991112 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000303 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERINET GROUP COM INC CENTRAL INDEX KEY: 0000050471 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 112050317 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-03718 FILM NUMBER: 561147 BUSINESS ADDRESS: STREET 1: 2500 NORTH MILITARY TRAIL STREET 2: SUITE 225-C CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 5619983435 MAIL ADDRESS: STREET 1: 2500 NORTH MILITARY TRAIL STREET 2: SUITE 225-C CITY: BOCA RATON STATE: FL ZIP: 33421 FORMER COMPANY: FORMER CONFORMED NAME: EQUITY GROWTH SYSTEMS INC /DE/ DATE OF NAME CHANGE: 19951214 FORMER COMPANY: FORMER CONFORMED NAME: INFOTEC INC DATE OF NAME CHANGE: 19930506 8-K/A 1 AMENDMENT TO 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 November 12, 1999 Date of Report (Date of earliest reported) AmeriNet Group.com, Inc. (Exact name of registrant as specified in its chapter) Delaware (State or other jurisdiction of incorporation 000-03718 (Commission File Number) 11-2050317 (IRS Employer Identification No.) 2500 North Military Trail, Suite 225; Boca Raton, Florida 33431 (Address of principal executive offices) (Zip Code) (561) 998-3435 Registrant's telephone number, including area code 902 Clint Moore Road, Suite 136-C; Boca Raton, Florida 33487 (Former name or former address, if changed since last report) Item 5. Other Events. These financial statements and pro-forma statements are being filed to replace those originally filed in a current report on Form 8-K filed with the Commission on January 26, 2000. As previously disclosed in the Registrant's Form 10-QSB for the period ended September 30, 1999, on November 11, 1999, but effective as of September 30, 1999 for all operating, financial, tax and accounting purposes, Wriwebs.com, Inc. ("WRI"), a Florida-based provider of Internet related services was merged into American Internet Technical Centers, Inc. a wholly owned subsidiary of the Registrant in a privately negotiated, arms-length transaction in consideration for 531,000 shares of the Registrant's common stock and the right to receive an additional 150,000 shares, based on future performance, distributed to the four stockholders of WRI. The financial statements of WRI and the pro forma financial information required to be filed in accordance with Item 7 of Form 8-K are filed herewith. Item 7. Financial Statements and Exhibits. (a) Financial Statements Audited Financial Statements of WRI for the years ended December 31, 1998 and Unaudited Financial Statements for the nine months ended September 30, 1999. (b) Pro forma financial information. AmeriNet Group.com, Inc. Pro Forma Combined Balance Sheets at December 31, 1998; Pro Forma Combined Statements of Operations for the twelve months ended December 31, 1998 and three months ended September 30, 1999 and six months ended June 30, 1999. 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. AmeriNet Group.com, Inc Dated: March 3, 2000 /s/ Michael H. Jordan --------------------------------- Michael Harris Jordan President Page 2 Index to Financial Statements The following financial statements, pro forma financial information and exhibits are filed as part of this Form 8-K/A: (a) Financial Statements Independent Auditor's Report Balance Sheet Statement of Operations Statement of Changes in Stockholders' Deficit Statement of Cash Flows Notes to Financial Statements (b) Pro financial information. Pro forma Financial Statements AmeriNet Group.com, Inc. On November 12, 1999, AmeriNet Group.com, Inc., through its wholly owned subsidiary, American Internet Technical Center, Inc., merged with WRIwebs.com, Inc. ("WRI"). As consideration the registrant issued 531,000 shares of its common stock to the shareholders of WRI and will issue 53,100 shares of common stock to Yankee Companies. Under the terms of the agreement the registrant will invest $300,000 in WRI within 120 days after the completion of the merger and the filing of the required reports with the Securities and Exchange Commission. In connection with the acquisition, the agreement provides that the current majority stockholder of WRI retains the right, for a period of two years starting on the 182nd day following completion of the Merger, to exchange all of his Amerinet securities issued pursuant to the agreement, including dividends or distributions based on the ownership thereof, for between seventy and eighty percent of the Surviving Corporation's Common Stock. The Surviving Corporation would repay all funds advanced to it or it's affiliates or designees directly or indirectly by or through Amerinet together with: (a) Interest at the rate of six percent per annum from the day of funding, concurrently with the exercise of the Caputa option or (b) Over a period of twenty four months, in equal installments, starting on the date of the exercise of the option, together with interest at the rate of eight percent per annum, payable first, and after all the interest has been paid of principle. Such repayment obligation is secured through a pledge of assets of the Surviving Corporation either having a value equal to 150% of the aggregate indebtedness or comprised of all of the Surviving Corporation's Capital Stock, in either case using forms of notes and security agreements mutually agreed to by Amerinet and the Surviving Corporation; and, the payment is guaranteed by Mr. Caputa. The Company accounts for the investment in WRIwebs.com, Inc. under the equity method. The company recognizes 20 percent of WRI's net losses. The following Pro Forma Combined Balance Sheet of the Registrant has been prepared by management of the Registrant based upon the balance sheets of the Registrant as of December 31, 1998. The Pro Forma Combined Statement of Operations was prepared based upon the statement of operations for the Registrant for the twelve months ended December 31, 1998, the six months ended June 30,1999, and the three months ended September 30, 1999. The pro forma statement of operations also includes twenty percent (20%) in WRI's income or losses for the twelve months ended December 31, 1998, the six months ended June 30, 1999, and the three months ended September 30, 1999. The pro forma statements give effect to the transaction under the equity method of accounting and the assumptions and adjustments in the accompanying notes to pro forma combined financial statements. The pro forma combined balance sheet gives effect to the acquisition as if it had occurred as of December 31, 1998. The pro forma combined statement of operations for the year ended December 31, 1998, gives effect to the acquisition as if it had occurred as of January 1, 1998. The pro forma combined statement of operations for the six months ended June 30, 1999, gives effect to the acquisition as if it had occurred as of January 1, 1999. The pro forma combined statement of operations for the three months ended September 30, 1999, gives effect to the acquisition as if had occurred as of July 1, 1999. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable. The pro forma combined financial statements do not purport to represent what the combined companies' financial position or results of operations would actually have been had the acquisition occurred on such date or as of the beginning of the period indicated, or to project the combined companies' financial position or results of operations for any future period. Page 3 AmeriNet Group.com, Inc. Pro Forma Combined Balance Sheets December 31, 1998 (Unaudited) Historical AmeriNet WRI Pro Forma December 31, 1998 December 31, 1998 Total Adjustments Combined Current assets: Cash $ 13,182 $ - $ 13,182 $ 13,182 -------------------------------------------------------------------------------------------- Other assets: Investment in WRIwebs.com, Inc. - - - (a) 748,104 748,104 -------------------------------------------------------------------------------------------- Total assets $ 13,182 $ - $ 13,182 $ 748,104 $ 761,286 ============================================================================================ Current liabilities: Accounts payable $ 4,661 $ - $ 4,661 $ 4,661 Accrued expenses 147,000 - 147,000 147,000 Deferred revenue - - - - Cash overdraft - - - - -------------------------------------------------------------------------------------------- Total current liabilities 151,661 - 151,661 151,661 Equity subject to potential redemptions - - - (a) 748,104 748,104 -------------------------------------------------------------------------------------------- Stockholders' deficit: Preferred stock - - - - Common stock 59,911 - 59,911 59,911 Additional paid in capital 2,930,395 - 2,930,395 2,930,395 Accumulated deficit (3,128,785) - (3,128,785) (3,128,785) -------------------------------------------------------------------------------------------- Total stockholders' deficit (138,479) - (138,479) - (138,479) -------------------------------------------------------------------------------------------- Total liabilities and stockholders' deficit $ 13,182 $ - $ 13,182 $ 748,104 $ 761,286 ============================================================================================
1. The Pro Forma Balance Sheet at December 31, 1998, is based upon the balance sheets of the Registrant and WRIwebs.com, Inc. as of December 31, 1998. (a) The purchase price for the acquisition of all the common stock of WRIwebs.com, Inc. was 584,000 shares at $1.281 per share. The Registrant accounts for the investment under the equity method. Page 4 AmeriNet Group.com, Inc. Pro Forma Combined Statement of Income For the twelve months ended December 31, 1998 (Unaudited) Historical AmeriNet WRI Twelve months ended Twelve months ended Pro Forma Pro Forma December 31, 1998 December 31, 1998 Total Adjustments Combined Revenues earned $ - $ - $ - $ - Cost of revenues earned - - - - -------------------------------------------------------------------------------------------- Gross profit - - - - Selling, general and admn expense - - - - -------------------------------------------------------------------------------------------- Total operating expense - - - - - Loss from operations - - - - - Other income (expense) Equity in losses of subsidiary - - - (b) (18,187) (18,187) -------------------------------------------------------------------------------------------- Provision for income taxes - - - - - -------------------------------------------------------------------------------------------- Loss from discontinued operations (562,415) - (562,415) - (562,415) -------------------------------------------------------------------------------------------- Net loss $ (562,415) $ - $(562,415) $ (18,187) $ (580,602) ============================================================================================ Basic net loss per share $ (0.13) $ (0.12) ================== ============ Wieghted average shares outstanding 4,174,778 4,758,878 ================== ============ Fully diluted net loss per share $ (0.13) $ (0.12) ================== ============ Fully diluted average shares outstanding 4,174,778 4,758,878 ================== ============
1. The Pro Forma Statement of Operations for the year ended December 31, 1998 is based upon the twelve months ended December 31, 1998 for the Registrant and WRIwebs.com, Inc. and gives effect to the acquisition as if it had occured on January 1, 1998. (b) The Registrant accounts for the investment under the equity method and recognizes 20% of WRI's losses of $90,935. Page 5 AmeriNet Group.com, Inc. Pro Forma Combined Balance Sheets June 30, 1999 (Unaudited) Historical AmeriNet WRI Pro Forma June 30, 1999 June 30, 1999 Total Adjustments Combined Current assets: Cash $ 79,021 $ - $ 79,021 $ 79,021 Accounts receivable, net 76,662 - 76,662 76,662 -------------------------------------------------------------------------------------------- Total current assets 155,683 - 155,683 155,683 Property and equipment, net 33,656 - 33,656 33,656 -------------------------------------------------------------------------------------------- Other assets: Goodwill, net 1,470,559 - 1,470,559 1,470,559 Investment in WRIwebs.com, Inc. - - - (c) 748,104 748,104 Deposits 14,492 - 14,492 14,492 -------------------------------------------------------------------------------------------- Total other assets 1,485,051 - 1,485,051 748,104 2,233,155 -------------------------------------------------------------------------------------------- Total assets $ 1,674,390 $ - $ 1,674,390 $ 748,104 $ 2,422,494 ============================================================================================ Current liabilities: Accounts payable $ 10,648 $ - $ 10,648 $ 10,648 Accrued expenses 16,901 - 16,901 16,901 Deferred revenue 80,558 - 80,558 80,558 Loans to stockholders 29,333 - 29,333 29,333 -------------------------------------------------------------------------------------------- Total current liabilities 137,440 - 137,440 137,440 Equity subject to potential redemptions - - - (c) 748,104 748,104 -------------------------------------------------------------------------------------------- Stockholders' equity: Preferred stock - - - Common stock 80,948 - 80,948 80,948 Additional paid in capital 4,841,005 - 4,841,005 4,841,005 Accumulated deficit (3,385,003) - (3,385,003) (3,385,003) -------------------------------------------------------------------------------------------- Total stockholders' equity 1,536,950 - 1,536,950 - 1,536,950 -------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $1,674,390 $ - $ 1,674,390 $ 748,104 $ 2,422,494 ============================================================================================
1. The Pro Forma Balance Sheet at June 30, 1999, is based upon the balance sheets of the Registrant and WRIwebs.com, Inc. as of June 30, 1999. (c) The purchase price for the acquisition of all the common stock of WRIwebs.com, Inc. was 584,000 shares at $1.281 per share. The Registrant accounts for the investment under the equity method. Page 6 AmeriNet Group.com, Inc. Pro Forma Combined Statement of Income For the six months ended June 30, 1999 (Unaudited) Historical AmeriNet WRI Six months ended Six months ended Pro Forma June 30, 1999 June 30, 1999 Total Adjustments Combined Revenues earned $ - $ - $ - $ - Cost of revenues earned - - - - -------------------------------------------------------------------------------------------- Gross profit - - - - - Operating expenses: Selling, general and admn expense 256,218 - 256,218 256,218 -------------------------------------------------------------------------------------------- Total operating expenses 256,218 - 256,218 - 256,218 Loss from operations (256,218) - (256,218) (256,218) Other income (expense) Equity in income of subsidiary - - - (d) 7,532 7,532 -------------------------------------------------------------------------------------------- Net loss $ (256,218) $ - $ (256,218) $ 7,532 $ (248,686) ============================================================================================ Basic net loss per share $ (0.04) $ (0.04) ================== ============ Wieghted average shares outstanding 6,091,566 6,675,666 ================== ============ Fully diluted net loss per share $ (0.04) $ (0.04) ================== ============ Fully diluted average shares outstanding 6,091,566 6,675,666 ================== ============
1. The Pro Forma Statement of Operations for the six months ended June 30, 1999 is based upon the six months ended June 30, 1999 for the Registrant and WRIwebs.com, Inc. and gives effect to the acquisition as if it had occured on January 1, 1999. (d) The Registrant accounts for the investment under the equity method and recognizes 20% of WRI's income of $37,658 Page 7 AmeriNet Group.com, Inc. Pro Forma Combined Balance Sheets September 30, 1999 (Unaudited) Historical AmeriNet WRI ProForma September 30, 1999September 30, 1999 Total Adjustments Combined Current assets: Cash $ 32,718 $ - $ 32,718 $ 32,718 Accounts receivable, net 49,093 - 49,093 49,093 -------------------------------------------------------------------------------------------- Total current assets 81,811 - 81,811 81,811 Property and equipment, net 53,326 - 53,326 53,326 -------------------------------------------------------------------------------------------- Other assets: Goodwill, net 639,589 - 639,589 639,589 Investment in WRIwebs.com, Inc. - - - (e) 748,104 748,104 Deposits 14,492 - 14,492 14,492 -------------------------------------------------------------------------------------------- Total other assets 654,081 - 654,081 748,104 1,402,185 Total assets $ 789,218 $ - $ 789,218 $ 748,104 $ 1,537,322 ============================================================================================ Current liabilities: Accounts payable $ 65,370 $ - $ 65,370 $ 65,370 Accrued expenses 15,010 - 15,010 15,010 Deferred revenue 39,970 - 39,970 39,970 Loans to stockholders 29,333 - 29,333 29,333 Loans payable - other 75,000 - 75,000 75,000 -------------------------------------------------------------------------------------------- Total current liabilities 224,683 - 224,683 - 224,683 Equity subject to potential redemptions - - - (e) 748,104 748,104 -------------------------------------------------------------------------------------------- Stockholders' equity: Preferred stock - - - - Common stock 81,924 - 81,924 81,924 Common stock to be retired (9,328) (9,328) (9,328) Additional paid in capital 4,254,223 - 4,254,223 4,254,223 Accumulated deficit (3,762,284) - (3,762,284) (3,762,284) -------------------------------------------------------------------------------------------- Total stockholders' equity 564,535 - 564,535 - 564,535 Total liabilities and stockholders' equity $ 789,218 $ - $ 789,218 $ 748,104 $ 1,537,322 ============================================================================================
1. The Pro Forma Balance Sheet at September 30, 1999, is based upon the balance sheets of the Registrant and WRIwebs.com, Inc. as of September 30, 1999. (e) The purchase price for the acquisition of all the common stock of WRIwebs.com, Inc. was 584,000 shares at $1.281 per share. The Registrant accounts for the investment under the equity method. Page 8 AmeriNet Group.com, Inc. Pro Forma Combined Statement of Income For the three months ended September 30, 1999 (Unaudited) Historical AmeriNet WRI Three months ended Three months ended ProForma September 30, 1999 September 30, 1999 Total Adjustments Combined Revenues earned $ 168,169 $ - $ 168,169 $ 168,169 Cost of revenues earned 69,109 - 69,109 69,109 -------------------------------------------------------------------------------------------- Gross profit 99,060 - 99,060 - 99,060 Operating expenses: Selling, general and admn expense 476,341 - 476,341 476,341 -------------------------------------------------------------------------------------------- Total operating expenses 476,341 - 476,341 - 476,341 Loss from operations (377,281) - (377,281) (377,281) Other income (expense) Equity in income of subsidiary - - - (f) (18,153) (18,153) -------------------------------------------------------------------------------------------- Net loss $ (377,281) $ - $ (377,281) $ (18,153) $ (395,434) ============================================================================================ Basic net loss per share $ (0.05) $ (0.05) ================== ============ Wieghted average shares outstanding 8,148,308 8,732,408 ================== ============ Fully diluted net loss per share $ (0.05) $ (0.05) ================== ============ Fully diluted average shares outstanding 8,148,308 8,732,408 ================== ============
1. The Pro Forma Statement of Operations for the three months ended September 30, 1999 is based upon the three months ended September 30, 1999 for the Registrant and WRIwebs.com, Inc. and gives effect to the acquisition as if it had occured on July 1, 1999. (f) The Registrant accounts for the investment under the equity method and recognizes 20% of WRI's losses of $90,765. Page 9 WRIwebs.com, INC. FINANCIAL STATEMENTS FROM JANUARY 20, 1998 (INCEPTION) THROUGH DECEMBER 31, 1998 Page 10 TABLE OF CONTENTS Independent Auditor's Report .............................................11 Financial Statements: Balance Sheets as of December 31, 1998 and unaudited as of June 30, 1999 and September 30, 1999 ...............................12 Statements of Operation for the period from January 20, 1998 (Inception) through December 31, 1998 and unaudited for the six months ended June 30, 1999 and for the three months ended September 30, 1999..............13 Statements of Changes in Stockholders' Deficit for the period from January 20, 1998 (Inception) through December 31, 1998 and unaudited for the six months ended June 30, 1999 and for the three months ended September 30, 1999..................................................14 Statements of Cash Flows for the period from January 20, 1998 (Inception) through December 31, 1998 and unaudited for the six months ended June 30, 1999 and for the three months ended September 30, 1999 .............15 Notes to Financial Statements ............................................16-19 Page 11 DASZKAL BOLTON MANELA DEVLIN & CO. CERTIFIED PUBLIC ACCOUNTANTS A PARTNERSHIP OF PROFESSIONAL ASSOCIATIONS 2401 N.W. BOCA RATON BOULEVARD, SUITE 100 BOCA RATON, FLORIDA 33431 TELEPHONE (561) 367-1040 FAX (561) 750-3236 JEFFREY A. BOLTON, CPA, P.A. MEMBER OF THE AMERICAN INSTITUTE MICHAEL I. DASZKAL, CPA, P.A. OF CERTIFIED PUBLIC ACCOUNTANTS ROBERT A. MANELA, CPA, P.A. TIMOTHY R. DEVLIN. CPA, P.A. MICHAEL S. KRIDEL, CPA, P.A. INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders WRIwebs.com, Inc. We have audited the accompanying balance sheet of WRIwebs.com, Inc. as of December 31, 1998, and the related statement of operations, changes in stockholders' deficit and cash flows from January 20, 1998 (inception) to December 31, 1998. These financial statements are the responsibility of the management of WRIwebs.com, Inc. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit 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 audit provides 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 WRIwebs.com, Inc. as of December 31, 1998, and the results of the operations and its cash flows from January 20, 1998 (inception) to December 31, 1998, in conformity with generally accepted accounting principles. /s/ Daszkal Bolton Manela Devlin & Co. CPAs Boca Raton, Florida January 18, 2000 Page 12 WRIwebs.com, Inc. BALANCE SHEETS ASSETS June 30, September 30, December 31, 1999 1999 1998 (Unaudited) (Unaudited) Current assets: Cash $ 4,002 $ 13,832 $ 7,598 Accounts receivable - net 23,633 49,250 71,896 Loan receivable - stockholder 8,406 - - Loan receivable - other - - 510 --------------------------------------------------------- Total current assets 36,041 63,082 80,004 --------------------------------------------------------- Property and equipment, net 30,162 35,054 67,094 --------------------------------------------------------- Total assets $ 66,203 $ 98,136 $ 147,098 ========================================================= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 42,602 $ 51,475 $ 78,798 Accrued expenses 19,187 9,646 9,646 Deferred revenue 74,823 68,192 69,838 Cash overdraft 13,026 - - Loan payable - stockholder - 14,601 77,755 Note payable - current portion - - 19,002 ----------------------------------------------------------- Total current liabilities 149,638 143,914 255,039 ----------------------------------------------------------- Note payable - equipment - - 14,998 ----------------------------------------------------------- Total liabilities 149,638 143,914 270,037 ----------------------------------------------------------- Stockholders' deficit: Common stock, $1.00 par value, 7,500 shares authorized, issued and 7,500 7,500 7,500 outstanding Additional paid in capital - - 13,604 Accumulated deficit (90,935) (53,278) (144,043) ------------------------------------------------------------- Total stockholders' deficit (83,435) (45,778) (122,939) ------------------------------------------------------------- Total liabilities and stockholders' deficit $ 66,203 $ 98,136 $ 147,098 =============================================================
See accompanying notes to financial statements Page 13 WRIwebs.com, Inc. STATEMENTS OF OPERATION January 20, 1998 Six Months Three Months (Inception) Ended Ended Through June 30, 1999 September 30, 1999 December 31, 1998 (Unaudited) (Unaudited) Revenues earned $ 1,037,212 $ 692,390 $ 252,083 Cost of revenues earned 339,713 235,339 161,348 -------------------------------------------------------------- Gross profit 697,499 457,051 90,735 Operating expenses: Selling expenses 376,691 271,307 130,953 General and administrative expenses 411,743 148,087 50,547 -------------------------------------------------------------- Total operating expenses 788,434 419,394 181,500 -------------------------------------------------------------- Net income (loss) $ (90,935) $ 37,657 $(90,765) ==============================================================
See accompanying notes to financial statements. Page 14 WRIwebs.com, Inc. STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT Number Additional of Common Paid-In Accumulated Shares Stock Capital Deficit Total Balance, January 1, 1998 - $ - $ - $ - $ - Issuance of common stock 7,500 7,500 - 7,500 Net loss - December 31, 1998 - - - (90,935) (90,935) --------------------------------------------------------------------------- Balance, December 31, 1998 7,500 7,500 - (90,935) (83,435) Net income - June 30, 1999 (Unaudited) - - - 37,657 37,657 --------------------------------------------------------------------------- Balance, June 30, 1999 (Unaudited) 7,500 7,500 - (53,278) (45,778) Issuance of common stock for services - - 13,604 - 13,604 Net loss - September 30, 1999 (Unaudited) - - - (90,765) (90,765) --------------------------------------------------------------------------- Balance, September 30, 1999 (Unaudited) 7,500 $ 7,500 $ 13,604 $ (144,043) $(122,939) ===========================================================================
See accompanying notes to financial statements. Page 15 WRIwebs.com, Inc. STATEMENTS OF CASH FLOWS January 20, 1998 Six Months Three Months (Inception) Ended Ended Through June 30, 1999 September 30, 1999 December 31, 1998 (Unaudited) (Unaudited) Cash flows from operating activities: Net income (loss) $ (90,935) $ 37,657 $ (90,765) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,836 5,000 3,700 Bad debts expense 6,398 3,602 3,000 Common stock issued for services - - 13,604 (Increase) decrease in: Accounts receivables (30,031) (29,219) (25,648) Loan receivable - other - - (510) Increase (decrease) in: Accounts payable 42,602 8,873 27,324 Accrued expenses 19,187 (9,541) - Deferred revenue 74,823 (6,631) 1,647 ------------------------------------------------------------ Net cash provided (used) by operating activities 25,880 9,741 (67,648) ------------------------------------------------------------ Cash flows used by investing activities: Purchase of property and equipment (33,998) (9,892) (1,740) ------------------------------------------------------------ Cash flows from financing activities: Issuance of common stock 7,500 - - Cash overdraft 13,026 13,026 - Increase (decrease) in stockholder loan (8,406) 23,007 63,154 ------------------------------------------------------------ Net cash provided by financing activities 12,120 36,033 63,154 ------------------------------------------------------------ Net increase (decrease) in cash 4,002 35,882 (6,234) Cash at beginning of year - 4,002 13,832 ------------------------------------------------------------ Cash at end of year $ 4,002 $ 39,884 $ 7,598 ============================================================
See accompanying notes to financial statements. Page 16 WRIwebs.com, INC. NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Web Results Institute, Inc. (the "Company") was incorporated under the laws of the State of Florida on August 31, 1998. Prior to its formation as a Subchapter S Corporation, the Company existed as a limited liability company. The Company changed its name to WRIwebs.com, Inc. on April 19, 1999. The Company was established to design, produce and host websites. Hosting services, including search engine registrations, are typically six-month to one-year contracts. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all cash and other demand deposits to be cash and cash equivalents. As of December 31, 1998, the Company had no cash equivalents. Property and Equipment Property and equipment are stated at cost and are being depreciated using the straight-line method over the estimated useful lives of five to seven years. Revenue Recognition Revenue from contract sales is recognized when all material services relating to the sale have been substantially performed. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Advertising Advertising costs are expensed when incurred. The advertising cost incurred for the period ended December 31, 1998 was $7,959. Unaudited Interim Information The information presented as of June 30, 1999 and September 30, 1999, and for the six-month period ended June 30, 1999 and the three-month period ended September 30, 1999, has not been audited. In the opinion of management, the unaudited interim financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company's financial position as of June 30, 1999 and September 30, 1999, and the results of its operations and its cash flows for the six months ended June 30, 1999 and the three months ended September 30, 1999, and the stockholders' deficit for the six months ended June 30, 1999 and for the three months ended September 30, 1999. Page 17 WRIwebs.com, INC. NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 3 - CORPORATION FORMATION On August 8, 1998, the Company was incorporated, and elected to be treated as an S Corporation. Prior to its formation as a corporation, the Company existed as a limited liability company that began on January 20, 1998. This is a change in legal organization, but not in the entity. This type of transfer is not covered by APB Opinion No. 16 "Business Combinations." The assets and liabilities so transferred were accounted for at historical cost in a manner similar to that in pooling of interests accounting. NOTE 4 - ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are recorded net of an allowance for doubtful accounts of $6,398 at December 31, 1998. NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of cash, accounts receivable, accounts payable and loans to stockholders approximates fair value because of their short maturities. NOTE 6 - RELATED PARTY TRANSACTIONS At December 31, 1998, the Company had an outstanding receivable from the stockholder in the amount of $8,406. The transactions involving the stockholder/officer are summarized below: Balance at January 1, 1998 $ - Advances to stockholders 8,406 ---------- Balance at December 31, 1998 $ 8,406 ========== NOTE 7 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31, 1998: Computer and other equipment $ 31,762 Software 406 Furniture and fixtures 1,830 -------------- Total property and equipment 33,998 Less: accumulated depreciation (3,836) -------------- Property and equipment, net $ 30,162 ============== Depreciation expense for the period ended December 31, 1998, was $3,836. Page 18 WRIwebs.com, INC. NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 8 - OPERATING LEASES The Company leases its facilities in Florida under a long-term operating lease agreement. Future minimum lease payments are as follows: Year ending Operating December 31, Lease ---------------------- -------------------- 1999 $ 26,802 2000 35,736 2001 8,934 ----------------- Total minimum lease payments $ 71,472 ================= Rental expense for the period ended December 31, 1998 was $29,571. NOTE 9 - COMMITMENTS AND CONTINGENCIES Litigation The Company believes a claim may arise for unpaid telephone charges in the amount of $19,115. In the opinion of management, this claim will be settled for an estimated $12,000. A payable has been recorded at December 31, 1998 to reflect this claim. Additionally, the Company believes a claim may arise from an agreement with a website sales selling agent. The selling agent paid $10,000 towards the building of a working relationship between the two companies, but the agent was unable to sell the websites. Management has recorded a payable for half of the potential claim, and a payable of $5,000 has been recorded at December 31, 1998. NOTE 10 - CONCENTRATION OF CREDIT RISK Financial instruments, which potentially expose the Company to concentrations of credit risk, as defined by Statement of Financial Accounting Standards No. 105, consist primarily of trade receivables. The Company officers have attempted to minimize this risk by monitoring the companies to whom they provided credit. NOTE 11 - INCOME TAXES The Company has elected to be treated as an S Corporation for Federal and State income tax purposes. Under this election, all taxable income, losses and credits pass through to the individual stockholders and are reflected on their individual income tax returns. Consequently, no provision for income taxes has been provided by the corporation. The financial statements reflect earnings on the percentage of completion method of accounting whereas the completed contract method is used for income tax purposes. NOTE 12 - SUBSEQUENT EVENTS On November 12, 1999, the Company merged with American Internet Technical Center, Inc. (AITC), a wholly-owned subsidiary of AmeriNet Group.com, Inc. (AmeriNet). As consideration, AmeriNet issued 531,000 shares of common stock to the stockholders of the Company. Under the terms of the acquisition agreement, Page 19 WRIwebs.com, INC. NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 12 - SUBSEQUENT EVENTS, continued AmeriNet will invest $300,000 in the Company within 120 days after the completion of the merger and filing of the required reports with the United States Securities and Exchange Commission. Under the terms of the merger, the current majority stockholder of WRI will retain the right, for a period of two years, starting on the 182nd day following the completion of the merger, to exchange all of his AmeriNet securities issued pursuant to the agreement for between seventy and eighty percent of the surviving Company's common stock. The acquisition will be recorded using the purchase method of accounting. The results of operations since the date of acquisition, November 12, 1999, will be included in the consolidated statements of operations of AmeriNet Group.com, Inc. Goodwill will be recorded and amortized over its useful life using the straight-line method. On the date of acquisition, the Company's status changed to a regular corporation from an S corporation. Page 20 -----END PRIVACY-ENHANCED MESSAGE-----