<PAGE>
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) October 22, 1999.
----------------
emailthatpays.com, Inc.
-----------------------
(Exact name of registrant as specified in charter)
Florida 000-26047 65-0609891
- ------------------------- ----------------------- ------------------
(State or other jurisdic- (Commission File Number) (IRS Employer
tion of incorporation) Identification No.)
428 West Sixth Avenue, Vancouver, BC, Canada V5Y 1L2
- --------------------------------------------- ----------
(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code 604-801-5566
------------
tvtravel.com, Inc.
Realm Production and Entertainment, Inc.
------------------------------------------------------------
(Former name or former address, if changed since last report.)
------------------------------------
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial Statements of Businesses Acquired.
--------------------------------------------
(1) emailthatpays.com Consolidated Balance Sheet for
September 30, 1999
(2) emailthatpays.com Consolidated Statement of Operations and
Deficit for the Nine Month Period Ended September 30, 1999
(3) emailthatpays.com Consolidated Statement of Cash Flows for
the Nine Month Period Ended September 30, 1999
(4) Report of Independent Public Accountants
(5) emailthatpays.com Balance Sheet for December 31, 1998
(6) emailthatpays.com Statement of Operations and Deficit for
the Period Ended December 31, 1998
(7) emailthatpays.com Statement of Cash Flows for the Period
Ended December 31, 1998
(8) emailthatpays.com Notes to Financial Statements
(b) Pro Forma Financial Information.
-------------------------------
(1) Pro Forma Consolidated Balance Sheet for September
30, 1999
(2) Pro Forma Consolidated Statement of Operations for Period
Ended September 30, 1999 and Year Ended December 31, 1998
(c) Exhibits
23.1 Consent of Independent Public Accountants
1
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page No.
--------
emailthatpays.com
- -----------------
<S> <C>
emailthatpays.com Consolidated Balance Sheet for September 30, 1999................ F-3
emailthatpays.com Consolidated Statement of Operations and Deficit for the
Nine Month Period Ended September 30, 1999................................ F-4
emailthatpays.com Consolidated Statement of Cash Flows for the
Nine Month Period Ended September 30, 1999................................ F-5
Report of Independent Public Accountants........................................... F-7
emailthatpays.com Balance Sheet for December 31, 1998.............................. F-8
emailthatpays.com Statement of Operations and Deficit for the
Period Ended December 31, 1998............................................ F-9
emailthatpays.com Statement of Cash Flows for the
Period Ended December 31, 1998............................................ F-10
emailthatpays.com Notes to Financial Statements.................................... F-11
Unaudited Pro Forma Financial Information
- -----------------------------------------
Consolidated Pro Forma Balance Sheet for September 30, 1999........................ F-16
Consolidated Pro Forma Statement of Operations for Period Ended
September 30, 1999 and Year Ended December 31, 1998....................... F-17
</TABLE>
F-1
<PAGE>
emailthatpays.com
Financial Statements
Period ended September 30, 1999
(Prepared By Management)
<PAGE>
emailthatpays.com
CONSOLIDATED BALANCE SHEET
September 30, 1999
(Prepared By Management)
================================================================================
ASSETS
Current assets:
Cash $ 110,430
Accounts receivable 192,868
Prepaid expenses 8,709
------------------------------------------------------------------
312,007
Due from related parties 2,812
Capital assets (Net of Accumulated Amortization of $15,202) 199,638
- --------------------------------------------------------------------------------
$ 514,457
- --------------------------------------------------------------------------------
LIABILITIES AND DEFICIENCY IN ASSETS
Current liabilities:
Current Portion of Long Term Debt $ 204,702
Accounts Payable and Accrued Expenses 142,848
Taxes Payable 22,905
------------------------------------------------------------------
370,455
Note Payable 500,000
Loans Payable 247,298
Deficiency in assets:
Share capital 109,606
Deficit (712,902)
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(603,296)
- --------------------------------------------------------------------------------
$ 514,457
- --------------------------------------------------------------------------------
F-3
<PAGE>
emailthatpays.com
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
For the Nine Month Period Ended September 30, 1999
(Prepared By Management)
================================================================================
REVENUE $ 785,577
COST OF SALES (533,671)
- --------------------------------------------------------------------------------
GROSS PROFIT 251,906
EXPENSES
Salaries and fringe benefits 387,698
Advertising and promotion 72,797
Consulting fees 66,988
Other Selling, General and Administrative 55,233
Rent 34,979
Computer services 26,032
Telephone and utilities 19,536
Legal and accounting 16,184
Amortization 16,063
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695,510
LOSS FROM OPERATIONS (443,604)
OTHER INCOME (EXPENSES):
Interest income 1,857
Interest expense (21,435)
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(19,578)
- --------------------------------------------------------------------------------
Loss for the period, being deficit at end of period $(463,182)
- --------------------------------------------------------------------------------
F-4
<PAGE>
emailthatpays.com
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Month Period Ended September 30, 1999
(Prepared By Management)
================================================================================
Cash provided by (used in):
Operations:
Loss for the period $ (463,182)
Loss on disposal of capital assets 7,005
Amortization, which does not involve cash 16,063
Increase in accounts receivable (176,483)
Increase in prepaid expenses (8,456)
Increase in accounts payable 117,344
Increase in taxes payable 22,905
Decrease in wages payable (32,609)
------------------------------------------------------------------
(517,413)
Financing:
Advance from shareholders $ (112,475)
Proceeds from issuance of common stock 105,715
Proceeds from issuance of long-term debt 305,319
Proceeds from note payable 500,000
------------------------------------------------------------------
798,559
Investments:
Purchase of capital assets (218,389)
Loss from disposal of capital assets 14,815
Advances from related parties (10,722)
------------------------------------------------------------------
(192,852)
Increase in cash
88,294
Cash, beginning of period 22,136
- --------------------------------------------------------------------------------
Cash, end of period $ 110,430
- --------------------------------------------------------------------------------
F-5
<PAGE>
Audited Financial Statements of
emailthatpays.com
(a Development Stage Enterprise, formerly Hotel Media Group Inc.)
Period ended December 31, 1998
F-6
<PAGE>
[KPMG LETTERHEAD]
AUDITORS' REPORT TO THE STAKEHOLDERS
We have audited the accompanying balance sheet of emailthatpays.com (a
Development Stage Enterprise, formerly Hotel Media Group Inc.) as at December
31, 1998 and the related statements of operations and deficit and cash flows for
the period then ended. 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
in the United States. Those standards require that we plan and perform an audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of emailthatpays.com as at
December 31, 1998, and the results of its operations and its cash flows for the
period then ended in conformity with United States generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
emailthatpays.com will continue as a going concern. As discussed in note 1 to
the financial statements, the continued operation of the Company is dependent
upon the Company's ability to obtain additional financing and upon its ability
to sell an economically viable service to attain profitable operations. As such,
the Company's need to generate cash from operations and obtain additional
financing raises substantial doubt about its ability to continue as a going
concern. Management plans as to this matter are discussed in note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
On September 17, 1999 we reported separately to the shareholders of
emailthatpays.com on the financial statements for the same period, prepared in
accordance with Canadian generally accepted accounting principles.
/s/ KPMG LLP
- ----------------------
Chartered Accountants
Victoria, Canada
September 17, 1999, except Note 9 which is dated December 23, 1999.
F-7
<PAGE>
emailthatpays.com
(a Development Stage Enterprise, formerly Hotel Media Group Inc.)
Balance Sheet
December 31, 1998
================================================================================
Assets
Current assets:
Cash $ 144
Prepaid expenses 137
---------------------------------------------------------------------------
281
Property and equipment (note 3) 9,620
- --------------------------------------------------------------------------------
$ 9,901
- --------------------------------------------------------------------------------
Liabilities and Deficiency in Assets
Current liabilities:
Accounts payable and accrued liabilities $ 3,261
Wages payable 32,609
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35,870
Due to related parties (note 4) 146,681
- --------------------------------------------------------------------------------
Total liabilities 182,551
Stakeholders' equity:
Share capital (note 5) 1
Deficit (172,651)
- --------------------------------------------------------------------------------
Total stakeholders' equity (172,650)
Future operations (note 1)
Contingency (note 6)
Commitments (note 8)
- --------------------------------------------------------------------------------
$ 9,901
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
F-8
<PAGE>
emailthatpays.com
(a Development Stage Enterprise, formerly Hotel Media Group Inc.)
Statement of Operations and Deficit
Period ended December 31, 1998
================================================================================
Expenses:
Salaries $ 113,020
Rent 10,982
Travel 10,291
Advertising 9,936
Office supplies 9,885
Professional fees 8,051
Utilities 4,424
Interest and bank charges 3,126
Depreciation 1,537
Parking 733
Repairs and maintenance 666
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172,651
- --------------------------------------------------------------------------------
Loss for the period, being deficit at end of period
and deficit accumulated during the development stage $ (172,651)
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
F-9
<PAGE>
emailthatpays.com
(a Development Stage Enterprise, formerly Hotel Media Group Inc.)
Statement of Cash Flows
Period ended December 31, 1998
================================================================================
Cash provided by (used in):
Operations:
Loss for the period $ (172,651)
Depreciation, which does not involve cash 1,537
Increase in prepaid expenses (137)
Increase in accounts payable and accrued liabilities 3,261
Increase in wages payable 32,609
---------------------------------------------------------------------------
Net cash flows used in operating activities (135,381)
Financing:
Advances from related parties 146,681
Issue of share capital 1
---------------------------------------------------------------------------
Net cash flows provided by financing activities 146,682
Cash flows used in investing activities:
Purchase of property and equipment (11,157)
- --------------------------------------------------------------------------------
Net increase in cash 144
Cash, beginning of period -
- --------------------------------------------------------------------------------
Cash, end of period $ 144
- --------------------------------------------------------------------------------
There were no non-cash investing and financing activities during the
period.
See accompanying notes to financial statements.
F-10
<PAGE>
emailthatpays.com
(a Development Stage Enterprise, formerly Hotel Media Group Inc.)
Notes to Financial Statements
Period ended December 31, 1998
================================================================================
emailthatpays.com (the "Company") was incorporated on June 26, 1998, under
the Nevada Corporations Act. It is a Development Stage Enterprise with its
principal business activity being the development of a database to gather,
monitor and manage points earned by members based on internet usage.
1. Future operations:
These financial statements have been prepared on the going concern basis,
which assumes the realization of assets and payment of liabilities in the
normal course of business, and do not include adjustments relating either to
the realization of assets or the settlement of liabilities that might be
required should the Company be unable to continue as a going concern. At
December 31, 1998 the Company had a working capital deficiency of $35,589 and
losses since inception of $172,651. These conditions raise substantial doubt
about the ability of the Company to continue as a going concern.
The continued operation of the Company is dependent upon the Company's
ability to obtain additional financing to complete the development of its
database, and ultimately upon its ability to sell an economically viable
service to attain profitable operations. Management is of the opinion that
sufficient working capital will be obtained from external sources in order to
continue operations. However, there is no assurance that the aforementioned
events will occur and be successful.
2. Significant accounting policies:
(a) Property and equipment:
Property and equipment are recorded at cost and are depreciated at rates
which will reduce original cost to estimated residual value over the
useful life of each asset. The annual rates used to compute depreciation
on a declining balance basis are as follows:
----------------------------------------------------------------------
Asset Rate
----------------------------------------------------------------------
Office furniture and equipment 20%
Computer hardware 30%
Computer software 100%
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(b) Use of estimates:
The preparation of financial statements in conformity with generally
accepted accounting procedures requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent liabilities at the date of the financial
statements, and the reported amounts of expenses during the period.
Actual results could differ from the estimates used in the preparation of
financial statements.
F-11
<PAGE>
emailthatpays.com
(a Development Stage Enterprise, formerly Hotel Media Group Inc.)
Notes to Financial Statements
Period ended December 31, 1998
================================================================================
2. Significant accounting policies (continued):
(c) Financial instruments:
The carrying amounts reported in the balance sheet for cash, accounts
payable and accrued liabilities and wages payable approximate their fair
market value, due to the short terms to maturity of these instruments.
3. Property and equipment:
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Accumulated Net book
Cost depreciation value
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Office furniture and equipment $ 3,573 $ 357 $ 3,216
Computer hardware 7,464 1,120 6,344
Computer software 120 60 60
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$ 11,157 $ 1,537 $ 9,620
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4. Due to related parties:
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Parent company $ 106,481
Affiliated company 12,980
Shareholder of related company 27,220
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$ 146,681
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The above advances are unsecured, non-interest bearing and have no set
terms of repayment, with the exception of amounts due to the parent
company, which bear interest at an annual rate of 7%.
5. Share capital:
----------------------------------------------------------------------------
Authorized:
100 million common voting shares, with no par value
Issued:
1 Common share $ 1
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F-12
<PAGE>
emailthatpays.com
(a Development Stage Enterprise, formerly Hotel Media Group Inc.)
Notes to Financial Statements
Period ended December 31, 1998
================================================================================
6. Contingency:
Uncertainty due to the Year 2000 Issue:
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent something other
than a date. The effects of the Year 2000 Issue may be experienced before,
on, or after January 1, 2000, and, if not addressed, the impact on operations
and financial reporting may range from minor errors to significant systems
failure which could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects of the Year
2000 Issue affecting the Company, including those related to the efforts of
customers, suppliers, or other third parties, will be fully resolved.
7. Income taxes:
At December 31, 1998, the Company has non-capital losses in excess of
$180,000 available to reduce future years' income for tax purposes until
2005, the effect of which has not been recorded in the accounts.
8. Lease commitments:
Obligations under lease agreements which include estimated annual minimum
lease payments plus operating costs over the next five years are as follows:
-----------------------------------------------------------------------------
1999 $ 15,000
2000 -
2001 -
2002 -
2003 -
Thereafter -
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F-13
<PAGE>
emailthatpays.com
(a Development Stage Enterprise, formerly Hotel Media Group Inc.)
Notes to Financial Statements
Period ended December 31, 1998
================================================================================
9. Subsequent events:
Subsequent to period end 6,571,999 shares of the Company's common stock were
issued for total consideration of $105,542.
On October 22, 1999, the Company's shareholders acquired control of Realm
Production & Entertainment, Inc pursuant to the terms of a Plan of Merger and
Reorganization Agreement, whereby each share of the Company's common stock
was exchanged for one share of the common stock of Realm Production &
Entertainment, Inc.
F-14
<PAGE>
emailthatpays.com
Pro-Forma Financial Statements
September 30, 1999
(Prepared By Management)
F-15
<PAGE>
emailthatpays.com
PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1999
(Prepared By Management)
================================================================================
ASSETS
Current Assets:
Cash $ 111,017
Accounts receivable 258,613
Prepaid expenses 14,787
------------------------------------------------------------------
384,417
Property, plant and equipment 1,238,037
Goodwill 1,424,837
Security Deposits 26,680
Capitalized Production Costs 1,106,250
- --------------------------------------------------------------------------------
TOTAL ASSETS $ 4,180,221
- --------------------------------------------------------------------------------
LIABILITIES AND DEFICIENCY IN ASSETS
Current Liabilities:
Notes Payable-Related Parties $ 138,792
Notes Payable 26,150
Current Portion-Loans 323,730
Film Costs Payable 100,000
Accounts Payable and Accrued Expenses 570,202
Accrued Salaries 40,574
Taxes Payable 22,905
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1,222,353
Note Payable 17,280
Loans Payable 247,298
Stakeholders' Equity:
Common Stock 114,597
Additional Paid-In Capital 3,291,596
Deficit (712,903)
------------------------------------------------------------------
2,693,290
- --------------------------------------------------------------------------------
TOTAL LIABILITIES AND STAKEHOLDERS' EQUITY $ 4,180,221
- --------------------------------------------------------------------------------
F-16
<PAGE>
emailthatpays.com
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Period Ended September 30, 1999 and Year Ended December 31, 1998
(Prepared By Management)
================================================================================
<TABLE>
<CAPTION>
For the Nine Month For the Year Ended
Period Ended December 31, 1998
September 30, 1999 (Prepared by
(Prepared By Management) Management)
<S> <C> <C>
REVENUE $ 1,636,631 $ 601,518
COST OF SALES (572,609) (281,777)
- ----------------------------------------------------------------------------------------------------
GROSS PROFIT 1,064,022 319,741
- ----------------------------------------------------------------------------------------------------
EXPENSES
Amortization of Production Costs 100,000 125,938
Depreciation and amortization 235,867 106,074
Salaries and Fringe Benefits 911,301 708,604
Legal and Accounting 84,473 102,806
Consulting Fees 179,913 97,716
Phones and Utilities 53,689 43,471
Rent 160,539 99,439
Computer services 26,032 --
Advertising and Promotion 72,797 67,851
Other Selling, General and Administrative 311,476 123,142
--------------------------------------------------------------------------------------
2,136,087 1,475,041
LOSS FROM OPERATIONS (1,072,065) (1,155,300)
OTHER INCOME (EXPENSES):
Interest income 1,921 260
Interest expense (112,926) (36,851)
Benefits from Income Taxes 261,000 --
Settlement of Debt 425,840 --
--------------------------------------------------------------------------------------
(36,591)
- ----------------------------------------------------------------------------------------------------
LOSS FOR THE PERIOD AND YEAR $ (496,230) $(1,191,891)
- ----------------------------------------------------------------------------------------------------
</TABLE>
F-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
emailthatpays.com, Inc.
(Registrant)
Date: January 5, 2000 By: /s/ Daniel Hunter
----------------------------------
Name: Daniel Hunter
Title: Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit No.
- -----------
23.1 Consent of Independent Public Accountants
<PAGE>
[KPMG LETTERHEAD]
The Board of Directors
emailthatpays.com
January 5, 2000
We consent to the inclusion of our report dated September 17, 1999, with respect
to the balance sheet of emailthatpays.com (a Development Stage Enterprise,
formerly Hotel Media Group Inc.) as at December 31, 1998, and the related
statements of operations and deficit and cash flows for the period then ended,
which report appears in the Form 8-K of emailthatpays.com, Inc. (formerly
tvtravel.com, Inc. and formerly Realm Production and Entertainment, Inc.)
dated October 22, 1999.
KPMG LLP
Chartered Accountants
Victoria, Canada
January 5, 2000
