SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 17, 2000
INTERNET CABLE CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 000-26011 87-0540291
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Chadds Ford Business Campus
Brandywine One - Suite 300
Chadds Ford, Pennsylvania 19317
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 429-2900
263 King Street, Charleston, South Carolina 29401
(Former name or former address, if changed since last report.)
This Form 8-K/A1 amends the Form 8-K filed by the Registrant on January 19, 2000
(File No. 0-26011) with regards to disclosure of the financial statements
required in Item 7.
<PAGE>
Item 7. Financial Statements and Exhibits.
2.1 Share Purchase Agreement dated July 8, 1999, by and between 1291973
Ontario Limited, Eugene Harbin, Joseph Melanson, Ontario Cable and
Contracting Incorporated, Rupel Holdings Inc., Ryon Future Inc., Vonda
Thompson and Internet Cable Corporation.*
2.2 Agreement and Plan of Merger dated October 8, 1999 by and between
Internet Cable Corporation, ICC Acquisition Corp., CAD Consultants,
Inc. and Craig Lerman.*
23.1 Consent of Ernst & Young, L.L.P.
23.2 Consent of Meisel, Tuteur & Lewis, P.C.
99.1 Form of Employment Agreement between Joseph M. Melanson and Internet
Cable Corporation.*
99.2 Form of Employment Agreement between Craig Lerman and Internet Cable
Corporation.*
99.3 Form of Employment Agreement between Michael F. Mulholland and Internet
Cable Corporation.*
99.4 Cable Systems Technical Services Inc. - Financial Statements for the
years ended December 31, 1999 and 1998
99.5 CAD Consultants, Inc. - Financial Statements for the years ended
December 31, 1999 and 1998
99.6 Unaudited Pro Forma Financial Statements of Internet Cable Corporation,
Cable Systems Technical Services Inc., and CAD Consultants, Inc.
- -----------
* Incorporated by reference to Internet Cable Corporation's report on
Form 8-K dated January 19, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Internet Cable Corporation
By: /S/ WILLIAM F. WALSH
---------------------
William F. Walsh, Chief Financial Officer
Date: March 17, 2000
CONSOLIDATED FINANCIAL STATEMENTS
CABLE SYSTEMS TECHNICAL
SERVICES INC.
December 31, 1999 and 1998
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors of
CABLE SYSTEMS TECHNICAL SERVICES INC.
We have audited the accompanying consolidated balance sheets of CABLE SYSTEMS
TECHNICAL SERVICES INC. and subsidiary as of December 31, 1999 and 1998, and the
related consolidated statements of income and comprehensive income,
shareholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform an audit
to obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of CABLE SYSTEMS
TECHNICAL SERVICES INC. and subsidiary as of December 31, 1999 and 1998, and the
consolidated results of their operations and their cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States. Thornhill, Canada, March 9, 2000. Chartered Accountants
/s/ Ernst & Young L.L.P.
------------------------
Thornhill, Canada
March 9, 2000 Chartered Accounts
<PAGE>
<TABLE>
<CAPTION>
CABLE SYSTEMS TECHNICAL SERVICES INC.
CONSOLIDATED BALANCE SHEETS
[expressed in U.S. dollars]
As of December 31
1999 1998
$ $
- --------------------------------------------------------------------------------
ASSETS
CURRENT
<S> <C> <C>
Cash 457,753 136,225
Accounts receivable, net of allowance
for doubtful accounts of
$42,828 [1998 - nil] [NOTE 3] 1,075,553 1,013,007
Work in progress 226,374 39,023
Prepaid expenses and sundry assets 101,126 19,679
- --------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 1,860,806 1,207,934
- --------------------------------------------------------------------------------
Capital assets [NOTE 4] 707,950 401,014
- --------------------------------------------------------------------------------
2,568,756 1,608,948
- --------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable and accrued
liabilities [NOTE 5] 624,247 451,519
Unearned revenue -- 182,740
Income taxes payable 419,829 29,521
Share repurchase loan [NOTE 6] -- 27,186
Advance from Internet Cable
Corporation [NOTE 17] 338,442 --
Shareholders' loans [NOTE 7] 254,725 303,221
Current portion of obligation under
capital leases [NOTE 8] 64,263 14,159
Current portion of long-term debt [NOTE 9] -- 114,255
- ----------------------------------------------------------------------------
Total current liabilities 1,701,506 1,122,601
- ----------------------------------------------------------------------------
Obligation under capital leases [NOTE 8] 104,150 12,357
Long-term debt [NOTE 9] -- 266,441
- ----------------------------------------------------------------------------
Total liabilities 1,805,656 1,401,399
- ----------------------------------------------------------------------------
Minority interest 154,172 3,920
- ----------------------------------------------------------------------------
Commitments [NOTE 10]
Shareholders' equity
Share capital [NOTE 6]
Authorized
10,000 each Class A and Class B voting,
non-cumulative, redeemable, preference shares
Unlimited common shares
Issued
50 Class A preference shares 36,114 36,114
692 common shares 150,750 150,750
Retained earnings 422,064 16,765
- ----------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 608,928 203,629
- ----------------------------------------------------------------------------
2,568,756 1,608,948
- ----------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES
On behalf of the Board:
Director Director
<PAGE>
<TABLE>
<CAPTION>
CABLE SYSTEMS TECHNICAL SERVICES INC.
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
[expressed in U.S. dollars]
Years ended December 31
1999 1998
$ $
- --------------------------------------------------------------------------------
<S> <C> <C>
REVENUE [NOTE 3] 6,023,910 4,067,104
- --------------------------------------------------------------------------------
EXPENSES
Wages and benefits 2,641,402 2,214,478
Vehicles 554,279 502,422
Management fees [NOTE 11] 352,584 261,905
Travel and lodging 198,165 150,744
Office and general 257,360 141,788
Amortization of capital assets 125,784 100,550
Communication 97,295 95,136
Equipment lease and rental 79,440 72,557
Rent and utilities 61,984 31,450
Legal and accounting 58,563 69,259
Bank charges and interest 26,464 59,402
Field costs 189,135 85,497
Advertising [NOTE 11] 232,906 68,982
Interest on long-term debt 52,859 19,843
Travel and entertainment 81,424 3,374
Foreign exchange gain (12,320) (23,956)
- --------------------------------------------------------------------------------
4,997,324 3,853,431
- --------------------------------------------------------------------------------
Income before extraordinary item, income taxes
and minority interest 1,026,586 213,673
EXTRAORDINARY ITEM
Penalty for early repayment of debt [NOTE 17] 61,795 --
Income before income taxes and minority interest 964,791 213,673
Income taxes [NOTE 12] 409,240 30,243
- --------------------------------------------------------------------------------
Net income before minority interest 555,551 183,430
Minority interest 150,252 3,920
- --------------------------------------------------------------------------------
NET INCOME AND COMPREHENSIVE INCOME FOR THE YEAR 405,299 179,510
- --------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 692 692
- --------------------------------------------------------------------------------
NET INCOME PER SHARE BEFORE EXTRAORDINARY ITEM $ 675 $ 259
- --------------------------------------------------------------------------------
NET INCOME PER SHARE $ 586 $ 259
- --------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF
SHAREHOLDERS' EQUITY
[expressed in U.S. dollars]
Years ended December 31
1999 1998
$ $
- --------------------------------------------------------------------------------
<S> <C> <C>
CLASS A PREFERENCE SHARES
BALANCE, BEGINNING OF YEAR 36,114 103,591
100 Class A shares purchased -- 67,477
- ------------------------------------------------------------------------------
BALANCE, END OF YEAR 36,114 36,114
- ------------------------------------------------------------------------------
COMMON SHARES
BALANCE, BEGINNING AND END OF YEAR 150,750 150,750
- ------------------------------------------------------------------------------
RETAINED EARNINGS
BALANCE, BEGINNING OF YEAR 16,765 (162,745)
Net income for the year 405,299 179,510
- ------------------------------------------------------------------------------
BALANCE, END OF YEAR 422,064 16,765
- ------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 608,928 203,629
- --------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
CABLE SYSTEMS TECHNICAL SERVICES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
[expressed in U.S. dollars]
Years ended December 31
1999 1998
$ $
- ----------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income for the year 405,299 179,510
Add items not involving cash
Amortization of capital assets 125,784 100,550
Loss on disposal of capital assets -- 14,000
Minority interest 150,252 3,920
- ----------------------------------------------------------------------------
681,335 297,980
Net change in non-cash working capital balances
related to operations [NOTE 13] 48,952 (474,237)
- ----------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES 730,287 (176,257)
- ----------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of capital assets (240,651) (28,870)
Proceeds from disposal of capital assets -- 26,995
- ----------------------------------------------------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES (240,651) (1,875)
- ----------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of obligation under capital leases (50,172) (58,379)
Increase in long-term debt -- 325,350
Repayment of long-term debt (380,696) (32,200)
Repayment of share repurchase loan (27,186) (31,910)
Repayment of shareholders' loans (48,496) (288)
Advance from Internet Cable Corporation 338,442 --
Redemption of Class A preference shares -- (67,477)
- ----------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES (168,108) 135,096
- ----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH DURING THE YEAR 321,528 (43,036)
Cash, beginning of year 136,225 179,261
- ----------------------------------------------------------------------------
CASH, END OF YEAR 457,753 136,225
- ----------------------------------------------------------------------------
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid 27,602 --
Interest paid 52,859 19,843
Penalty for early repayment of debt 61,795 --
- ----------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
1. ORGANIZATION
The Company provides sophisticated engineering, testing, maintenance and other
services to the cable television industry throughout the United States ["U.S."]
and Canada. The Company maintains offices in Chicago, Illinois, Jacksonville,
Florida, and Richmond, Virginia, in the U.S. and Toronto, London and Cambridge,
Ontario in Canada.
2. SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared by management in
accordance with accounting principles generally accepted in the U.S. and are
expressed in U.S. Dollars. The more significant accounting policies are as
follows:
BASIS OF PRESENTATION
These consolidated financial statements comprise the accounts of Cable Systems
Technical Services Inc. [the "Company"], an Ontario, Canada corporation, and its
78.8% owned U.S. subsidiary, Cable Systems Technical Services Inc., a Delaware
corporation. All significant intercompany balances and transactions have been
eliminated.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, accounts receivable,
accounts payable and accrued liabilities, income taxes payable, long-term debt,
share repurchase loan, advance from Internet Cable Corporation, shareholders'
loans and obligations under capital leases. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant interest,
currency or credit risks arising from these financial instruments and the fair
values of these financial instruments approximate their carrying values.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
This allowance is estimated by specifically identifying those accounts
receivable for which the Company has a history of slow collections.
1
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
CAPITAL ASSETS
Capital assets are recorded at cost less accumulated amortization. Amortization
is provided using the following annual rates and bases which are expected to
charge operations with the total cost of the assets over their estimated useful
lives:
Equipment 20% declining balance
Furniture and fixtures 20% declining balance
Computer equipment 30% declining balance
Vehicles 30% declining balance
Leasehold improvements straight-line over the term of the lease
Computer equipment under capital lease 30% declining balance
Vehicles under capital lease 30% declining balance
FOREIGN EXCHANGE TRANSLATION
The Company's functional currency is the U.S. dollar. Transactions denominated
in Canadian currencies and the accounts of the Canadian parent have been
translated into U.S. dollars using the temporal method. Under this method,
monetary assets and liabilities have been translated at year-end rates of
exchange and non-monetary assets and liabilities have been translated at the
rate in effect on the date of acquisition of these assets and liabilities.
Revenue and expense items have been translated using the average rate of
exchange for the year.
WORK IN PROCESS
Work in process is recorded at the lower of cost, exclusive of any profit
margin, and net realizable value. Included in work in process are wages and
benefits, field and vehicle costs and other overhead costs that are directly
attributable to the projects.
UNEARNED REVENUE
Unearned revenue is comprised of amounts received in advance of services
completed.
REVENUE RECOGNITION
Revenue is recognized on completion of services performed pursuant to contract
terms.
2
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
ADVERTISING COSTS
Advertising costs are expensed as incurred.
COMPUTATION OF NET INCOME PER COMMON SHARE
Basic income per common share is computed using the weighted average number of
common shares outstanding during the years. There are no dilutive common
equivalent shares outstanding during the years.
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 consolidated financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
3. ECONOMIC DEPENDENCE AND CONCENTRATION OF CREDIT RISK
The Company is economically dependent on one customer. Sales to this customer
represent approximately 64% [1998 - 19%] of the Company's revenue. At December
31, 1999, one customer represents approximately 55% [1998 - 17%] of the accounts
receivable balance.
The Company sells it services to many customers, however, two customers
represent approximately 80% [1998 - 64%] of the Company's sales and 73% [1998 -
80%] of the Company's accounts receivable balance.
3
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
4. CAPITAL ASSETS
Capital assets consist of the following:
<TABLE>
<CAPTION>
1999 1998
--------------------------------- -------------------------------
NET NET
ACCUMULATED BOOK ACCUMULATED BOOK
COST AMORTIZATION VALUE COST AMORTIZATION VALUE
$ $ $ $ $ $
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Equipment 476,961 183,510 293,451 335,277 131,915 203,362
Furniture and fixtures 62,558 15,852 46,706 25,918 8,979 16,939
Computer equipment 89,444 35,075 54,369 47,314 21,669 25,645
Vehicles 20,197 3,029 17,168 -- -- --
Leasehold improvements 5,582 4,769 813 5,582 3,737 1,845
Computer equipment under
capital lease 376,041 95,549 280,492 183,972 52,108 131,864
Vehicles under capital lease 47,000 32,049 14,951 47,000 25,641 21,359
- ----------------------------------------------------------------------------------------------------
1,077,783 369,833 707,950 645,063 244,049 401,014
====================================================================================================
</TABLE>
5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of:
1999 1998
$ $
- --------------------------------------------------------------------------------
Trade payables 217,344 215,798
Payroll and employee benefits 261,924 159,350
Management bonuses 126,784 --
Other 18,195 76,371
- --------------------------------------------------------------------------------
624,247 451,519
================================================================================
6. SHARE REPURCHASE LOAN
In April 1998, the Company redeemed 100 Class A preference shares for $100,000.
The shareholder allowed the Company to pay this amount over one year without
interest.
4
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
7. SHAREHOLDERS' LOANS
Shareholders' loans bear interest at prime plus 4% [prime rate at December 31,
1999 - 6.5%; 1998 - 6.75%], with no fixed repayment terms. Interest has been
waived for 1999 and 1998 as was required by the Business Development Bank of
Canada ["BDC"].
8. OBLIGATION UNDER CAPITAL LEASES
1999 1998
$ $
- --------------------------------------------------------------------------------
Obligations under capital leases,
expiring at various dates to 2002,
subject to imputed interest at annual
rates between 8.8% to 10.0%.
These obligations are secured by the assets
acquired thereunder 168,413 26,516
Less current portion 64,263 14,159
- --------------------------------------------------------------------------------
104,150 12,357
================================================================================
During the year, interest of $10,113 [1998 - $305] was charged to operations for
assets under capital leases.
The following is a schedule of future minimum annual lease payments for computer
equipment and vehicles under capital leases:
$
- --------------------------------------------------------------------------------
2000 76,909
2001 67,794
2002 44,778
- --------------------------------------------------------------------------------
Total minimum lease payments 189,481
Less portion representing imputed interest 21,068
- --------------------------------------------------------------------------------
168,413
================================================================================
5
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
9. LONG-TERM DEBT
Long-term debt consists of the following:
1999 1998
$ $
- --------------------------------------------------------------------------------
Bank loan, bearing interest at 10%,
repayable in monthly installments
of $1,897, repaid December 1999 -- 27,760
Bank loan, bearing interest at 7.85%, repayable
in monthly installments of $1,193, repaid
December 1999 -- 29,047
BDC loan, bearing interest at prime plus 3%,
repayable in monthly installments of $6,748
plus interest, repaid December 1999 [note 17] -- 323,889
- --------------------------------------------------------------------------------
-- 380,696
Less current portion -- 114,255
- --------------------------------------------------------------------------------
-- 266,441
================================================================================
10. LEASE COMMITMENTS
The Company is obligated to make the following future minimum annual lease
payments under operating leases for equipment, vehicles and premises:
$
- --------------------------------------------------------------------------------
2000 172,108
2001 122,412
2002 126,547
2003 80,472
- --------------------------------------------------------------------------------
501,539
================================================================================
6
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
11. RELATED PARTY TRANSACTIONS
During the year, the Company incurred management fees to companies controlled by
its shareholders of $352,584 [1998 - $261,905]. Included in accrued liabilities
are management fees payable to these companies of $126,784 [1998 - nil].
Approximately $147,260 [1998 - $47,000] of advertising fees were paid to
Technical Solutions Inc. which is controlled by certain shareholders of the
Company. These transactions were recorded at the amounts agreed to by the
parties.
12. INCOME TAXES
The Company's income tax provision consists of:
1999 1998
$ $
- --------------------------------------------------------------------------------
U.S. Federal 353,500 6,000
U.S. State 69,000 4,000
Canadian (13,260) 20,243
- --------------------------------------------------------------------------------
409,240 30,243
================================================================================
The Company's effective income tax rate is calculated as follows:
1999 1998
% %
- --------------------------------------------------------------------------------
Combined federal and provincial income tax rates 34.0 16.7
Non-taxable portion of capital gains 7.2 1.1
Other 1.2 (3.6)
- --------------------------------------------------------------------------------
42.4 14.2
================================================================================
7
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
13. CONSOLIDATED STATEMENT OF CASH FLOWS
The net change in non-cash working capital balances related to operations
consists of the following:
1999 1998
$ $
- --------------------------------------------------------------------------------
Increase in accounts receivable (62,546) (305,926)
Increase in work in progress (187,351) (39,023)
Increase in prepaid expenses and sundry assets (81,447) (477)
Increase (decrease) in accounts payable and
accrued liabilities 172,728 (341,072)
(Decrease) increase in unearned revenue (182,740) 182,740
Increase in income taxes payable 390,308 29,521
- --------------------------------------------------------------------------------
48,952 (474,237)
================================================================================
14. SEGMENT DISCLOSURES
The Company has one operating segment being that which provides sophisticated
engineering, testing, maintenance and other services to the cable television
industry.
The following is a summary of key financial information on a geographical basis
based on customer location:
1999
----------------------------------------
Canada U.S. Consolidated
$ $ $
- --------------------------------------------------------------------------------
Sales to external customers 1,361,236 4,662,674 6,023,910
Interest on long-term debt 40,631 12,228 52,859
Amortization of capital assets 76,120 49,664 125,784
Net (loss) income for the year (120,583) 676,134 555,551
Identifiable assets 814,286 1,754,470 2,568,756
Capital expenditures 133,430 299,290 432,720
================================================================================
8
<PAGE>
CABLE SYSTEMS TECHNICAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[expressed in U.S. dollars]
December 31, 1999 and 1998
1998
-------------------------------------
Canada U.S. Consolidated
$ $ $
- --------------------------------------------------------------------------------
Sales to external customers 2,214,465 1,852,639 4,067,104
Interest on long-term debt 17,505 2,338 19,843
Amortization of capital assets 79,190 21,360 100,550
Net income for the year 70,314 113,116 183,430
Identifiable assets 967,066 641,882 1,608,948
Capital expenditures 26,335 24,892 51,227
================================================================================
15. LOSS CARRYFORWARDS
The Company has non-capital losses for income tax purposes amounting to
approximately $120,000 available to be applied against future taxable income.
The Company has recorded full valuation allowance against this tax asset
associated with these loss carryforwards as it is more likely than not the
Company will not utilize these losses. These losses will expire as of December
31, 2005.
16. COMPARATIVE CONSOLIDATED FINANCIAL STATEMENTS
The comparative consolidated financial statements have been reclassified from
statements previously presented to conform to the presentation of the 1999
consolidated financial statements.
17. SUBSEQUENT EVENT
On January 4, 2000, all of the outstanding shares of the Company were acquired
by Internet Cable Corporation ["ICC"], a U.S. public company. In contemplation
of this happening, on December 20, 1999, ICC advanced the Company funds to repay
the long-term debt described in note 9 to the consolidated financial statements
prior to the transaction closing. This advance is non-interest bearing, due on
demand and unsecured. The BDC charged the Company a penalty for early repayment.
This amount is recorded as an extraordinary item in the consolidated statements
of income and comprehensive incomes.
7
<PAGE>
CAD CONSULTANTS, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE>
CAD CONSULTANTS, INC.
DECEMBER 31, 1999 AND 1998
--------------------------
CONTENTS
Independent Auditor's Report 1
Financial Statements:
Balance Sheets 2
Statements of Operations and
Retained Deficit 3
Statements of Cash Flows 4
Notes to Financial Statements 5 - 6
Independent Auditor's Report on Additional Information 7
Additional Information 8
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Stockholder
CAD Consultants, Inc.
Parsippany, New Jersey
We have audited the accompanying balance sheets of CAD Consultants, Inc. (an S
Corporation) as of December 31, 1999 and 1998, and the related statements of
operations and retained deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CAD Consultants, Inc. as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
MEISEL, TUTEUR & LEWIS, P.C.
Roseland, New Jersey
March 7, 2000
<PAGE>
<TABLE>
<CAPTION>
CAD CONSULTANTS, INC.
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
--------------------------
ASSETS
1999 1998
--------- ---------
CURRENT ASSETS
<S> <C> <C>
Cash $ 22,038 --
Accounts receivable and unbilled services 262,878 114,090
Prepaid expenses 5,253 2,126
Due from employees 9 885
--------- ---------
TOTAL CURRENT ASSETS 290,178 117,101
--------- ---------
PROPERTY AND EQUIPMENT, AT COST,
NET OF ACCUMULATED DEPRECIATION OF $97,877
AND $82,039 IN 1999 AND 1998 82,541 38,139
--------- ---------
OTHER ASSETS
Security deposits 4,735 3,535
--------- ---------
TOTAL OTHER ASSETS 4,735 3,535
--------- ---------
TOTAL ASSETS $ 377,454 158,775
========= =========
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
CURRENT LIABILITIES
Accounts payable $ 103,692 101,716
Customer deposits payable 172,528 --
Payroll and sales taxes payable 2,429 2,971
Due to stockholder -- 68,628
Note payable - stockholder -- 245,462
Due to acquisition company 584,678 --
--------- ---------
TOTAL CURRENT LIABILITIES 863,327 418,777
--------- ---------
STOCKHOLDER'S DEFICIENCY
Common stock (no par value, 2,500 shares
authorized; 100 shares issued and outstanding) 100 100
Retained deficit (485,973) (260,102)
--------- ---------
TOTAL STOCKHOLDER'S DEFICIENCY (485,873) (260,002)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY $ 377,454 158,775
========= =========
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
CAD CONSULTANTS, INC.
STATEMENTS OF OPERATIONS AND RETAINED DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
----------------------------------------------
1999 1998
--------- ---------
REVENUES
<S> <C> <C>
Consulting income $ 678,871 726,008
Design income 143,017 145,421
Commission income 13,932 --
--------- ---------
TOTAL REVENUES 835,820 871,429
COST OF GOODS SOLD 388,099 469,900
--------- ---------
GROSS PROFIT 447,721 401,529
OPERATING EXPENSES 526,367 483,130
--------- ---------
LOSS FROM OPERATIONS (78,646) (81,601)
--------- ---------
OTHER EXPENSE
Interest expense (147,225) (6,629)
--------- ---------
TOTAL OTHER EXPENSE (147,225) (6,629)
--------- ---------
NET LOSS (225,871) (88,230)
RETAINED DEFICIT
Beginning (260,102) (171,872)
--------- ---------
Ending $(485,973) (260,102)
========= =========
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
CAD CONSULTANTS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
----------------------------------------------
1999 1998
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $(225,871) (88,230)
--------- ---------
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH USED IN OPERATING ACTIVITIES:
Depreciation 15,838 18,303
Changes in operating assets and liabilities:
Accounts receivable (148,788) 52,898
Accounts payable 1,976 (34,072)
Accrued expenses -- --
Payroll and sales taxes payable (542) (2,307)
Due from employees 876 (198)
Prepaid expenses (3,127) (65)
Security deposit (1,200) --
Customer deposits payable 172,528 --
--------- ---------
TOTAL ADJUSTMENTS TO NET LOSS 37,561 34,559
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (188,310) (53,671)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (60,240) (7,580)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (60,240) (7,580)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stockholder loan (68,628) 49,128
Principal payments on note payable - stockholder (245,462) (14,538)
Proceeds from acquisition company 584,678 --
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 270,588 34,590
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 22,038 (26,661)
CASH AND CASH EQUIVALENTS - BEGINNING -- 26,661
--------- ---------
CASH AND CASH EQUIVALENTS - ENDING $ 22,038 --
========= =========
SUPPLEMENTAL DISCLOSURE
Interest paid $ 147,225 6,629
Income taxes paid $ 200 225
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
CAD CONSULTANTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------
1. NATURE OF OPERATIONS
CAD Consultants, Inc. was incorporated in 1993 in the State of New Jersey. The
Company is engaged in computer and software design and consulting.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments with maturities of
90 days or less.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation is computed on the
accelerated method over the estimated useful lives of the related assets.
Major renewals and betterments are capitalized. Maintenance and repairs are
expensed as incurred. When properties are retired or otherwise disposed of,
related costs and accumulated depreciation are removed from the accounts.
INCOME TAXES
The provision for state income taxes is calculated at statutory rates.
The Company has elected to be treated as an S Corporation for federal and state
income tax purposes. Under Section 1362 of the Internal Revenue Code, S
Corporation income and losses are passed through to the stockholders and
included in the stockholder's tax returns; therefore no provision for income
taxes has been provided.
RECLASSIFICATION
Certain reclassifications have been made in the 1998 financial statements to
conform to the classifications used in the 1999 financial statements.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
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
period. Actual results could differ from those estimates.
3. PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows:
ESTIMATED
1999 1998 USEFUL LIVES
-------- -------- -------------
Office equipment $116,492 63,621 5 years
Software 37,220 29,851 5 years
Office furniture and fixtures 26,706 26,706 7 years
-------- --------
180,418 120,178
Less: Accumulated depreciation and
amortization 97,877 82,039
-------- --------
$ 82,541 38,139
======== ========
Depreciation expense charged to operations amounted to $15,838 and $18,303 for
the years ended December 31, 1999 and 1998, respectively.
-5-
<PAGE>
CAD CONSULTANTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------
4. COMMITMENTS AND CONTINGENCIES
The Company conducts its operations in a leased facility under a noncancelable
operating lease expiring on February 28, 2001. The lease payments include
utilities and are subject to annual increases of $1,356.
Rent expense for the years ended December 31, 1999 and 1998 was $30,317 and
$25,772, respectively.
At December 31, 1999, total future minimum lease payments are as follows:
Year ending December 31,
2000 $ 29,811
2001 4,968
--------
$ 34,779
========
5. DUE TO ACQUISITION COMPANY
In January 2000 the Company's stockholder sold one hundred percent of his stock
to an acquiring company. As part of the stock sale, in December 1999, the
acquiring company provided CAD Consultants, Inc. with monies to satisfy certain
accounts payable and all amounts due to stockholder.
-6-
<PAGE>
INDEPENDENT AUDITOR'S REPORT ON ADDITIONAL INFORMATION
To the Stockholder
CAD Consultants, Inc.
Parsippany, New Jersey
Our report on our audits of the basic financial statements of CAD Consultants,
Inc. (an S Corporation) for 1999 and 1998 appears on page 1. Those audits were
made for the purpose of forming an opinion on the basic financial statements
taken as a whole. The additional information is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
MEISEL, TUTEUR & LEWIS, P.C.
Roseland, New Jersey
March 7, 2000
<PAGE>
<TABLE>
<CAPTION>
CAD CONSULTANTS, INC.
ADDITIONAL INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
----------------------------------------------
1999 1998
-------- --------
SCHEDULES OF COST OF GOODS SOLD
<S> <C> <C>
Purchases $317,342 367,634
Subcontractors 64,018 95,593
Freight-in 6,739 6,673
-------- --------
TOTAL COST OF GOODS SOLD $388,099 469,900
======== ========
SCHEDULES OF OPERATING EXPENSES
Advertising and catalogues $ 5,559 8,007
Automobile 20,668 16,748
Commissions 10,000 --
Depreciation 15,838 18,303
Donations 1,076 400
Dues and subscriptions 192 192
Employee benefits 7,329 3,907
Employer 401(k) contribution 7,570 6,635
Seminars 2,028 3,411
Meals and entertainment 6,388 3,442
Promotions -- 1,867
Insurance 4,409 6,271
Equipment rental -- 148
Miscellaneous 449 1,988
Office expense 3,684 6,395
Salaries
Officer's 141,235 137,316
Office and consultants 178,579 178,038
Payroll taxes 21,684 21,404
Postage 734 289
Professional fees 36,637 6,443
Rent 30,317 25,772
Repairs and maintenance 586 623
Other taxes 200 450
Telephone 12,360 10,607
Temporary help -- 10,419
Trade show 3,442 6,866
Travel 15,403 7,189
-------- --------
TOTAL OPERATING EXPENSES $526,367 483,130
======== ========
</TABLE>
See independent auditor's report on additional information.
-8-
<PAGE>
Pro Forma Financial Data
The pro forma balance sheet at December 31, 1999 combines the
December 31, 1999 unaudited balance sheet of Internet Cable Corporation (the
"Company") with the December 31, 1999 balance sheets of Cable System Technical
Services, Inc. ("Cable TSI") and CAD Consultants, Inc. ("CAD") as if both
acquisitions were consummated on December 31, 1999. The 1999 pro forma statement
of operations combines the Company's unaudited statement of operations for the
twelve months ended December 31, 1999 with the annual historical statements of
operations of Cable TSI and CAD for the twelve months ended December 31, 1999 as
if both acquisitions had occurred on January 1, 1999. The pro forma financial
data is not necessarily indicative of the actual operating results that would
have occurred or the future operating results that will occur as a consequence
of such transactions.
The unaudited pro forma balance sheet and statement of operations and
notes thereto should be read in conjunction with the historical financial
statements of the Company, Cable TSI and CAD, and with the notes to the pro
forma financial data.
<PAGE>
INTERNET CABLE CORPORATION
PRO FORMA BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<CAPTION>
CABLE
INTERNET SYSTEM CAD
CABLE TECHNICAL CONSULTANTS,
CORPORATION SERVICES, INC. INC.
------------ -------------- -------------
ASSETS
- ------
Current assets
<S> <C> <C> <C>
Cash $ 1,731,707 $ 457,753 $ 22,038
Accounts receivable - net 1,600 1,075,553 262,878
Note receivable 40,000 -- --
Prepaid expenses and other assets 785 101,126 5,262
Inventory 29,201 226,374 --
------------ ------------ ------------
Total current assets 1,803,293 1,860,806 290,178
Property and equipment 52,993 707,950 82,541
Security deposits -- -- 4,735
Other assets 2,000 -- --
Investments in acquired companies/
goodwill 5,652,576 -- --
------------ ------------ ------------
Total assets $ 7,510,862 $ 2,568,756 $ 377,454
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Accounts payable and accrued
expenses $ 623,946 $ 624,247 $ 106,121
Customer deposits payable -- -- 172,528
Income taxes payable -- 419,829 --
Loans payable - stockholder 60,000 -- --
Due to acquiring company -- 338,442 584,678
Current portion of capital lease -- 64,263 --
Loan payable, stockholders 70,000 254,725 --
------------ ------------ ------------
Total current liabilities 753,946 1,701,506 863,327
Bridge loans payable 249,864 -- --
Obligations under capital leases -- 104,150 --
------------ ------------ ------------
Total liabilities 1,003,810 1,805,656 863,327
------------ ------------ ------------
Minority interest -- 154,172 --
------------ ------------ ------------
Stockholders' equity
Common stock 9,332 186,864 100
Additional paid-in capital 14,005,724 -- --
Retained earnings (deficit) (7,508,004) 422,064 (485,973)
------------ ------------ ------------
6,507,052 608,928 (485,973)
------------ ------------ ------------
Total liabilities and
stockholders' equity $ 7,510,862 $ 2,568,756 $ 377,454
============ ============ ============
PRO FORMA
PRO FORMA ADJUSTMENTS DECEMBER 31,
------------------------------
DR CR 1999
------------- ------------- ---------
ASSETS
Current assets
Cash $ 1,530,000(1) $ 153,000(5) $3,177,104
161,530(2) --
249,864(6) --
Accounts receivable - net -- -- 1,340,031
Note receivable -- -- 40,000
Prepaid expenses and other assets -- -- 107,173
Inventory -- -- 255,575
------------ ------------ ------------
Total current assets 1,530,000 564,394 4,919,883
Property and equipment -- -- 843,484
Security deposits -- -- 4,735
Other assets -- -- 2,000
Investments in acquired companies/
goodwill 547,656(2) 1,046,175(7) 7,404,057
2,250,000(3)
------------ ------------ ------------
Total assets $ 4,327,656 $ 1,610,569 $ 13,174,159
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
expenses $ -- $ -- $ 1,354,314
Customer deposits payable -- -- 172,528
Income taxes payable -- -- 419,829
Loans payable - stockholder -- -- 60,000
Due to acquiring company 923,120(8) -- --
Current portion of capital lease -- -- 64,263
Loan payable, stockholders -- -- 324,725
------------ ------------ ------------
Total current liabilities 923,120 -- 2,395,659
Bridge loans payable 249,864(6) -- --
Obligations under capital leases -- -- 104,150
------------ ------------ ------------
Total liabilities 1,172,984 -- 2,499,809
------------ ------------ ------------
Minority interest -- -- 154,172
------------ ------------ ------------
Stockholders' equity
Common stock 186,964(7) 306(1) 10,088
450(3) --
Additional paid-in capital 485,973(4) 1,529,694(1) 18,018,094
153,000(5) 386,126(2) --
859,211(7) 2,249,550(3) --
422,064(4) --
923,120(8) --
Retained earnings (deficit) 422,064(4) 485,973(4) (7,508,004)
------------ ------------ ------------
2,107,212 5,997,283 10,520,178
------------ ------------ ------------
Total liabilities and
stockholders' equity $ 3,280,196 $ 5,997,283 $ 13,174,159
============ ============ ============
</TABLE>
<PAGE>
INTERNET CABLE CORPROATION
PRO FORMA STATEMENT OF OPERATIONS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
CABLE
INTERNET SYSTEM CAD PRO FORMA
CABLE TECHNICAL CONSULTANTS, PRO FORMA DECEMBER 31,
CORPORATION SERVICES, INC. INC. ADJUSTMENTS 1999
----------- ------------- ------------ ----------- ----------
Revenues
<S> <C> <C> <C> <C> <C>
Sales and services $ 35,983 $ 6,023,910 $ 835,820 $ -- $ 6,895,713
------------ ------------ ------------ ------------ ------------
Expenses
Cost of sales 88,428 -- 388,099 -- 476,527
General and administrative 1,003,820 5,059,119 526,367 957,000(B) 7,546,306
Amortization of goodwill -- -- -- 1,480,811(A) 1,480,811
Stock based compensation -
employees and directors 2,857,298 -- -- -- 2,857,298
Stock based compensation -
other 588,000 -- -- -- 588,000
------------ ------------ ------------ ------------ ------------
4,537,546 5,059,119 914,466 2,437,811 12,948,942
------------ ------------ ------------ ------------ ------------
Operating income (loss) (4,501,563) 964,791 (78,646) (2,437,811) (6,053,229)
Interest expense 456,172 -- 147,225 (439,541)(C) 163,856
------------ ------------ ------------ ------------ ------------
Net income (loss) before taxes (4,957,735) 964,791 (225,871) (1,998,270) (6,217,085)
Income taxes -- 409,240 -- (409,240)(D) --
Minority interest -- 150,252 -- -- 150,252
------------ ------------ ------------ ------------ ------------
Net income (loss) $ (4,957,735) $ 405,299 $ (225,871) $ (1,589,030) $ (6,367,337)
============ ============ ============ ============ ============
Loss attributable to common stock $ (6,367,337)
============
Basic and diluted loss per share $ (.63)
============
Shares used in the calculation of
loss per share 10,088,811(E)
============
</TABLE>
<PAGE>
INTERNET CABLE CORPORATION
NOTES TO PRO FORMA BALANCE SHEET
(1) This adjustment records the cash received from the remaining shares of a
private placement offering, which was consummated on January 31, 2000.
The original private placement offering consisted of the issuance of
1,816,000 shares of restricted common stock totaling $9,080,000. The
offering of each unit for this private placement consists of one share
of common stock and a stock purchase warrant to purchase one-half share
of common stock.
(2) This adjustment records the issuance of 100,000 stock options to Cable
Systems Technical Services, Inc. ("Cable TSI"), a Canadian company
acquired on January 4, 2000 by Internet Cable Corporation (the
"Company"). The fair value of these stock options was approximately
$386,126, based on the Black-Scholes Model of computing the value of
stock options. In addition, the Company paid $4,749,484 in cash as part
of the purchase price (including $161,350 paid on January 5, 2000, which
is also reflected in this adjustment). The total consideration to
acquire Cable TSI was $5,135,610, resulting in goodwill of $4,394,393.
(3) This adjustment records the issuance of 450,000 shares of restricted
common stock to CAD's stockholder in connection with the acquisition of
CAD. These shares were valued at $5 per share. In addition, the Company
paid $732,372 prior to December 31, 1999. The total consideration for
CAD was $2,982,372, resulting in goodwill of $3,009,664. Total goodwill
arising from both transactions of $7,404,057 also includes $332,250 of
legal fees (cash of $50,000 and 56,450 shares of common stock valued at
$5 per share), all of which were paid prior to December 31, 1999.
(4) These adjustments set the retained earnings and deficit of the
acquirees, Cable TSI and CAD, to zero. It consists of Cable TSI's
retained earnings of $422,064 and CAD's deficit of $485,973 at December
31, 1999.
(5) This adjustment is to reflect the remaining commission that was incurred
in connection with the private placement offering. Total commissions
were $908,000, which represents 10% of the total cash raised.
(6) This adjustment is to record the repayments of bridge loans that were
outstanding at December 31, 1999.
(7) This adjustment is to eliminate the investment of the acquired
companies, the related common stock and to recognize goodwill.
(8) This adjustment reclassifies to additional paid-in capital of the
acquired companies amounts that were part of the acquisition
consideration paid to the shareholders of such companies that were then
contributed to the companies to pay various liabilities.
<PAGE>
INTERNET CABLE CORPORATION
NOTES TO PRO FORMA STATEMENT OF OPERATIONS
(A) To adjust goodwill amortization to reflect a five-year life for the
goodwill arising from the merger.
(B) To adjust for officers' salaries for the period and to reflect their
new employment agreements.
(C) To eliminate the interest expense in connection with the bridge loans
and loans from stockholders, which were fully repaid in January 2000
with proceeds from the private placement.
(D) To reflect the income tax impact of the pro forma adjustments.
(E) The 10,088,011 shares outstanding at the completion of the merger are
treated as outstanding throughout the period.
Exhibit 23.1
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We hereby consent to the incorporation by reference of our report
dated March 9, 2000 in the Financial Statements of Cable Systems Technical
Services Inc. for the years ended December 31, 1999 and 1998, which appears in
the Form 8-KA of Internet Cable Corporation dated March 17, 2000.
/s/ Ernst & Young, L.L.P.
--------------------------
Ernst & Young, L.L.P.
Chartered Accountants
Exhibit 23.2
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference of our report
dated March 7, 2000 in the Financial Statements of CAD Consultants, Inc. for the
years ended December 31, 1999 and 1998, which appears in the Form 8-KA of
Internet Cable Corporation dated March 17, 2000.
/S/ MEISEL, TUTEUR & LEWIS, P.C.
--------------------------------
Meisel, Tuteur & Lewis, P.C.
Certified Public Accountants
