-----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, HdIBJveE910Vim7xfjhhXGNlCPvF+uT966NLb6QK5AwvpAxzg4zBTV5QzpU8bpN2 nzA/slrmiZQyiH9IhBbm4A== 0000050471-01-000003.txt : 20010308 0000050471-01-000003.hdr.sgml : 20010308 ACCESSION NUMBER: 0000050471-01-000003 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERINET GROUP COM INC CENTRAL INDEX KEY: 0000050471 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 112050317 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-03718 FILM NUMBER: 1561731 BUSINESS ADDRESS: STREET 1: CRYSTAL CORPORATE CNTR STREET 2: 2500 N MILITARY TRAIL - STE 225C 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 10QSB/A 1 0001.txt FORM 10-QSB/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0416 Expires: May 31, 2000 Estimated average burden hours per response: 9708.0 Form 10-QSB Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2000 Commission file number 000-03718 AmeriNet Group.com, Inc. ------------------------ (Name of small business issuer in its charter) Delaware (State of incorporation or organization) 65-0957587 (I.R.S. Employer Identification No.) 2500 North Military Trail Suite 225, Boca Raton, Florida (Address of principal executive offices) 33431 (Zip Code) Issuer's telephone number: (561) 998-3435 State the number of shares outstanding of each of the small business issuer's classes of common equity, as of the latest practicable date. As of December 31,2000, there were 12,465,192 shares of our company's common stock outstanding and 261,710 shares of our company's Class A preferred stock outstanding. Transitional Small Business Disclosure Format (Check one): Yes No x Page 1 Available Information. The public may read and copy any materials filed by our company with the Commission at the Commission's Public Reference Room at 450 Fifth Street, Northwest, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding our company and other issuers that file reports electronically with the Commission, at http://www.sec.gov. Our company's maintains a web site at http://www.amerinetgroup.com. Caveat Pertaining to Forward Looking Statements The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain of the statements contained herein, which are not historical facts, are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect our company is detailed from time to time in our company's reports filed with the Commission. This Report contains "forward looking statements" relating to our company's current expectations and beliefs. These include statements concerning operations, performance, financial condition, anticipated acquisitions and anticipated growth. For this purpose, any statements contained in this Report or the Form 10-KSB, Forms 10QSB, Forms 8-K, and the Information Statement referred to herein that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as "may", "will", "would", "expect", "believe", "anticipate", "intend", "could", "estimate", or "continue", or the negative or other variation thereof or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties which are beyond our company's control. Should one or more of these risks or uncertainties materialize or should our company's underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward looking statements. The information in this Report is qualified in its entirety by reference to the entire Report; consequently, this Report must be read in its entirety. Information may not be considered or quoted out of context or without referencing other information contained in this Report necessary to make the information considered, not misleading. Table of Contents & Cross Reference Sheet Part Item Page Number Number Number Caption I 1 Financial Statements 4 Condensed Consolidated Financial Statements 4 Condensed Consolidated Balance Sheet (Unaudited) as of December 31, 2000 5 Condensed Consolidated Statements of Operations (Unaudited), for the Three Months Ended December 31, 2000 and 1999 6 Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended December 31, 2000 and 1999 7 Notes to Condensed Consolidated Financial Statements 2 Management's Discussion and Analysis or Plan of Operation 13 Recent Developments Pertaining to Plan of Operation Page 2 12 Results of Operations 13 Liquidity and Capital Resources II 1 15 Legal Proceedings 2 15 Changes in Securities 3 * Defaults Upon Senior Securities 4 * Submission of Matters to Vote of Securities Holders 5 * Other Information 6 18 Exhibits and Reports on Form 8-K * Not Applicable Page 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: AMERINET GROUP.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2000 (UNAUDITED) ASSETS Current Assets: Cash $ 1,439 Accounts receivable, net 39,207 Costs and estimated earnings in excess of billings on uncompleted contracts 1,480 Prepaid expenses 2,718 -------- Total current assets 44,844 -------- Property and equipment, net 306,899 -------- Other assets: Investment in subsidiary - WRIwebs.com 676,560 -------- Total assets $1,028,303 ----------- LIABILITIES AND STOCKHOLDERS DEFICIT Current Liabilities: Checks outstanding in excess of bank balance $ 12,342 Accounts payable 269,648 Accrued expenses 82,489 Billings in excess of cost and estimated earnings on uncompleted contracts 16,228 Loans payable - related parties 52,082 ` Current maturities of loans payable 179,323 Current maturities of capital leases 28,122 ---------- Total current liabilities 640,234 Long term liabilities: Loans payable, net of current portion 212,299 Capital leases, net of current portion 8,501 --------- Total long term liabilities 220,800 Equity subject to potential redemptions 640,987 --------- Stockholders' deficit: Preferred stock, $.01 par value, 5,000,000 shares authorized, 246,710 issued and outstanding 2,467 Common stock, $.01 par value, 30,000,000 shares authorized, 12,465,192 issued and outstanding 124,652 Subscriptions payable 116,814 Outstanding stock options 17,270 Additional paid in capital 13,487,840 Accumulated deficit ( 14,222,761) ------------------- Total stockholders' deficit (473,718) --------------------- Total liabilities and stockholders' deficit $ 1,028,303 ------------------- See accompanying notes to the financial statements Page 4 AMERINET GROUP.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999 THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999 (UNAUDITED) 3 Months 3 Months 6 Months 6 Months Ended Ended Ended Ended 12/31/00 12/31/99 12/31/00 12/31/99 Revenues earned 128,633 36,709 345,269 204,878 Cost of revenues earned 53,574 88,969 246,214 158,078 --------------------------------------------------------- Gross profit (loss) 75,059 (52,260) 99,055 46,800 Selling, general & admin expenses 1,054,409 907,000 1,898,690 799,816 Depreciation & amortization 46,992 151,129 97,055 212,453 Goodwill charges and transactions 630,791 - 630,791 522,201 --------------------------------------------------------- Total operating expenses 1,732,192 1,058,129 2,626,536 1,534,470 --------------------------------------------------------- Loss from operations (1,657,133 (1,110,389)(2,527,481 (1,487,670) --------------------------------------------------------- Other income (expense) Interest expense 13,898 22,500 36,403 22,500 Debt forgiveness 222,983 222,983 Equity in losses (gains) of subsidiary (31,574) 6,751 (14,742) 6,751 --------------------------------------------------------- Total other (income) expense 205,307 29,251 244,644 29,251 Net Loss (1,862,440)(1,139,640)(2,772,125)(1,516,921) --------------------------------------------------------- Discount attributable to beneficial conversion privilege of preferred stock (500,000) (814,246) --------------------------------------------------------- Net loss applicable to common stock (2,362,440)(1,139,640)(3,586,371)(1,516,921) --------------------------------------------------------- Basic loss per share (0.19) (0.14) (0.29) (0.19) --------------------------------------------------------- Fully diluted loss per share (0.19) (0.14) (0.29) (0.19) --------------------------------------------------------- Weighted average shares outstanding 12,465,192 8,237,444 12,465,192 8,193,324 --------------------------------------------------------- Fully diluted average shares outstanding 12,465,192 8,237,444 12,465,192 8,193,324 --------------------------------------------------------- See accompanying notes to the financial statements Page 5 AMERINET GROUP.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999 (UNAUDITED) Six months Six months ended ended 12/31/00 12/31/99 Net cash used by operations (639,667) (624,300) ------------------------------------ Cash flows from investing activities: Purchase of property and equipment (7,950) (20,506) Cash overdraft acquired in acquisition (9,262) ------------------------------------ Net cash used by investing activities: (7,950) (29,768) ------------------------------------ Cash flows from financing activities: Preferred stock issued for cash, net of costs 303,424 Common stock issued for cash, net of costs 326,150 Payments on capital leases (36,008) Proceeds from loans payable 381,229 275,000 Payments on loans payable (38,015) Capital contributions 25,000 ------------------------------------ Net cash provided by financing activities 610,630 626,150 ------------------------------------ Net decrease in cash (36,987) (27,918) Cash at beginning of period 38,426 79,021 ------------------------------------ Cash at end of period 1,439 51,103 ------------------------------------ Supplemental disclosure of cash flow information: Cash paid during the year for: Interest 22,438 2,938 ------------------------------------ Non-cash transactions affecting investing and financing activities: Common stock issued for equipment 7,500 Common stock issued for interest 15,000 Common stock issued for acquisitions 2,348,273 Contribution of professional services 225,055 452,725 Conversion of debt to equity 1,744,372 ------------------------------------ see accompanying notes to the financial statements Page 6 NOTES TO FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and Article 10 of Regulation SB. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair presentation of the results for the interim periods presented have been included. These results have been determined on the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of our company's Annual Financial Statements for the year ended June 30, 2000. Operating results for the three months and six months ended December 31, 2000 are not necessarily indicative of the results that may be expected for the year ending June 30, 2001. It is recommended that the accompanying condensed financial statements be read in conjunction with the consolidated financial statements and notes thereto included in our company's Annual Report on Form 10-K. NOTE 2 - AMORTIZATION OF GOODWILL Goodwill represents the amount by which the purchase price of businesses acquired exceeds the fair market value of the net assets acquired under the purchase method of accounting. The excess of the fair value of the net assets of Lorilei acquired was $717,450 and was recorded as goodwill. Goodwill is being amortized on a straight-line method over five years. The accumulated amortization of the excess fair value of net assets of the Company acquired over cost is $86,659 at December 31, 2000. The excess of the fair value of the net assets of WRI acquired was $943,365 and was recorded as goodwill. Goodwill is being amortized on a straight-line method over three years. The accumulated amortization of the excess fair value of net assets of the Company acquired over cost is $340,659 at December 31, 2000. Page 7 NOTE 3 - GOODWILL IMPAIRMENT AND FORGIVENESS OF DEBT Pursuant to SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," our company evaluated the recover ability of the long-lived assets, primarily the loan receivable from WRI and the goodwill recorded upon the acquisition of Lorilei. Because a Superseder and Exchange Agreement between our company, Yankees, WRI and Michael Caputa was imminent at December 31, 2000 the carrying value of our company's loan receivable from WRI was re-evaluated and consequently we recorded a non-cash charge of $222,983, adjusting the carrying value of the loan to its estimated fair value of $-0-. Our company recorded a non-cash charge of $630,791, adjusting the carrying value of the unamortized portion of the goodwill recorded upon the acquisition of Lorilei to its estimated fair value of $-0-. Accumulated amortization on this goodwill was $86,659 at December 31, 2000. NOTE 4 - ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are recorded net of an allowance for doubtful accounts of $5,000 at December 31, 2000. NOTE 5 - STOCKHOLDERS' EQUITY On June 29, 2000 our company's Board of Directors adopted a resolution creating and designating the initial series of our company's Preferred Stock. The shares are designated Class A Preferred Stock and the number of shares authorized to be issued is 500,000 shares. Each share of Class A Preferred Stock is convertible into a minimum of 20 shares of our company's common stock. During the three months ended December 31, 2000, our company issued its Class A Preferred Stock for cash, for conversion of debt and in exchange for services as follows: (a) Our company converted $434,493 of Yankee's debt to 173,797 shares of Class A Preferred Stock at $2.50 per share in accordance with Yankee's preferred subscription rights. (b) 5,920 shares of Class A Preferred Stock which was reported in the our company's Quarterly report for the three month period ended September 30, 2000 on Form 10-QSB as issued to certain officers and consultants as compensation for services were in fact not issued and a subsequent agreement was made between our company and those individuals whereby their compensation would be deferred. (c) Our company issued 164,800 common stock options to Directors of our company for services provided during the calendar year ended December 31, 2000 at an exercise price of $1.4375 per share of common stock. (d) The shares of our company's common stock underlying the Yankees stock purchase option increased by 479,649 shares during the three month period ended December 31, 2000. Our company recorded a related compensation expense of $129,505. (e) Yankees contributed professional services of $112,525 to our company during the three month period ended December 31, 2000. NOTE 6 - COST AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS The following schedule presents the status of costs and estimated earnings on uncompleted contracts at December 31, 2000: Page 8 Costs incurred on uncompleted contracts $ 680 Estimated earnings 8,653 ------------------ Total 9,333 Less: billing to date (24,083) ------------------ Total $ (14,748) ================== Included in accompanying balance sheet under the following captions: Costs and estimated earnings in excess of billings on uncompleted contracts $ 1,480 Billings in excess of cost and estimated earnings on uncompleted contracts (16,228) ------------------- Total $ (14,748) =================== NOTE 7 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31, 2000: Land $ 25,000 Building 197,483 Vehicles 24,091 Furniture and fixtures 13,633 Machinery and equipment 79,870 Less: accumulated depreciation (33,178) ------------------- Property and equipment, net $ 306,899 =================== Depreciation expense for the three months ended December 31, 2000 was $11,119. NOTE 8 - RELATED PARTY TRANSACTIONS At December 31, 2000 our company had outstanding payables to stockholders in the amount of $52,082. The transactions are summarized as follows: Balance at beginning of period $ 320,800 Advances during the period 170,171 Payments during the period (4406) Conversions to equity (434,493) ------------------ Balance at end of period $ 52,082 ================== During the three months ended December 31, 2000, Yankees contributed professional services valued at $112,525 to our company. Our company recognized the $112,525 as consulting fees expense and the entire amount was contributed to our company as additional paid in capital. Our company shares office space in Boca Raton, Florida with a related party. Rent expense for the three months ended December 31, 2000 was $2,449. Page 9 NOTE 9 - INCOME TAXES The following table reconciles the income tax benefit at the US statutory rate to that in the financial statements at December 31, 2000: Taxes computed at 34% $ (942,523) WRI gain (100%) 25,061 Goodwill write down 214,469 Goodwill amortization 12,197 Compensation on stock option grants 527,336 Net operating losses and other losses (2,400,125) ----------------- Income tax benefit $ (2,563,585) =================== Taxes currently payable $ - Deferred income tax benefit 2,563,585 Change in beginning valuation allowance (2,563,585) ----------------- Provision (benefit) for income $ - ==================== At December 31, 2000, our company had an unused net operating loss carryforward of $5,958,968 available for use on its future corporate federal income tax returns. This amount includes the net operating losses of its subsidiary, Lorilei, since the date of acquisition. Our company's evaluation of the tax benefits of its net operating loss carryforward is presented in the following table. The tax amounts have been calculated using the 34% federal income tax rate. The components of deferred tax assets at December 31, 2000 were as follows: Deferred tax asset: Net operating loss carry forward $ 2,026,049 Stock options granted 527,336 Accrued interest 10,200 ------------------ Net deferred tax asset 2,563,585 Valuation allowance: Beginning of period (1,575,331) Increase during the period (988,254) ------------------ Ending balance (2,563,585) ----------------- Net deferred taxes $ - ===================== Year Loss Originated Year Expiring Amount - ----------------------------------- ------------------ ------------------ December 31, 1997 2012 $ 74,043 December 31, 1998 2013 399,415 June 30, 1999 2014 97,646 June 30, 2000 2015 1,706,054 September 30, 2000 2016 909,685 December 31, 2000 2017 2,772,125 ---------------- Total available net operating loss $ 5,958,968 ================ Page 10 NOTE 10 - STOCK OPTIONS On January 1, 2000 and on March 8, 2000 our company adopted Non-Qualified and Incentive Stock Option Plans. The objectives of these plans include attracting and retaining the best personnel and promoting the success of the Company by providing employees and directors the opportunity to acquire common stock. The Stock Option Plans authorizes our company to grant up to 3,000,000 common shares of which 529,800 have been granted at December 31, 2000. Our company has elected to account for the stock options under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Accordingly, no compensation expense has been recognized on the employee stock options. Our company accounts for stock options granted to consultants under Financial Accounting Standards Board Statement No. 123, "Accounting For Stock-Based Compensation". Our company recognized $129,505 in compensation expense for the three months ended December 31, 2000 in connection with an increase of 479,649 shares of common stock underlying the Yankee option to purchase up to 12 1/2% of the outstanding common shares of our company. With this increase in the underlying shares, Yankees now has the option to purchase 2,860,822 shares of our company's common stock for an aggregate price of $90,000. Had compensation expense for the Incentive Stock Option Plan been determined based on the fair market value of the options at the grant date consistent with the methodology prescribed under Statement of Financial Standards No. 123 "Accounting for Stock Based Compensation", our company's net loss for the three months ended December 31, 2000 would have increased by $1,648 to $1,864,088. The fair value of each option is estimated on the date of grant using the fair market option-pricing model with the assumption: Risk-free interest rate 6.5 % Expected life (years) various Expected volatility 1.01 Expected dividends None A summary of the option transactions during the three months ended December 31, 2000 is shown below: Number of Weighted- Average Shares Exercise Price ------------- -------------- Outstanding at September 30, 2000 3,185,738 $ 0.43 Granted 644,449 $ 0.38 Exercised - Forfeited Outstanding at Decmber 31, 2000 3,830,187 ---------------- Exercisable at December 31, 2000 2,820,778 ---------------- Available for issuance at Decmber 31, 2000 1,870,284 ================= Page 11 NOTE 11 - SUBSCRIPTIONS PAYABLE Certain officers of our company and/or one of its subsidiaries as well as certain independent contractors provide services to our company valued individually at $5,000 to $8,333 per month. The compensation earned by these individuals is due and payable at the end of one year's service with our company in the form of our company's common stock, provided they were employed for such period. At December 31, 2000 our company had incurred a total expense for executive compensation, consulting services and legal services provided by these individuals in the amount of $116,814. NOTE 12 - SUBSEQUENT EVENTS WRI Superseder and Exchange Agreement On January 26, 2001, the Superseder and Exchange Agreement entered into by and among our company; Yankees; WRI and Michael A. Caputa was executed by the parties. As a result of finalizing this agreement our company no longer has any equity interest in WRI. 500,380 shares of our company's common stock will be returned to our company's treasury by Michael Caputa. The executed agreement was filed with the Commission on Form 8-K on February 8, 2001. PriMed Consulting Agreement Our company entered into an agreement on January 16, 2001, which was fully executed on January 31, 2001, with PriMed Technologies, Inc., and PriMed Technologies LC of Deerfield Beach, Florida (website at www.primedtech.com; "PriMed"), pursuant to which our company's stockholders will, subject to prior registration under Section 5 of the Securities Act, receive 10% of the common stock of an entity to be formed consolidating the operations of PriMed and its affiliates ("New PriMed"). The stock dividend will be issued to our company's stockholders of record at the close of business on the day the required registration statement is declared effective by the Commission. As currently contemplated, our company's stockholders will receive one share of New PriMed common stock for every 10 shares of our company's common stock held. A copy of the agreement was filed on Form 8-K on February 8, 2001. Negotiations are continuing concerning our company's acquisition of a majority interest in New PriMed, in addition to the shares to be issued directly to our company's stockholders. PriMed, which is in the process of consolidating and expanding its current operations, is involved in the provision of management and support services to the health care industry along with the latest on-line technologies to its growing client base of physicians, hospitals and ancillary service organizations in South Florida. GreenGrouper Licensing Agreement On February 2, 2001 AmeriCom entered into a licensing agreement with Duffy DeVaul, the founder and owner of the popular, five year old, recreational fishing website, www.greengrouper.com. AmeriCom plans to develop the website, which was established in 1996, has over 13,000 members worldwide and registers monthly hits in excess of 500,000, into an e-commerce website aimed at capturing a share of the 120 billion dollar American recreational fishing industry. The website and a 30-minute weekly television show, with an expected audience of between 13 and 50 million viewers, will be the cornerstones of AmeriCom's GreenGrouper project. Plans are also being made for a GreenGrouper magazine. Page 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION MANAGEMENT'S DISCUSSION AND ANALYSIS Recent Developments Pertaining to Implementation of Plan of Operation Our company's ability to continue as a going concern is dependent upon its ability to attain a satisfactory level of profitability and to continue to have access to suitable financing. Management believes that divesting our company of it's unprofitable subsidiaries, Trilogy International, Inc. and Vista Vacations, Inc. at June 30, 2000, was a significant step towards accomplishing this goal. AmeriCom In September, 2000, our company organized a new subsidiary, AmeriNet Communications, Inc., A Florida coporation ("AmeriCom") and assigned it most of Lorilei's assets, personnel and operations. AmeriCom's target markets were redirected and expanded. All business formerly conducted by our company's Lorilei subsidiary have been conducted by AmeriCom since October 1, 2000. Based on an operating plan developed by our company's chief financial officer and chief operating officer, it was expected that AmeriCom would produce net operating income for the three month period ended December 31, 2000 and that by the end of our fiscal year June 30, 2001 AmeriCom would significantly contribute to the earnings of our company. Operations of AmeriCom did not produce the expected results and the subsidiary experienced significant operating losses for the three month period ended December 31, 2000. Because of the disappointing operating results of AmeriCom and without assurances of an immediate turnaround, Yankees informed our company in early December 2000, that it was unwilling to lend any additional funds to our company for use in funding the operating deficit at AmeriCom. In as much as our company has no current financing available from sources other than Yankees it has been unable to provide any funds to AmeriCom since early December. AmeriCom has continued to operate by deferring payables, but without additional financing it is uncertain as to whether the company can continue in business. AmeriCom has made major management changes, and Edward C. Dmytryk, also the president of our company, was elected president of AmeriCom during February of 2001. In addition, the remaining personnel have significantly reduced operating expenses (50%) and all remaining personnel are now paid solely through commissions. AmeriCom is re-evaluating its market and is in the process of developing projects such as The GreenGrouper website and related businesses. WRI Our company and the principals of WRI have entered into a superseder and exchange agreement. The agreement was filed with the Commission on Form 8-K on February 8, 2001. In summary the agreement calls for Michael Caputa , WRI's president, to return 500,380 shares of our company's common stock originally issued to him; for our company to forgive the debt owed to it by WRI and for WRI to distribute to the stockholders of our company 20% of its common stock after its registartion with the Commission . Upon completeion of the transactions contemplated by the agreements our company will no longer have any equity interest in WRI. The final agreement was executed by the parties on January 26, 2001. RESULTS OF OPERATIONS The consolidated income statement for our company for the three months and six months ended December 31, 2000 includes operations of our company at the holding company level and its wholly owned subsidiaries Lorilei and AmeriCom. In addition, 20% of the operating gains or losses of our company's affiliate WRI are included in our company's consolidated financials. For the three months and six months ended December 31, 1999 the consolidated income statement included our company for the entire period; our company's formerly wholly owned subsidiary AITC for the two months ended November 30, 1999; our formerly wholly owned subsidiary Trilogy for the one month ended December 31, 1999 and 20% of the operating losses of WRI for the one month ended December 31, 1999. For the three months ended December 31, 2000 our company reported revenues of $128,633 all of which were generated by our subsidiary company AmeriCom. Revenues for the three months ended December 31, 1999 were $36,709 generated by our former subsidiaries AITC and Trilogy. Page 13 Cost of revenues for the three months ended December 31, 2000, were $53,574 yielding a gross profit of $75,059 while cost of revenues for the three months ended December 31, 1999 were $88,969 for a gross loss of $52,260 for that period. Our company as a whole reported a net loss applicable to common stock for the three months ended December 31, 2000 of $2,362,440. These losses were comprised of equity in the gain of WRI (20%) of $14,742; net operating loss of our subsidiaries Lorilei and AmeriCom of $249,508; a writedown of the Lorieli goodwill of $630,791 and a net loss for the holding company of $1,496,883. For the three months ended December 31, 1999, our company's losses were $1,139,640 based on the following factors: elling, general and administrative expenses for the three months ended December 31, 200 were $1,054,409 compared to $907,000 for the three months ended December 31, 1999. $267,748 of the expense for the current period was incurred by our subsidiary AmeriCom in the normal course of business. The remaining $786,661 was incurred at the holding company level a large portion of which consisted of non-cash expenses. Yankees provided services to our company during the period valued at $112,525 which were treated as an expense and then as a donation of an equivalent sum by Yankees to our company's paid in capital. Because Yankees exercised its preferential subscription rights in converting $434,493 of debt to equity at a 50% discount to market during the period, the discount of $434,493 was treated as an expense with a corresponding addition to our company's paid in capital. Certain employees and consultants to our company agreed to defer a total of $51,762 in compensation earned by them during the period. The expense was recognized and a corresponding in subscriptions payable was added to stockholders' equity. Our company recognized a compensation expense of $129,505 in connection with the increase of 479,649 shares of common stock underlying the Yankee option to purchase up to 12 1/2% of the outstanding shares of our company's common stock. These non-cash expenses totaled $728,285. The remaining $58,376 of selling, general and administrative expense for the period was incurred at the holding company level in the normal course of conducting its business. Our company recorded a non-cash charge of $222,983 adjusting the carrying value of its loan receivable from WRI to its estimated fair value of $-0- at December 31, 2000. Depreciation and amortization expense for the three months ended December 31, 2000 was $46,992 as compared to an expense of $151,129 for the three months ended December 31, 1999. For the three months ended December 31, 1999, $110,940 of this expense was attributable to the amortization of our company's former wholly owned subsidiary Trilogy. Interest expense was $13,898 for the three months ended December 31, 2000 compared to $22,500 for the same period in 1999. In addition to the losses from operations incurred for the period, our company's loss attributable to common stock was increased by $500,000 as a result of a purchase made through a private placement of our company's Class A Preferred Stock. Because each share of the preferred stock is convertible into a minimum of 20 shares of our company's common stock, a discount attributable to the beneficial conversion of preferred stock must be taken in an amount equal to the difference between the conversion price of $.25 per share and the then market price of our company's common stock at the time the preferred stock was issued. LIQUIDITY AND CAPITAL RESOURCES At December 31, 2000 our company had cash on hand of $1,439 compared to $51,103 at December 31, 1999. At December 31, 2000 we had a working capital deficit of $507,026 compared to a working capital deficit at December 31, 1999 of $485,218. The deficit in working capital at December 31, 2000 was related principally to accounts payable and accrued expenses at the subsidiary level in excess of accounts receivable; the current portion of capital leases and loans payable at the subsidiary level. A similar situation existed at December 31, 1999, however, the subsidiary contributing to the deficit at that time was our former subsidiary Trilogy whereas at December 31, 2000 the deficit is principally attributable to our subsidiaries Lorieli and AmeriCom. Page 14 Our company and its subsidiaries have accumulated a net deficit of $14,222,761 since their inception. This gives rise to questions regarding the ability of our company to continue as a going concern. The deficit for the three months ended December 31, 2000 is $2,362,440. Management has implemented significant cost reductions though its discontinuance of unprofitable operations, but its one remaining operating subsidiary continues to operate at a deficit. With the assistance of Yankees, we are actively exploring acquisitions of operating companies and related infusions of capital which would materially improve our cash flow, liquidity and profitability, however we can not assure that it will be successfully implemented. Our company relies on Yankees for capital required to fund operating cash deficits and has a financing agreement with Yankees pursuant to which Yankees has granted our company a conditional $1,000,000 revolving line of credit. As of December 31, 2000 Yankees had loaned our company an aggregate of $640,200. The loans are secured by all of our company's assets, including the capital stock in its subsidiaries. At our request, Yankees has converted most of its loans to date into shares of our company's common stock and Class A Preferred Stock. As of December 31, 2000, Yankees had converted $595,592 of its aggregate loans into equity. Our company's continuing liquidity and access to capital is totally reliant on Yankees and investors introduced to our company by Yankees. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Our company has not been involved in any material legal proceedings, other than the mediation in connection with our company's election to rescind the WRI Merger and Reorganization Agreement as discussed previously in this report under "Managements Discussion and Analysis". The inactive subsidiary Lorilei Communications, Inc., has been sued for $7813.30 for an unpaid bill. ITEM 2. CHANGES IN SECURITIES RECENT SALES OF UNREGISTERED SECURITIES Since June 30, 2000, our company sold the securities listed in the table below without registration under the Securities Act in reliance on the exemption from registration requirements cited. Consequently, as of January 31, 2001, 12,465,192 shares of our company's common stock were outstanding and 261,710 shares of our company's class a preferred stock were outstanding. All footnotes follow the last table. Page 15 Class A Preferred Stock Amount of Total Total Registration Securities Offering Discounts Exemption Date Sold Subscriber Consideration or Commissions Relied on - ---- ----- ---------- ------------- -------------- --------- 2000: July 3 6,000 Bolina Trading Corp. $30,000 None (2) July 7 3,600 Bolina Trading Corp. $18,000 None (2) July 27 8,000 Bolina Trading Corp. $40,000 None (2) August 15 46,000 Yankees $115,000(4) (3) (2) August 15 3,393 K. Walker LTD $16,965 (5) None (2) August 30 5,920 Palmair, Inc. $29,600 None (2) October 5 85,500 Yankees $250,000(6) (3) (2) October 5 6,400 Bolina Trading Corp (6) (3) (2) October 5 500 Vanessa H. Lindsey (6) (3) (2) October 5 6,600 PalmAir, Inc. (6) (3) (2) October 5 1,000 Debra Ellenson (6) (3) (2) November 13 25,000 Yankees $64,492.50(7) (3) (2) November 13 2,000 Palm Air (7) (3) (2) November 13 797 Vanessa Lindsey (7) (3) (2) November 13 16,000 Yankees $40,000(7) (3) (2) December 5 27,000 Yankees $75,000(8) (3) (2) December 5 1,000 Vanessa Lindsey (8) (3) (2) December 5 2,000 PalmAir, Inc. (8) (3) (2) 2001 January 31 5,000 Debra Ellenson (9) (3) (2) January 31 5,000 Johnathan Eichner (10) (3) (2) January 31 5,000 Scott Heicken (10) (3) (2)
Notes to All Tables (1) Section 4(2) of the Securities Act. In each case, the subscriber was required to represent that the shares were purchased for investment purposes, the certificates were legended to prevent transfer except in compliance with applicable laws and the transfer agent was instructed not to permit transfers unless directed to do so by our company, after approval by its legal counsel. In addition, each subscriber was directed to review our company's filings with the Commission under the Exchange Act and was provided with access to our company's officers, directors, books and records, in order to obtain required information. (2) Section 4(6) of the Securities Act. In each case, the subscriber was required to represent that the shares were purchased for investment purposes, the certificates were legended to prevent transfer except in compliance with applicable laws and the transfer agent was instructed not to permit transfers unless directed to do so by our company, after approval by its legal counsel. Each subscriber was directed to review our company's filings with the Commission under the Exchange Act and was provided with access to our company's officers, directors, books and records, in order to obtain required information; and, a Form D reporting the transaction was filed with the Commission. Page 16 (3) No commissions or discounts were paid to anyone in conjunction with the sale of the foregoing securities, except that Yankees exercised preferential subscription rights granted by our company in Yankees' consulting agreement or that it may be entitled to compensation based on the terms of its consulting agreement with our company. (4) At the issuers request, Yankees converted $115,000 of debt to equity (a total of 46,000 shares of preferred stock). (5) At the issuers request, K. Walker converted $16,965 of debt to equity ( a total of 3,393 shares of preferred stock). (6) At the issuers request, Yankees converted $250,000 of debt to equity ( a total of 100,000 shares of preferred stock). At Yankees request a portion of the shares were given to associates. (7) At the issuers request, Yankees converted $104,492.50 of debt to equity ( a total of 43,797 shares of preferred stock). At Yankees request a portion of the shares were given to associates. (8) At the issuers request, Yankees converted $75,000 of debt to equity (a total of 30,000 shares of preferred stock). At Yankees request a portion of the shares were given to associates. (9) Pursuant to the terms of the amended consulting agreement between our company and Yankees, it is entitled to receive $10,000 per month or $10,000 worth of stock per month for compensation. (10) At the issuers request, Yankees converted $20,000 of debt to equity (a total of 10,000 shares of preferred stock). At Yankees request the shares were given to associates. AMOUNT OF COMMON EQUITY SUBJECT TO OUTSTANDING OPTIONS OR WARRANTS TO PURCHASE, OR SECURITIES CONVERTIBLE INTO, COMMON EQUITY OF OUR COMPANY As of January 31, 2001, our company had 10,030,875 shares of its common stock reserved for issuance in conjunction with current obligations to issue additional shares, in the event that currently outstanding options and warrants are exercised and conversion of preferred to common. NEW AUTHORIZED SHARES Our comapny's board of directors and stockholders authorized a change in the number of shares of Class A Preferred Stock from 500,000 to 1,000,000, however it did not increase the total number of authorized preferred stock. A new certificate of designation has been mailed for filing with the State of Delaware and is included as an exhibit to this report, see "Item 6, Exhibits and Reports on Form 8-K." Our company's board of directors and stockholders also authorized an increase in the number of shares of common stock from 20,000,000 shares, $0.01 par value, to 30,000,000 shares, $0.01 par value. An amendment to the articles of incorporation reflecting this change is being mailed for filing with the State of Delaware and is included as an exhibit to is report see "Item 6, Exhibits and Reports on Form 8-K." Page 17 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Required by Item 601 of Regulation S-B The exhibits listed below and designated as filed herewith (rather than incorporated by reference) follow the signature page in sequential order. Designation Page of Exhibit Number as Set Forth or Source of in Item 601 of Incorporation Regulation S-B By Reference Description (3)(i) Certificate of Articles of Incorporation: 3.6 20 Certificate of Designation of Class A Preferred 3.7 28 Certificate of Amendment to Articles of Incorporation (99) Additional Exhibits: .53 29 Letter to our company's transfer agent on our company's procedures for stock matters. (b) Reports on Form 8-K Filed During Quarter Ended December 31, 2000 During the calendar quarter ended December 31, 2000, our company filed the following reports on Form 8-K with the Commission: Financial Items Reported Date Filed Statements Included 5&7 11/02/00 None As a material subsequent event, our company filed the following reports on Form 8-K with the Commission: Financial Items Reported Date Filed Statements Included 5 & 7 01/05/01 None 5 & 7 02/08/01 None Signatures In accordance with the requirements of the Exchange Act, our company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AmeriNet Group.com, Inc. February 23, 2001 By: /s/Edward C. Dmytryk /s/ --------------------- Edward C. Dmytryk President, Chief Executive Officer & Director Page 18 ADDITIONAL INFORMATION AmeriNet Group.com, Inc. Crystal Corporate Center 2500 North Military Trail, Suite 225-C; Boca Raton, Florida 33431 Telephone (561) 998-3435; Fax (561) 998-4635 web-site, amerinetgroup.com; e-mail ed@amerinetgroup.com Corporate Headquarters: Edward C. Dmytryk, President & Chief Executive Officer; Lawrence R. Van Etten, Vice President & Chief Operating Officer; David K. Cantley, Treasurer; Vanessa H. Lindsey, Secretary; Douglas L. Wilson, General Counsel Officers Lawrence R. Van Etten; David K. Cantley; Vanessa H. Lindsey; Charles J. Champion, Jr.; G. Richard Chamberlin; Anthony Q. Joffe; Douglas L. Wilson; Edward C. Dmytryk; and J. Bruce Gleason Board of Directors Current Subsidiaries (Florida corporations) Wriwebs.com, Inc. 100 East Sample Road, Suite 210; Pompano Beach, Florida 33064 Telephone (954) 569-0200; Fax (954) 569-0300 Web site and e-mail www.wriwebs.com AmeriNet Communications, Inc. "Doing Business as The Firm MultiMedia" 7325 Southwest 32nd Street; Ocala, Florida 34474 Post Office Box 770787; Ocala, Florida 34477 Telephone (352) 861-1350; Fax (352) 861-1339 Web site and e-mail www.callthefirm.com Independent Public Accountants: Daszkal, Bolton & Manela, P.A. 240 West Palmetto Park Road, Suite 300; Boca Raton, Florida 33432 Telephone (561) 367-1040; Facsimile Transmission (561) 750-3236 e-mailto:patrick@dbmsys.usa.com Transfer Agent: Liberty Transfer Company 191 New York Avenue, Huntington, New York 11743 Telephone (516)-385-1616; Facsimile Transmission (516) 385-1619 Our company's report on Commission Form 10-QSB for the quarter ended December 31, 2000 will be furnished free of charge without exhibits to any beneficial owner of our company's common stock eligible to vote at our company's annual stockholders' meeting and will furnish the exhibits thereto to any such person specifically requesting them, subject to payment of our company's actual reproduction, handling and delivery costs associated therewith. Our company's report on Commission Form 10-QSB for the quarter ended December 31, 2000, including exhibits, is available without charge on the Securities and Exchange Commission's web-site located at www.sec.gov in the EDGAR archives. Requests for our company's report on Commission Form 10-QSB for the quarter ended December31, 2000, with or without exhibits, should be addressed to Edward C. Dmytryk, President; AmeriNet Group.com, Inc.; Crystal Corporate Center; 2500 North Military Trail, Suite 225-C; Boca Raton, Florida 33431, or faxed to Mr. Dmytryk at (561) 998-4635. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THIS REPORT NOR HAS IT PASSED UPON ITS ACCURACY OR ADEQUACY. Page 19 EX-3.6 2 0002.txt CERTIFICATE OF DESIGNATION AmeriNet Group.com, Inc. CERTIFICATE OF DESIGNATION PREFERENCES & RIGHTS OF CLASS A PREFERRED STOCK AmeriNet Group.com, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), does by its president and its secretary and under its corporate seal hereby certify as follows: WHEREAS, the Corporation's certificate of incorporation duly filed in the State of Delaware, as currently amended, authorizes the Corporation to issue 5,000,000 shares of preferred stock, $0.01 par value, the attributes of which are to be determined by resolution of the Corporation's Board of Directors from time to time, prior to issuance, in conformity with the requirements of Section 151 of the Delaware General Corporation Law. WHEREAS, pursuant to the authority vested in the Board of Directors by the certificate of incorporation, the Board at a meeting duly convened and held on the 29th day of June, 2000, created and designated 500,000 shares of its preferred stock, without attributes, as Class A Preferred Stock with attributes identical to those set forth in this certificate of designation. WHEREAS, pursuant to the authority vested in the Board of Directors by the certificate of incorporation, the Board of Directors by written consent in lieu of special meeting, on the 12th day of February, 2001,adopted the following resolution: NOW THEREFOR BE IT RESOLVED, that the Board of Directors hereby designates an additional 500,000 shares of its preferred stock, currently without attributes, as Class A Preferred stock with attributes identical to those set forth in the certificate of designation that was filed on July 3, 2000, with the Secretary of State of the State of Delaware as follows: 1.1 Designation and amount. The shares of the initial class of Preferred Stock shall be designated "Class A Preferred Stock, (hereinafter sometimes called "Preferred Stock"), and the number of shares which may be issued shall be 500,000. 1.2 Dividends. (A) The holders of shares of the Preferred Stock shall be entitled to receive, out of the assets of the Corporation legally available therefore, and as and when declared by the Board of Directors, dividends of every kind declared and paid to holders of the Corporation's Common Stock, at a rate per share twenty times that paid per share of Common Stock. (B) Each such dividend shall be paid to the holders of record of shares of the Preferred Stock as they appear on the stock register of the Corporation on the last day of the month next preceding the payment date thereof. Page 20 1.3 Conversion. The holders of shares of the Preferred Stock shall have the right, at their option, to convert all or any part of such shares into shares of Common Stock of the Corporation at any time on and subject to the following terms and conditions: (A) The shares of Preferred Stock shall be convertible at the office of transfer agent for the Preferred Stock (the "Transfer Agent"), and at such other place or places, if any, as the Board of Directors of the Corporation may designate, into fully paid and non-assessable shares (calculated as to each conversion to the nearest 1/100th of a share) of Common Stock. (B) The number of shares of Common Stock issuable upon conversion of each share of the Preferred Stock shall be equal to the greater of: (1) Twenty shares of Common Stock (the "Set Conversion Rate"); or (2) The number of shares of Common Stock obtained by dividing the gross price at which the preferred shares were issued by the Corporation (the "Issuance Price") by 80% of the closing price for the Corporation's Common Stock, as reported on the public stock market or securities exchange (in both cases, registered as such by the United States Securities Exchange Commission [the "Commission"]) having the highest average trading volume in the Corporation's securities (for purposes of illustration, the following, being acceptable: The New York Stock Exchange the NASDAQ Stock Market, the American Stock Exchange, the OTC Bulletin Board operated by the NASD, the Electronic Pink Sheets operated by the National Daily Quotation System, Inc.), on the day the notice of conversion provided to the Corporation is executed and dated by the holder with medallion signature guarantee (the "Market Conversion Rate"). (C) The Set Conversion Rate shall be subject to adjustment from time to time in certain instances as hereinafter provided. (D) No payment or adjustment shall be made in respect of dividends on the Common Stock or the Preferred Stock upon conversion of shares of the Preferred Stock. (E) No fractional shares of Common Stock will be issued, rather, one fractional share per holder will be rounded up to a whole share. Page 21 (F) Before any holder of shares of the Preferred Stock shall be entitled to convert the same into Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed and dated to the Corporation with a medallion signature guarantee, at the office of the Transfer Agent or at such other place or places, if any, as the Board of Directors of the Corporation has designated, and shall give written notice to the Corporation at said office or place that he elects to convey the same and shall state in writing therein the name or names (with addresses) in which he wishes the certificate or certificates for Common Stock to be issued. (G) The Corporation will, as soon as practicable thereafter, issue and deliver at said office or place to such holder of shares of the Preferred Stock, or to his nominee or nominees, certificates for the number of full shares of Common Stock to which he shall be entitled as aforesaid. (H) Shares of the Preferred Stock shall be deemed to have been converted as of the close of business on the date of the medallion signature guarantee on the certificate surrendered for conversion as provided above so long as it is received by the Corporation or the Corporation's transfer agent no later than the tenth business day thereafter, and the person or persons entitled to receive the Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such Common Stock as of the close of business on such date. 1.4 Adjustments (A) The Set Conversion Rate in effect at any time shall be subject to adjustment as follows: (1) The Set Conversion Rate in effect at the time of the record or effective date for the following listed events shall be proportionately adjusted so that the holder of any share of the Preferred Stock surrendered for conversation after such time shall be entitled to receive the kind and amount of shares which he would have owned or have been entitled to receive had such share of the Preferred Stock been converted immediately prior to such time: (a) If the Corporation declares a dividend on its Common Stock in shares of its capital stock; (b) If the Corporation subdivides its outstanding shares of Common Stock; (c) If the Corporation combines its outstanding shares of Common Stock into a smaller number of shares; or Page 22 (d) If the Corporation issues by reclassification of its Common Stock (including any such reclassification in connection with a consolidation or merger in which the Corporation is the continuing corporation) any shares of its capital stock. (2) Such adjustment shall be made successively whenever any event listed above shall occur. (3) In case the Corporation shall issue rights or warrants to all holders of its Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the closing price for the Corporation's Common Stock, as reported on the public stock market or securities exchange [as described in Section 1.3(B)(2)], if the underlying shares of Common Stock are to be pre-registered with the Commission (the "Current Market Price"), or 50% of the Current Market Price if the underlying shares of Common Stock are to be issued without registration pursuant to exemptions from applicable securities laws restricting their transferability as provided in Commission Rule 144 (the "Current Private Placement Price"), in each case on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Set Conversion Rate shall be reduced by multiplying the Set Conversion Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchaser would purchase at such Current Market Price or Current Private Placement Price (as the case may be) and the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. (4) In case the Corporation shall distribute to all holders of its Common Stock (including any such distribution made in connection with a consolidation or merger in which the Corporation is the continuing corporation) evidences of its indebtedness or assets (excluding dividends or other distributions paid out of earned surplus) or subscription rights or warrants (excluding those referred to in Section 1.4(A)(3) above), the Set Conversion Rate shall be adjusted so that the same shall equal the price determined by multiplying the Set Conversion Rate in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which the numerator shall be Page 23 the Current Market Price per share of the Common Stock on the date fixed for such determination less the then fair market value (as determined by the Board of Directors of the Corporation, whose determination shall be conclusive and described in a Board Resolution of the Corporation filed with the Transfer Agent) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price per share of the Common Stock, such adjustment to become effective immediately prior to the opening of business of the day following the date fixed for the determination of stockholders entitled to receive such distribution. (5) All calculations under this Section 1.4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. (6) In case of any consolidation or merger of the Corporation with or into any other corporation (other than a consolidation or merger in which the Corporation is the continuing corporation), or in case of any sale or transfer of all or substantially all of the assets of the Corporation, the holder of each share of the Preferred Stock shall after such consolidation, merger, sale or transfer have the right to convert such share of the Preferred Stock into the kind and amount of shares of stock and other securities and property which such holder would have been entitled to receive upon such consolidation, merger, sale or transfer if he had held the Common Stock issuable upon the conversion of such share of the Preferred Stock immediately prior to such consolidation, merger, sale or transfer. (B) In the event that at any time, as a result of an adjustment made pursuant to this Section 1.4, the holder of any share of the Preferred Stock surrendered for conversation shall become entitled to receive any securities other than shares of Common Stock, thereafter the amount of such other securities so receivable upon conversion of any share of the Preferred Stock shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock set forth in the foregoing subsections of this Sections 1.3 and the provisions of this Section 1.3 with respect to the Common Stock shall apply on like terms to any such other securities. (C) No adjustment in the Set Conversion Rate shall be required unless such adjustment would require a change of at least 1% in such price; provided, however, that any adjustments which by reason of this Section 1.4(C) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (D) Whenever the Set Conversion Rate is adjustable as herein provided: Page 24 (1) The Corporation shall promptly file with the Transfer Agent for the Preferred Stock a certificate of the treasurer of the Corporation setting forth the adjusted Set Conversion Rate and showing in reasonably detail the facts upon which such adjustment is based, including a statement of the consideration received or to be received by the Corporation for any shares of Common Stock issued or deemed to have been issued; and (2) A notice stating that the Set Conversion Rate has been adjusted and setting forth the adjusted Set Conversion Rate shall forthwith be required, and as soon as practicable after it is required, such additional notice shall be deemed to be required pursuant to this Section 1.4(D)(2) as of the opening of business on the tenth day after such mailing and shall set forth the Set Conversion Rate as adjusted at such opening of business, and upon the mailing of such additional notice no other notice need be given of any adjustment in the Set Conversion Rate occurring at or prior to such opening of business and after the time that the next preceding notice given by mailing became required. (E) In each of the following instances the Corporation shall cause to be filed with the Transfer Agent and shall cause to be mailed, first class postage prepaid, to the holders of record of the outstanding shares of Preferred Stock, at least 10 days prior to the applicable record date hereinafter specified, a notice stating the date on which a record is to be taken for the purpose of such distribution or rights, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such distribution or rights are to be determined, or the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up: (1) If the Corporation shall authorize the distribution to all holders of its Common Stock of evidences of its indebtedness or assets (other than dividends or other distributions paid out of earned surplus); or (2) If the Corporation shall authorize the granting to the holders of its Common Stock of rights to subscribe for or purchase any shares of capital stock of any class or of any other rights; or (3) In the event of any reclassification of the Common Stock (other than a subdivision or combination of its outstanding shares of Common Stock), or of any consolidation or merger to which the Corporation is a party and for which approval of any stockholders of the Corporation is required, or of Page 25 the sale or transfer of all or substantially all of the assets of the Corporation; or (4) In the event of any reclassification of the voluntary or involuntary dissolution, liquidation or winding up of the Corporation. 1.5 Required Corporate Actions (A) (1) The Corporation will at all times reserve, keep available and be prepared to issue, free from any preemptive rights, out of its authorized but unissued Common Stock, solely for the purpose of effecting conversion of the Preferred Stock, the full number of shares of Common Stock then issuable upon the conversion of all outstanding Preferred Stock. (2) The Corporation shall from time to time, in accordance with the laws of the State of Delaware, endeavor to amend its Certificate of Incorporation to increase the authorized amount of its Common Stock if at any time the Authorized amount of its Common Stock remaining unissued shall be not sufficient to permit the conversion of all Preferred Stock. (3) The Corporation shall, if any shares of Common Stock required to be reserved for issuance upon conversion of Preferred Stock pursuant to this section 1.3(F) required registration with or approval of any governmental authority under any Federal or state law before such shares may be issued upon such conversion, endeavor to cause such shares to be so registered or approved as expeditiously as possible. (B) (1) The Corporation will pay any and all taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of shares of the Preferred Stock pursuant hereto. (2) The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue or transfer and delivery of shares of Common Stock in a name other than that in which the shares of the Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax or has established to the satisfaction of the Corporation that such tax has been paid. (C) Whenever reference is made in Sections 1.3. 1.4 or 1.5 to the issuance or sale of shares of Common Stock, the term "Common Stock" shall include any stock of any class of the Corporation other than preferred Page 26 stock of any class with a fixed (absolutely or by reference to an adjustment formula) limit on dividends and a fixed amount payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation. 1.6 Liquidation rights. In the event of any liquidation or dissolution or winding up of the Corporation, voluntary or involuntary, the holders of the Preferred Stock shall be entitled to receive, subject to the rights of any other class of stock which ranks senior to the Preferred Stock as to distribution of assets on liquidation, but before any distribution is made on any class of stock ranking junior to the Preferred Stock as to the payment of dividends or the distribution of assets (including, without limitation, the Corporation's Common Stock, a sum per share of Preferred Stock equal to the Issuance Price per share. 1.7 Voting Rights. The Preferred Stock shall entitle its holders to twenty votes for every share held on terms identical to those of holders of twenty shares of Common Stock, or if there is more than one class or series of Common Stock outstanding, equal to twenty votes by those of shares of Common Stock having the greatest voting rights per share. That said resolution of the Corporation's board of directors, and the creation and authorization of issuance thereby of said series of 500,000 shares of convertible preferred stock and determination thereby of the dividend rate, liquidation preferences, voting rights and provisions in respect to conversion or exchange of said stock, were duly made by the Board of Directors pursuant to authority as aforesaid and in accordance with Sections 103, 151 and 102(4) of the Delaware General Corporation Law. In Witness Whereof, the Corporation has made under its corporate seal and the hands of its president and secretary, respectively, the foregoing certificate, and the president and secretary have hereunto set their hands and caused the corporate seal of the said corporation to be hereunto affixed this 12th day of February, 2001. AMERINET GROUP.COM, INC. By: /s/ Edward C. Dmytryk Edward C. Dmytryk President [Corporate Seal] Attest: /s/ Vanessa H. Lindsey Vanessa H. Lindsey Secretary Page 27 EX-3.7 3 0003.txt AMENDMENT TO ARTICLES OF INCORPORATION Certificate of Amendment of Certificate of Incorporation of AmeriNet Group.com, Inc. This Certificate of Amendment to Certificate of Incorporation is executed by the undersigned duly authorized corporate officers of AmeriNet Group.com, Inc., who, being duly sworn, certify as follows: First: The annual meeting of the stockholders of said corporation was duly called and held on December 21, 2000, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at such meeting it was resolved by a vote of holders of 8,052,011 of the shares of capital stock entitled to vote at the meeting, with no vote being cast against, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered "Fourth" so that, as amended, said Article shall be and read as follows: "The authorized capital of the Corporation shall be divided into shares of capital stock, as follows: (1) The total number of shares of common stock which the corporation shall have authority to issue is 30,000,000, and the par value of each of such shares is $0.01. (2) The Corporation shall be authorized to issue 5,000,000 shares of preferred stock, $.01 par value, the attributes of which are to be determined by resolution of the Corporations Board of Directors from time to time, prior to issuance, in conformity with the requirements of Section 151 of the Delaware General Corporation Law." Second: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. Third: That the capital of said corporation shall not be reduced under or by reason of said amendment. In Witness Whereof, the Corporation has made under its corporate seal and the hands of its president and secretary, respectively, of said corporation, the foregoing certificate, and the president and secretary have hereunto set their hands and caused the corporate seal of the said corporation to be hereunto affixed this 19th day of February, 2001. AMERINET GROUP.COM, INC. By: /s/ Edward C. Dmytryk Edward C. Dmytryk President [Corporate Seal] Attest: /s/ Vanessa H. Lindsey Vanessa H. Lindsey Secretary Page 28 EX-99.53 4 0004.txt STOCK PROCEDURE MEMO Amerinet Group.com, Inc. A publicly held Delaware corporation Edward C. Dmytryk Administrative & Executive Offices President & Chief Executive Officer 1941 Southeast 51st Terrace Ocala, Florida 34471 Lawrence R. Van Etten Telephone (352) 694-6661 Vice-President & Chief Operating Officer Fax (352) 694-1325 e-mail, tyclegal@atlantic.net Vanessa H. Lindsey Secretary Crystal Corporate Center 2500 North Military Trail, Suite 225-C Douglas L. Wilson, Esquire Boca Raton, Florida 33431 General Counsel Telephone (561) 998-3435 Fax (561) 998-4635 David K. Cantley Lawrence R. Van Etten e-mail info@amerinetgroup.com Vanessa H. Lindsey Charles J. Champion Respond to Ocala address Anthony Q. Joffe Douglas L. Wilson Edward C. Dmytryk G. Richard Chamberlin J. Bruce Gleason ------ Board of Directors Wriwebs.com, Inc. 100 East Sample Road, Suite 210; Pompano Beach, Florida 33064 AmeriNet Communications, Inc. "The Firm MultiMedia" 7325 Southwest 32nd Street; Ocala, Florida 34474 Post Office Box 770787; Ocala, Florida 34477 Operating Subsidiaries February 15, 2000 Liberty Transfer and Trust Company 274B New York Avenue New York, New York 11743 Attention: Lisa Conger Re.: AmeriNet Group.com, Inc. a publicly held Delaware corporation with a class of securities registered under Section 12(g) of the Exchange Act ("AmeriNet") Dear Lisa: The following provisions, conditions and requirements shall be implemented immediately in conjunction with any transactions in AmeriNet securities: 1. In order to assure compliance with applicable federal and state securities laws regulating the issuance and transfer of securities, AmeriNet's transfer agent is hereby instructed that prior to effecting any original issuances of securities or issuances of treasury stock, it must receive: (A) A written and signed direction from the president of AmeriNet or such other officer as AmeriNet's board of directors has designated to the transfer agent for such purposes, specifying: (1) The quantity, class, series and par value of stock to be issued; (2) The applicable exemption from registration or legally acceptable evidence that the stock has been registered with both the United States Securities and Exchange Page 29 Liberty Transfer and Trust Co. February 15, 2001 Page 2 Commission (the "Commission") and appropriate state regulators (e.g., review of filings on the Commission's EDGAR system); and (3) Specific delivery instructions. (B) A certified copy of a resolution of AmeriNet's board of directors specifically authorizing the issuance of the subject securities and specifying the quantity thereof and the exemption from registration under applicable securities laws relied on. 2. All certificates shall be numbered in accordance with procedures designed to assure that there are no gaps in the record of securities issued or transferred, and all records pertaining to transactions in AmeriNet's securities, including reports to AmeriNet, shall reflect such certificate numbers. 3. No restricted stock (as that term is used for purposes of Commission Rule 144 and related matters) may be transferred unless: A. An affidavit is provided by the person requesting the transaction and, if different, the person in whose name the securities are registered, affirming all facts material to the legal opinion described below, including, without limitation: (1) The date the securities were acquired; (2) The specific consideration paid therefor; (3) If the securities were issued in whole or in part in exchange for services: (A) a specific description of the services provided; (B) the date such services started; and (C) the date such services were completed. (4) A detailed history of transactions in such securities during the preceding 90 days; (5) A disclosure of all persons with whom transactions must be aggregated under applicable securities laws, and representations as to any transactions by them during the preceding 90 days, and of any transactions contemplated by them during the next 90 days; (6) Representations by any person who has been an officer, director or holder of more than 10% of any class of AmeriNet's equity securities that all reports on Commission Forms 3, 4 and 5 have been filed with the Commission and that copies have been provided to AmeriNet; Page 30 Liberty Transfer and Trust Co. February 15, 2001 Page 3 (7) Representations by any person who has been a holder of more than 5% of any class of AmeriNet's equity securities that all reports on Commission Schedules 13D or 13G have been filed with the Commission and that copies have been provided to AmeriNet; (8) Representations as to full ownership rights, whether record or beneficial; (9) Representations as to any other person who has an undisclosed interest in the transaction; and (10) All other factual representations necessary for an attorney to provide a detailed legal opinion asserting, without qualification, that the transaction will be in full compliance with all applicable federal and state securities laws. B. An opinion of counsel is provided from an attorney: (1) Acceptable to AmeriNet; (2) Who carries malpractice insurance covering the practice of securities law and the provision of legal opinions of the type required; (3) Representing the party requesting the transaction provided that such attorney may not also be serving as legal counsel to AmeriNet in reviewing the opinion (4) Addressed to AmeriNet, the transfer agent and any securities brokerage firm involved in the transaction (5) Certifying to the propriety of the transaction and specifically addressing each item of law involved (including each applicable subsection thereof), specifically reciting all material facts relied on, and containing legal conclusions based on such facts; (6) Which is submitted to all of the addressees and is acknowledged in a signed writing addressed and delivered to the transfer agent by AmeriNet's president (or other officer designated in a resolution of AmeriNet's board of directors), after consultation with AmeriNet's legal counsel, as acceptable. C. No general "this is legal as proposed" opinions may be accepted. D. Documentary evidence is provided that: (1) The transaction is being effected through a broker who, by affidavit, has agreed to comply with the requirements of Commission Rule 144 (unless the transaction meets the requirements of Commission Rule 144[k]); (2) The transaction meets applicable volume limitations; Page 31 Liberty Transfer and Trust Co. February 15, 2001 Page 4 (3) A report on Commission Form 144 has been properly filed; and (4) If any person who has been an officer, director or holder of 10% or more of any class of AmeriNet's equity securities is involved in the transaction, a representation that all required reports on Commission Forms 3, 4 and 5, and on Commission Schedules 13D and 13G have been filed as to past transactions and, if such positions or holdings where in effect within the preceding 90 days, that such schedules or reports are being filed in conjunction with the proposed transaction. 4. No control stock (as that term is used for purposes of Commission Rule 144 and related matters) may be transferred unless the transfer agent receives signed written directions from AmeriNet's president or such other officers as have been designated by resolution of the board of directors to perform such function, directing the transfer agent to effect such transfer, accompanied by a written and signed instrument from the control person involved, confirming that: (A) The transaction is being effected through a broker who, by affidavit, has agreed to comply with the control transaction requirements of Commission Rule 144 (or, an opinion of counsel meeting the requirements for restricted stock transactions as set forth above, is provided confirming that the transaction may be legally affected in a manner other than pursuant to Commission Rule 144). (B) The transaction meets applicable volume limitations; (C) A report on Commission Form 144 has been properly filed; and (D) All required reports on Commission Forms 3, 4 and 5, and on Commission Schedules 13D and 13G have been filed as to past transactions and are being filed in conjunction with the proposed transaction. 5. No legends will be removed from certificates unless they are being transferred to another person in a bona fide transaction, in compliance with the foregoing requirements. 6. Copies of the foregoing shall be retained by the transfer agent for as long as it serves in such role for AmeriNet, and shall be made available to AmeriNet, upon request. 7. In order to assure that no securities are issued in excess of those authorized in AmeriNet's then current certificate of incorporation, AmeriNet shall provide the transfer agent and the transfer agent shall retain for its records pertaining to transactions in AmeriNet's securities, a copy of AmeriNet's certificate of incorporation and, concurrently with their filing, copies of any amendments thereto or certificates designating attributes as to preferred stock where such authority has been retained by AmeriNet's board of directors. Page 32 Liberty Transfer and Trust Co. February 15, 2001 Page 5 No exceptions from these requirements are to be made for anyone, regardless of their role with AmeriNet or the transfer agent, unless required by a court order. Very truly yours AmeriNet Group.com, Inc. /s/ Edward C. Dmytryk Edward C. Dmytryk President & Chief Executive Officer Copy: Securities and Exchange Commission Division of Market Regulation Page 33 EX-27 5 0005.txt FDS --
5 THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER ENDED DECEMBER 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000050471 AmeriNet Group.com, Inc. 3-MOS JUN-30-2001 OCT-1-2000 DEC-31-2000 1,439 0 44,207 (5,000) 0 44,844 334,518 (27,619) 1,028,303 640,234 0 0 2,467 124,652 116,814 (473,718) 345,269 345,269 246,214 246,214 2,626,536 0 36,403 (3,586,371) 0 0 0 0 0 (3,586,371) (0.19) (0.19)
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