<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended 6/30/2000
---------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________to ____________
Commission file number 000-25735
---------
iQrom Communications, Inc.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 88-0370480
--------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
7635 Ashley Park Court, Suite 503V, Orlando, Florida 32835
----------------------------------------------------------
(Address of principal executive offices)
(407) 299-2230
---------------------------
(Issuer's telephone number)
Hiking Adventures, Inc., 114 Magnolia Street,
Suite 400-127, Bellingham, Washington 98225
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>
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 (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [x] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 21,654,378
----------
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [x]
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
iQrom COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30,
2000
ASSETS (Unaudited)
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 4,662,180
ACCOUNTS RECEIVABLE 1,048,928
INVENTORY 22,404
PREPAID EXPENSES 9,600
------------
TOTAL CURRENT ASSETS 5,743,112
FIXED ASSETS - NET 93,641
INTANGIBLE ASSETS - NET 95,069,260
------------
TOTAL ASSETS $100,906,013
=============
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 1,463,960
PURCHASE CONSIDERATION PAYABLE 2,475,000
NOTES PAYABLE 100,000
------------
TOTAL LIABILITIES 4,038,960
SHAREHOLDERS' EQUITY
COMMON STOCK, (par value $0.001, authorized 50,000,000
shares; issued and outstanding, 21,654,378 shares) 2,165
ADDITIONAL PAID IN CAPITAL 105,948,503
ACCUMULATED DEFICIT (9,114,660)
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Cumulative Translation Adjustment 31,045
------------
TOTAL SHAREHOLDERS' EQUITY 96,867,053
------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $100,906,013
=============
See accompanying notes to consolidated financial statements
<PAGE>
iQrom COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
(Unaudited) (Unaudited) Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUE
TOTAL REVENUE $1,876,172 - $2,388,354 -
-----------------------------------------------------------------------------
COST OF SALES 1,507,785 - 1,895,933 -
-----------------------------------------------------------------------------
GROSS PROFIT 368,387 - 492,420 -
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES
Advertising and selling 135,347 - 284,635 -
Professional fees 795,581 - 842,413 -
Salaries and benefits 568,298 - 881,230 -
Depreciation 5,013 - 6,868 -
Amortization of Intangible Assets 6,478,151 6,487,213
Other 316,986 12,237 469,416 29,908
-----------------------------------------------------------------------------
OPERATING LOSS 7,930,989 12,237 8,479,355 29,908
INTEREST INCOME 90,778 - 93,410 -
INTEREST EXPENSE (29,434) - (29,366) -
-----------------------------------------------------------------------------
NET LOSS $7,869,645 $12,237 $8,415,310 $29,908
=============================================================================
NET LOSS PER SHARE - basic and
diluted $.41 $0 $.58 $0
Weighted Shares Outstanding 19,092,976 18,063,086 14,546,488 14,031,543
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
iQrom COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
June 30
2000 1999
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Adjustments to reconcile net loss to net cash used in operating activities:
Net Loss $(8,415,310) $(29,908)
Depreciation 6,869
Amortization 6,494,082
Loss on disposal of fixed assets 1,050
Change in operating assets and liabilities:
Accounts receivable (1,048,688)
Inventory (22,404)
Prepaid assets (9,600)
Accounts payable and accrued expenses 702,747 29,908
----------- --------
Net cash used in operating activities (2,298,124) -
INVESTING ACTIVITIES:
Purchases of fixed assets (95,261)
Payments for patents (129,072)
Payments for trademarks (3,262)
Acquisition of business net of cash acquired (2,748,367) -
--------
Net cash used in investing activities (2,975,962) -
FINANCING ACTIVITIES:
Issuance of common stock 9,900,000
-----------
Net cash provided by financing activities 7,500,000 -
EFFECT OF EXCHANGE RATE CHANGES ON CASH - 36,266 -
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 4,662,180 -
CASH AND CASH EQUIVALENTS - BEGINNING OF THE PERIOD - -
CASH AND CASH EQUIVALENTS - END OF THE PERIOD $4,662,180 -
===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
iQrom Communications, Inc
Notes to Consolidated Financial Statements
June 30, 2000
Note 1 - Basis of Presentation.
The accompanying unaudited, consolidated financial statements of iQrom
Communications, Inc. (the Company), and its wholly owned subsidiaries
have been prepared in accordance with generally accepted accounting
principles for interim financial information in response to the
requirements of Article 10 of Regulation S-X and the instructions of
Form 10-QSB. Accordingly, they do not contain all of the information
and footnotes required by accounting principles generally accepted in
the United States of America. In the opinion of management, the
accompanying unaudited, consolidated financial statements reflect all
adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation of the Company's financial
position and the results of its operations and its cash flows for the
interim periods presented. These financial statements should be read in
conjunction with our audited financial statements as of November 30,
1999, including the notes thereto, and the other information included
in our most recent filing on Form 8K, which was filed with the
Securities and Exchange Commission, or SEC, on July 3, 2000. The
following discussion may contain forward looking statements which are
subject to the risk factors set forth in "Risks and Uncertainties" as
stated in Item 2 of this filing.
Operating results for the interim periods presented are not necessarily
indicative of the operating results that may be expected for the year
ending December 31, 2000.
Note 2 - Summary of Significant Accounting Policies.
Principles of Consolidation - The consolidated financial statements of
operations include the Company and its wholly owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated
in the consolidated financial statements.
Revenue Recognition - The Company designs, develops and distributes
digital communications technology based on its own and licensed
intellectual property. Revenues from the sale of products are
recognized at the time they are shipped.
Cash and Equivalents - The Company considers all highly liquid
financial instruments with maturity at the time of purchase of ninety
days or less to be cash equivalents.
Recent Accounting Pronouncements - The Financial Accounting Standards
Board (FASB) recently issued Statement No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of Effective
Date of FASB Statement No. 133." The Statement defers for one year the
effective date of FASB Statement No. 133 (SFAS No. 133), "Accounting
for Derivative Instruments and Hedging Activities." The rule will now
apply to all fiscal quarters of all fiscal years beginning after June
15, 2000. The Statement permits early adoption as of the beginning of
any fiscal quarter after its issuance. Statement 133 will require the
Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the nature
of the hedge, changes in fair value will either be offset against the
change in the fair value of the hedged assets, liabilities, or firm
commitments through earnings or recognized in other comprehensive
income until the hedged item is recognized in earnings. The Company has
not yet determined if it will early adopt and what the effect of
Statement 133 will be on its earnings and financial position.
<PAGE>
Foreign Currency Translation - Assets and liabilities of the Company's
non-U.S. subsidiary are translated into U.S. dollars using the end of
period exchange rates. The effect of this translation is reported in
Accumulated Other Comprehensive Income in the accompanying consolidated
balance sheet. Income statement elements of the non-US subsidiary are
translated to U.S. dollars using average period exchange rates and are
recognized as part of revenues, costs and expenses.
Intangible Assets - Intangible assets consist principally of
Trademarks, Patents and Goodwill. These are amortized on a
straight-line basis over twenty, fifteen and three years, respectively.
The Company has elected to amortize the Goodwill over a three-year
period. The amount of the amortization will have a large negative
impact on the Company's reported earnings for each period. However,
these charges are of a non-cash nature.
Net Loss Per Share Information - Basic and diluted loss per share are
computed based on the weighted average shares outstanding during the
period. Diluted net income per share includes the dilutive effect of
potential common stock issuances using the treasury stock method.
Common equivalent shares are excluded from the computation if their
effect is anti-dilutive. The Company's warrants have been excluded from
diluted loss per share since their effect is anti-dilutive.
Note 3 - Shareholders Equity.
Reverse Acquisition - On April 10, 2000, Hiking Adventures, Inc.,
amended its articles of incorporation to change its name to iQrom
Communications, Inc (iQrom). On April 20, 2000, the Company acquired
50% of the outstanding common stock of DXP US, Inc. (DXP) from its UK
shareholders, Messrs. Elek, Maynard-Taylor and Allmark, by way of
exchange (the share exchange) in consideration for the issue of
6,400,314 voting common shares in the capital of the Company plus a
share of cash proceeds from the placement referred to under the
following subheading (Issuance of Equity). Immediately subsequent to
the Share Exchange, DXP was merged with and into iQrom Communications
Acquisition Co. (ICA), a wholly owned subsidiary of the Company (the
Reorganization). As a result of the Reorganization, all of the common
stock of DXP outstanding and owned by POV US, LLC (i.e. the 50% of
common stock of DXP not already owned by the Company by virtue of the
Share Exchange) was converted into 6,400,314 voting shares in the
capital of the Company plus a share of the cash proceeds from the
Placement referred to above. All of the common stock of DXP issued and
outstanding owned of record by the Company by virtue of the Share
Exchange was cancelled and retired and the separate existence of DXP
thereby ceased and ICA continued as the surviving corporation.
Additionally, 2,466,250 voting common shares of the Company held by its
former President were cancelled as part of the transaction. This
resulted in the former shareholders of DXP owning approximately 59% of
the voting common shares of the Company upon completion of the Share
Exchange and Reorganization. The Reorganization has been accounted for
as a reverse merger under generally accepted accounting principles as
more fully described below.
The accounting treatment for the reverse merger means that DXP is
considered the acquiring entity and that ICA is the acquired entity
even though iQrom is the surviving legal entity. As a result of this
reverse purchase accounting treatment, (i) the historical financial
statements of the Company for periods prior to the date of the merger
are no longer the historical financial statements of iQrom, and are,
therefore, no longer presented; (ii) the historical financial
statements of the Company for periods prior to the date of the merger
are those of DXP; (iii) all reference to the financial statements of
the "Company" apply to the historical financial statements of DXP prior
to the merger and to the consolidated financial statements of iQrom
subsequent to the merger.
Issuance of Equity - Prior to the Share Exchange and Reorganization
described above, the Company undertook a private placement (the
Placement). As the first tranche of the Placement, the Company issued
1,320,000 units at a price of $7.50 per unit to a group of investors.
Each unit consisted of one share of the Company's common stock and a
half warrant. Each holder of two one-half warrants is entitled to
acquire one share of the Company's common stock at a price of not less
than $7.50 if the warrant is exercised within a year of issuance or $10
if exercised in the second year. If not exercised, the warrants expire
on April 20, 2002.
The Company received proceeds of $9,900,000 from the first tranche of
the Placement. $2,400,000 of the proceeds from the first tranche of the
Placement were owed to the former shareholders of DXP, and the
remainder was retained for working capital purposes.
<PAGE>
For the second tranche of the Placement, the Company will issue 330,000
shares of its common stock at a price of $7.50 per share for total
proceeds of $2,475,00. No warrants are to be issued with these shares.
The agreement calls for the issuance of the shares upon the achievement
of certain revenue targets by the Company. The $2,475,000 will be used
to make the final payment to DXP shareholders. (See item 2. Below.)
Operating results for the three and six months ended June 30, 2000 are
not necessarily indicative of the operating results that may be
expected for the year ending December 31, 2000.
Item 2. Management's Discussion and Analysis or Plan of Operation.
A predecessor to the Registrant, the non-US subsidiary of ICA, itself a
wholly owned subsidiary of the Company, was incorporated in the United Kingdom
("UK") in March 1999 under the name of DXP New Media Services Limited ("DXP
NMS"). In June 1999, DXP NMS entered into an exclusive licensing agreement with
iOra Limited, a UK software developer, for the use of iOra's proprietary SoftCD
technology. See Part II, Item 5 below. DXP NMS commenced trading in September
1999. In March 2000, DXP NMS changed its name to iQrom Limited. On April 20,
2000, through a series of transactions described above, iQrom Limited became a
subsidiary of the Registrant.
The Consolidated Statements of Operations above includes the trading
results of iQrom Limited for the six months ended June 30, 2000 and of the
Registrant for the period April 20, 2000 to June 30, 2000. The Company is in the
process of building and growing its operations, activities, and staff in the US,
UK, and Europe. Comparisons with its activities for the six months ended June
30, 1999 offer little insight into its current operations.
Revenues increased from $512,182 during the first quarter 2000 to
$1,876,172 in the second quarter 2000 and are expected to continue to grow
during the remaining quarters of 2000. The Company believes its present business
lines to be somewhat seasonal, with the summer months of June, July and August
being its slower period.
Selling, General and Administrative expenses increased significantly as
a result of opening an office in Orlando, Florida and increases in staff both in
the UK and the US.
The large increase in professional fees during the three months ending
June 30, related mainly to non-recurring legal expenses associated with the
initial formation and organization of the Company.
Amortization of Goodwill, which commenced as of April 20, 2000, was
$6,354,213 for the three months ended June 30, 2000.
As described above, there were two tranches to the Private Placement.
The terms of the second tranche called for the issue of 330,000 shares of stock
in the capital of the Company at a price of $7.50 per share once the Company has
met certain
<PAGE>
revenue targets for the three months ending June 30th. The Company is to receive
$2,475,000 from the Escrow Agent, who, in turn, will release the 330,000 shares.
Once received, the Company will distribute funds to the original DXP
shareholders in final consideration of the Share Exchange and Reorganization.
The company acquired Hiking Adventure in a transaction accounted for as
a reverse merger. Generally accepted accounting principles require the Company
to value the transaction at $96,004,710 based on the issuance of 12,800,628
shares of common stock at a fair market value of $7.50 per share. Management,
using the guidance as provided in (EITF 99-12) determined the fair market value
of the Common Stock. Under the provisions of EITF 99-12, a company is allowed to
value the securities at the time the terms of the transaction have been agreed
to and announced. The fair market value of $7.50 per share was determined based
on the Company's common stock trading range in the days preceding the
announcement of the merger.
Risks and Uncertainties: The Private Securities Litigation Reform Act
of 1995 provides a 'safe harbor' for forward-looking statements. Certain
information included in this report (as well as information included in oral
statements and other written statements made or to be made by the Company)
contains statements that are forward-looking, such as statements related to
anticipated future revenues of the Company and success of current product
offerings. Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results in the future
and, accordingly, such results may differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
<PAGE>
Item 5. Other Information.
The Registrant has entered into two agreements with iOra Limited
("iOra") to provide the Registrant with exclusive worldwide rights to iOra's
SoftCD(TM) technology, which compares the original and new versions of any
digital data and creates an amendment file incorporating only the variations
from the original data. This file is then integrated via the Internet through a
user's hard drive, effectively resulting in a new CD-ROM on which the publisher
can change and update the content. The Registrant and iOra entered into an OEM
Smart Card Agreement dated June 29, 1999, as supplemented by a Supplemental
Agreement dated April 4, 2000, in which iOra granted the Registrant exclusive
rights to use iOra's technology with respect to an updateable CD card, a
business card-sized medium playable on any CD device and also updateable via the
Internet employing SoftCD(TM) technology. The Registrant and iOra entered into a
CD-U Agreement dated June 23, 2000 (effective July 1, 2000) which granted the
Registrant exclusive worldwide rights to use the technology with respect to the
120mm CD format to create an updateable CD with a storage capacity of up to
700MBs in the CD implementation and more than four gigabytes in the DVD version.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit 3.1 - Articles of Incorporation as filed in the Office of the Secretary
of State of the State of Nevada on October 18, 1996, as amended by
Certificate of Amendment to Articles of Incorporation filed in the
Office of the Secretary of the State of Nevada on April 10, 2000.
Exhibit 10 - Material Contracts
10.1 Agreement dated April 13, 2000 between DXP US, Inc. and Aldersey
Egerton Maynard-Taylor, Thomas Gabor Elek, Colin Allmark, POV US, LLC,
Gerald A. Pierson, Michael Feit, IQROM Communications, Inc. and IQROM
Communications Acquisitions Co. [Previously filed as Exhibit 99.1 to
Form 8-K filed on May 5, 2000.]
10.2 First Financing Subscription Agreement dated April 6, 2000 between the
Registrant and Agens Ag. [Previously filed as Exhibit 99.2 to Form
8-K/A filed on July 3, 2000] Subscription Agreements between the
Registrant and the other Subscribers listed below have not been filed
in accordance with Instruction 2 to Item 601 of Regulation S-K since
they are substantially identical to the Subscription Agreement with
Agens Ag filed herewith. The material details in which the following
<PAGE>
Subscription Agreements differ from the Agens Subscription Agreement
are as follows:
Subscriber Units Acquired Purchase Price
---------- -------------- --------------
BWI Avionics Ltd. 143,333 $1,074,997.50
Euro Atlantic Equity Fund Ltd. 476,667 $3,575,002.50
Highway Finance Ltd. 166,667 $1,250,002.50
Blue Capital AG 133,333 $ 999,997.50
10.3 Second Financing Subscription Agreement dated April 6, 2000 between the
Registrant and Online Partners Inc. [Previously filed as Exhibit 99.3
to Form 8-K/A filed on July 3, 2000]
10.4 Share Purchase Warrant dated April 20, 2000 issued by the Registrant to
Agens Ag for 200,000 Common Shares. [Previously filed as Exhibit 99.4
to Form 8-K/A filed on July 3, 2000] Share Purchase Warrants issued by
the Registrant to the other Subscribers listed below have not been
filed in accordance with Instruction 2 to Item 601 of Regulation S-K
since they are substantially identical to the Share Purchase Warrant
issued to Agens Ag filed herewith. The material details in which the
following Share Purchase Warrants differ from the Agens Share Purchase
Warrant are as follows:
Subscriber Warrants Purchase Price
---------- -------- --------------
BWI Avionics Ltd. 71,667 $1,074,997.50
Euro Atlantic Equity Fund Ltd. 238,334 $3,575,002.50
Highway Finance Ltd. 83,334 $1,250,002.50
Blue Capital AG 66,667 $ 999,997.50
10.5 Patent License Agreement dated April 7, 2000, between DiskXpress US,
Inc. and DXP US, Inc.
10.6 Supply Agreement dated April 7, 2000, between Ingman Limited, IQROM
Limited (formerly DXP New Media Services Limited) and DXP US, Inc.
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K.
A Report on Form 8-K was filed on May 5, 2000, reporting the change in
control of the Company which occurred as of April 20, 2000 in connection with
<PAGE>
the purchase of the outstanding common stock of DXP US, Inc. and its wholly
owned subsidiary, iQrom Limited discussed in Part I above. An Amendment to
Current Report on Form 8-K/A was filed on July 3, 2000 to include the audited
and unaudited financial statements of the business acquired and pro forma
financial information.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
iQrom COMMUNICATIONS, INC.
--------------------------
(Registrant)
Date August 14, 2000
/s/ Thomas Gabor Elek
(Signature)*
Thomas Gabor Elek, President and
Chief Executive Officer
*Print the name and title of each signing officer under his signature.
<PAGE>
EXHIBIT INDEX
Exhibit 3.1 - Articles of Incorporation as filed in the Office of the Secretary
of State of the State of Nevada on October 18, 1996, as amended by
Certificate of Amendment to Articles of Incorporation filed in the
Office of the Secretary of the State of Nevada on April 10, 2000.
Exhibit 10 - Material Contracts
10.1 Agreement dated April 13, 2000 between DXP US, Inc. and Aldersey
Egerton Maynard-Taylor, Thomas Gabor Elek, Colin Allmark, POV US, LLC,
Gerald A. Pierson, Michael Feit, IQROM Communications, Inc. and IQROM
Communications Acquisitions Co. [Previously filed as Exhibit 99.1 to
Form 8-K filed on May 5, 2000.]
10.2 First Financing Subscription Agreement dated April 6, 2000 between the
Registrant and Agens Ag. [Previously filed as Exhibit 99.2 to Form
8-K/A filed on July 3, 2000] Subscription Agreements between the
Registrant and the other Subscribers listed below have not been filed
in accordance with Instruction 2 to Item 601 of Regulation S-K since
they are substantially identical to the Subscription Agreement with
Agens Ag filed herewith. The material details in which the following
Subscription Agreements differ from the Agens Subscription Agreement
are as follows:
Subscriber Units Acquired Purchase Price
---------- -------------- --------------
BWI Avionics Ltd. 143,333 $1,074,997.50
Euro Atlantic Equity Fund Ltd. 476,667 $3,575,002.50
Highway Finance Ltd. 166,667 $1,250,002.50
Blue Capital AG 133,333 $ 999,997.50
10.3 Second Financing Subscription Agreement dated April 6, 2000 between the
Registrant and Online Partners Inc. [Previously filed as Exhibit 99.3
to Form 8-K/A filed on July 3, 2000]
10.4 Share Purchase Warrant dated April 20, 2000 issued by the Registrant to
Agens Ag for 200,000 Common Shares. [Previously filed as Exhibit 99.4
to Form 8-K/A filed on July 3, 2000] Share Purchase Warrants issued by
the Registrant to the other Subscribers listed below have not been
filed in accordance with Instruction 2 to Item 601 of Regulation S-K
since they are substantially identical to the Share Purchase Warrant
issued to Agens Ag filed herewith. The material details in which the
following Share Purchase Warrants differ from the Agens Share Purchase
Warrant are as follows:
<PAGE>
Subscriber Warrants Purchase Price
---------- -------- --------------
BWI Avionics Ltd. 71,667 $1,074,997.50
Euro Atlantic Equity Fund Ltd. 238,334 $3,575,002.50
Highway Finance Ltd. 83,334 $1,250,002.50
Blue Capital AG 66,667 $ 999,997.50
10.5 Patent License Agreement dated April 7, 2000, between DiskXpress US,
Inc. and DXP US, Inc.
10.6 Supply Agreement dated April 7, 2000, between Ingman Limited, IQRO
Limited (formerly DXP New Media Services Limited) and DXP US, Inc
Exhibit 27 - Financial Data Schedule
