<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 1999
SKYLYNX COMMUNICATIONS, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
COLORADO 0-24687 84-1360029
- -------------- ------------------------- --------------------
(State or other (Commission file number) (Employer Identi-
incorporation) fication No.)
600 South Cherry Street, Suite 305, Denver, Colorado 80246
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 316-0400
--------------------------------------------------------------------
103 Sarasota Quay, Sarasota, Florida 34236
------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
<PAGE>
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
(a) Financial Statements
--------------------
Pursuant to Item 7(a)(4), the Registrant files herewith the
following financial statements of the acquired business:
Simply Internet, Inc. Audited Financial Statements
Independent Auditor's Report
Balance sheet as of December 31, 1998
Statements of Operation and Accumulated Deficit for the year ended
December 31, 1998 and inception to December 31, 1997
Statements of Cash Flows for the years ended December 31, 1998 and
December 31, 1997
Notes to Financial Statements
(b) Unaudited Financial Statements
------------------------------
Balance Sheet as of March 31, 1999 (unaudited)
Statements of Operations for the Three Month Periods Ended March 31,
1999 and 1998
Statements of Cash Flow for the Three Month Period Ended March 31,
1999 and 1998
Notes to Financial Statements
(c) Pro Forma Financial Information
-------------------------------
Pursuant to Item 7(b) and Item 7(a)(4), the Registrant files
herewith the following unaudited pro forma consolidated financial information:
Pro Forma Consolidated Balance Sheets as of March 31, 1999 and
December 31, 1998
Pro Forma Consolidated Statements of Operations for the three month
period ended March 31, 1999 and the year ended December 31, 1998
The unaudited Pro Forma Consolidated Balance Sheets as of March 31, 1999
and December 31, 1998 and unaudited Pro Forma Consolidated Statements of
Operations for the year ended December 31, 1998 and the three month period
ended March 31, 1999 (collectively the Pro Forma Consolidated Financial
Statements) give effect to the acquisition by SkyLynx Communications of
certain assets of Simply Internet, Inc. These transactions were accounted
for as a purchase in accordance with the provisions of Accounting Principles
Board Opinion Number 16.
The Pro Forma Consolidated Statements of Operations were prepared
assuming that the acquisition described above was consummated as of the
beginning of each period presented. The Pro Forma Consolidated Balance Sheet
includes the pro forma purchase accounting entries for the acquisition and was
prepared assuming that the transaction was consummated as of January 1, 1998.
The unaudited Pro Forma Consolidated Financial Statements are based upon
historical consolidated and combined financial statements of the Registrant
and Simply Internet, Inc.
The pro forma adjustments and the resulting Pro Forma Consolidated
Financial Statements have been prepared based upon available information and
certain assumptions and estimates deemed appropriate by the Registrant. A
final determination of required purchase accounting adjustments and the
allocation of the purchase price to the assets acquired based upon their
respective fair values has not yet been made for the acquisition.
The Pro Forma Consolidated Balance Sheet and the Pro Forma Consolidated
Statements of Operations are not necessarily indicative of the results of
operations that actually would have been achieved had the acquisition been
consummated as of the dates indicated, or that may be achieved in the future.
Furthermore, the Pro Forma Consolidated Financial Statements do not reflect
changes that may occur as the result of post-combination activities and other
matters.
The Pro Forma Consolidated Financial Statements and notes thereto should
be read in conjunction with the accompanying historical financial statements
and notes thereto of Simply Internet, Inc. and the audited consolidated
financial statements of the Registrant and subsidiaries included in its Annual
Report on Form 10-KSB for the year ended December 31, 1998.
<PAGE>
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders of
Simply Internet, Inc.:
We were engaged to audit the accompanying balance sheet of Simply Internet,
Inc. (a California corporation) as of December 31, 1998, and the related
statements of operations, stockholders' deficit and cash flows for the years
ended December 31, 1998 and 1997. These financial statements are the
responsibility of the Company's management.
We were unable to obtain written representations from the Company's management
concerning the financial statements referred to above. In addition, as
instructed, we did not request confirmation from the Company's legal counsel
regarding pending or threatened litigation, claims and assessments. Such
written representations and confirmation are considered necessary under
generally accepted auditing standards.
Because we cannot obtain the written representations and confirmation referred
to in the preceding paragraph, the scope of our work was not sufficient for us
to express, and we do not express, an opinion on the financial statements
referred to above.
Arthur Andersen LLP
Tampa, Florida,
June 18, 1999
<PAGE>
<PAGE>
SIMPLY INTERNET, INC.
BALANCE SHEET -- DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 45,892
Prepaid expenses and other current assets 4,308
-------------
Total current assets 50,200
PROPERTY AND EQUIPMENT, net 148,846
-------------
Total assets $ 199,046
=============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 114,914
Accrued liabilities 11,490
Deferred revenue 225,156
Line of credit 14,876
Note payable to related party 28,637
Current maturities of capital lease obligations 40,445
------------
Total current liabilities 435,518
CAPITAL LEASE OBLIGATIONS, net of current
maturities 48,502
------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Common stock, no par value; 1,000,000 shares
authorized, 52,632 shares issued and
outstanding 2,632
Additional paid in capital 66,117
Accumulated deficit (403,723)
------------
Total stockholders' deficit (284,974)
------------
Total liabilities and stockholders' deficit $ 199,046
============
</TABLE>
The accompanying notes are an integral part of this balance sheet.
<PAGE>
SIMPLY INTERNET, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---------- -----------
<S> <C> <C>
REVENUES $ 1,353,746 $ 1,074,407
---------- -----------
COSTS AND EXPENSES:
Cost of revenues 255,861 181,266
Selling, general and administrative 1,175,364 837,329
---------- -----------
Total costs and expenses 1,431,225 1,018,595
---------- -----------
(LOSS) INCOME FROM OPERATIONS (77,479) 55,812
---------- -----------
OTHER EXPENSE:
Interest (20,664) (3,325)
Other (58,309) (25,724)
---------- -----------
Total other expense (78,973) (29,049)
---------- -----------
NET (LOSS) INCOME $ (156,452) $ 26,763
=========== ===========
NET (LOSS) INCOME PER SHARE - BASIC AND DILUTED $(2.97) $.51
=========== ===========
SHARES USED IN COMPUTING NET (LOSS) INCOME
PER SHARE - BASIC AND DILUTED 52,632 52,632
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<PAGE>
SIMPLY INTERNET, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit Total
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1996 50,000 $ 50,000 $ 16,361 $(180,605) $(114,244)
Net income - - - 26,763 26,763
Capital contributions 2,632 2,632 14,368 - 17,000
Distributions to stockholders - - - (92,231) (92,231)
----------- ---------- ---------- ---------- ----------
BALANCE, December 31, 1997 52,632 52,632 30,729 (246,073) (162,712)
Net loss - - - (156,452) (156,452)
Capital contributions - - 35,388 - 35,388
Distributions to stockholders - - - (1,198) (1,198)
----------- ---------- ---------- ---------- ----------
BALANCE, December 31, 1998 52,632 $ 52,632 $ 66,117 $(403,723) $(284,974)
=========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<PAGE>
SIMPLY INTERNET, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------ ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (156,452) $ 26,763
Adjustments to reconcile net (loss) income to
net cash provided by operating activities-
Depreciation 83,780 40,204
Changes in operating assets and liabilities-
Prepaid expenses and other current assets 3,150 (5,343)
Accounts payable 44,918 41,304
Accrued liabilities 1,479 6,753
Deferred revenue 37,900 106,411
------------ ----------
Net cash provided by operating activities 14,775 216,092
------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of property and
equipment (20,498) (161,977)
Proceeds from disposal of property and equipment 45,525 -
------------ ----------
Net cash provided by (used in)
investing activities 25,027 (161,977)
---------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit 10,064 24,602
Payments on line of credit (45,188) -
Proceeds from note payable to stockholder 30,000 -
Payments on note payable to stockholder (1,363) (6,614)
Payments on capital lease obligations (26,658) -
Capital contributions 35,388 17,000
Distributions to stockholders (1,198) (92,231)
------------ ----------
Net cash provided by (used in)
financing activities 1,045 (57,243)
------------ ----------
NET INCREASE (DECREASE) IN CASH 40,847 (3,128)
CASH, beginning of year 5,045 8,173
------------ ----------
CASH, end of year $ 45,892 $ 5,045
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 20,724 $ 3,325
SUPPLEMENTAL DISCLOSURE OF NON-CASH
FINANCING ACTIVITIES:
Equipment acquired under capital leases $ 115,605 $ -
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<PAGE>
SIMPLY INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. ORGANIZATION AND BUSINESS:
Simply Internet, Inc. (the Company), was formed to provide high-speed
Internet connectivity and enhanced Internet services through the use of
wireline technologies. The Company was formed in 1996 through the investment
of two individuals who made an initial contribution of $50,000 in exchange for
50,000 shares of the Company's stock. The Company sells primarily to business
customers in the San Diego, California area.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization
are provided using the straight-line method over the estimated useful lives of
depreciable assets.
Expenditures for repairs and maintenance are charged to expense when
incurred. Expenditures for major renewals and betterments, which extend the
useful lives of existing equipment, are capitalized and depreciated. Upon
retirement or disposition of property and equipment, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain
or loss is recognized in the statements of operations.
Revenue Recognition and Deferred Revenue
Revenue, comprised primarily of billings on Internet and enhanced
services, is recognized as the services are provided. Amounts collected prior
to the services being provided are reflected as deferred revenue.
Installation and customer set-up fees are recognized upon completion of
the services.
Income Taxes
The Company has elected to report its earnings under Subchapter S of the
Internal Revenue Code. All income or loss is reported through the
stockholders' personal tax returns. The tax returns and the amount of taxable
income or loss are subject to examination by federal and state taxing
authorities. If such examinations result in changes to taxable income or
loss, the tax liabilities of the stockholders could be changed accordingly.
Fair Value of Financial Instruments
The Company believes that the carrying value of financial instruments on
the balance sheet approximates their fair value.
Income (Loss) per Share
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share" (SFAS 128). The Company adopted SFAS 128 for the year ended December
31, 1997. Under SFAS 128, net income (loss) per share-basic is determined by
dividing net income (loss) by the weighted average number of shares of common
stock outstanding during the period. Net income (loss) per share-diluted is
determined by dividing the net income (loss) by the weighted average number of
shares of common stock outstanding and dilutive common equivalent shares
during the period.
3. LIQUIDITY:
The Company incurred a loss from operations for the year ended December
31, 1998. As further discussed in Note 7 to the financial statements, the
Company's management sold substantially all of its assets to SkyLynx
Communications, Inc. (SkyLynx), in exchange for cash during the second quarter
of 1999. Management believes that the sale to SkyLynx will allow the Company
to increase sales and marketing efforts, which in turn should generate
increased revenues and improve operating results.
4. PROPERTY AND EQUIPMENT:
Property and equipment consisted of the following as of December 31,
1998:
<TABLE>
<CAPTION>
Useful Lives
in Years Amount
------------ ------
<S> <C> <C>
Communications and computer equipment 3 $248,256
Furniture and fixtures 3 27,322
Less- Accumulated depreciation and
amortization (126,732)
---------
Property and equipment, net $148,846
=========
</TABLE>
5. NOTE PAYABLE TO RELATED PARTY:
The Company has an unsecured note payable (the Note) to a previous
stockholder, which bears interest at a rate of 10 percent and is due upon
demand. Amounts outstanding under the Note at December 31, 1998, are
classified as current liabilities in the accompanying balance sheet.
6. LINE OF CREDIT:
On November 17, 1997, the Company entered into a $50,000 line of credit
agreement (the Line) with a bank. The Line bears interest at 10.5 percent,
which is payable monthly. The outstanding principal balance was due on
November 17, 1998. The Line is secured by certain assets of the Company. At
December 31, 1998, there was $14,876 of outstanding borrowings on the Line,
and there were no borrowings available under the Line. The outstanding
balance on the Line was paid during the first quarter of 1999.
7. CAPITAL LEASE OBLIGATIONS:
The Company has capital leases for certain of its computers and
equipment. Assets under capital leases are capitalized using interest rates
appropriated at the inception of each lease. The leases generally provide for
the lessee to pay taxes, maintenance, insurance and certain other operating
costs of the leased property over the three-year term of each lease.
The total cost of assets under capital leases and accumulated amortization as
of December 31, 1998, was $115,605 and $28,914, respectively.
Future minimum lease payments required under capital leases for equipment
at December 31, 1998, are as follows:
<TABLE>
<CAPTION>
Year Ending December 31, Amount
- ------------------------ ---------
<S> <C>
1999 $ 50,466
2000 47,114
2001 5,868
---------
Net minimum lease payments under capital leases 103,448
Less- Portion representing interest (14,501)
---------
Present value of net minimum lease payments 88,947
Less- Current maturities (40,445)
---------
Capital lease obligations, less current
maturities $ 48,502
========
</TABLE>
The lease agreements required payments of principal and interest under
capital leases of $37,892 for 1998.
8. COMMITMENTS AND CONTINGENCIES:
Operating Leases
The Company leases office space and equipment under operating leases.
These leases require the Company to pay maintenance, insurance, taxes and
certain other expenses in addition to the stated rentals.
Future minimum lease payments for noncancellable operating leases in
effect at December 31, 1998, are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31, Amount
- ------------- -------
<S> <C>
1999 $34,978
2000 8,085
2001 8,085
-------
$51,148
</TABLE>
Rent expense under operating leases for the year ended December 31, 1998
and 1997, totaled $31,067 and $18,610, respectively.
9. SUBSEQUENT EVENT:
Effective April 26, 1999, the Company sold substantially all of its
assets to SkyLynx for $2,123,775 in cash.
<PAGE>
<PAGE>
SIMPLY INTERNET, INC.
BALANCE SHEET -- MARCH 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 19,323
Prepaid expenses and other current assets 4,353
-----------
Total current assets 23,676
PROPERTY AND EQUIPMENT, net 138,194
-----------
Total assets $ 161,870
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 103,127
Accrued liabilities 11,490
Deferred revenue 257,870
Note payable to stockholder 28,136
Current maturities of capital lease obligations 43,387
-----------
Total current liabilities 444,010
CAPITAL LEASE OBLIGATIONS, net of current
maturities 38,109
-----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Common stock, no par value; 1,000,000 shares
authorized,
52,632 shares issued and outstanding 52,632
Additional paid in capital 96,117
Accumulated deficit (468,998)
-----------
Total stockholders' deficit (320,249)
-----------
Total liabilities and stockholders' deficit $ 161,870
===========
</TABLE>
The accompanying notes are an integral part of this balance sheet.
<PAGE>
<PAGE>
SIMPLY INTERNET, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Month Period
Ended March 31,
1999 1998
------------- ------------
<S> <C> <C>
REVENUES $ 348,097 $ 315,442
COSTS AND EXPENSES:
Cost of revenues 93,698 64,807
Selling, general and administrative 313,637 275,434
------------- ------------
Total costs and expenses 407,335 340,241
------------- ------------
LOSS FROM OPERATIONS (59,238) (24,799)
INTEREST EXPENSE (4,894) (2,693)
------------- ------------
NET LOSS $ (64,132) $ (27,492)
============= ============
NET LOSS PER SHARE - BASIC AND DILUTED $ (1.22) $ (.52)
============= ============
SHARES USED IN COMPUTING NET LOSS PER
SHARE - BASIC AND DILUTED $ 52,632 $ 52,632
============= ============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<PAGE>
SIMPLY INTERNET, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Month Period
Ended March 31,
1999 1998
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (64,132) $ (27,492)
Adjustments to reconcile net loss to net
cash used in operating activities-
Depreciation 26,631 20,945
Changes in operating assets and liabilities
Prepaid expenses and other current assets (45) (4,416)
Accounts payable (11,787) (7,153)
Deferred revenue 32,714 -
------------- ------------
Net cash used in operating
activities (16,619) (18,116)
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of property
and equipment (8,079) (9,747)
------------- ------------
Net cash used in investing
activities (8,079) (9,747)
CASH FLOWS FINANCING ACTIVITIES:
Proceeds from line of credit - 10,064
Payments on line of credit (14,876) (16,077)
Proceeds from note payable - 30,000
Payments on note payable (501) -
Payments on capital lease obligations (15,351) -
Capital contributions 30,000 6,000
Distributions to stockholders (1,143) -
------------- ------------
Net cash (used in) provided by
financing activities (1,871) 29,987
------------- ------------
NET (DECREASE) INCREASE IN CASH (26,569) 2,124
CASH, beginning of period 45,892 5,045
------------- ------------
CASH, end of period $ 19,323 $ 7,169
============= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 4,894 $ 2,693
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING
ACTIVITIES:
Equipment acquired under capital leases $ 7,900 $ -
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<PAGE>
SIMPLY INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(Unaudited)
1. INTERIM FINANCIAL INFORMATION:
-----------------------------
The interim financial statements as of March 31, 1999, and for the three-
month periods ended March 31, 1999 and 1998, are unaudited and have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Simply Internet, Inc.'s management,
the unaudited interim financial statements contain all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation.
The results of operations for the interim periods are not necessarily
indicative of the results for the entire fiscal year.
<PAGE>
<PAGE>
SIMPLY INTERNET
Unaudited Pro Forma Condensed, Combined Financial Information
December 31, 1998
The following unaudited pro forma condensed, combined balance sheet and a
pro forma condensed, combined statement of operations gives the effect to the
Company.
These unaudited pro forma condensed, combined statements are not
necessarily indicative of results of operations had the acquisitions occurred
at January 1, 1998, nor the results the results to be expected in the future.
The following footnotes should be read in understanding pro forma
adjustments to the unaudited pro forma condensed, consolidated statements.
(a) Adjustment reflects the $2,123,775 asset purchase of Simply
Internet; $1,974,929 customer list and covenant not to compete, $4,308 other
assets, $148,846 property and equipment and 225,156 Deferred revenue. The
consideration paid in this transaction was $1,911,398 cash, and $212,378
purchase price holdback.
(b) Adjustment to recognize twelve months amortization expense
($731,926) on the customer list and the covenant not to compete agreements.
The property was depreciated over three years and customer list and covenant
not to compete agreements over two to three years.
(c) Adjustments to reflect balances at December 31, 1998 that were not
acquired by the Company.
(d) Adjustment to reflect the $2,000,000 cash required for acquisitions
and the adjustment to equity to fund acquisitions and continuing operations.
<PAGE>
<PAGE>
PRO FORMA CONDENSED, COMBINED BALANCE SHEET
AS OF DECEMBER 31,1998
<TABLE>
<CAPTION>
(c)
SkyLynx Simply Pro Forma
Communications, Internet, Total Adjustments Pro Forma Pro Forma
Inc. Inc. Simply Simply Adjustments Combined
-------------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
- ------
Cash 512,925 45,892 558,817 (45,892) (1,911,398) (a) 601,528
2,000,000 (d)
Accounts receivable - - - -
Inventory - - - -
Other current assets 20,135 4,308 24,443 - 24,443
----------- ----------- ----------- ----------- ----------- -----------
Current assets 533,060 50,200 583,260 (45,892) 88,603 625,971
----------- ----------- ----------- ----------- ----------- -----------
Property & equipment 1,632,370 148,846 1,781,216 - 1,781,216
Other assets 242,173 - 242,173 2,195,777 (a) 2,437,950
----------- ----------- ----------- ----------- ----------- -----------
Total assets 2,407,603 199,046 2,606,649 (45,892) 2,284,380 4,845,137
=========== =========== =========== =========== =========== ===========
Liability and Equity
- --------------------
Accounts payable 360,176 114,914 475,090 (114,914) - 360,176
Accrued expense 363,138 11,490 374,628 (11,490) - 363,138
Unearned revenue - 225,156 225,156 - - 225,156
Other Current
Liabilities 411,160 83,958 495,118 (83,958) - 411,160
----------- ----------- ----------- ----------- ----------- -----------
Current liabilities 1,134,474 435,518 1,569,992 (210,362) - 1,359,630
----------- ----------- ----------- ----------- ----------- -----------
LT debt - - - - - -
Other LT Liabilities - 48,502 48,502 (48,502) 212,378 (a) 212,378
----------- ----------- ----------- ----------- ----------- -----------
Total LT Liabilities - 48,502 48,502 (48,502) 212,378 212,378
----------- ----------- ----------- ----------- ----------- -----------
Total Liabilities 1,134,474 484,020 1,618,494 (258,864) 212,378 1,572,008
Preferred stock 2,645,828 - 2,645,828 2,000,000 (d) 4,645,828
Common stock 9,531 50,000 59,531 (50,000) - 9,531
Paid in capital 4,171,356 68,749 4,240,105 (68,749) - 4,171,356
Retained earnings
(deficit) (5,553,586) (403,723) (5,957,309) 403,723 - (a) (5,553,586)
Total shareholders'
equity 1,273,129 (284,974) 988,155 284,974 2,000,000 3,273,129
----------- ----------- ----------- ----------- ----------- -----------
Total liability
and equity 2,407,603 199,046 2,606,649 26,110 2,212,378 4,845,137
=========== =========== =========== =========== =========== ===========
</TABLE>
PRO FORMA CONDENSED, COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,1998
<TABLE>
<CAPTION>
SkyLynx Simply Pro Forma
Communications, Internet, Adjustments Pro Forma
Inc. Inc. Total Simply Combined
-------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenues 7,898 1,353,746 1,361,644 1,361,644
Operating cost
and expenses 5,300,834 1,431,225 6,732,059 731,926 7,463,985
Loss from operations(5,292,936) (77,479) (5,370,415) (731,926) (6,102,341)
Interest and other
income (expenses) 18,104 (78,973) (60,869) - (60,869)
----------- ----------- ----------- ----------- -----------
Net Loss (5,274,832) (156,452) (5,431,284) (731,926) (6,163,210)
=========== =========== =========== =========== ===========
Weighted average
common shares
outstanding 8,946,874 8,946,874
Basic loss per share (0.59) (0.69)
</TABLE>
<PAGE>
<PAGE>
SIMPLY INTERNET
Unaudited Pro Forma Condensed, Combined Financial Information
March 31, 1998
The following unaudited pro forma condensed, combined balance sheet and a
pro forma condensed, combined statement of operations gives the effect to the
Company
These unaudited pro forma condensed, combined statements are not
necessarily indicative of results of operations had the acquisitions occurred
at January 1, 1999, nor the results the results to be expected in the future.
The following footnotes should be read in understanding pro forma
adjustments to the unaudited pro forma condensed, consolidated statements.
(a) Adjustment reflects the $2,123,775 asset purchase of Simply
Internet; $2,239,098customer list and covenant not to compete, $4,353 other
assets, $138,194 property and equipment and 257,870 deferred revenue. The
consideration paid in this transaction was $1,911,398 cash, and $212,378
purchase price holdback.
(b) Adjustment to recognize three months amortization expense
($186,952) on the customer list and the covenant not to compete agreements.
The property was depreciated over three years and customer list and covenant
not to compete agreements over two to three years.
(c) Adjustments to reflect balances at December 31, 1998 that were
not acquired by the Company.
(d) Adjustment to reflect the $2,000,000 cash required for
acquisitions and the adjustment to equity to fund acquisitions and continuing
operations.
<PAGE>
<PAGE>
PRO FORMA CONDENSED, COMBINED BALANCE SHEET
As of March 31,1998
<TABLE>
<CAPTION>
(c)
SkyLynx Simply Pro Forma
Communications, Internet, Total Adjustments Pro Forma Pro Forma
Inc. Inc. Simply Simply Adjustments Combined
-------------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
- ------
Cash 843,365 19,323 862,688 (19,323) (1,911,397) (a) 931,968
2,000,000 (d)
Accounts receivable - - - - -
Inventory - - - - -
Other current assets 269,536 4,353 273,889 - 273,889
----------- ----------- ----------- ----------- ----------- -----------
Current assets 1,112,901 23,676 1,136,577 (19,323) 88,603 1,205,857
----------- ----------- ----------- ----------- ----------- -----------
Property & equipment 1,728,989 138,194 1,867,183 - 1,867,183
Other assets 1,029,307 - 1,029,307 2,239,098 (a) 3,268,405
----------- ----------- ----------- ----------- ----------- -----------
Total assets 3,871,197 161,870 4,033,067 (19,323) 2,327,701 6,341,445
=========== =========== =========== =========== =========== ===========
Liability and Equity
- --------------------
Accounts payable 356,057 103,127 459,184 (103,127) - 356,057
Accrued expense 184,476 11,490 195,966 (11,490) - 184,476
Unearned revenue - 257,870 257,870 - - 257,870
Other Current
Liabilities 373,093 71,523 444,616 (71,523) - 373,093
----------- ----------- ----------- ----------- ----------- -----------
Current liabilities 913,626 444,010 1,357,636 (186,140) - 1,171,496
----------- ----------- ----------- ----------- ----------- -----------
LT debt 25,000 - 25,000 - - 25,000
Other LT Liabilities - 38,109 38,109 (38,109) 212,378 (a) 212,378
----------- ----------- ----------- ----------- ----------- -----------
Total LT Liabilities 25,000 38,109 63,109 (38,109) 212,378 237,378
----------- ----------- ----------- ----------- ----------- -----------
Total Liabilities 938,626 482,119 1,420,745 (224,249) 212,378 1,408,874
Preferred stock 3,978,119 - 3,978,119 2,000,000 (d) 5,978,119
Common stock 10,889 50,000 60,889 (50,000) - 10,889
Paid in capital 7,786,972 98,749 7,885,721 (98,749) - 7,786,972
Retained earnings
(deficit) (8,843,409) (468,998) (9,312,407) 468,998 - (a) (8,843,409)
Total shareholders'
equity 2,932,571 (320,249) 2,612,322 320,249 2,000,000 4,932,571
----------- ----------- ----------- ----------- ----------- -----------
Total liability
and equity 3,871,197 161,870 4,033,067 96,000 2,212,378 6,341,445
=========== =========== =========== =========== =========== ===========
</TABLE>
PRO FORMA CONDENSED, COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,1999
<TABLE>
<CAPTION>
SkyLynx Simply Pro Forma
Communications, Internet, Adjustments Pro Forma
Inc. Inc. Total Simply Combined
-------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenues 67,888 315,442 383,330 383,330
Operating cost
and expenses 3,360,606 340,241 3,700,847 186,592 3,887,439
Loss from operations(3,292,718) (24,799) (3,317,517) (186,592) (3,504,109)
Interest and other
income (expenses) 2,895 (2,693) 202 - 202
----------- ----------- ----------- ----------- -----------
Net Loss (3,289,823) (27,492) (3,317,315) (186,592) (3,503,907)
=========== =========== =========== =========== ===========
Weighted average
common shares
outstanding 10,572,168 10,572,168
Basic loss per share (0.31) (0.33)
</TABLE>
<PAGE>
<PAGE>
SIGNATURE
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.
SKYLYNX COMMUNICATIONS , INC.
Dated: July 12, 1999 By: /s/ Jeffery A. Mathias
--------------- -------------------------------
Jeffery A. Mathias, President
