U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ........... to ...........
Commission file number 333-51302
STAMPEDE WORLDWIDE, INC.(Formerly CHRONICLE COMMUNICATIONS, INC.)
(Name of small business issuer in its charter)
FLORIDA
(State or other jurisdiction of incorporation or organization)
58-2235301
(I.R.S. Employer Identification No.)
3910 Riga Boulevard, Tampa, Florida 33619
(Address of principal executive offices) (Zip Code)
(813) 630-2762
Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act:
Title of each class: NONE
Name of each exchange on which registered: NOT APPLICABLE
Securities registered under Section 12(g) of the Exchange Act:
Title of class: NONE
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months and (2)
has been subject to such filing requirements for the past 90 days. Yes
... No X
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $1,674,810
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 21,400,876 shares at
January 04, 2001
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I,
Part II, etc.) into which the document is incorporated: (1) any annual
report to security holders; (2) any proxy or information statement; and
(3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities
Act of 1933 ("Securities Act"). The list documents should be clearly
described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1990).
NONE
Transitional Small Business Disclosure Format (check one): Yes No X
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended, and
is subject to the safe harbors created by those sections. These forward-
looking statements are subject to significant risks and uncertainties,
including information included under Parts I and II of this annual
report, which may cause actual results to differ materially from those
discussed in such forward-looking statements. The forward-looking
statements within this annual report are identified by words such as
"believes", "anticipates", "expects", "intends", "may", "will" and other
similar expressions regarding the Company's intent, belief and current
expectations. However, these words are not the exclusive means of
identifying such statements. In addition, any statements which refer to
expectations, projections or other characterizations of future events or
circumstances and statements made in the future tense are forward-looking
statements. Readers are cautioned that actual results may differ
materially from those projected in the forward looking statements as a
result of various factors, many of which are beyond the control of the
Company. The Company undertakes no obligation to publicly release the
results of any revisions to these forward-looking statements which may be
made to reflect events or circumstances occurring subsequent to the
filing of this annual with the SEC. Readers are urged to carefully review
and consider the various disclosures made by the Company in this annual
report.
PART I
Item 1. Description of Business.
Stampede Worldwide, Inc., (the "Company") was incorporated in Georgia on
April 5, 1996, under the name of JMAR Communications, Inc., and changed its
name to Chronicle Communications, Inc., effective July 30, 1997. The Georgia
company merged into its newly incorporated, wholly owned Florida subsidiary
on February 2, 2000 for the sole purpose of changing the Company's state of
incorporation to Florida from Georgia. On April 14, 2000, the Company
changed its name to Stampede Worldwide, Inc.
The Company's founder is John V. Whitman, Jr., the Company's president and
chairman. The Company was organized for the purpose of establishing and
operating a shopper style tabloid newspaper in the Crisp County, Georgia
market area which included several contiguous counties. The Company later
expanded operations to include a second shopper style tabloid newspaper,
including community news features, serving the Grady County, Georgia market
area which included several contiguous counties. Subsequently, the Company
added a two-edition broadsheet (full sized) Sunday newspaper serving those
markets, with a full membership in the Associated Press. In February 1998,
the Company terminated publication of the Sunday newspapers. In February
1999, the Company terminated publication of all shopper style tabloid
newspapers and became a holding company with its operations located entirely
in its subsidiary companies.
The Company, through its subsidiaries hosts a network of services including
e-business solutions, hardware and software productivity solutions, custom IT
training, premium technology staffing, and dynamic commercial printing
expertise. The Company focuses on client's information technology investment
and through new programming tools and Internet technology, provides rapid
program development for both traditional business information solutions such
as Human resource management and new Internet market driven electronic
commerce, corporate intranets and supplier/customer extranets. The Company's
value proposition is directed toward client's total costs associated with
planning and designing enterprise resources, providing the hardware,
software, staffing and training to maximize their return on information
technology investments. The Company, through its "Pewter Partnership" with
the Tampa Bay Buccaneers, a National Football League team, and has been named
the exclusive Web development firm for that organization. The Company has
two service centers for its subsidiaries. Stampede Worldwide, Inc. provides
and maintains Management Information Systems (MIS) and network administration
to its subsidiaries. The Company's MIS department also provides network-
consulting services through Stampede Network.com to its clients. Stampede
Worldwide, Inc. aggregates the clerical and administrative needs of its
subsidiaries and fulfils those needs from the parent company level.
Internet and software solutions:
The Company, through its Stampede Network.com subsidiary, provides a full
range of Internet solutions, including creation, planning and design of Web
sites, intranets, extranets and Web enabled application software for
customers. The Company's services enable its customers to more effectively
utilize the Internet in their communications, marketing and sales. The
Company is a Microsoft Certified Solution Provider. The Company account
representative sales staff identifies the client's total information
technology needs including staffing, training, hardware and packaged software
needs and custom application development. The Company's programming staff is
primarily involved with custom application development.
Computer equipment, software and peripheral equipment sales-
The Company through its subsidiary, Spiderscape.com is a vendor of a full
line of computer hardware, software, network products and peripheral
equipment. The Company operates an e-commerce Web site at Spiderscape.com at
which it offers approximately 150,000 different products. The Company also
publishes and distributes an eighty-four-page catalog which is mailed to
selected lists. Spiderscape.com went on line on October 18, 2000 and the
first mailing of the catalog began November 1, 2000. The first catalog has
been and will be mailed to over 122,000 addresses. Orders received over the
Internet or through the Company's telephone service center are automatically
directed to the Company's strategic partners, Tech Data Corp. and Ingram
Micro, Inc., for fulfillment. The Company's sales are paid almost
exclusively by credit card and are shipped with the Company's labeling and
packing list by the Company's strategic partners. Spiderscape provides the
hardware and packaged software products for the Company's direct sales
efforts. Essentially providing the Company's account representative with in-
house customer service representative for their client's hardware/software
order. The Company believes data base driven e-commerce web-sites, such as
Spiderscape.com and the Company's clients will benefit from automatic layout
technology for hardcopy catalog creation. Spiderscape.com is providing the
Company with the platform to test and perfect its method for automatic
layout.
Information technology training-
The Company offers technical computer and software training through its
Stampede I-Academy subsidiary. The Company operates a web site at www.i-
Academy.com. The Company's clients include individuals, school boards and
commercial businesses. The Company provides K-12 teacher training and
continuing education to information technology professionals. The Company's
classes are offered in five broad areas, including both Windows and MacIntosh
platforms. These areas are network management, technical support, digital
imaging, video and graphics and technology and educational training in
applications software. The Company's network management courses cover
Microsoft, Cisco, Apple, Citrix, Linux, Novell, Hewlett Packard, 3Com, Nortel
and Compaq. The Company's technical support courses cover CompTia's A+ and
Network+, Windows Operating Systems and PC assembly. The Company's digital
imaging courses cover Adobe programs, Quark Xpress, Macromedia Director,
FireWorks and Freehand, Java Script, Shock Wave, HyperStudio, Movie Works,
Corel Draw and Paint and Extension Suitcase. The Company's video and
graphics courses cover Final Cut Pro, Adobe products, Quark Xpress, HTML,
Macromedia Director Shockwave Studio, Fireworks and Flash, Java Script and
Shockwave. The Company's technology and education courses cover Microsoft
Office Suite, WebQuest, network administration, technology in the primary and
secondary classroom, trouble shooting, video editing and multimedia
production. Nearly all the Company's Stampede Network.com client's have
training needs, the Company's i-Academy students are potential purchasers of
Spiderscape.com's merchandise as well as potential staff placements for
Stampede Quest.
Information technology personnel placement-
The Company, through Stampede Quest, provides employment placement services
for information technology professionals. Services are provided for both
full time and contract employment opportunities. The Company confirms the
technical proficiencies claimed by its placement candidates before they are
referred to clients. Stampede Quest operates a web site at
www.stampedequest.com that lists open job positions. Stampede Quest provides
career placement functions for Stampede I-Academy students. Stampede
Network.com clients often require contract placements for major initiatives
as well as permanent network administrators and programmers whom all need
reoccurring training.
Commercial printing-
The Company provides complete commercial web press printing services through
Chronicle Commercial Printing, Inc. Chronicle Commercial Printing operates a
web-site at www.chronicleinc.com. While this line of business was originally
a result of the Company's commercial printing business through an acquired
subsidiary, the Company's commercial printing capabilities enhance its e-
commerce activities by enabling the Company to produce its printed catalogues
at minimum cost. The Company is able to offer catalog printing services to
its Web solutions clients, complimenting with traditional media the client's
e-commerce initiatives. The Company also prints tabloid newspapers, such as
La Gazetta, the nation's oldest trilingual newspaper, newspaper inserts and
other newsprint products.
The Company employees a total of 58 individuals across all operating
divisions of which all 58 are considered full-time employees.
Item 2. Description of Property.
The Company owns a 32,000 sq ft office and light industrial building located
on 5.25 acres in Tampa, Florida. All of the Company's operations are located
at this facility. The Company believes that the facility is adequate for
current operations and growth in the foreseeable future. The property is
subject to a seller-financed mortgage.
The Company has installed eight Compaq servers performing the following
functions for the Company: Primary and secondary domain control, email
service, development, test and live Internet platforms, sufficient switching
and routing equipment, supporting a Windows NT operating system. The Company
has a written disaster recovery plan, including ample uninterruptible power
supplies and tape backup. The Company has 50 Compaq Ipax work stations on a
10/100 Ethernet local area network. The Company has three T-1 data
connections for sufficient and redundant Internet connectivity.
The Company has a state-of-the-art training center including two classrooms
with fourteen Pentium III 600 mhz work stations and one classroom with nine
MacIntosh dual processor G-4 work stations.
The Company's new printing press is manufactured by the Raghbeer Company.
The press is a model FAST-300 and includes eight printing units, six roll
stands and a folder. Other improvements to the press room are a six pocket
stitcher/trimmer, several cutters, forklifts, ink pump systems and an online
counter/stacker. The press has the capability of printing a ninety-six page,
8.5X11 glued book with thirty-two pages of process color in a single pass.
The FAST-300 is very similar in configuration and operation to a Goss
Community printing press. The Company has a complete pre-press facility,
including disk to film capability.
Item 3. Legal Proceedings
In November 1999, the Bright Now, Inc. subsidiary filed for protection under
Chapter 11 of the Federal Bankruptcy Code. This proceeding was converted to a
Chapter 7 Liquidation during the month of February, 2000. As of September 30,
2000, the Company believes it has fulfilled all its obligations under a Chapter
7 liquidation.
Larry S. Hyman vs. Chronicle Communication, Inc., Case No. 98-5547 CI 7 in
the Pinellas County, Florida Circuit Court. This action is for breach of
contract in the acquisition of a printing plant and seeks $739,371.70 in
damages. Plaintiff's motion for summary judgment has been denied. The
Company believes it has substantial defenses to this claim and is vigorously
defending.
Patken Leasing Company, Inc. vs. Chronicle Communications, Inc., Case No.
99014163 in the Dade County, Florida Circuit Court. This action seeks
recovery of approximately $108,000 for sums advanced to Bright Now, Inc., a
former subsidiary of the Company that was liquidated in bankruptcy. The
Company believes it has substantial defenses to this claim and is vigorously
defending.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders.
Part II
Item 5. Market for Common Equity and Related Stockholder Matters.
The National Association of Securities Dealers, Inc, quotes the Company's
Common Stock under the stock symbol "CRNC", through February 2000 and now
under "STPW" on the OTC Bulletin Board. The following table sets forth the
approximate high and low bid quotations for the Company's Common Stock for each
calendar quarter during the twelve months ended September 30, 2000, as adjusted
for a one for five share combination effective on November 22, 2000. These
quotations are inter-dealer quotations without retail markup, markdown or
commissions and may not represent actual transactions.
Quarter ended High Bid Low Bid
September 1998 $0.19 $0.19
December 1998 0.50 0.50
March 1999 0.97 0.78
June 1999 0.29 0.29
September 1999 0.46 0.33
December 1999 0.65 0.60
March 2000 1.20 1.00
June 2000 0.45 0.40
September 2000 0.55 0.55
The high and low bid quotations for the Company's Common Stock on November
24, 2000 were $0.17 and $0.14 and the closing price on that date for the
Company's Common Stock on the OTC Bulletin Board was $0.16.
The Company had approximately 6,832 holders of its common stock at September
30, 2000.
The Company's transfer agent is Atlas Stock Transfer of Salt Lake City, Utah.
Dividends:
Dividends on the Common Stock can be paid lawfully only out of current and
retained earnings and surplus of the Company, when, as and if declared by the
Board of Directors. The Company has not declared or paid any dividends on the
Common Stock or the Preferred Stock and there is no assurance dividends will
be paid in the foreseeable future. The payment of dividends in the future
rests within the discretion of its Board of Directors and will depend, among
other things, upon the Company's earnings, its capital requirements and its
financial condition, as well as other factors which the board of directors
deems relevant. The Company does not expect to pay cash dividends within the
next five years based upon its plan to invest its profits, if any, in
expansion of the Company's technology business model.
Recent Sales of Securities:
For unregistered common stock transactions, see Item 10 "Executive
Compensation".
Subsequent Sale of Unregistered Securities:
The Company subsequent to the fiscal year ended September 30, 2000, sold an
aggregate of 41 shares of Series A and Series B Convertible Preferred Stock to
16 accredited investors with cash proceeds in the aggregate amount of $410,000.
The Company relied upon Section 4(2) of the Securities Act of 1933, as amended,
in that the offering did not involve a public offering. The terms of the 15
shares of Series B Preferred Stock entitle the holder to elect an additional
member to the board of directors under certain circumstances. The Series B
Preferred Stock has been fully converted into common stock as of January 10,
2001. See Exhibit 3 for the complete terms of both series of preferred stock
Item 6. Management's Discussion and Analysis or Plan of Operation.
For the years ended September 30, 2000 and 1999:
During March 2000, the Company purchased ETA Internet Solutions through its
subsidiary Stampede Network.com, Inc. for 22,222* shares of the Company's
common stock and $199,471 cash. The total cost of the transaction was
$236,138, which exceeded the fair value of the net assets acquired by $187,167.
The excess was allocated to goodwill to be amortized on a straight-line basis
over 20 years.
During January 1999, the Company acquired Bartow Communications, Inc., a real
estate publisher in the Washington, D.C. area, for 25,000* shares of common
stock. The total cost of the acquisition was $14,062, which exceeded the fair
value of the net assets acquired by $214,814. The excess was allocated to
goodwill to be amortized on a straight-line basis over 20 years. In July 2000,
the Company's subsidiary Chronicle Commercial Printing, Inc. ceased publication
of the real estate magazines published by Bartow Communications and returned
the operations to the former owner in a transaction resulting in a net gain of
$34,087 to the Company. The net gain includes write off of goodwill related to
the acquisition of $198,712.
During August 1999, the Company acquired Americomp Computers, Inc., a Houston
based computer retailer, for 450,000* shares of the Company's stock. The total
cost of the acquisition was $373,5000, which exceeded the fair value of the net
assets by $401,791. The excess was allocated to goodwill to be amortized on a
straight-line basis for 20 years. During March 2000, the Company closed the
Houston facility and consolidated its computer retail operations into its Tampa
subsidiary, Spiderscape.com. The disposal resulted in a net loss of $411,841
to the Company, which includes a write off of $391,746 of goodwill related to
the acquisition.
The Company completed an acquisition of Bright Now, Inc. and Southern Paper and
Converters Inc. on September 30, 1998. This acquisition of the two related
companies was treated as a "pooling" under generally accepted accounting
principles. As a result of the pooling, the operations of the parent company
only and the acquired subsidiaries have been consolidated for the fiscal year
ended September 30, 1999. At September 30, 2000 and 1999, the Company, on both
a parent only and consolidated basis, and its subsidiaries, considered
individually, were technically insolvent.
In November 1999, the Bright Now, Inc. subsidiary filed for protection under
Chapter 11 of the Federal Bankruptcy Code. This proceeding was converted to a
Chapter 7 Liquidation during the month of February, 2000. As of September 30,
2000, the Company believes it has fulfilled all its obligations under a Chapter
7 liquidation.
The Company operated a commercial web-offset printing business located in
Tampa, Florida and during part of the reported periods was the publisher of two
free weekly shopper-style tabloid newspapers, and a two edition Sunday
newspaper and a real estate publication in the Maryland area and was a contract
publisher of trade magazines. The Company's revenues were generated through
sales of commercial printing sales of display advertising in its own
publications, sales of classified advertising and sales of recycled newsprint
to the packaging and shipping industry, and the sales of computer parts and
accessories.
The Company's operating activity for the year ended September 30, 1999
reflect seventeen weeks of The South Georgia Chronicle - Thomas County
Edition. The Company operated its commercial printing plant and its paper
recycling business for the entire 1999 fiscal year, Bartow Communications New
Homes Register for nine full months, Nicholson Enterprises for nine full months
and AmeriComp Computers for forty-two calendar days.
The Company incurred operating losses of $7,053,140 and $3,967,079 for the
years ended September 30, 2000 and 1999, respectively. Also, at September 30,
2000 and 1999, current liabilities exceeded current assets by $2,905,408 and
$4,131,033, respectively, yielding a positive increase in working capital
between the two fiscal years of $1,225,625.
The Company had a slight decrease in revenue growth for the 2000 fiscal year
when compared to the 1999 fiscal year of approximately 13% or $259,690.
However, the change in gross profit for the same period rose by $266,630 or
116%. The decrease in revenues is attributed to the downtime in the printing
operations due to the installation of a new press. The increase in gross
profits were the results of replacing vendors of paper supplies used in the
printing business with lower cost sources and to the closing of the Houston
division of Americomp in March 2000. Americomp Houston's revenues were
primarily derived from low-margin sales of computer hardware and software.
The Company experienced an increase in operating expenses for
the 2000 fiscal year compared to the 1999 fiscal year of $3,352,691. The
increase is largely related to total stock compensation to officers, directors
and employees of $2,755,133, advertising expenses of $1,168,365, stock
commissions of $562,600, legal expenses of $165,247 and accounting expenses of
$129,744.
*Adjusted for share combination of one for five on November 22, 2000.
Limited liquidity and financial resources:
During the 2000 and 1999 fiscal years, the Company funded much of its working
capital needs through the sale of its common stock. Approximately $8,783,000
in capital was raised in connection with these stock sales. The Company's
continued ability to operate is dependent on its ability to either refinance
its existing debt or raise additional capital.
The Company's working capital position increased by $1,225,625 at September 30,
2000. This condition is the result of an increase in current assets of
$246,526 and a decrease in total current liabilities of $979,099, partially as
a result of the Chapter 7 liquidation of all liabilities associated with its
Bright Now, Inc. subsidiary. The Company experienced an increase from period
to period in short-term notes by $497,854. Other accrued liabilities also
increased by $931,275. Accounts payable decreased by $1,099,157. Current
maturities of long-term debt also decreased by $925,513. Accrued payroll
liabilities decreased by $351,614.
The Company had limited liquidity as a result of limited positive cash flows
during the reported periods and its liquidity was limited to the sale of common
stock, collections of accounts receivable and generation of additional accounts
receivable, primarily from revenues generated from the commercial web printing
business. The Company's management believes the Company can improve its gross
margins by expanding operations and increasing revenues, thereby spreading
fixed costs over a broader revenue base.
Losses for the year ended September 30, 2000 were directly related to the cost
of branding the Company's new technology identity and infrastructure
capitalization needs. The losses for the twelve months ended September 30,
1999, were directly related to commercial printing jobs dropped at the
Company's printing facility that did not meet the Company's minimum profit
standards and seasonal downturn in the commercial printing business.
Additionally, the Company suffered revenue losses as a result of limited
working capital and vendors requiring payment on delivery.
The Company showed a decrease in cost of sales for the twelve months
ended September 30, 2000, over the same period in 1999. Cost of sales as a
percent of revenue was 70.4% for the twelve months ended September 30, 2000,
verses 88.1% for the same twelve months ended 1999, which represents an almost
30.0% decline in cost of sales.
The Company's management believes if it had been better capitalized during the
period it could have offset the losses by making capital equipment purchases
and repairs that would be expected to have improved efficiency and increased
its commercial printing revenues and to complete the capitalization of the
technology business model.
During the years ended September 30, 2000 and 1999, the Company's activities
were conducted primarily in its subsidiaries.
During the year ended September 30, 2000, the Company's subsidiaries and their
respective businesses were as follows:
Chronicle Commercial Printing, Inc. - commercial web offset printing
Stampede Network.com, Inc. - web design and hosting, and proprietary
database programming
Spiderscape.com, Inc. - Internet and catalog based computer hardware and
software retailing
Bartow Communications, Inc. - publisher of new homes real estate
guides in Metropolitan Washington, DC, which was returned to the
original owner in July 2000.
i-Academy, Inc. - technical computer and software training facilities
and Stampede Quest, a technology employment placement agency which also
operates under the i-Academy subsidiary.
Americomp Computers, Inc. - Houston, Texas based hardware and software
retailer
Bright Now, Inc. - commercial web offset printing
During the year ended September 30, 1999, the Company's subsidiaries and their
respective businesses were as follows:
Bright Now, Inc. - commercial web offset printing
Bartow Communications, Inc. - publisher of new homes real estate
guides in Metropolitan Washington, DC
Americomp Computers, Inc. - Houston, Texas based hardware and software
retailer.
Financial results:
The Company greatly improved its financial position as of September 30, 2000 in
contrast to its financial position at September 30,1999. Current assets
increased by $246,526 and current liabilities decreased by $979,099 between
those dates. The cash balance increased by $77,983 and the accounts payable
and accrued liabilities balances decreased by $519,496 as of the aforementioned
dates. Furthermore, bank overdrafts were eliminated. Stockholders' equity has
increased by $2,073,304 from a deficit of $2,076,351 at September 30, 1999 to a
deficit of $3,047 at September 30, 2000. Overall, the balance sheet has
increased by $3,288,209 from total assets of $2,585,130 at September 30, 1999
to $5,873,339 at September 30, 2000.
For the twelve months ended September 30, 2000 in contrast with the same period
in 1999, revenues decreased by only $259,690 or 13.4%. The reduction in
revenues may be attributed to the downtime for the installation of the new
press for Chronicle Commercial Printing, and the elimination of the retail
portion of Americomp Computers.
Management was able to decrease the cost of sales by $526,320 for the twelve
months periods ended September 30, 2000 versus 1999. Additionally, the gross
profit margin improved by 115.9% for the twelve months periods ended September
30, 2000.
Net loss per common share, basic decreased by $1.99* to $(0.60)* for the twelve
months ended September 30, 2000 versus ($2.59)* for the same period of 1999.
During the current quarter the Company's management has vigorously been
eliminating and rectifying ongoing operational and administrative matters to
more effectively continue with its ongoing efforts to strengthen and ultimately
bring profitability to the Company and its shareholders. These efforts have
included significant reduction of payables, resolution of litigation and
employment contracts, and refocusing on core business objectives. To this end,
in January 2000 the Company moved into a 32,000 square foot facility that can
comfortably house all operations. The new state of the art FAST-300 press
(cost - $709,000) was installed in February 2000. In March the Company
acquired the assets and talent of ETA Internet Solutions, Inc. to establish
Stampede Network.com, Inc. Also, during March 2000, the Company closed the
Houston facility of Americomp Computers, Inc. and consolidated its computer
retail operations into its Tampa subsidiary, Spiderscape.com, Inc. On April 5,
2000 the Company purchased its new Tampa facility for $2,250,000 with better
than market seller financing and no mortgage payments required before the first
quarter of next fiscal year. Effective July 21, 2000, the Company discontinued
activities with Bartow Communications, Inc. and returned it to its previous
owner. In August 2000 the Company completed construction of a three classroom-
training center located within its corporate facility used for instruction of
proprietary software programs. The name of the training center is "i-Academy".
Additionally, i-Academy, through its Stampede Quest division has begun offering
staffing solutions of IT professionals to clients on a temporary to permanent
basis. October brought the launch of our Spiderscape subsidiary with its on-
line and catalog sales of computer hardware and software.
*Adjusted for share combination of one for five on November 22, 2000.
Liquidity and capital resources:
During the twelve months ended September 30, 2000 and 1999, the Company funded
much of its working capital needs through the sale of its common stock.
The Company's working capital ratio was negative as of September 30, 2000 and
has continued to remain in that position through the date of this filing.
Working capital at September 30, 2000 increased by $1,225,625 from working
capital at September 30, 1999. The Company's current ratio at September 30,
2000 was a negative 1.0:6.0 ratio in sharp contrast to the negative current
ratio of 1.0:13.2 at September 30, 1999.
In December 1999, the Company acquired its current facility. In January 2000,
the Company acquired its web press. These acquisitions increased the Company's
assets by $2,945,000. The combined financing payments on this property and
equipment are $17,089 per month through April 2001, at which time an additional
principal payment of $100,000 is due at May 2001. Starting in May 2001 the
monthly payments increase to $20,000 through the end of the Company's fiscal
year.
Year 2000 considerations:
The Company has not experienced any adverse consequences related to year 2000
considerations.
Item 7. Financial Statements.
December 20, 2000
To the Board of Directors and Stockholders of
Stampede Worldwide, Inc.
We have audited the accompanying consolidated balance sheets of Stampede
Worldwide, Inc., (a Florida Corporation) and subsidiaries as of September 30,
2000 and 1999, and the related consolidated statements of operations, changes
in stockholders' deficit, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
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
audits 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 Stampede Worldwide,
Inc. and subsidiaries as of September 30, 2000 and 1999, and the results of
their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2, the Company's
significant operating losses and negative cash flows raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
Respectfully submitted,
BELLA, HERMIDA, GILLMAN, HANCOCK & MUELLER
/s/
Certified Public Accountants
Plant City, Florida
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2000 and 1999
ASSETS
2000 1999
CURRENT ASSETS:
Cash $ 53,746 $ 7,707
Accounts Receivable, net of
Allowances of $22,250 (2000)
and $6,200 (1999) 135,665 197,218
Inventory 101,711 32,110
Other Current Assets 293,852 101,413
---------- -----------
Total Current Assets 584,974 338,448
PROPERTY AND EQUIPMENT,
Net of Accumulated
Depreciation of $124,239
(2000) and $745,659 (1999) 4,457,747 1,334,850
ADVANCES TO STOCKHOLDERS 596,756 303,083
INTANGIBLE ASSETS, NET 233,862 608,749
---------- -----------
TOTAL ASSETS $5,873,339 $2,585,130
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Bank Overdraft $ $ 31,944
Short-Term Notes 820,175 322,321
Current Maturities
of Long-Term Debt 252,877 1,178,390
Accounts Payable 486,366 1,585,523
Accrued Payroll Liabilities 180,617 532,231
Other Accrued Liabilities 1,750,347 819,072
---------- -----------
Total Current Liabilities 3,490,382 4,469,481
LONG-TERM LIABILITIES 2,386,004 192,000
---------- -----------
Total Liabilities 5,876,386 4,661,481
---------- -----------
STOCKHOLDERS' DEFICIT:
Common Stock, $.001 Par
Value, 100,000,000
Shares Authorized,
19,716,611 and 3,074,840
Shares Issued and
Outstanding at September
30, 2000, and 1999,
respectively 19,716 3,075
Additional Paid In Capital 14,589,483 5,822,828
Common Stock Receivable ( 569,668) ( 188,225)
Accumulated Deficit (14,042,578) (7,714,029)
------------ ------------
Total Stockholders'
Deficit ( 3,047) (2,076,351)
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS'
DEFICIT $5,873,339 $2,585,130
=========== ===========
The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements
2
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended September 30, 2000 and 1999
2000 1999
SALES $1,674,810 $1,934,500
COST OF SALES 1,178,257 1,704,577
---------- -----------
GROSS PROFIT 496,553 229,923
---------- -----------
OPERATING EXPENSES:
General and Administrative 7,185,492 3,764,034
Depreciation and Amortization 182,779 170,354
Interest 181,422 262,614
---------- -----------
Total Operating Expenses 7,549,693 4,197,002
---------- -----------
NET LOSS FROM OPERATIONS (7,053,140) (3,967,079)
---------- -----------
OTHER EXPENSE:
Loss on Disposal of
Property and Equipment 124,670 14,462
Loss on Disposal of
Investment 91,652 55,902
Loss on Disposal of
Subsidiaries 377,753
---------- -----------
Total Other Expense 594,075 70,364
---------- -----------
NET LOSS BEFORE EXTRAORDINARY
ITEMS (7,647,215) (4,037,443)
---------- -----------
EXTRAORDINARY ITEMS:
Gain on Forgiveness of Debt 201,678
Gain on Liquidation of a
Subsidiary following a pooling
of interests 1,116,988
---------- -----------
Total Extraordinary Items 1,318,666
---------- -----------
NET LOSS $(6,328,549) $(4,037,443)
============ =============
NET LOSS PER COMMON
SHARE, BASIC $ ( 0.60) $ ( 2.59)
============ =============
WEIGHTED-AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 10,482,699 1,559,779
============ =============
The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements
STAMPEDE WORLDWIDE, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999
Common Stock
$.001 Par Additional
Shares Amount Paid In Capital
--------- --------- ----------------
Balance October 1, 1998 673,557 $ 674 $ 2,514,692
Common Stock Issued:
For Cash, Net of Offering Costs 565,276 565 667,306
For Consulting Services 513,694 504 574,521
For Employee Compensation 452,716 453 1,011,707
For Debt Repayment 214,148 214 325,989
For Operating Expenses 78,878 79 133,162
For Acquisitions 500,000 500 407,312
Common Shares Issued
for Receivable 86,572 86 188,139
Net Loss
--------- ------- -----------
Balance, September 30, 1999 3,074,840 $ 3,075 $ 5,822,828
Common Stock Issued:
For Cash, Net of Offering Costs 12,898,085 12,898 5,575,880
For Employee Compensation 1,355,742 1,355 1,581,073
For Debt Repayment 494,320 494 359,580
For Operating Expenses 1,575,994 1,576 837,903
For Acquisitions 22,222 22 36,645
Surrender and Cancellation
of Common Stock ( 375) ( 5,573)
Common Shares Issued
for Receivable 295,783 296 381,147
Net Loss
---------- ------- -----------
Balance, September 30, 2000 19,716,611 $19,716 $14,589,483
========== ======= ===========
STAMPEDE WORLDWIDE, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999
Stock Accumulated
Receivable Deficit Total
------------ -------------- -------------
Balance October 1, 1998 $ $ (3,676,586) $ (1,161,220)
Common Stock Issued:
For Cash, Net of Offering Costs 667,871
For Consulting Services 575,025
For Employee Compensation 1,012,160
For Debt Repayment 326,203
For Operating Expenses 133,241
For Acquisitions 407,812
Common Shares Issued
for Receivable (188,225)
Net Loss (4,037,443) (4,037,443)
----------- ------------ ------------
Balance, September 30, 1999 $ (188,225) $ (7,714,029) $ (2,076,351)
Common Stock Issued:
For Cash, Net of Offering Costs 5,588,778
For Employee Compensation 1,582,428
For Debt Repayment 360,074
For Operating Expenses 839,479
For Acquisitions 36,667
Surrender and Cancellation
of Common Stock ( 5,573)
Common Shares Issued
for Receivable (381,443)
Net Loss (6,328,549) (6,328,549)
------------ ------------- -------------
Balance, September 30, 2000 $ (569,668) $(14,042,578) $ (3,047)
============ ============= =============
The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended September 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(6,328,549) $(4,037,443)
Adjustments to Reconcile
Net Loss to Net Cash Used
in Operating Activities:
Depreciation and Amortization 182,779 170,354
Provision for Losses on Accounts
Receivable ( 16,050)
Extraordinary Item - Liquidation
of Subsidiary (1,123,879)
Extraordinary Item - Forgiveness
of Debt ( 201,678)
Expenses Paid with Stock 2,039,239 2,147,778
Expenses Paid with Debt 396,236
Net Loss on Disposal of Assets 124,670 14,462
Net Loss on Disposal of Investments 76,652 55,902
Net Loss on Disposal of Subsidiaries 391,277
Changes in Operating Assets and
Liabilities, Net of Effects
of Disposals:
Accounts Receivable ( 5,077) 116,295
Inventory ( 126,545) 63,730
Other Current Assets ( 272,623)
Other Assets ( 3,528) ( 33,134)
Accounts Payable 67,033 312,913
Accrued Liabilities 1,415,174 615,895
------------- -------------
Net Cash Used in
Operating Activities (3,781,105) ( 177,012)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Paid for Investment in
Subsidiaries ( 199,471)
Cash Received
from Acquisitions 46,929
Capital Expenditures (1,901,870) ( 14,549)
------------- -------------
Net Cash Provided by
(Used in) Investing
Activities (2,101,341) 32,380
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank Overdraft ( 31,944) 20,135
Proceeds from Short-Term Debt 763,444 68,500
Principal Payments on Long-Term Debt ( 66,505) ( 33,448)
Principal Payments on Short-Term Debt ( 26,044)
Stockholders Advances ( 602,695) (129,343)
Stockholder Repayments 309,023
Proceeds from Issuance of Stock 5,583,206 212,038
------------- -------------
Net Cash Provided by
Financing Activities 5,928,485 137,882
------------- -------------
NET INCREASE (DECREASE) IN CASH 46,039 ( 6,750)
CASH AT BEGINNING OF YEAR 7,707 14,457
------------- -------------
CASH AT END OF YEAR $ 53,746 $ 7,707
============== =============
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Years Ended September 30, 2000 and 1999
2000 1999
------------- -------------
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Cash Paid during the Year for
Interest $ 24,836 $29,455
============= =============
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Property Acquired by Long-Term Note $ 2,125,000
============= =============
Equipment Acquired by Capital Lease $ 556,000
============= =============
Stock Issued for Stockholder Advances $209,009
============= =============
Stock Issued for Acquisitions $ 36,667 $512,049
============= =============
Stock Issued for Debt Repayment $ 85,097 $ 43,640
============= =============
Stock Issued for Receivable $ 381,443 $188,225
============= =============
Stock Issued for Payments on
Accounts Payable $ 213,519
============= =============
Stock Issued for Payment on Accrued
Liabilities $ 444,126
============= =============
Property Surrendered for Debt Repayment $ 130,040 $ 14,000
============= =============
Proceeds from Sale of
Investments for Stockholders Advances $ 8,297
============= =============
The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Stampede Worldwide, Inc., (the "Company") was incorporated in Georgia on April
5, 1996, under the name of JMAR Communications, Inc., and changed its name to
Chronicle Communications, Inc., effective July 30, 1997. The Georgia company
merged into its newly incorporated, wholly owned Florida subsidiary on February
2, 2000 for the sole purpose of changing the Company's state of incorporation
to Florida from Georgia. On April 14, 2000, the Company changed its name to
Stampede Worldwide, Inc.
Stampede Worldwide, Inc. is engaged in the business of communications
technology. Through its subsidiaries, which include Chronicle Commercial
Printing, Stampede Network.com, i-Academy and Spiderscape, Inc., the Company
offers commercial web offset printing and publishing, complete internet and
intranet solutions, information technology training and staffing and computer
hardware and software sales.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles 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
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Reclassification of Financial Statement Presentation
Certain reclassifications have been made to the 1999 financial statements to
conform to the 2000 financial statement presentation. Such reclassifications
had no effect on net income as previously reported.
Cash Equivalents
For purposes of financial statement presentation, the Company considers all
highly liquid instruments with maturity of three months or less to be cash
equivalents. The Company holds no such instruments at September 30, 2000 and
1999.
Accounts Receivable
The Company grants unsecured credit to its customers for terms of 10 to 60
days. Bad debts are reported using the allowance method.
Inventory
Inventories are recorded at the lower of cost (first-in, first-out) or market.
Inventories consist principally of paper, printing supplies and computer parts.
Property and Equipment
Property and equipment are stated at cost and depreciated using the straight-
line method over estimated useful lives ranging from 5 to 40 years.
Expenditures for maintenance and repairs are charged to expense as incurred.
Major improvements are capitalized.
7
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Intangibles
Intangible assets consist primarily of Goodwill and are amortized using the
straight-line method over 20 years.
Advertising Costs
Advertising costs are generally charged to operations in the year incurred and
totaled $1,168,365 and $11,760 for the years ended September 30, 2000 and 1999,
respectively.
Deferred Tax Assets and Liabilities
Deferred income taxes are the result of the expected future tax consequences of
temporary differences between the financial statement and tax bases of assets
and liabilities. A valuation allowance is provided against deferred income tax
assets in circumstances where management believes recoverability of a portion
of the asset is not reasonably assured.
Earnings (Loss) per Share
Basic net earnings (loss) per common share is computed by dividing the net
earnings (loss) by the weighted-average number of common shares outstanding.
Common stock equivalents have not been included in the computation for these
periods because their inclusion would be antidilutive. Diluted earnings per
share are computed to include potential dilution from the exercise or
conversion of securities, such as stock options or warrants, into common stock.
Because the effect of including these securities is antidilutive, they have
been excluded from the computation and the diluted loss per share is equal to
the basic loss per share.
Stock-Based Compensation
The Company accounts for stock issued to employees as provided in Accounting
Principles Board Opinion No. 25, whereby compensation expense is recorded on
the date the options are granted equal to the excess of the market price of the
underlying stock over the exercise price and provides pro forma disclosure of
the application of Statement of Financial Accounting Standards No. 123.
Principles of Consolidation
The consolidated financial statements include the accounts of Stampede
Worldwide, Inc. and all wholly owned subsidiaries. All material inter-company
transactions have been eliminated.
Fair Value of Financial Instruments
At September 30, 2000 and 1999, the fair values of cash and cash equivalents,
accounts receivable, and accounts payable approximate their carrying value due
to their short-term nature. The fair value of debt is estimated at its
carrying value based upon current rates available to the Company.
8
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 2: GOING CONCERN
The Company has incurred substantial operating losses since inception. The
Company recorded losses from operations of $7,053,140 and $3,967,079 for the
years ended September 30, 2000 and 1999, respectively. Current liabilities
exceed current assets by $2,905,408 at September 30, 2000. These factors,
combined with the fact that the Company has not generated positive cash flows
from operating activities since inception, raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification
of recorded assets or the amounts and classification of liabilities that might
be necessary if the Company is unable to continue as a going concern.
NOTE 3: ACQUISITIONS AND DISPOSALS
During March 2000, the Company purchased ETA Internet Solutions through its
subsidiary Stampede Network.com, Inc. for 22,222 shares of the Company's common
stock and $199,471 cash. The total cost of the transaction was $236,138, which
exceeded the fair value of the net assets acquired by $187,167. The excess was
allocated to goodwill to be amortized on a straight-line basis over 20 years.
During January 1999, the Company acquired Bartow Communications, Inc., a real
estate publisher in the Washington, D.C. area, for 25,000 shares of common
stock. The total cost of the acquisition was $14,062, which exceeded the fair
value of the net assets acquired by $214,814. The excess was allocated to
goodwill to be amortized on a straight-line basis over 20 years. In July 2000,
the Company's subsidiary Chronicle Commercial Printing, Inc. ceased publication
of the real estate magazines published by Bartow Communications and returned
the operations to the former owner in a transaction resulting in a net gain of
$34,087 to the Company. The net gain includes write off of goodwill related to
the acquisition of $198,712.
During August 1999, the Company acquired Americomp Computers, Inc., a Houston
based computer retailer, for 450,000 shares of the Company's stock. The total
cost of the acquisition was $373,500, which exceeded the fair value of the net
assets by $401,791. The excess was allocated to goodwill to be amortized on a
straight-line basis for 20 years. During March 2000, the Company closed the
Houston facility and consolidated its computer retail operations into its Tampa
subsidiary, Spiderscape.com. The disposal resulted in a net loss of $411,841
to the Company, which includes a write off of $391,746 of goodwill related to
the acquisition.
9
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 4: PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
Property and Equipment, at cost, consist of the following:
2000 1999
Land $ $ 30,875
Building and Improvements 2,458,125 691,471
Machinery and Equipment 1,190,915 1,054,519
Furniture and Fixtures 330,574 29,931
Computers and Software 602,372 273,713
------------- --------------
Total 4,581,986 2,080,509
Less, Accumulated Depreciation 124,239 745,659
------------- --------------
Net Property and Equipment $4,457,747 $1,334,850
============= ==============
Depreciation expense for the years ended September 30, 2000 and 1999 was
$160,548, and $158,939, respectively.
Intangible Assets, at cost, consist of the following:
2000 1999
Goodwill $ 187,167 $ 616,616
Loan Costs 3,609
Other 52,500
------------- --------------
Total 239,667 620,225
Less, Accumulated Amortization 5,805 11,476
------------- --------------
Net Intangible Assets $ 233,862 $ 608,749
============= ==============
Amortization expense for the years ended September 30, 2000 and 1999 was
$22,231 and $11,415, respectively.
NOTE 5: SHORT-TERM DEBT
Short-Term Debt consists of the following:
2000 1999
------- ------
Line of credit payable to bank; unsecured;
bearing interest at bank prime plus 2.5%;
in default, entire principal plus interest,
costs and fees due immediately. Balance of
$30,931 plus interest liquidated in bankruptcy. $ $ 30,931
Note payable to individual; secured by
mortgage on real estate; bearing interest
at 10%; in default, entire principal plus
interest due immediately. Balance of $46,245
plus interest liquidated in bankruptcy. 46,245
10
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 5: SHORT-TERM DEBT (CONTINUED)
Loan payable to individual; unsecured;
bearing interest at 10%; in default, entire
principal plus interest due immediately. Balance
of $108,305 plus interest liquidated in bankruptcy. 108,305
Loan payable to individual; unsecured; bearing
interest at 10%; in default, entire principal plus
interest due immediately. Balance of $34,800 plus
interest liquidated in bankruptcy. 34,800
Note payable to individual; unsecured;
bearing interest at 11%; in default, entire
principal plus interest due immediately 12,500
Loans payable to individuals; unsecured; bearing
interest at various rates with various repayment terms. 56,732 89,540
Note payable; secured by a first priority security
interest in 76.3444 shares of Convertible Preferred
Stock Series A (issued subsequent to September
30, 2000); bearing interest at 6.75%; due
September 19, 2001. 763,443
------- --------
Total Short-Term Debt $820,175 $322,321
======== ========
NOTE 6: LONG-TERM DEBT
Long-Term Debt consists of the following:
2000 1999
------- ------
Note payable to bank; bearing
interest at 10.95%;monthly payments
of $4,231; in default with entire
principal, plus interest, costs
and fees due immediately; secured
by mortgage on real estate. Balance
of $521,350 plus interest liquidated
in bankruptcy. $ $ 521,350
Note payable to bank; bearing interest
at bank prime plus 2.5%; monthly payments
of $5,609; in default with entire
principal, plus interest, costs and
fees due immediately; secured by blanket
lien on all business assets. Balance
of $297,641 plus interest liquidated
in bankruptcy. 297,641
Note payable to financial institution;
bearing interest at 18%; monthly payments
of $3,849; in default with entire principal,
interest, costs and fees due immediately;
secured by lien on equipment and judgment
entered March 19, 1998. Balance of $171,000
plus interest liquidated in bankruptcy. 171,000
11
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 6: LONG-TERM DEBT (CONTINUED)
2000 1999
------- ------
Mortgage note payable; bearing interest
at 8%; monthly payments of principal
and interest of $1,142; in default, entire
principal plus interest and fees due
immediately; secured by mortgage on real
estate; guaranteed by the Company's president
and majority stockholder. Property surrendered
for full debt repayment. 110,567
Note payable to bank; bearing interest
at 11%; in default, entire unpaid balance
of principal and interest due immediately;
secured by equipment, trade accounts
receivable, and 42,500 shares of the
Company's common stock; co-signed by
four stockholders. 40,832
Note payable to stockholder; bearing
interest at 11%; in default, entire
unpaid balance of principal and interest
due immediately; secured by all of the
property of the Company. 25,000
Loans payable to individuals; unsecured;
bearing interest at various rates
with various repayment terms. 20,000 204,000
Note payable; secured by mortgage
and security agreement on property;
interest accrues at 6.51% payable
May 1, 2004; monthly principal payments ranging
from $5,000 to $15,000 with additional
principal payments of $100,000 payable
May 1, 2001, $250,000 payable May 1, 2002
and $1,315,000 payable May 1, 2004; note
matures May 1, 2004. 2,125,000
Capitalized Lease on Equipment; monthly
payments of $12,089, including interest
at 11%; lease expires April 1, 2005. 493,881
------- --------
Total 2,638,881 1,370,390
Less, Current Maturities 252,877 1,178,390
---------- -----------
Net Long-Term Debt $2,386,004 $ 192,000
========== ===========
The aggregate annual maturities of long-term debt are as follows:
YEAR ENDING SEPTEMBER 30, AMOUNT
------------------------- -------------
2001 $ 252,877
2002 485,079
2003 271,007
2004 1,548,316
2005 81,602
-------------
TOTAL $2,638,881
=============
12
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 7: INCOME TAXES
The Company recognizes the amount of taxes payable or refundable for the
current year and recognizes deferred tax liabilities and assets for the
expected future tax consequences of events and transactions that have been
recognized in the Company's financial statements or tax returns. The Company
currently has substantial net operating loss carry-forwards that may be applied
against future income. These losses create a deferred tax asset at September
30, 2000 and 1999. The Company has recorded a 100% valuation allowance against
net deferred tax assets due to uncertainty of their ultimate realization.
2000 1999
------ ------
Deferred Tax Assets Resulting from
Net Operating Losses $ 1,972,306 $ 1,112,296
Less, Valuation Allowance 1,972,306 1,112,296
----------- -----------
Net Deferred Tax Assets $ 0 $ 0
=========== ===========
The Internal Revenue Code contains provisions, which may limit the net
operating loss carryforward available for use in any given year if significant
changes in ownership interest in the Company occur.
The loss carry forwards expire as follows:
YEAR OF EXPIRATION AMOUNT
------------------- --------
2011 $ 68,400
2012 1,385,735
2013 1,923,731
2014 4,078,504
2015 6,435,665
---------------
$ 13,892,035
===============
NOTE 8: SEGMENT REPORTING
The Company's reportable business segments are strategic business units that
offer distinctive products and services that are marketed through different
channels. They are managed separately because of their unique technology,
marketing and distribution requirements.
The Company has three reportable segments: Commercial Printing, Computer
Equipment Sales and Information Technology Solutions. The Commercial Printing
segment provides complete commercial web press printing services. The Computer
Equipment Sales segment provides a full line of computer hardware, software,
network products and peripheral equipment. The Information Technology
Solutions segment provides a full range of Internet solutions, including
creation, planning and design of Web sites, intranets, extranets and custom
internet enabled application software.
The Company's accounting policies for segments are the same as those described
in the summary of significant accounting policies. Management evaluates
segment performance based on segment profit and loss before income taxes and
nonrecurring gains and losses.
13
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 8: SEGMENT REPORTING (CONTINUED)
A summary of the Company's segmented information for the year ended September
30, 2000 is as follows:
Segments
-------------------------------------------
Commercial Computer Information Consolidated
Printing Equipment Sales Technology Other Totals
------------ ---------------- ----------- ------ -----------
Net Sales
to unaffiliated
customers $ 1,026,120 $ 456,045 $ 148,365 $ 44,280 $1,674,810
Interest
Expense 99,129 99,129
Depreciation and
Amortization 91,603 2,565 7,143 29 101,340
Segment
Profit (Loss) ( 338,650 ) ( 283,054 ) (363,038 ) 39,026 ( 945,716)
Segment Assets 1,174,513 80,879 182,115 56,743 1,494,250
Expenditures
for Segment
Assets 958,920 69,617 131,845 14,629 1,175,011
Reconciliation of Segment Information to Consolidated Amounts
Information for the Company's reportable segments relates to the enterprise's
consolidated totals as follows:
Revenues
Total Revenues for Reportable Segments $ 1,674,810
-----------------
Total Consolidated Revenues $ 1,674,810
=================
Profit or Loss
Total Profit or Loss for Reportable Segments $ ( 945,716)
Other Income (Expense) ( 594,075)
Extraordinary Items 1,318,666
General Corporate Expenses ( 6,107,424)
-----------------
Total Consolidated Income (Loss) $ ( 6,328,549)
=================
Assets
Total Assets for Reportable Segments $ 1,494,250
General Corporate Assets
not Attributed to Segments 4,397,089
-----------------
Total Consolidated Assets $ 5,873,339
=================
14
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 9: RELATED PARTY TRANSACTIONS
During the years ended September 30, 2000 and 1999, a member of the Board of
Directors provided legal services in the amounts of $135,196 and $134,226,
respectively.
The Company has made advances to its President and majority stockholder. The
Company holds a note receivable for these advances. The note bears interest at
7% and there are no specified repayment terms for the principal balance. The
balances of these advances, less the amounts repaid, are as follows:
2000 1999
---------- ----------
Advances to Stockholders $ 905,779 $ 563,505
Less, Amount Repaid 309,023 260,422
---------- -----------
Net Advances to Stockholders $ 596,756 $ 303,083
========== ===========
NOTE 10: STOCK OPTIONS
The Company issues stock options to its officers and directors as compensation
for their services. The Company has elected to account for these stock options
using Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees". Compensation expense is measured as the excess of the quoted
market price of the stock over the option price on the measurement date and
charged to the period in which the related services are performed.
Compensation charged to operations amounted to $2,066,525 and $382,668 for the
years ended September 30, 2000 and 1999, respectively.
FASB Statement No. 123 requires pro forma disclosure of information regarding
net income and earnings per share determined as if the Company has accounted
for these stock options using the fair value method of that Statement. The pro
forma information for September 30, 2000 and 1999 is as follows:
2000 1999
------- -------
Pro Forma Net Loss $(6,937,757) $(4,379,774)
=========== ============
Pro Forma Net Loss
per Common Share $( 0.66) $( 2.81)
=========== ============
The estimated fair value of these stock options was calculated using the Black-
Scholes option pricing model. The weighted-average fair value of the options
at their grant date and the assumptions used in the models are as follows:
2000 1999
------- -------
Weighted-Average Fair Value $ .53 $ .42
Risk-Free Interest Rate 6.26% 5.01%
Dividend Yield 0 0
Volatility Factor of
Expected Market Price 3.22 4.19
Weighted-Average Expected Life 1 1
15
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 10: STOCK OPTIONS (CONTINUED)
A summary of the Company's stock option activity and related information is as
follows:
2000 1999
---------------------- ----------------
Weighted-Average Weighted-Average
Exercise Price Exercise Price
Options Per Share Options Per Share
Outstanding, October 1 281,273 $ .60 78,019 $ .13
Granted 5,030,949 .20 660,611 .60
Exercised (1,043,972) .42 (457,357) .60
------------ ---------
Outstanding
September 30 4,268,250 $ .18 281,273 $ .60
=========== =========
All shares outstanding at September 30, 2000 are exercisable at prices ranging
from $.16 to $.27 with a weighted-average remaining contractual life of three
years.
NOTE 11: CAPITALIZATION
In January 2000, the Company amended its articles of incorporation to authorize
100,000,000 shares of common stock with a par value of $.001. In February
2000, the Company amended its articles of incorporation to authorize 10,000,000
shares of preferred stock, with rights and privileges to be determined by the
Board of Directors.
Common stock receivable represents an amount due to the Company for shares
issued and outstanding at year-end. The Company holds a note receivable from
its President for shares issued in connection with the exercise of stock
options. The note bears interest at 7% and there are no repayment terms
specified for the principal balance.
On November 13, 2000, the Board of Directors authorized a five-to-one reverse
stock split. All references in the accompanying financial statements to the
number of common shares and per share amounts have been restated to reflect the
stock spilt.
In October 2000, the Company designated 350 shares of authorized preferred
stock as Series A Convertible Preferred Stock and subsequently issued 102
shares. Each share has a stated and liquidating value of $10,000 and has no
voting rights except as stated below. The shares participate on any dividend
declared on the Company's common stock. The Series A Convertible Preferred
Stock is redeemable at the option of the Company at its stated value plus a
premium of 10% annually. The shares are convertible at the option of the
holder after one year in a ratio based on 50% of market price provided that a
sufficient number of common shares are available to effect the conversion. In
the event such common shares are not available the preferred shares cease to be
redeemable and will be granted voting rights on an "as converted" basis.
In November 2000, the Company designated 150 shares of authorized preferred
stock as Series B Convertible Preferred Stock. The shares have the right to
participate in dividends declared on common shares on an "as converted" basis.
Each share has a stated and liquidating value of $10,000 and has no voting
rights except in the event the Company fails to perform certain covenants or
discharge certain obligations as agreed. The Company agreed to not declare any
dividend on, make any distribution to, or repurchase or redeem any class of
stock ranking junior to the Series B. The shares may be redeemed at the option
of the company after one year for the redemption price of $11,000 per share.
16
STAMPEDE WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 11: CAPITALIZATION (CONTINUED)
The shares are convertible at the option of the holder after one year in a
ratio based on 50% of market price. The Company is required to escrow not less
than 125% of the largest number of shares of common stock into which the
outstanding preferred shares can be converted. The Company has issued 15
shares of Series B Convertible Preferred Stock; 10 shares were subsequently
converted into 2,783,876 shares of common stock.
Subsequent to September 30, 2000, the Company issued 21,000,000 shares of
common stock to be escrowed for conversion of preferred stock and for
contingent financing requirements. Approximately 2,700,000 of the escrowed
common shares were used for conversion of preferred stock. Approximately
1,700,000 additional common shares were issued for general corporate purposes.
NOTE 12: COMMITMENTS AND CONTINGENCIES
The Company is a defendant in a breach of contract in the acquisition of a
printing plant, and the plaintiff seeks $739,371 in damages. Plaintiff's
motion for summary judgment has been denied. The Company believes it has
substantial defenses to this claim and is vigorously defending.
The Company is also an defendant in an action seeking recovery of approximately
$108,000 for sums advanced to Bright Now, Inc., a former subsidiary of the
Company that was liquidated in bankruptcy. The Company believes it has
substantial defenses to this claim and is vigorously defending.
The Company leased various office equipment under operating leases with terms
of less than one year. Rent expense for these leases amounted to $18,852 and
$2,823 for the years ended September 30, 2000 and 1999, respectively.
NOTE 13: CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to concentration of
credit risk consist principally of cash equivalents and unsecured trade
receivables. The Company's cash equivalents are maintained with financial
institutions located in Florida. The Company holds no cash equivalent in
excess of federally insured limits. The Company grants credit to customers,
substantially all of whom are located in Florida. The Company's ability to
collect these receivables is dependent upon economic conditions in Florida and
the financial condition of its customers.
NOTE 14: EXTRAORDINARY GAINS
In September of 1998, the Company acquired Bright Now, Inc., a printing company
located in Tampa, Florida, in a business combination accounted for as pooling-
of-interests. In November 1999, Bright-Now, Inc., filed for reorganization
under Chapter 11 of the United States Bankruptcy Code. In February 2000, the
case was converted to Chapter 7 liquidation. Operations ceased and the assets
of Bright-Now, Inc. were distributed to its creditors. The liquidation results
in a net gain from disposal of a subsidiary acquired in a pooling-of-interests
of $1,116,988 for the year ended September 30, 2000.
During the year ended September 30, 2000, the Company was able to negotiate the
settlement of certain debts that were in default for less than their carrying
values. These debts related mainly to the discontinued Georgia printing and
publishing activities of Chronicle Communications, Inc. These transactions
resulted in a gain from forgiveness of debt of $201,678.
17
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
The names, ages and terms of office of directors and executive officers of
The Company are set forth in the following table:
Name Age All positions with Company Director
since
- ---------------------------------------------------------------------------
James W. Boggs 60 Director 2000
Winston D. Carlee, Jr. 38 Chief Financial Officer n/a
Donald D. Clark 41 Director 2000
Sally I. McFolling 47 Director 2000
Jackson L. Morris 56 Director, General Counsel
and Secretary 1996
David E. Salmon 37 Chief Operating Officer n/a
John V. Whitman, Jr. 42 Director and President 1996
Each director is elected by holders of a majority of the Common Stock to
serve for a term of one year and until his or her successor is elected and
qualified, which is generally at the next annual meeting of stockholders.
Non-management directors are paid a cash fee of $500 per meeting and $150 per
hour for time devoted to the Company's business outside of directors'
meetings, including committee meetings. Directors also are issued 20,000
shares of common stock per year as additional compensation for services,
which are subject to surrender pro rata for services of less than a year.
See Item 10" Executive Compensation". Officers serve at the will of the
board. The Company may indemnify directors and officers against damages
which qualify, in the opinion of the disinterested members of the board, for
indemnification under Florida law and the Company's Bylaws. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers or persons controlling the Company
pursuant to Florida law, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
James W. Boggs has been a director of the Company since September 2000. He
is a member of the Audit Committee. For the past fifteen years, Mr. Boggs
has owned and operated Swiss Chalet Travel Agency & Gift Shop and the Tampa
Bay Visitors Information Center, both in Tampa, Florida. Mr. Boggs has
served as president of several chambers of commerce and a director of the
Florida Jaycees.
Winston D. Carlee, Jr., has been the Company's Chief Financial Officer
beginning November 2000. Mr. Carlee is a certified public accountant with
experience in auditing. From June 2000 to the time of joining the Company,
Mr. Carlee was employed by Pender Newkirk & Company, Tampa, Florida as an
audit manager. From December 1998 to June 2000, he was employed by KGMP
Consulting in their New York City Office, as a financial systems consultant
in the state and local government sector. From November 1989 to December
1998, Mr. Carlee was employed in auditing at the Company's independent
auditor, Bella, Hermida, Gillman, Hancock & Mueller, certified public
accountants. Mr. Carlee earned a B.A. degree (1987) in accounting from the
University of West Florida.
Donald D. Clark, has been a director of the Company since September 2000. He
is a member of the Audit Committee. Mr. Clark has practiced law for more
than the past five years. He is presently employed by Brown Clark, attorneys
in Sarasota, Florida, of which he is a founding member. Brown Clark employs
10 attorneys. Mr. Clark practice includes construction, surety, lien,
commercial, condominium and condemnation law. Mr. Clark is a member of the
Florida Bar and is admitted to practice U.S. District Court for the Middle
District of Florida and the Eleventh Circuit Court of Appeals. Mr. Clark
earned a B.S. degree (1981) in finance from the University of Florida and a
Juris Doctor degree (1985) from Mercer University School of Law in Macon,
Georgia.
Sally I. McFolling has been a director of the Company since September 2000.
She is a member of the Audit Committee. Ms. McFolling is the Tampa Division
President of David Weekly Homes. She joined the David Weekly Homes
organization in 1994, serving as its Orlando Sales Consultant and later as
Sales Coach/Manager for Florida markets. She earned a B.S. degree (1975)in
biology from Wesleyan College in Macon, Georgia.
Jackson L. Morris, Esq., a director and general counsel of the Company since
inception and corporate secretary since August 23, 1998, is an attorney in
private practice since 1975. Mr. Morris' law practice is primarily in the
areas of general corporate, securities and contract law. Mr. Morris is a
member of The Florida Bar, The State Bar of Georgia (inactive) and The
District of Columbia Bar. He is admitted to practice before the United
States Tax Court and Supreme Court of the United States of America. Mr.
Morris earned a B.A. degree in economics (1966) and a Juris Doctor degree
(1969) from the Emory University in Atlanta, Georgia and a L.L.M. degree in
federal taxation (1974) from Georgetown University Law Center. The U.S.
Securities and Exchange Commission has brought a civil suit against Mr.
Morris and others alleging that he sold 50,000 shares common stock in
violation of the registration requirements of the Securities Act. Mr. Morris
received the shares as compensation for services rendered in connection with
a shell company reverse merger and pursuant to a legal opinion that the
shares were not restricted. The suit seeks an injunction and penalty against
Mr. Morris.
David E. Salmon, has been the Chief Operating Officer and Investor Relations
Officer of the Company since November 1, 1999. Mr. Salmon previously served
as Investor Relation Manager with the Company during 1998 and early 1999.
Mr. Salmon has served in various roles with public companies since 1992. Mr.
Salmon is a member of the National Investor Relations Institute.
Dale Mulert, has been Chief Technical Officer of the Company since March 30,
2000. Mr. Mulert is the former president of the Red Design Group, owner and
operator of ETA Internet Solutions, Head of the Tampa Bay Area Cold Fusion
Users Group, and has working knowledge of LAN-WAN and internet hosting
protocols. Mr. Mulert is fluent in the programming lanquages Coldfusion,
HTML, DHTML, Java Script, and SQL. He is CCA Citrix Certified and CCSA
Checkpoint firewall security certified.
John V. Whitman, Jr., is the founder, director and president of the Company
since inception. In February and March 1996, Mr. Whitman was planning for a
business which became the Company. From September 1, 1995 into February
1996, Mr. Whitman was the President of Southwest Georgia Shoppers, Inc., a
subsidiary of Gray Communications Systems, Inc., a New York Stock Exchange
listed company, (trading symbol GCS) which had purchased the assets of
Phillips Publishing, Inc. owner of the Tallahassee Advertiser, The Add Sheet,
The South Georgia News and Shopper and The Gadsden News and Shopper. During
his brief tenure with Southwest Georgia Shoppers, Inc., Mr. Whitman was
assigned the additional responsibilities of president of the Rockdale Citizen
Publishing Company, the owner of the Gwinnett Daily Post and The Rockdale
Citizen. Mr. Whitman was the vice president and publisher of Phillips
Publishing, Inc. from October 1992 to August 1995. Mr. Whitman founded The
South Georgia News and Shopper and The Gadsden News and Shopper for Phillips
Publishing, Inc. Mr. Whitman managed thirty-eight full time and forty-three
part time employees and exercised full management and financial
responsibility for Phillips Publishing, Inc.'s operations. He also served as
a consultant and motivational speaker to other Phillips publishing divisions.
For seven months in 1992, Mr. Whitman was employed by Southeast Publishing
Ventures in the capacity of District Manager, in which he launched a new
housing guide for the Treasure Coast of Florida and turned around a new
housing guide for the Orlando, Florida market. In 1991 and 1992, Mr. Whitman
was engaged in consulting in the publishing industry and efforts to acquire a
print media company for his own account. Mr. Whitman attended Hillsborough
Community College and the University of South Florida.
Item 10. Executive Compensation:
The following table sets forth the compensation paid during the three fiscal
years ended September 30, 2000 to Mr. Whitman, as the Company's chief
executive officer. Mr. Salmon and Mr. Mulert are included in the table
because they are executive officers paid more than $100,000 following the
end of the last fiscal period.
Fiscal Securities
Name Year Salary Bonus underlying options
- --------------------- ------ -------- ----------- ------------------
John V. Whitman, Jr. 1998 $125,000 $ 21,395 39,991* (2)
Chairman of the 1999 $175,000 $1,144,291 534,164* (2)
Board and President 2000 $175,000(1)$1,813,236 4,198,860* (2)
David E. Salmon 2000 $100,000 $ 278,750(3) 0
Chief Operating
Officer
Dale Mulert, Chief
Technical Officer 2000 $105,000 $ 33,000 0
(1) Mr. Whitman's salary includes $36,000 in cash salary and a $139,000
reduction in Receivable due from Shareholder.
(2) The Company granted an evergreen option to Mr. Whitman in May 1998 which
enabled Mr. Whitman to maintain approximately 21.805 percent of the Company's
stock at all times, subject to exercise of the option from time to time. The
exercise price during the respective years following date of grant is a
percentage of the average bid and asked quotation (or closing price) on
the day prior to exercise, as follows: twelve months beginning May 1998 -
20%; second twelve months - 30%; third twelve months - 40%; and, thereafter -
50%. Mr. Whitman agreed to termination of this option on September 30, 2000
with respect to any shares to which it might entitle him after the
termination date. At September 30, 2000, the maximum number of shares Mr.
Whitman is entitled to purchase under the options is 3,549,844*. The options
expire on September 30, 2003.
Mr. Whitman has exercised stock options during the twelve months ended
September 30, 2000, as follows:
(a) 649,016* shares of common stock on January 28, 2000, at an exercise price
of $.60* per share and with a fair market value at the time of exercise of
$1.13.
(b) 206,691* shares of common stock on October 15, 1999 at an exercise price
of $.57 per share and with a fair market value at the time of exercise of
$1.90.
(3) Mr. Salmon was granted a bonus of 250,000* shares of the Company's
common stock. The bonus is valued at fair market value at the date of grant.
*Adjusted for share combination of one for five on November 22, 2000.
Certain Transactions With Management And Others
The Company makes advances to and receives advances from Mr. Whitman its
President and Chief Executive Officer in the normal course of business. The
amount of these advances due to the Company approximates $596,756 and
$303,083 at September 30, 2000 and 1999, respectively. The Company holds a
note receivable for these advances. The note bears interest at 7% and there
are no specified repayment terms for the principal balance. Also, the Company
holds a note receivable from its President for shares issued in connection with
the exercise of stock options. The note bears interest at 7% and there are no
repayment terms specified for the principal balance.
During fiscal year 2000, the Company issued 250,000* shares of its common stock
to David E. Salmon, the Company's Chief Operating Officer, as a bonus. The
Company expects to continue to award common stock bonuses to Mr. Salmon in
lieu of salary increases until such time as the Company is in a position to
pay a salary commensurate with the position responsibilities and
expectations.
Mr. Morris exercised his options for 113,683* shares of common stock on
January 28, 2000, at an exercise price of $.60* per share and with a fair
market value at the time of exercise of $1.20. On October 15, 1999, he
exercised his options for 74,582* shares of common stock at an exercise price
of $.95 and with a fair market value at the time of exercise of $1.90. Mr.
Morris was granted options in August 1998 which entitled him to maintain five
percent of the Company's issued and outstanding commons stock at any time.
The exercise price is one half of the average bid and asked quotations on the
date of exercise. Mr. Morris agreed to termination of this option on
September 30, 2000 with respect to any shares to which it might entitle him
after the termination date. At September 30, 2000, the maximum number of
shares Mr. Morris is entitled to purchase under the options is 718,406*. The
options expire on September 30, 2003.
In September 2000 the Company issued 20,000* shares of its common stock to Jim
Boggs one of the Company's new directors for future services during the year.
In the event any director does not complete a full year of service, the
director is required to surrender a pro rata number of shares for the balance
of the year. Subsequent to fiscal year ended September 30, 2000, two
additional directors were elected, each were awarded 20,000* shares for joining
the board. Each outside director will be awarded 20,000* shares in each
subsequent year for their services on the board.
Subsequent to fiscal year ended September 30, 2000, the Company granted 50,000*
common stock purchase options to Winston D. Carlee, Jr. as an inducement for
him to join the Company as its Chief Financial Officer. These options are good
for five years and are exercisable at a price of $.25* per share.
*Adjusted for share combination of one for five on November 22, 2000.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The names of directors and officers and the name of each person who owns
legally and beneficially more than five percent of the Company's issued and
outstanding Common Stock at the date of this Prospectus, the address of each
such person, the number of shares which each owns and the percentage of the
Common Stock represented by such shares (assuming in each case the exercise
of Common Stock Purchase Options held by all such persons), before and after
the Offering (assuming all Shares are sold) is set forth in the following
table.
All ownership is both legal and beneficial unless otherwise indicated and
includes shares subject to the exercise of common stock purchase options.
See "Selling Stockholders".
Name Number of Shares
Before sale of %
Shares* Ownership
- ------------------------ ---------------- -----------
James Boggs (1) 20,000 (1)
Winston D. Carlee, Jr. (1) 50,000 (1)
Donald D. Clark (1) 20,000 (1)
Sally McFolling (1) 20,000 (1)
Jackson L. Morris (1) 1,008,581 4.16
David E. Salmon (1) 166,040 (1)
John V. Whitman, Jr. (1)(2) 4,339,038 17.88
All directors and officers
as a group (7 persons) 5,623,659 23.19
(1)Less than one percent
(1) The address of all directors and officers is the address of
the Company.
(2) Mr. Whitman Shares legal ownership of 96,252 shares, as adjusted, with
his wife.
*Adjusted for share combination of one for five on November 22, 2000.
Item 12. Certain Relationships and Related Transactions.
See Item 10, above, and Notes 9 and 11 to the Financial Statements included
elsewhere herein for advances made by the Company to Mr. Whitman, its
President and Chairman.
During the years ended September 30, 2000 and 1999, a member of the Board of
Directors provided legal services in the amounts of $135,196 and $134,226,
respectively.
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits:
3(a) Articles of Incorporation, as amended, incorporated by reference to
Registration Statement on Form SB-2, Commission File No. 333-34283 and 333-
90503 and Annual Report on Form 10-KSB for the fiscal year 1998.
3(b) Bylaws, incorporated by reference to the Registration Statement on
Form SB-2, Commission File No. 333-34283.
21 Subsidiaries of the Company.
27 Financial data schedule.
(b) Reports on Form 8-K. The Company did not file any reports on Form 8-K
during the last three months of the period covered by this annual report.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Stampede Worldwide, Inc.
By: /s/ John V. Whitman, Jr.
Date signed: January 12, 2001
President and Chief Executive Officer
Signature Capacity in which signed: Date signed:
- ------------------------ ------------------------- -------------
/s/ John V. Whitman, Jr. Director,
John V. Whitman, Jr. Chief Executive Officer, January 12, 2001
Chief Accounting Officer
and Principal Financial
/s/ Winston D. Carlee, Jr. Chief Financial Officer January 12, 2001
Winston D. Carlee, Jr.
EXHIBIT INDEX
21 Subsidiaries of the Company
27 Financial data schedule
EXHIBIT 21 Subsidiaries of the Company
The Subsidiaries of the Company during the period covered by the related
annual report on Form 10-KSB are:
Chronicle Commercial Printing, Inc.
Stampede Network.Com, Inc.
Spiderscape.Com, Inc.
i-Academy, Inc.
Bartow Communications, Inc.
Americomp Computers, Inc., a Texas corporation (wholly owned)
EXHIBIT 23 Consent of certifying auditor
EXHIBIT 23.2 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form SB-2 of
our report dated December 20, 2000, relating to the September 30, 2000 and 1999
consolidated financial statements of Stampede Worldwide, Inc. and to the
reference to our firm under the caption "Experts" in the Prospectus.
/s/ W. Andrew Mueller
W. Andrew Mueller, C.P.A.
Bella, Hermida, Gillman, Hancock & Mueller
Plant City, Florida
January 12, 2001
EXHIBIT 27 Financial data schedule
Supplemental information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Exchange Act By Non-reporting Issuers
(1) The Company has not issued any annual
report to its stockholders during or for the 1999 fiscal year.
(2) The Company did not issue a proxy
statement, form of proxy or other proxy soliciting material to the
Company's stockholders for any purpose.
