-----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, T2ek7wRzWDGS2LddxY9TXSGJP1/LDeTRGvhPwxuArKiUf+p7Ubs3I/qrgMf+AzUT Kg2bvJWtsoIBpjmESCgVlw== 0001050502-01-000239.txt : 20010319 0001050502-01-000239.hdr.sgml : 20010319 ACCESSION NUMBER: 0001050502-01-000239 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000412 ITEM INFORMATION: FILED AS OF DATE: 20010315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: E-NET FINANCIAL COM CORP CENTRAL INDEX KEY: 0000926844 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 841273503 STATE OF INCORPORATION: NV FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-24512 FILM NUMBER: 1569685 BUSINESS ADDRESS: STREET 1: 3200 BRISTOL STREET STREET 2: SUITE 710 CITY: COSTA MESA STATE: CA ZIP: 92626 BUSINESS PHONE: 7145572222 MAIL ADDRESS: STREET 1: 2102 BUSINESS CENTER DRIVE STREET 2: 115E CITY: IRVINE STATE: CA ZIP: 92612 FORMER COMPANY: FORMER CONFORMED NAME: E-NET COM CORP DATE OF NAME CHANGE: 20000127 FORMER COMPANY: FORMER CONFORMED NAME: E NET FINANCIAL CORP DATE OF NAME CHANGE: 19990920 FORMER COMPANY: FORMER CONFORMED NAME: E NET CORP/NV DATE OF NAME CHANGE: 19990513 8-K/A 1 0001.txt 8-K/A 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 Commission File of earliest event Number: reported): April 12, 2000 1-10210 e-NET FINANCIAL.COM CORPORATION ---------------------------------------------------- (Exact name of registrant as specified in its charter) NEVADA 84-1273503 ------------------------------ --------------------------- (State or other jurisdiction of (IRS Employer Identification incorporation) Number) 3200 Bristol Street, Suite 700 Costa Mesa, California 92626 -------------------------------------- -------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (714) 866-2100 (Former name or former address, if changed since last report) N/A INTRODUCTION Pursuant to Items 7 (b) (2) of the Securities and Exchange Commission's (the "Commission") General Instructions for Form 8-K, e-Net Financial.Com Corporation ("e-Net" or "Company") hereby amends Item 7 (b) of its Current Report on Form 8-K, filed with the Commission on April 19, 2000 to file unaudited pro forma condensed consolidated financial information for the Company reflecting the acquisition of American Residential Funding, Inc. ("AMRES") on April 12, 2000. The unaudited pro forma condensed consolidated financial information also includes the effects of the acquisitions of Titus Real Estate LLC ("Titus"), LoanNet Mortgage Corp. ("LoanNet") and ExpiDoc.com Inc, ("ExpiDoc") prior to the close of AMRES on April 12, 2000. ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS ITEM 7(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED Filed herewith as part of this report (Exhibit 1) are the audited balance sheets of AMRES as of June 30, 1999 and 1998, and the related statements of operations, stockholder's equity and cash flows for the years ended June 30, 1999 and June 30, 1998, and the notes thereto. If required, the audited financial statements of Titus, LoanNet and ExpiDoc have been previously filed pursuant to Item 310 of Regulation SB. Filed herewith as part of this report (Exhibit 2) are the unaudited balance sheet of AMRES as of March 31, 2000 and the statements of operations, stockholder's equity and cash flows for the nine months ended March 31, 2000 and 1999, and the notes thereto. ITEM 7(b) PRO FORMA FINANCIAL INFORMATION Filed herewith as part of this report (Exhibit 3) are the Company's unaudited pro forma condensed consolidated balance sheet as of April 30, 2000, unaudited pro forma condensed consolidated statement of operations for the ten months ended April 30, 2000, and the notes thereto. SIGNATURES Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed in its behalf by the undersigned, thereunto duly authorized. E-Net Financial.com Corporation (Registrant) Date: June 23, 2000 By: /s/ Vince Rinehart -------------------------------- Vince Rinehart President Exhibits 1. Audited balance sheets of AMRES as of June 30, 1999 and 1998, and the related statements of operations, stockholder's equity and cash flows for the years ended June 30, 1999 and June 30, 1998. 2. Unaudited balance sheet of AMRES as of March 31, 2000 and the statements of operations, stockholder's equity and cash flows for the nine months ended March 31, 2000 and 1999. 3. Unaudited pro forma condensed consolidated balance sheet as of April 30, 2000, unaudited pro forma condensed consolidated statement of operations for the ten months ended April 30, 2000 EX-1 2 0002.txt FINANCIAL STATEMENTS JUNE 30, 1999 & 1998 Exhibit 1 AUDITED BALANCE SHEETS OF AMRES AS OF JUNE 30, 1999 AND 1998, AND THE RELATED STATEMENTS OF OPERATIONS, STOCKHOLDER'S EQUITY AND CASH FLOWS FOR THE YEARS ENDED JUNE 30, 1999 AND JUNE 30, 1998 INDEPENDENT AUDITORS REPORT DATED JUNE 30, 1998 Independent Auditors' Report ---------------------------- Board of Directors AMERICAN RESIDENTIAL FUNDING, INC. We have audited the accompanying balance sheet of American Residential Funding, Inc. as of June 30, 1998, and the related income statement and statement of cash flows for the five months then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of American Residential Funding, Inc. as of June 30, 1998, and the results of its operations and its cash flows for the five months then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated July 1, 1998, on our consideration of American Residential Inc.'s internal control structure, and report dated July 1, 1998, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD program transactions. By: /s/ Hukriede, Walsh & Associates ----------------------------------------- Hukriede, Walsh & Associates, CPAs July 1, 1998 Westminster, California AMERICAN RESIDENTIAL FUNDING, INC. BALANCE SHEET AS OF JUNE 30, 1998 ASSETS - ------ Current Assets: - -------------- Cash and Cash Equivalents $ 130,000 ------------ Total Current Assets 130,000 Other Assets: - ------------ Organization Costs 2,285 ------------ Total Assets $ 132,285 ============ LIABILITIES AND EQUITY - ---------------------- Stockholder's Equity: - -------------------- Common Stock no par value: 25,000 shares authorized, 5,000 issued and outstanding $ 130,000 Additional Paid-In Capital 2,285 ------------ Total Stockholder's Equity 132,285 ------------ Total Liabilities & Equity $ 132,285 ============ The accompanying notes are integral parts of this statement. AMERICAN RESIDENTIAL FUNDING, INC. INCOME STATEMENT FOR THE ELEVEN MONTHS ENDED JUNE 30, 1998 REVENUES: - -------- ----------- Total Revenue $ 0 ----------- EXPENSES - -------- ----------- Total Expenses $ 0 ----------- ----------- NET INCOME $ 0 - ---------- =========== The accompanying notes are integral parts of this statement. AMERICAN RESIDENTIAL FUNDING, INC. STATEMENT OF CASH FLOWS FOR THE ELEVEN MONTHS ENDED JUNE 30, 1998 Cash Flows from Operating Activities: - ------------------------------------ Net Income $ 0 Adjustments to Reconcile Net Income to Net Cash Decrease (Increase) in Assets: Organization Costs (2,285) (Decrease) Increase in Liabilities: ----------- Cash Provided by Operations $ (2,285) ----------- Cash Flows Used By Investing Activities: Cash Flows Used by Investing Activities $ 0 ----------- Cash Flows Used By Financing Activities: - --------------------------------------- Capital Contributions 132,285 ----------- Cash Flows Provided from Financing Activities $ 132,285 ----------- Net Increase in Cash $ 130,000 Cash at Beginning of Year 0 ----------- Cash at End of Year $ 130,000 =========== The accompanying notes are integral parts of this statement. AMERICAN RESIDENTIAL FUNDING, INC. NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1998 ORGANIZATION - ------------ The Corporation was incorporated in the State of Nevada on March 13, 1998, under the name American Residential Funding Inc. The company will be principally engaged as a mortgage broker in the real estate industry. As of this date, there has been no revenue generating activity in the company's principal line of business. ACCOUNTING POLICIES - ------------------- Income and expenses will be reported on a accrual basis, which means that income is recognized as it is earned and expenses are recognized as they are incurred whether or not cash is received or paid out at that time. In concurrence with industry practice, loan fees and commissions are recognized when the related loans are funded by the primary lenders. CASH AND INVESTMENTS - -------------------- For purposes of reporting cash flows, cash and cash equivalents include debt and equity instruments purchased with a maturity of three months or less. INDEPENDENT AUDITORS REPORT DATED JUNE 30, 1999 Report of Independent Accountants Board of Directors American Residential Funding, Inc. We have audited the accompanying balance sheet of American Residential Funding, Inc. as of June 30, 1999, and the related statements of income, stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the 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 and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statement referred to above present fairly, in all material respects, the financial position of American Residential Funding, Inc. as of June 30, 1999, and the results of its operations, changes in stockholders' equity, and cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting information included in the report (shown on pages 10 through 15) are presented for the purposes of additional analysis and are not a required part of the basic financial statements of American Residential Funding, Inc. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a reports dated September 7, 1999, on our consideration of American Residential Funding, Inc. internal control structure, its compliance with specific requirements applicable to major HUD programs and non-major HUD program transactions. By: /s/ Hukriede, Walsh & Associates ------------------------------------- Hukriede, Walsh & Associates, CPAs September 7, 1999 Westminster, California American Residential Funding, Inc. Balance Sheet June 30, 1999 ASSETS Current Assets Cash $ 105,317 Commissions Receivable 128,325 Advances to Employees 8,525 Investments 600,000 Notes Receivable 100,000 ------------ Total Current Assets 942,168 ------------ Property and Equipment Computers and Equipment 17,343 Office Furniture & Fixtures 1,405 Accumulated Depreciation (2,225) Organization Costs 31,070 Accumulated Amortization (3,006) ------------ Total Property and Equipment 44,588 ------------ Other Assets Deposits 572 Investments 40,000 ------------ Total Other Assets 40,572 ------------ Total Assets $ 1,027,327 ============ The accompanying report and notes are an integral part of this financial statement. American Residential Funding, Inc. Balance Sheet June 30, 1999 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Current Liabilities Commissions Payable $ 95,794 Accounts Payable 25,517 Accrued Expenses Payable 28,745 Contracts Payable 18,500 Taxes Payable 800 ----------- Total Current Liabilities 167,356 ----------- Long-Term Liabilities Deferred Taxes Payable 746 Notes Payable 150,000 ----------- Total Long-Term Liabilities 150,746 ----------- Total Liabilities 318,102 ----------- SHAREHOLDERS' EQUITY Shareholders' Equity Common Stock 105,000 Preferred Stock 600,000 Retained Earnings 4,225 ----------- Total Shareholders' Equity 709,225 ----------- Total Liabilities and Shareholders' Equity $ 1,027,327 =========== The accompanying report and notes are an integral part of this financial statement.
American Residential Funding, Inc. Statement of Stockholders' Equity For the Year Ended June 30, 1999 Common Stock Preferred Additional Retained Total Stock Paid-in-Capital Earnings Balance, July 1, 1998 $ 130,000 $ 0 $ 2,285 $ 0 $132,285 Preferred Stock issued 0 600,000 0 0 600,000 Stock shares redeemed (25,000) 0 (2,285) 0 (27,285) Net income(loss) 0 0 0 4,225 4,225 Balance, June 30, 1999 $ 105,000 $ 600,000 0 $ 4,225 $709,225 The accompanying report and notes are an integral part of this financial statements
American Residential Funding, Inc. Income Statement For the Periods Ended June 30, 1999 REVENUES $ 3,547,933 -------------- EXPENSES Advertising and Marketing 20,819 Amortization and Depreciation 5,231 Automobile and Travel 15,688 Commissions and Fees 2,304,227 Consulting and Contractors 58,339 Credit Reports 22,556 Directors Fees 2,750 Dues and Subscriptions 12,893 Equipment 16,331 Insurance 40,881 Interest 3,088 Miscellaneous 7,100 Office Supplies 44,973 Officer Compensation 131,100 Postage and Delivery 14,068 Professional Development 11,113 Professional Fees 50,475 Rent 125,660 Repairs and Maintenance 11,719 Salaries and Benefits 536,351 Taxes and Licenses 3,319 Telephone 62,392 Travel and Entertainment 9,068 Utilities 10,925 Gain (Loss) on Acquisitions 20,294 -------------- Total Expenses 3,541,361 NET INCOME BEFORE TAXES 6,571 Provision for Income Taxes 2,346 NET INCOME $ 4,225 ============== The accompanying report and notes are an integral part of this financial statement. American Residential Funding, Inc. Statement of Cash Flows For the Year Ended June 30, 1999 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 4,225 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation 2,225 Amortization 3,006 Changes in assets and liabilities: (Increase) decrease in trade receivables (136,850) (Increase) decrease in deposits (572) Increase (decrease) in accounts payable and accrued expense 166,556 Increase (decrease) in deferred taxes payable 746 Increase (decrease) in income taxes payable 800 --------- Net cash provided by (used in) operating activities 40,136 --------- CASH FLOWS FROM INVESTING ACTIVITIES Investments (40,000) Notes Receivable (100,000) Organization Costs (28,785) Purchase of property and equipment (18,748) --------- Net cash provided by (used in) investing activities (187,533) --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings 150,000 Redemption of common stock (27,285) --------- Net cash provided by (used in) financing activities 122,715 --------- Net increase (decrease) in cash and cash equivalents (24,683) Cash balance - beginning of period 130,000 --------- Cash balance - end of period $ 105,317 ========= The accompanying report and notes are an integral part of this financial statements AMERICAN RESIDENTIAL FUNDING, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 ORGANIZATION American Residential Funding, Inc. is a Nevada corporation organized March 13, 1998. The Company is a HUD-approved Title I and Title II loan correspondent, licensed by the Department of Real Estate. American Residential Funding, Inc. originates and sells HUD-insured mortgages and conventional loans. These loans are sold to financial institutions or other entities who securitize loans for investments. ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Revenue Recognition The financial statements of the Company are prepared using the accrual basis of accounting whereas revenues are recognized when earned and expenses are recognized when incurred. This basis of accounting conforms to generally accepted accounting principles. CASH AND CASH EQUIVALENTS The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. INVESTMENTS The Corporation has purchased 100,000 shares common stock of a publicly traded company which are classified as available-for-sale equity securities reported in accordance with FASB 115. Investment shares are held by a Trustee and have been irrevocably assigned to American Residential Funding, Inc.. The investment is reported at the lower of cost or market. The fair market value, $600,000, is based on quoted market prices as of June 30, 1999. The stock is restricted under the Securities and Exchange Commission Ruling 144. American Residential Funding, Inc. has invested $40,000 in a related company, reported at cost. AMERICAN RESIDENTIAL FUNDING, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 NOTES RECEIVABLE As of June 30, 1999, the Company holds a 12 month unsecured note receivable from a related company in the amount of $100,000 bearing 12% interest, principal and interest due June 15, 2000. AMORTIZATION AND DEPRECIATION Fixed assets are recorded at cost. Depreciation expense is computed under the straight line method over the useful lives of the assets. Organization costs are amortized under the straight line method over five years. CONTRACTS PAYABLE The Company has entered into a acquisition agreement with another company providing for the purchase of the sebsequent income generated, assets and obligations of an existing mortgage originating organization with monthly payments due of $2,750 through November 15, 1999. NOTES PAYABLE American Residential Funding, Inc. holds a $150,000 note payable to a related company bearing 5% interest, principal and interest payable April 1, 2005. STOCKHOLDERS' EQUITY The components of stockholders' equity are as follows: Preferred Stock consists of Class A shares of non-redeemable preferred stock at no par value, 5% interest, cumulative. There are 20,000 shares authorized; 12,000 shares are issued and outstanding. Class A Preferred shares are convertible to common stock. The Corporation has authorized 5,000 shares of no par common stock, with 5,000 shares issued and 4,038 shares outstanding. During fiscal year end June 30, 1999, the company redeemed 962 shares at cost. AMERICAN RESIDENTIAL FUNDING, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 TREASURY STOCK The Company has purchased, in the current fiscal year ended, 962 shares of American Residential Funding, Inc. common stock, at a total cost of $27,285. INCOME TAXES The Company uses different depreciation methods for financial reporting of fixed assets than for income tax reporting. These timing differences results in a tax deferral for the year ended June 30, 1999. The Company has accrued a minimum franchise tax expense of $800 to the State of California and has accrued a deferred federal tax liability of $746 for the fiscal year end June 30, 1999. COMMITMENTS AND CONTINGENCIES The Company has entered into various employment agreements with management individuals. The agreements require the Company to pay these parties (in aggregate) $120,000 per year over a period of three years, various other incentives, stock options and other commission arrangements based upon performance. LEASE OBLIGATIONS The Company has entered into noncancelable operating lease agreements and real estate lease agreements. The following is a schedule of future minimum rental payments required under the leases as of June 30, 1999. Period Ended June 30 Amount -------------------- ------ 2000 $20,506 2001 8,184 2002 8,184 2003 2,046 ------- Total $38,920 ======= EX-2 3 0003.txt FINANCIAL STATEMENTS ENDED MARCH 31, 2000 & 1999 EXHIBIT 2 Unaudited balance sheet of AMRES as of March 31, 2000 and the statements of operations, stockholder's equity and cash flows for the nine months ended March 31, 2000 and 1999 AMERICAN RESIDENTIAL FUNDING, INC. BALANCE SHEET AS OF MARCH 31, 2000 (UNAUDITED) ASSETS Current assets: Cash $ 50,374 Receivables 191,281 Marketable securities 600,000 Other current assets 59,349 Notes receivable from related party 54,000 ------------- Total current assets 955,004 Property and equipment, net 105,385 Other assets 40,117 ------------- $ 1,100,506 ============= LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $ 65,224 Accrued liabilities 134,346 Notes payable 374,956 ------------- Total liabilities 574,526 Shareholders' deficit: Preferred stock 600,000 Common stock 105,000 Accumulated deficit (179,020) ------------- Total shareholders' deficit 525,980 ------------- $ 1,100,506 ============= See accompanying notes to financial statements AMERICAN RESIDENTIAL FUNDING, INC. STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED) 2000 1999 ------------- ------------- Revenues $ 4,045,935 $ 2,349,920 Cost of revenues 2,945,611 1,508,685 ------------- ------------- Gross profit 1,100,324 841,235 General and administrative expenses 1,272,613 818,614 ------------- ------------- (Income) loss before income taxes (172,289) 22,621 Provision for income taxes 2,506 800 ------------- ------------- Net income (loss) $ (174,795) $ 21,821 ============= ============= See accompanying notes to financial statements
AMERICAN RESIDENTIAL FUNDING, INC. STATEMENTS OF CASHFLOWS FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED) 2000 1999 ---- ---- Cash flows from operating activities: Net income (loss) $ (174,795) $ 21,821 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 5,236 3,923 Changes in operating assets and liabilities: Receivables (62,956) (139,580) Other current assets (50,824) (18,557) Accounts payable (69,773) 92,950 Accrued liabilities 87,555 12,606 --------- --------- Net cash used in operating activities (265,557) (26,837) --------- --------- Cash flows from investing activities: Purchases of property and equipment (60,797) (46,053) Other assets 455 (40,087) --------- --------- Net cash used in investing activities (60,342) (86,140) --------- --------- Cash flows from financing activities: Repayment of capital contribution -- (27,285) Proceeds from notes payable 224,956 145,000 Proceeds from (repayments of) related party borrowings 46,000 (80,000) --------- --------- Net cash provided by financing activities 270,956 37,715 --------- --------- Net decrease in cash (54,943) (75,262) Cash at beginning of period 105,317 130,000 --------- --------- Cash at end of period $ 50,374 $ 54,738 ========= ========= See accompanying notes to financial statements
NOTE 1 - BASIS OF PRESENTATION UNAUDITED INTERIM FINANCIAL STATEMENTS The accompanying financial statements are unaudited and are prepared in accordance with rules and regulations of the Securities and Exchange Commission for interim quarterly reporting. Accordingly, these financial statements do not include all disclosures required under generally accepted accounting principles. In the opinion of management, the accompanying financial statements contain all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position of American Residential Funding, Inc. as of March 31, 2000, and the results of their operations and their cash flows for the nine months ended March 31, 2000. Results for the nine months ended March 31, 2000, are not necessarily indicative of the operations which may occur during the year ending June 30, 2000. NOTE 2 - SUBSEQUENT EVENT Subsequent to March 31, 2000, AMRES' former parent sold a subsidiary to an unrelated party. AMRES had outstanding debt due to this unrelated party. In connection with the agreement to sell the subsidiary, all outstanding debt of AMRES due to the unrelated party was forgiven. As a result of this forgiveness of debt, AMRES recorded an extraordinary gain of $346,856. EX-3 4 0004.txt CONDENSED CONSOLIDATED FINANCIAL STYATEMENTS 2000 Exhibit 3 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2000, UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE TEN MONTHS ENDED APRIL 30, 2000 BACKGROUND On April 12, 2000, e-Net acquired AMRES for 7,500,000 shares of common stock and a $4,000,000 note payable, of which $1,595,000 was paid by e-Net at the time of close. AMRES has more significant operations and has management control of current operations of e-Net or its subsidiaries. e-Net, prior to a series of acquisitions in February and March 2000, was considered a blank-check company with limited operating history. On February 11, 2000, e-Net acquired all the issued and outstanding capital stock of Titus. In connection with this acquisition the Company issued 300,000 shares of restricted common stock and 100,000 shares of B Preferred. The acquisition was treated under the purchase method with the excess of cost over the fair value of net assets acquired of $1,600,00 allocated to goodwill. On February 14, 2000, the Company acquired all the issued and outstanding capital stock of LoanNet. In connection with this acquisition the Company issued 250,000 shares of common stock valued at $2,305,625. The acquisition was treated under the purchase method with the excess of cost over the fair value of the net assets acquired of $2,226,873 allocated to goodwill. On March 17, 2000, the Company acquired all the issued and outstanding capital stock of ExpiDoc for 24,000 shares of the Company's common stock. These shares were valued at $321,510. The acquisition was treated under the purchase method with the excess of cost over the fair value of the net assets acquired of $315,860 allocated to goodwill. BASIS OF PRESENTATION The accompanying unaudited pro forma condensed consolidated balance sheet presents the financial position of the Company on April 30, 2000. The acquisition of AMRES has been accounted for as a recapitalization of AMRES, whereby AMRES is deemed the acquiring company for financial reporting purposes. Accordingly, the historical assets and liabilities and related operations of AMRES are presented at historical cost in manner similar to a pooling of interests. This unaudited pro forma condensed consolidated statement of operations has been prepared utilizing historical financial statements and notes thereto, as well as pro forma adjustments as described in the notes to this pro forma statement of operations. The pro forma statement of operations is based on the assumptions set forth herein and in the notes to such financial statement. The pro forma statement of operations includes the effects of the following acquisitions: o The effects of debt issued by e-Net to acquire American Residential Funding, Inc., ("AMRES"). o Acquisition of Titus Real Estate, LLC through the issuance of 300,000 shares of common stock and 100,000 shares of Series B $1,000,000 Redeemable Preferred Stock in a transaction valued by the parties at $1.6 million. o Acquisition of LoanNet Mortgage, Inc. through the issuance of 250,000 shares of common stock in a transaction valued at $2.3 million. o Acquisition of ExpiDoc, Inc. through the issuance of 24,000 shares of common stock in a transaction valued at $196,000. The unaudited pro forma condensed consolidated statement of operations for the ten months ended April 30, 2000, includes the operating results of e-Net, Titus, LoanNet, and ExpiDoc from the dates of acquisition, using the purchase method of accounting. The consolidated financial information of e-Net, includes the historical results of AMRES for all periods presented and the results of e-Net from the date of the reverse acquisition, April 12, 2000, through April 30, 2000. The consolidated financial information of the predecessor entity e-Net includes the results of operations for the nine months ended January 31, 2000. The unaudited pro forma condensed consolidated statement of operations are presented for illustrative purposes only and do not purport to represent what the Company's results of operations would have been had the acquisitions described herein occurred on May 1, 1999, and are therefore qualified in their entirety by reference to and should be read in conjunction with the historical consolidated financial statements and notes thereto of e-Net, and the historical financial statements of Titus, LoanNet, and ExpiDoc.
E-NET FINANCIAL.COM CORPORATION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2000 - ------------------------------------------------------------------------------------------------------------- E-NET AMRES TITUS LOANNET ASSETS Current assets: Cash and cash equivalents $ 312,422 $ 154,409 $ 446 $ 36,969 Receivables 36,006 189,288 2,651 3,458 Prepaid expenses and other current assets 158,630 40,276 -- -- ------------ ------------ ------------ ------------ Total current assets 507,058 383,973 3,097 40,427 Property and equipment, net 130,837 77,321 -- 84,089 Investments in subsidiaries 4,240,135 -- -- -- Goodwill, net -- -- -- -- Other 46,181 63,017 -- 13,000 ------------ ------------ ------------ ------------ Total assets $ 4,294,211 $ 524,311 $ 3,097 $ 137,516 ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued liabilities $ 184,668 $ 158,103 $ -- $ 18,093 Notes payable to related parties 1,434,735 374,956 -- -- Other current liabilities 130,977 -- -- -- ------------ ------------ ------------ ------------ Total current liabilities 1,750,380 533,059 -- 18,093 Other liabilities 39,649 -- -- 100,000 ------------ ------------ ------------ ------------ Total liabilities 1,790,029 533,059 -- 118,093 ------------ ------------ ------------ ------------ Stockholders' equity (deficit) Convertible class C preferred stock 1,493,638 -- -- -- Common stock and additional paid-in capital 10,227,228 280,000 -- 134,543 Retained earnings (6,595,684) (288,748) 3,097 (115,120) (accumulated deficit) Treasury stock (1,991,000) -- -- -- ------------ ------------ ------------ ------------ Total stockholders' equity (deficit) 3,134,182 (8,748) 3,097 19,423 ------------ ------------ ------------ ------------ Total liabilities and stockholders' equity (deficit) $ 4,294,211 $ 524,311 $ 3,097 $ 137,516 ============ ============ ============ ============ Adjustments Pro Forma EXPIDOC (Note A) Consolidated ASSETS Current assets: Cash and cash equivalents $ 88,118 $ -- $ 592,364 Receivables 22,555 -- 253,958 Prepaid expenses and other current assets -- -- 198,906 ------------ ------------ ------------ Total current assets 110,673 -- 1,045,228 Property and equipment, net -- -- 292,247 Investments in subsidiaries -- (4,240,135)(1) -- Goodwill, net -- 4,014,636 4,014,636 Other -- -- 122,198 ------------ ------------ ------------ Total assets $ 110,673 $ (225,499) $ 5,474,309 ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued liabilities $ 28,516 $ -- $ 389,380 Notes payable to related parties -- -- 1,809,691 Other current liabilities -- -- 130,977 ------------ ------------ ------------ Total current liabilities 28,516 -- 2,330,048 Other liabilities -- -- 139,649 ------------ ------------ ------------ Total liabilities 28,516 -- 2,469,697 ------------ ------------ ------------ Stockholders' equity (deficit) Convertible class C preferred stock -- -- 1,493,638 Common stock and additional paid-in capital 125,220 (852,650)(3) 9,914,341 Retained earnings (43,063) 627,151 (6,412,367) (accumulated deficit) Treasury stock -- -- (1,991,000) ------------ ------------ ------------ Total stockholders' equity (deficit) 82,157 (225,499) 3,004,612 ------------ ------------ ------------ Total liabilities and stockholders' equity (deficit) $ 110,673 $ (225,499) $ 5,474,309 ============ ============ ============ See notes to unaudited pro forma condensed consolidated financial statements
e-NET FINANCIAL.COM CORPORATION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE TEN MONTHS ENDED APRIL 30, 2000 Predecessor e-Net e-Net Titus LoanNet ExpiDoc ------------ ------------ ------------ ------------ ------------ Revenue $ 4,689,170 $ 91,058 $ 47,141 $ 69,347 $ 90,565 Cost of revenue 3,411,750 -- -- 44,293 53,809 ------------ ------------ ------------ ------------ ------------ Gross profit 1,277,420 91,058 47,141 25,054 36,756 Selling, general, and administrative 2,059,374 2,086,239 236,671 195,823 189,487 Stock-based compensation 1,000,000 -- -- -- -- ------------ ------------ ------------ ------------ ------------ Income (loss) from operations (1,781,954) (1,975,181) (189,530) (170,769) (152,731) Other income (expense): Interest expense, net -- (7,588) -- -- -- Other (14,945) 7,514 -- -- -- ------------ ------------ ------------ ------------ ------------ (14,945) (74) -- -- -- ------------ ------------ ------------ ------------ ------------ Loss before extraordinary item (1,796,899) (1,995,255) (189,530) (170,769) (152,731) Loss on extinguishment of debt -- (78,641) -- -- -- ------------ ------------ ------------ ------------ ------------ Net loss $ (1,796,899) $ (2,073,896) $ (189,530) $ (170,769) $ (152,731) ============ ============ ============ ============ ============ Basic and diluted loss per common share $ (.22) ============ Weighed average shares outstanding 8,222,636 ============ Table continues below. Adjustments Pro Forma (Note A) Consolidated ------------ ------------ Revenue $ -- $ 4,987,281 Cost of revenue -- 3,509,852 ------------ ------------ Gross profit -- 1,477,429 Selling, general, and administrative 329,266 (1) 5,096,860 Stock-based compensation -- 1,000,000 ------------ ------------ Income (loss) from operations (329,266) (4,619,431) Other income (expense): Interest expense, net (270,307)(2) (277,895) Other -- (7,431) ------------ ------------ (270,307) (285,326) ------------ ------------ Loss before extraordinary item (599,573) (4,904,757) Loss on extinguishment of debt 78,641 (3) -- ------------ ------------ Net loss $ (599,573) $ (4,904,757) ============ ============ Basic and diluted loss per common share $ (.24) ============ Weighed average shares outstanding 20,186,033 ============ See notes to unaudited pro forma condensed consolidated statement of operations
NOTE A: UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2000 The accompanying unaudited pro forma condensed consolidated balance sheet presents the financial position of e-Net Financial.com Corporation on April 30, 2000. The acquisition of AMRES has been accounted for as a reverse acquisition, whereby AMRES is deemed the acquiring company for financial reporting purposes. Accordingly, the historical assets and liabilities and related operations of AMRES are presented at historical cost in manner similar to a pooling of interests. The common shares retained by the e-Net shareholders which were outstanding on or about January 20, 2000, were reflected as shares issued in connection with the recapitalization as a result of the reverse acquisition of e-Net. The following pro forma adjustments to the unaudited condensed consolidated balance sheet are as follows: (1) Adjustment to eliminate the investments in Titus, LoanNet and ExpiDoc. LoanNet $ (2,318,625) ExpiDoc (321,510) Titus (1,600,000) ------------ $ (4,240,135) ============ (2) Adjustment to record goodwill and intangibles as a result of the acquisitions of Titus, LoanNet and Expidoc. Titus $ 1,596,903 LoanNet 2,226,873 ExpiDoc 190,860 ------------ $ 4,014,636 ============ (3) Adjustment for recapitalization of AMRES by e-Net of $592,887 and an adjustment to eliminate the historical equity of ExpiDoc of $125,220 and amounts in common stock and additional paid-in capital of LoanNet of $134,543. Recapitalization $ (592,887) ExpiDoc (125,220) LoanNet (134,543) ------------ $ (852,650) ============ (4) Adjustment for the recapitalization of AMRES by e-Net of $592,887 and to eliminate the acquired retained earnings/(accumulated deficit) for Titus, LoanNet and ExpiDoc: Recapitalization $ 592,887 Titus (3,097) LoanNet 42,791 ExpiDoc (5,430) ------------ $ 627,151 ============ Note B. Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Ten Months Ended April 30, 2000 The unaudited pro forma condensed consolidated statement of operations for the ten months ended April 30, 2000, includes the operations of Titus, LoanNet, and ExpiDoc from the dates of acquisition. The Company recorded goodwill as follows: Amount Life ------ ---- LoanNet $2,226,873 7 Titus 1,600,000 10 ExpiDoc 210,296 7 ---------- $4,037,169 ========== (1) Adjustment to record the depreciation of fixed assets acquired from LoanNet and amortization of goodwill for Titus, LoanNet, and ExpiDoc. Goodwill is amortized over a period of seven years to ten years due to lack of operating history. LoanNet - Depreciation .................... $ 11,679 LoanNet - Amortization .................... 132,552 Titus ..................................... 160,000 ExpiDoc ................................... 25,035 -------- $329,266 ======== (2) Adjustment to record interest expense on note issued to acquire AMRES of $270,307. (3) Adjustment for non-recurring item. (4) Pro Forma Weighted Average Shares Outstanding As Reported - 8,222,636 Shares retained by e-Net shareholders in reverse acquisition 10,979,937 Shares issued for Loan Net Acquisition 250,000 Shares issued for Titus Acquisition 1,300,000 Shares issued for ExpiDoc Acquisition 24,000 Less Shares included in "as reported" above (590,540) ----------- 20,186,033 =========== -----END PRIVACY-ENHANCED MESSAGE-----