-----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, Nl11NCHS244uVDCLV6lddciaDCwiYl8RLEfGybPuw6jC8UhvsCu7d7L6XKIxYMMv hD6o6ju5+PLE6pddvzQeIw== /in/edgar/work/0000917253-00-000058/0000917253-00-000058.txt : 20000927 0000917253-00-000058.hdr.sgml : 20000927 ACCESSION NUMBER: 0000917253-00-000058 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000922 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000922 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAINWIRE PARTNERS INC /DE/ CENTRAL INDEX KEY: 0000917253 STANDARD INDUSTRIAL CLASSIFICATION: [3823 ] IRS NUMBER: 570941152 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-23892 FILM NUMBER: 727274 BUSINESS ADDRESS: STREET 1: 9229 UNIVERSITY BLVD STREET 2: STE 201 CITY: CHARLESTON STATE: SC ZIP: 29406 BUSINESS PHONE: 8435539456 MAIL ADDRESS: STREET 1: 9229 UNIVERSITY BLVD STREET 2: STE 201 CITY: CHARLESTON STATE: SC ZIP: 29406 FORMER COMPANY: FORMER CONFORMED NAME: ENVIROMETRICS INC /DE/ DATE OF NAME CHANGE: 19940107 8-K/A 1 0001.txt CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): September 22,2000 (August 4,2000) RAINWIRE PARTNERS, INC. Delaware 0-23892 57-0941152 (State or other (Commission File (IRS Employer jurisdiction of No.) ID No.) incorporation) 695 Pylant Street, Atlanta, GA 30306 (Address of principal executive offices) 404-892-1111 (Registrant's telephone number, including area code) 4940 Peachtree Industrial Blvd., Suite 350, Norcross, GA, 30071 (Former name or former address, if changed since last report) Item 5. Other Events. This Form 8-K/A is filed as an amendment to the Form 8-K which was filed on August 4, 2000 announcing the July 26, 2000 closing of the Plan and Agreement to Exchange Stock by and among Envirometrics, Inc., The Catapult Group, Inc. and the shareholders of Catapult. The name was subsequently changed to Rainwire Partners, Inc. Description of the Company Rainwire Partners, Inc. is an advanced technology consulting firm specializing in the design, management and auditing of Internet technology initiatives. Rainwire is a "next generation" web development company. The company provides strategy, design, process management and quality assurance services that act as an insurance policy for organizations undertaking broad and expensive advanced technology initiatives. Structured as a consultancy, Rainwire offers a cohesive set of services targeted exclusively at the "delivery" of technology solutions. These service offerings include: 1. Solutions Design and Management. The solutions design and management services of Rainwire provide the customer with the strategy, planning, solution design and documentation services necessary to successfully begin any technology implementation initiative. The end result of these services is the Rainwire Blueprint. This extensive set of documentation acts as a road-map to the successful completion of any technology project and is used to create and manage customer expectation throughout the development process. 2. Managed Development Services. The managed development services of Rainwire supply the customer with a streamlined and effective means of developing a technology initiative. This group assists the customer in selecting and managing an inventory of capable and value-driven development organizations to fulfill development for Rainwire customers. This group also provides project management and project auditing services to insure that the customer is consistently receiving the value committed to them by their selected developer. 3. Quality Management & Auditing Services. The quality management and auditing services of Rainwire provide the customer with the peace of mind that their money and efforts dedicated to technology will pay the dividend originally committed in the Rainwire Blueprint. By providing solution testing, quality management and completed project auditing services, this group provides the customer with a set of "checks and balances" to document that their expenditures and efforts have resulted in a functional, tested and value-driven solution. The Company's Mission The goal of Rainwire Partners is to ensure that every customer expenditure made toward the implementation of Internet solutions and other advanced technologies yields a positive financial return while exceeding the expectations of the customer and their stakeholders. Initially operating in the Atlanta area in Georgia, Rainwire is rapidly expanding to sell its services into multiple markets in the Southeast. Our emphasis will be on providing a complete specialized service based on having years of experience in the processes and procedure of developing difficult technology for business use. Market research indicates that the major criticism Rainwire's type of client has of existing web development firms is that they rarely meet the expectation of their customer. These customers feel that they are already spending too much money for the service that they are being provided. By capitalizing on our experience in the customer delivery and management aspects of complex technology initiatives, we will be able to establish a reputation for excellence, value and reliability in a market that is currently starved for such an enterprise. This Form 8-K/A contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that certain statements in this Form 8-K/A are "forward looking statement" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors. Such uncertainties and risks include, among others, certain risks associated with government regulation, and general economic and business conditions. Actual events, circumstances, effects and results may be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Consequently, the forward-looking statements contained herein should not be regarded as representations by Rainwire Partners, Inc. or any other person that the projected outcomes can or will be achieved. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Business Acquired See Exhibit 7.1 for complete audited financial information on The Catapult Group, Inc. THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET DECEMBER 31, 1999 CURRENT ASSETS Cash $ 2,294 Accounts receivable 233,897 Due from stockholder 20,000 ------------ TOTAL CURRENT ASSETS 256,191 PROPERTY & EQUIPMENT, net of accumulated depreciation of $12,769 29,720 OTHER ASSETS Goodwill, net of accumulated amortization of $16,762 486,103 Deposits 4,942 ------------ 491,045 ------------ TOTAL ASSETS $ 776,956 ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 500,000 Accounts payable 26,786 Accrued Expenses 54,268 ------------ TOTAL CURRENT LIABILITIES 581,054 ------------ STOCKHOLDERS' EQUITY Common stock, $.01 par value; authorized 10,000,000 shares, 6,000,000 issued and outstanding 60,000 Additional paid-in capital 554,930 Accumulated deficit (419,028) ------------ TOTAL STOCKHOLDERS' EQUITY 195,902 ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 776,956 ============ THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 REVENUES Consulting income $ 578,229 OPERATING EXPENSES Communication and internet services 227,615 General and administrative 366,889 Founders' services 390,000 ------------ TOTAL OPERATING EXPENSES 984,504 ------------ OPERATING LOSS (406,275) ------------ OTHER INCOME (EXPENSE) Interest expense (13,356) Interest income 603 ------------ (12,753) ------------ NET LOSS $ (419,028) ============ WEIGHTED AVERAGE COMMON SHARES USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE 6,000,000 ------------ BASIC AND DILUTED LOSS PER COMMON SHARE $ (.07) ============ THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET JUNE 30, 2000 UN-AUDITED ---------- CURRENT ASSETS Cash $ - Accounts receivable 201,348 ------------ TOTAL CURRENT ASSETS 201,348 PROPERTY & EQUIPMENT, net of accumulated depreciation of $22,369 48,305 OTHER ASSETS Goodwill, net of accumulated amortization of $33,524 469,341 Deposits 4,942 ------------ 474,283 ------------ TOTAL ASSETS $ 723,936 ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Checks issued in excess of bank balance $ 10,353 Notes payable 500,000 Accounts payable 171,119 Accrued Expenses 80,773 ------------ TOTAL CURRENT LIABILITIES 762,244 ------------ STOCKHOLDERS' EQUITY Common stock, par value $.01; authorized 10,000,000 shares; issued - 6,000,000 shares 60,000 Additional paid-in capital 554,930 Accumulated deficit (653,238) ------------ TOTAL STOCKHOLDERS' EQUITY (38,308) ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 723,936 ============ THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 UN-AUDITED ---------- REVENUES $ 937,305 COST OF REVENUE 353,045 OPERATING EXPENSES Sales and Marketing 84,863 General and administrative 693,174 Depreciation and Amortization 26,362 ------------ TOTAL OPERATING EXPENSES 804,399 ------------ OPERATING LOSS (220,139) ------------ OTHER INCOME (EXPENSE) Interest expense (16,250) Interest income 1,130 Other income (expense) 1,050 ------------ (14,070) ------------ NET LOSS $ (234,209) ============ WEIGHTED AVERAGE COMMON SHARES USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE 6,000,000 ------------ BASIC AND DILUTED LOSS PER COMMON SHARE $ (.04) ============ (b) Pro Forma Financial Information RAINWIRE PARTNERS, INC. PROFORMA CONSOLIDATED BALANCE SHEET JUNE 30, 2000
Actual Adjustments Pro Forma --------------- --------------- --------------- ASSETS Current Assets Cash and cash equivalents $ 439,649 $ 30,936 (1)$ 470,585 Accounts receivable 201,347 17,010 (1) 218,357 Other net monetary assets - 127,184 127,184 Prepaid expenses - 5,572 (1) 5,572 --------------- --------------- --------------- Total Current Assets 640,996 180,702 821,698 --------------- --------------- --------------- Property and Equipment Furniture and equipment 70,674 202,615 (1) 273,289 Less accumulated depreciation (22,369) (183,129) (205,498) --------------- --------------- --------------- 48,305 19,486 67,791 --------------- --------------- --------------- Other Assets Deposits 4,942 11,852 (1) 16,794 Goodwill, net of accumulated amortization of 469,340 - 469,340 --------------- --------------- --------------- 474,282 11,852 486,134 --------------- --------------- --------------- TOTAL $ 1,163,583 $ 212,040 $ 1,375,623 =============== =============== ===============
Actual Adjustments Pro Forma --------------- --------------- --------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Notes payable $ 250,000 $ $ 250,000 Current maturities of long-term debt - 18,171 (1) 18,171 Accounts payable 171,119 231,370 (1) 402,489 Accrued expenses and other 80,773 60,916 (1) 141,689 -------------- --------------- --------------- Total Current Liabilities 501,892 310,457 812,349 -------------- --------------- --------------- Long-term Debt, less current portion Banks and others - 72,805 (1) 72,805 Affiliates 700,000 (700,000)(2) - Deferred gain on asset sale - 12,083 (1) 12,083 -------------- --------------- --------------- Total Current Liabilities 700,000 (615,112) 84,888 -------------- --------------- --------------- Redeemable Preferred Stock, Par value $.001; authorized 2,500,000 shares; issued 2000 - 24,959 - 49,918 (1) 49,918 -------------- --------------- --------------- - 49,918 49,918 -------------- --------------- --------------- Common Stock and Accumulated Deficit Common stock, par value $.001; authorized 20,000,000 shares; issued - 7,005,387 shares 60,000 (60,000)(2) 7,005 5,555 (2) 3,852 (1) 148 (2) 22 (2) 1,503 (2) (4,975)(3 900 (2) Additional paid-in capital 554,930 54,445 (2) 1,074,702 (22)(2) (239,624)(1) 4,975 (3) 699,100 (2) Accumulated deficit (653,239) - (653,239) -------------- --------------- --------------- (38,309) 466,777 428,468 -------------- --------------- --------------- $ 1,163,583 $ 212,040 $ 1,375,623 ============== =============== ===============
RAINWIRE PARTNERS, INC. PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS JUNE 30,2000 AND DECEMBER 31, 1999 Six Months Ended July 31, 1999 thru June 30, 2000 December 31, 1999 -------------- --------------- Service Revenue $ 937,305 $ 578,229 - --------------- Direct Service Costs 353,045 227,615 - -------------------- -------------- --------------- Gross Profit 584,260 350,614 -------------- --------------- Operating Expenses - ------------------ Sales and marketing 84,863 346,805 General and administrative 693,174 390,000 Depreciation and amortization 26,362 20,084 -------------- --------------- 804,399 756,889 -------------- --------------- Operating Loss (220,139) (406,275) -------------- --------------- Other Income (Expense) - ---------------------- Interest income 1,130 603 Interest expense (16,250) (13,356) Other income (expense) 1,050 - -------------- --------------- Net Income (Loss) $ (234,209) $ (419,028) ----------------- ============== =============== Net (Loss) Per Common Share $ (0.034) $ (0.07) - --------------------------- ============== =============== Weighted average number of common shares outstanding 6,894,875 5,927,401 ============== =============== See Notes to Consolidated Proforma Financial Statements RAINWIRE PARTNERS, INC. NOTES TO UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS The unaudited pro forma condensed financial statements have been prepared combining the net monetary assets purchased of Envirometrics, Inc. and The Catapult Group, Inc. and adjusting such combined balances to conform to the accounting policies of the two companies. The following describes adjustments and other items relevant to the pro forma financial statements. (1) Net deficiency in monetary assets acquired from Envirometrics, Inc. amounted to $239,624 at June 30, 2000. This is due to the use of cash approximating and significant decrease in trade accounts receivable from December 31, 1999. (2) Re-capitalization. The weighted average number of shares outstanding was calculated assuming Envirometrics shares were exchanged for all of the outstanding shares of The Catapult Group at January 1, 2000 and 5,555,064 new shares of Envirometrics, Inc. common stock was issued. Additionally, the weighted average number of shares includes the 900,000 shares of common stock that were issued for the $700,000 equity infusion at July 26, 2000. (3) Loss per Common Share. Loss per common share is based upon the weighted average number of common shares outstanding. The calculation also assumes that holders of Envirometrics, Inc. common shares participated in a reverse split transaction and were issued one share of Envirometrics, Inc. common stock for every ten shares held. (4) Impairment of long-lived assets. The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be fully recoverable. The Company performs undiscounted cash flow analyses to determine if impairment exists. Based on a review performed for the quarter ended June 30, 2000, no impairment existed that would require adjustment to or disclosure in the pro forma financial statements. Note 1. Proforma Financial Condition and Plan of Operation at June 30, 2000 The pro forma consolidated balance sheet presents positive working capital in the amount of approximately $18,000. As a result of the $700,000 equity infusion that occured at closing on July 26, 2000, a note payable amounting to $250,000 was retired as if it occured at June 30, 2000. Prior to the closing of and in accordance with the Exchange Agreement, The Catapult Group was to have obtained a financing commitment for Two Million Dollars ($2,000,000) in net proceeds or such lesser amount as may be agreed to by Envirometrics and The Catapult Group, from a third party investor(s) upon terms and conditions satisfactory to Envirometrics and The Catapult Group. At closing on July 26, 2000, the Company received an equity infusion of Seven Hundred Thousand dollars ($700,000). This initial equity infusion was used to retire the aforementioned notes outstanding. Note 2. Results of Operations and Management's Plans Envirometric's completion of the plan to exchange stock with The Catapult Group, Inc. represents the conclusion of the Company's turn-around efforts and a considerable shift in strategy from environmental consulting services to Internet and electronic commerce strategy and consulting services. Traditionally, The Catapult Group has provided end-to-end Internet technology solutions to its clientele. Moving forward, the Company will continue to provide these services while orienting its brand and its operations toward a pure consulting model. Under this model, the Company will supply its customers with technology design and strategy, project management, quality assurance, and auditing services. As a component of this honing of focus and market differentiation, the organization has changed its operating name to Rainwire Partners, Inc.("Rainwire"). Rainwire will aggressively expand both its Atlanta and Charleston operations late in the third quarter and early in the fourth quarter of this year. The Company has continued to enlist new business throughout the second and third quarters of 2000. However, the pace of new revenues has slowed as the Company makes changes to its billing structure and begins to phase in its consulting model and enhanced business plan. Additionally, late in the second quarter, one of the Company's larger accounts was unable to pay amounts owed to the Company. This default generated the write-off of nearly $100,000 in receivables and the elimination of unbilled revenue accruals. The total write-off to this customer was approximately $250,000. The Company anticipates a return to profitability in the first quarter of 2001. The Company intends to pursue other acquisition opportunities and expand its effort in the Southeastern United States. The timing and success of these efforts is unpredictable. Accordingly, the Company is unable to accurately estimate its expected capital requirement. Funding for these efforts will likely come from the issuance of additional equity. In the last 30 days, Rainwire has secured additional projects centering on the deployment of Internet technology initiatives from; a company focusing on creating and managing transformational technologies, products and business models from ideas through market entry, a company that is a leader in packaged concrete products, and a company providing technology infrastructure. These initial contracts total $125,000 in projected revenue. (c) Exhibits The following exhibit is filed as a part of this Form 8-K/A 7.1 The Catapult Group, Inc. Audited Financial Statements for the year ended December 31, 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 hereto duly authorized. RAINWIRE PARTNERS, INC. (Registrant) Dated: September 22, 2000 By: s/s Walter H. Elliott, III -------------------------- Walter H. Elliott, III Vice President Exhibit 7.1 - ----------- TAUBER & BALSER, P.C. Certified Public Accountants 3340 Peachtree Road, N.E. Suite 250 Atlanta, GA 30326 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We consent to the incorporation by reference of our report dated March 29, 2000 included in the September 22, 2000 Form 8-K/A for Rainwire Partners, Inc. (formerly known as The Catapult Group, Inc.) /s/ Tauber & Balser, P.C. Tauber & Balser, P.C. Atlanta, Georgia September 22, 2000 THE CATAPULT GROUP, INC. 1999 AUDITED FINANCIAL STATEMENTS THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999 THE CATAPULT GROUP, INC. AND SUBSIDIARY TABLE OF CONTENTS PAGES INDEPENDENT AUDITORS' REPORT..........................................148 CONSOLIDATED BALANCE SHEET............................................149 CONSOLIDATED STATEMENT OF OPERATIONS..................................150 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY........................151 CONSOLIDATED STATEMENT OF CASH FLOWS..............................152-153 NOTES TO FINANCIAL STATEMENTS.....................................154-160 SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS.....................161 INDEPENDENT AUDITORS' REPORT Board of Directors and Shareholders The Catapult Group, Inc. and Subsidiary Norcross, Georgia We have audited the accompanying consolidated balance sheet of The Catapult Group, Inc. and Subsidiary as of December 31, 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for the period from July 21, 1999 (inception) to December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our 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 provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Catapult Group, Inc. and Subsidiary as of December 31, 1999, and the results of their operations and their cash flows for the period from July 21, 1999 (inception) to December 31, 1999. in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The consolidating information is presented for purposes of additional analysis of the consolidated statement of operations rather than to present the results of operations of the individual companies. The consolidating information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole. /S/ TAUBER & BALSER, P.C. ------------------------- Atlanta, Georgia March 29, 2000 THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET DECEMBER 31, 1999 ASSETS CURRENT ASSETS Cash $ 2,294 Accounts receivable 233,897 Due from stockholder 20,000 ------------ TOTAL CURRENT ASSETS 256,191 PROPERTY & EQUIPMENT, net of accumulated depreciation of $12,769 29,720 OTHER ASSETS Goodwill, net of accumulated amortization of $16,762 486,103 Deposits 4,942 ------------ 491,045 ------------ TOTAL ASSETS $ 776,956 ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 500,000 Accounts payable 26,786 Accrued Expenses 54,268 ------------ TOTAL CURRENT LIABILITIES 581,054 ------------ STOCKHOLDERS' EQUITY Common stock, $.01 par value; authorized 10,000,000 shares, 6,000,000 issued and outstanding 60,000 Additional paid-in capital 554,930 Accumulated deficit (419,028) ------------ TOTAL STOCKHOLDERS' EQUITY 195,902 ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 776,956 ============ The accompanying notes are an integral part of these financial statements THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 REVENUES Consulting income $ 578,229 OPERATING EXPENSES Communication and internet services 227,615 General and administrative 366,889 Founders' services 390,000 ------------ TOTAL OPERATING EXPENSES 984,504 ------------ OPERATING LOSS (406,275) ------------ OTHER INCOME (EXPENSE) Interest expense (13,356) Interest income 603 ------------ (12,753) ------------ NET LOSS $ (419,028) ============ WEIGHTED AVERAGE COMMON SHARES USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE 6,000,000 ------------ BASIC AND DILUTED LOSS PER COMMON SHARE $ (.07) ============ The accompanying notes are an integral part of these financial statements THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999
Common Stock Issued Additional ------------------- Paid-In Accumulated Stockholders' Shares Par Value Capital Deficit Equity ------ --------- ------- ------- ------ Balance, July 21, 1999 - $ - $ - $ - $ - Issuance of stock 1,500,000 15,000 135,000 - 150,000 Issuance of stock for services 3,900,000 39,000 351,000 - 390,000 Issuance of stock for acquisition 600,000 6,000 68,930 - 74,930 Net loss - - - (419,028) (419,028) --------- --------- -------- ---------- -------- BALANCE, DECEMBER 31, 1999 6,000,000 $ 60,000 $554,930 $ (419,028) $195,902 ========= ========= ======== ========== ======== The accompanying notes are an integral part of these financial statements
THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (419,028) ------------ Adjustments: Stock issued for services 390,000 Depreciation and amortization 20,084 Changes in assets and liabilities, net of effects of i2o, Inc. purchase: Accounts receivable (175,480) Accounts payable and accrued expenses 34,556 ------------ Total Adjustments 269,160 NET CASH USED IN OPERATING ACTIVITIES (149,868) CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment (6,358) Payment for acquisition of subsidiary, net (221,480) ------------ NET CASH USED BY INVESTING ACTIVITIES (227,838) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of note payable 250,000 Proceeds from issuance of common stock 130,000 ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 380,000 ------------ NET INCREASE IN CASH AND CASH END OF YEAR $ 2,294 ============ (Continued) The accompanying notes are an integral part of these financial statements. THE CATAPULT GROUP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 (CONTINUED) SUPPLEMENTAL DISCLOSURES OF CASH INFORMATION: Cash paid for interest $ - ============ SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: Details of acquisition Fair value of assets acquired $ 636,428 Cash paid for the common stock (265,000) Issuance of common stock (74,930) Note payable (250,000) ----------- Liabilities assumed $ 46,498 =========== Due from stockholder for purchase of common stock $ 20,000 =========== The accompanying notes are an integral part of these financial statements. THE CATAPULT GROUP, INC. AND SUBIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS AND OPERATING HISTORY The Catapult Group, Inc. (the "Company") is an Internet services company, providing internet consulting, systems development and integration as well as marketing and communications solutions to Global 2000 and middle-market companies. The Company's operations focus on three primary areas. The consulting portion focuses on building the framework for systems development and deployment by matching customer requirements with available technologies. The systems development portion uses this "blueprint" to construct and deploy solutions using the most efficient combination of customized programming and third-party software. Once complete, the Marketing and Communications portion assists customers with branding and marketing the product. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of The Catapult Group, Inc. and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated. FAIR VALUE OF FINANCIAL INSTRUMENTS All financial instruments reported are carried at cost, which approximates fair value because of the short maturity of those instruments. CREDIT RISK The Company's accounts receivable potentially subject the Company to credit risks as collateral is generally not required. The Company requires signed contracts prior to starting any project. PROPERTY AND EQUIPMENT Property and equipment are recorded at cost, and depreciated using an accelerated method over the estimated useful lives of the assets, commencing when the assets are installed or placed in service. GOODWILL Goodwill is the excess of cost over fair value of net assets acquired in a business combination accounted for as a purchase. Goodwill is amortized on a straight-line basis over 10 years. Amortization expense for the period ended December 31, 1999 was $16,762. REVENUE RECOGNITION Revenues are recorded as services are performed and costs are recorded as incurred. The Company at each reporting date reviews the status of major contracts and immediately records losses in total, if any. Advance billings and collections relating to future services, if any, are recorded as deferred revenue and recognized when revenue is earned. THE CATAPULT GROUP, INC. AND SUBIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED ADVERTISING EXPENSE Advertising expense includes the cost of sales brochures, print advertising in trade publications, and trade shows. The cost of advertising is expensed as incurred. Advertising expense for the period ended December 31, 1999 was $8,602. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. NET LOSS PER SHARE Loss per share is computed based on the weighted average of the number of common shares outstanding of 6,000,000 for each period. For additional disclosure regarding warrants see Note 7. 2. DUE FROM STOCKHOLDER Due from stockholder consisted of an interest free advance which was collected in March 2000. 3. PROPERTY AND EQUIPMENT Property and equipment at December 31, 1999 consist of the following: Furniture and fixtures $ 5,134 Computer and office equipment 37,355 -------- 42,489 Less accumulated deppreciation 12,769 -------- $ 29,720 ======== Depreciation expense for the period ended December 31, 1999 was $3,322. THE CATAPULT GROUP, INC. AND SUBIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 4. NOTES PAYABLE Notes payable at December 31, 1999 consist of the following: Note payable related to purchase of i2o, Inc. at 5%, due August 4, 2000, collateralized by the common stock of the Company, interest and principal payable at maturity. $250,000 Note payable related to purchase of i2o, Inc. at 8%, due February 4, 2000, interest and principal payable at maturity. The note was still outstanding at March 29,2000 $250,000 -------- $500,000 ======== Both notes are due within twelve months and are therefore current. 5. INCOME TAXES Deferred income taxes and the related valuation allowances result from the potential tax benefits of tax carryforwards and temporary differences between financial and income tax reporting. . The Company has recorded a valuation allowance to reflect the uncertainty of the ultimate utilization of the deferred tax asset as follows: Deferred tax asset: Net operating loss carryforward $ 12,000 Stock issued for services 156,000 -------- Deferred tax asset 168,000 Valuation allowance (168,000) -------- Net deferred tax asset $ - ======== The reconciliation of the effective income tax rate to the Federal statutory rate is as follows: Federal income tax rate (34.0)% Effect of valuation allowance on deferred tax asset 34.0 State income tax, net of Federal benefit 0.0 ------- Effective income tax rate 0.0% ======= Net operating loss carryforwards of approximately $30,000 arising in 1999 expires in 2019. 6. LEASE COMMITMENTS The Company leases office space and equipment under operating leases expiring at various times. Rental expense was $15,035 for the period ended December 31, 1999. The minimum rentals are as follows: 2000 $ 60,564 2001 56,097 2002 47,135 2003 46,521 --------- $ 210,317 ========= 7. STOCK PURCHASE WARRANTS AND OPTIONS The Company applies the fair value method for stock warrants issued to consultants. Compensation expense is recognized only when warrants are granted with a discounted exercise price. For 1999, the exercise price for all stock warrants issued was below the market value of the underlying stock on the grant date. Compensation expense related to stock warrants issued in 1999 was nominal. The following table summarizes warrant activity during 1999: Weighted-Average Shares Exercise Price ------- ------------------ Outstanding at beginning of the period - $ - Granted 60,000 0.01 ------- ------- Outstanding at end of the period 60,000 $ 0.01 ======= ======= The following table summarizes information about the warrants outstanding at December 31, 1999: Exercise price $0.01 Weighted-average remaining contract life 10 years Weighted-average exercise price $0.01 All warrants outstanding at December 31, 1999 are exercisable. On September 28, 1999, the Company adopted the 1999 Stock Incentive Plan (the "Plan"), which provided for the issuance of Incentive Stock Options ("ISO's") and non-qualified stock options to officers, directors, key employees and consultants in connection with the Company's incentive compensation program. The number of shares reserved for the Plan was 882, 350. THE CATAPULT GROUP, INC. AND SUBIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 The Plan authorizes the grant of ISO's or non-qualified options with such vesting provisions as determined at the time of grant. The exercise price of each option granted under the Plan shall be set forth in the Stock Option Agreement. The exercise price of any ISO granted shall not be less than the fair market value of the Company's common stock on at the date of grant. These options must be exercised within ten years of the date of grant. Incentive stock options issued to persons who directly or indirectly own more than 10% of the outstanding stock of the Company shall have an exercise price of no less than 110 percent of the fair market value or the Company's common stock on the date of grant and are exercisable up to five years from the date of grant. At December 31, 1999, no options were issued or outstanding under this Plan. 8. FOUNDERS' SERVICES In July 1999, the Company issued 3,900,000 shares to certain founders in exchange for services rendered. Charges to expense related to the transaction were $390,000, which was calculated based on the fair market value of the stock at the date of issuance THE CATAPULT GROUP, INC. AND SUBIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999 9. ACQUISITIONS In July 1999, the Company acquired 12.7% of i2o, Inc. a Georgia corporation, for the issuance of 600,000 shares of common stock. On August 4, 1999, the Company acquired the remaining 87.3% for $515,000. A portion of this purchase was financed by issuance of a note payable of $250,000. The acquisition was accounted for as a purchase and was included in operations from that date through December 31, 1999. The details of the purchase are as follows: Assets purchased $ 133,563 Liabilities assumed $ (46,498) Goodwill $ 502,865 10. MAJOR CUSTOMERS For the period July 21, 1999 (Inception) to December 31, 1999, the Company earned approximately 85% of its revenue from four customers. At December 31, 1999, accounts receivable included approximately $208,000 from these customers. 11. SUBSEQUENT EVENT The Company has entered into an agreement to be acquired by Envirometrics, Inc. ("Envirometrics"), a corporation, in exchange for all outstanding stock. The acquisition will result in shareholders of the Company owning 90% of the acquiring entity. The acquisition will be accounted for as a purchase of net monetary assets of Envirometrics by The Catapult Group, Inc. in accordance with generally accepted accounting principles. The acquisition is a reverse purchase of the assets and liabilities of Envirometrics by The Catapult Group, Inc. The accounting treatment applied in the reverse acquisition differs from the legal form of the transaction and the continuing legal entity is Envirometrics, which will change its name to The Catapult Group, Inc. The transaction is contingent on the acquiring entity's stock being relisted on the OTC Bulletin Board, which was accomplished on March 21, 2000 and other requirements. Upon consummation, The Catapult Group, Inc. will become a reporting company with the Securities and Exchange Commission. As of March 29, 2000, the acquisition has not been consummated. THE CATAPULT GROUP, INC. AND SUBSIDIARY SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS FOR THE PERIOD FROM JULY 21, 1999 (INCEPTION) TO DECEMBER 31, 1999
The Catapult Group I2O, INC. ELIMINATIONS CONSOLIDATED REVENUES Consulting income $ - $ 578,229 $ - $ 578,229 OPERATING EXPENSES Communication and internet services - 227,615 - 227,615 General and administrative 46,761 320,128 - 366,889 Founders' services 390,000 - - 390,000 ---------- ----------- -------- ----------- TOTAL OPERATING EXPENSES 436,761 547,743 - 984,504 ---------- ----------- -------- ----------- OPERATING (LOSS) INCOME (436,761) 30,486 - (406,275) ----------- ---------- -------- ----------- OTHER INCOME (EXPENSE) Interest expense (13,356) - - (13,356) Interest income - 603 - 603 ----------- ---------- -------- ---------- (13,356) 603 - (12,753) ----------- ---------- -------- ---------- NET INCOME (LOSS) $ (450,117) $ 31,089 $ - $ (419,028) =========== ========== ======== ==========
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