EX-3 4 0004.txt EXHIBIT 3 Exhibit 3 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2000, UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR 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. Titus and AMRES had common ownership and management. The acquisition of Titus is accounted for at historical cost in manner similar to a pooling of interests since Titus is considered part of the control group of AMRES. 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. The acquisition of Titus is also accounted for at historical cost in manner similar to a pooling of interests since Titus is considered part of the control group of AMRES. The unaudited pro forma condensed consolidated statement of operations for the year ended April 30, 2000, includes the operating results of e-Net, LoanNet, and ExpiDoc assuming the acquisitions had been consummated at May 1, 1999 using the purchase method of accounting, and are based on the estimates and assumptions set forth herein and in the notes to such financial statements. This pro forma presentation has been prepared utilizing historical financial statements and notes thereto included herein as well as pro forma adjustments as described in the notes to unaudited pro forma condensed consolidated statement of operations. 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 the Company and the historical financial statements of AMRES, 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 Current assets: Cash and cash equivalents $ 12,449 $ 154,409 $ 446 $ 36,969 Receivables 36,006 189,288 2,651 3,458 Marketable securities 121,845 - - - Prepaid expenses and other current assets 86,830 40,276 - - ------------ ------------ ------------ ------------ Total current assets 257,130 383,973 3,097 40,427 Property and equipment, net 130,837 77,321 - 84,089 Investments in subsidiaries 2,640,135 - - - Goodwill, net - - - - Other 46,181 63,017 - 13,000 ------------ ------------ ------------ ------------ Total assets $ 3,074,283 $ 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 - related party 2,405,000 - - - Notes payable 379,735 374,956 - - Other current liabilities 130,977 - - - ------------ ------------ ------------ ------------ Total current liabilities 3,100,380 533,059 - 18,093 Other liabilities 39,649 - - - ------------ ------------ ------------ ------------ Total liabilities 3,140,029 533,059 - 18,093 ------------ ------------ ------------ ------------ Preferred Stock - LoanNet - - - 100,000 Stockholders' equity (deficit) Convertible class C preferred stock 1,493,638 - - - Common stock and additional paid-in capital 8,179,255 280,000 300 134,543 Retained earnings (accumulated deficit) (7,707,019) (288,748) 2,797 (115,120) Unrealized loss on marketable securities (40,620) - - - Treasury stock (1,991,000) - - - ------------ ------------ ------------ ------------ Total stockholders' equity (deficit) (65,746) (8,748) 3,097 19,423 ------------ ------------ ------------ ------------ Total liabilities and stockholders' equity (deficit) $ 3,074,283 $ 524,311 $ 3,097 $ 137,516 =========== =========== =========== =========== Adjustments Pro Forma EXPIDOC (Note A) Consolidated Current assets: Cash and cash equivalents $ 88,118 $ - $ 292,391 Receivables 22,555 - 253,958 Marketable securities - - 121,845 Prepaid expenses and other current assets - - 127,106 ------------ ------------ ------------ Total current assets 110,673 - 795,300 Property and equipment, net - - 292,247 Investments in subsidiaries - (2,640,135)(1) - Goodwill, net - 2,417,733(2) 2,417,733 Other - - 122,198 ------------ ------------ ------------ Total assets $ 110,673 $ (222,402) $ 3,627,478 ============ ============= ============ Liabilities and stockholders' equity (deficit) Current liabilities: $ $ - $ Accounts payable and accrued liabilities 28,516 - 389,380 Notes payable - related party - - 2,405,000 Notes payable - - 754,691 Other current liabilities - - 130,977 ------------ ------------ ------------ Total current liabilities 28,516 - 3,680,048 Other liabilities - - 39,649 ------------ ------------ ------------ Total liabilities 28,516 - 3,719,697 ------------ ------------ ------------ Preferred Stock - LoanNet - - 100,000 Stockholders' equity (deficit) Convertible class C preferred stock - - 1,493,638 Common stock and additional paid-in capital 125,220 (714,782)(3) 8,004,536 Retained earnings (accumulated deficit) (43,063) 492,380(4) (7,658,773) Unrealized loss on marketable securities - - (40,620) Treasury stock - - (1,991,000) ------------ ------------ ------------ Total stockholders' equity (deficit) 82,157 (222,402) (192,219) ------------ ------------ ------------ Total liabilities and stockholders' equity (deficit) $ 110,673 $ (222,402) $ 3,627,478 =========== ============ ============
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 YEAR ENDED APRIL 30, 2000 --------------------------------------------------------------------------------
E-NET AMRES TITUS LOANNET EXPIDOC Revenue $ 102,748 $ 5,309,374 $ 47,141 $ 72,805 $ 62,334 Cost of revenue - 3,831,223 - - - ------------- ------------- ------------- ------------- ------------- Gross profit 102,748 1,478,151 47,141 72,805 62,334 ------------- ------------- ------------- ------------- ------------- Costs and expenses: Selling, general, and administrative 2,145,100 1,752,193 236,671 187,925 105,429 ------------- ------------- ------------- ------------- ------------- Loss from operations (2,042,352) (274,042) (189,530) (115,120) (43,095) Other income (expense) Interest expense, net (158,016) - - - - Gain on sale of subsidiary 1,833,523 - - - - Other (94,292) 34,442 - - 32 ------------- ------------- ------------- ------------- ------------- Loss before income taxes (461,137) (239,600) (189,530) (115,120) (43,063) Provision for income taxes - (2,506) - - - ------------- -------------- ------------- ------------- ------------- Net loss $ (461,137) $ (242,106) $ (189,530) $ (115,120) $ (43,063) ============= ============ ============ ============ ============ Basic and diluted loss per common share $ (.03) ============= Weighed average shares outstanding 17,716,342 ============= Adjustments Pro Forma (Note B) Consolidated Revenue $ - $ 5,594,402 Cost of revenue - 3,831,223 ------------- ------------- Gross profit - 1,763,179 ------------- ------------- Costs and expenses: Selling, general, and administrative 181,833(5) 4,609,151 ------------- ------------- Loss from operations (181,833) (2,845,972) Other income (expense) Interest expense, net (272,589)(6) (430,605) Gain on sale of subsidiary (1,833,523)(7) - Other - (59,818) ------------- ------------- Loss before income taxes (2,287,945) (3,336,395) Provision for income taxes - (2,506) ------------- ------------- Net loss $ (2,287,945) $ (3,338,901) ============ ============ Basic and diluted loss per common share $ (.19) ============= Weighed average shares outstanding 17,716,342 =============
See notes to unaudited pro forma condensed consolidated financial statements NOTE A: UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2000 The following pro forma adjustments to the unaudited condensed consolidated balance sheet are as follows: (1) Adjustment to eliminate the investments in LoanNet and ExpiDoc. LoanNet $ (2,318,625) ExpiDoc (321,510) ------------ $ (2,640,135) ============ (2) Adjustment to record goodwill as a result of the acquisitions of LoanNet and Expidoc. LoanNet $ 2,226,873 ExpiDoc 190,860 ------------ $ 2,417,733 ============ (3) Adjustment for recapitalization of Amres by e-Net of $1,552,959 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 $ (455,019) ExpiDoc (125,220) LoanNet (134,543) ------------ $ (714,782) ============ (4) Adjustment for recapitalization of Amres by e-Net of $1,552,959 and an adjustment to eliminate the acquired retained earnings/(accumulated deficit) for LoanNet and ExpiDoc of $42,791 and ($5,430), respectively. Recapitalization $ 455,019 LoanNet 42,791 ExpiDoc (5,430) ------------ $ 492,380 ============ NOTE B: UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED APRIL 30, 2000 The following pro forma adjustments to the unaudited pro forma condensed consolidated statement of operations are as if the acquisitions and related transactions had been completed at the beginning of the fiscal period presented are not indicative of what would have occurred had the acquisitions actually been made as of such dates. The results of operations of Titus, LoanNet and ExpiDoc have been reported for the period of inception to April 30, 2000 for each entity, which have been included in the historical results of operations for the Company for the year ended April 30, 2000. The dates of inception for LoanNet and ExpiDoc are December 16, 1999, and August 27, 1999, respectively. (5) Adjustment to record the amortization of goodwill for LoanNet and ExpiDoc and the depreciation of the assets received from LoanNet. Goodwill is amortized over a period of seven years. LoanNet - Amortization $ 132,552 LoanNet - Depreciation 11,679 ExpiDoc 37,602 --------- $ 181,833 =========== (6) Adjustment to record interest expense on notes payable to EMB Corp. and World Trends Financial as a result of the Purchase Agreement with EMB Corp. for AMRES and Titus. (7) Adjustment to eliminate a one-time charge for the sale of VPNCOM.Net Corporation, a subsidiary of the Company.