SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 000-29994
Anything Internet Corporation
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(Exact name of registrant as specified in its charter)
COLORADO 84-1425882
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(State or other jurisdiction (I.R.S. Employer Identification
of incorporation) Number)
10333 East Dry Creek Rd, Ste. 270, Englewood, CO 80112
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 662-0900
Securities registered pursuant to Section
12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE
Securities registered pursuant to Section
12(g) of the Act:
Common Stock, no par value
--------------------------
(Title of Class)
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
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Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB [ ].
The Registrant's revenues for its fiscal year ended June 30, 2000 were $
685,268.
The aggregate market value of the voting stock on September 30, 2000 (consisting
of Common Stock, no par value per share) held by non-affiliates was
approximately $20,978,307 based upon the closing price for such Common Stock on
said date ($3.50), as reported by a market maker. On such date, there were
5,993,802 shares of Registrant's Common Stock outstanding.
PART I
Item 1. Description of Business
General
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Anything Internet Corporation was incorporated in August of 1997 as a Colorado
corporation. The Company operated Internet storefronts including
AnythingPC.com, AnythingUnix.com, AnythingMac.com, AnythingCoffee.com,
Anythingbooks.com and AnyReminder.com, selling Internet computer hardware,
coffee retail services, books and providing a free reminder service site with
gift sales.
During first quarter 2000, under direction of a new management team, Anything
Internet launched a transformation from its previous position as a generalized
E-commerce services provider to that of a highly focused syndicator of
L-commerce. L-commerce consists of "location-aware" Internet applications that
deliver location and geographic information for commercial use. These
applications enable "location-based services" to deliver information to users
based on the location of fixed and/or mobile assets through Internet and/or
wireless communication devices. These applications are used for purposes such as
asset tracking, consumer mapping portals and personalized location tracking. To
achieve the objective of becoming a leading location service provider, the
Company acquired Inform Worldwide Inc. on June 29th, 2000 in exchange for shares
of the Company. The Company has also signed definitive agreement to purchase
Mapas y Datos and Mapas Latinos, both of Colombia to further our efforts in
location based technology.
Prior to its acquisition, Inform operated as a privately owned corporation to
provide location technology services to the telecommunications and utilities
industries. Founded in 1993, Inform has served over 200 organizations
worldwide, including Hewlett Packard, Compaq, CH2MHill, SAIC/Telcordia, Oracle,
and Utilicorp. Through R&D investments and pilot projects, Inform built
software applications that integrates geographic information into business
systems and processes to enable and support monitoring and management of assets
through the Internet.
As demand for Internet information by and about mobile users grows, the need for
location-based services proliferates. The Company intends to take advantage of
this trend by becoming a global leader in L-commerce.
Unless the context otherwise requires, the "Company" refers to Anything Internet
Corporation and its subsidiaries. The Company's principal executive offices are
located at 10333 E. Dry Creek Road, Suite 270, Englewood, Colorado. The
Company's telephone number is 303-662-0900. The Company also maintains a
worldwide website at www.anythinginternet.com. The information posted on the
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Company's website is not incorporated in this annual report.
Product Development
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E-Hub
Through the acquisition in June 2000 of Inform Worldwide, Anything Internet
achieved its first goal of obtaining an geographic information system (GIS)
company to serve as the catalyst for advancing the company's plans to become a
syndicator of Location Commerce. Anything Internet has adopted Inform's business
plan, which is to leverage its experience in L-commerce and use its early mover
advantage to capture entirely new opportunities created by the proliferation of
location-based services. The cornerstone of the Company's strategy is an
electronic hub (or E-hub) that integrates location technology in an application
service provider (ASP) environment. The Company intends to bring together a
large number of technology suppliers and buyers under the E-hub's virtual roof.
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The E-hub gives the Company the ability to act as a syndicator that serves its
customers by providing a convenient mechanism for integrating geographical data
and location technology into their software applications. Through the E-hub, we
will be able to deliver highly specialized GIS information and location
information through the Internet and wireless communication devices, a format
that can be easily used by today's customers. Because its platform is software -
not bricks and mortar - Inform can rapidly adapt to new technology developments
and scale capacity to meet growth demands with minimal additional investment.
The Company is undergoing the first stage of E-hub building during the third
quarter of 2000. The preliminary E-hub server has been built in our Colorado
Springs office, using the Company's existing resources. Our E-hub operates the
www.mapaslatinos.com through a goodwill agreement between the Company and Mapas
--------------------
y Datos. The Company's developmental resources have shifted their focus from
web site building to the rollout of our E-hub. Using TOM CAT, Oracle Database,
MapXtreme and Map Info Data, www.mapaslatinos delivers road maps of North
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America, Mexico and Colombia through the internet. South America Road Map
information is scheduled to roll out in the fourth quarter of 2000. No other
map portals currently serves the South American and Latin America market.
Inform Worldwide, Inc. has developed and licensed during fiscal year 1999 two
software applications:
LoadMAN
A package used within engineering operations of gas distribution utilities to
link results of third party network simulation with a customer's geographic
information system.
Magic J
A toolkit for use by software engineers to develop Internet-based applications
for customers using the Smallworld GIS product.
Services
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E-Commerce Storefronts
Anything Internet Corporation owns Internet retail storefronts including
www.AnythingPC.com; www.AnythingMac.com; www.AnythingUnix.com;
------------------ ------------------- --------------------
www.AnythingCoffee.com; www.AnythingBooks.com, www.AnyReminders.com and www.
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Anythinggifts.com.
AnythingPC.com, AnythingMac.com and AnythingUnix.com were developed by the
Company during early 1999. These storefronts sold PC, Mac and Unix hardware
through the Internet. The Company added Anythingbooks.com during the 2nd
quarter of 1999, providing a E-Commerce portal to sell books through an
affiliate agreement with Barnes and Noble. AnythingCoffee.com was created
around the same period of time. This site specializes in selling gourmet coffee
through the Internet. During the last quarter of 1999, the Company developed a
free reminder service web site by the name of www.anythingReminder.com, which
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includes e-mail reminders, contacts, calendar, e-cards and a gift center.
AnyReminders.com manages all traffic from the three computer hardware sales
portals. www.Anythinggifts.com was created in early 2000 and this site provides
free gift registry services for consumers. At the end of September 2000, as the
Company changed its focus to concentrate on developing highly specialized
location related services, these general E-Commerce sites ceased operations,
except for the coffee, reminder and gift registry sites.
During fiscal 1999, the Company also provided web design services for other
companies, including e-commerce portals for sites such as www.mbca.org (Mercedes
------------
Benz Club of America).
Consulting
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During fiscal year 1999 Inform Worldwide, Inc. provided a variety of services
related to the implementation of location-based technologies. These services
included technology consulting, computer programming, product implementation
support and training.
Among the over 50 customers served during the period, the following projects
contributed most significantly to the company's revenues or attainment of
strategic goals:
Convergent Group - Inform provided consulting, training and product
implementation services related to the implementation of Convergent Group's
location-based software applications. Many of these services were provided
directly to Convergent Group's utility customers; including Cinergy Services,
Citizens and CILCO. Convergent Group is a leading provider of systems
integration services to electric and gas utilities.
Level3 Communications, Inc. - Inform provided technology consulting and
database implementation support related to Level3's deployment of location-based
technologies used in its network operations. Level3 is a global provider of
communications services.
CH2MHill - Inform provided technology consulting, database implementation and
software development services to this global provider of telecommunications
engineering services. Through CH2MHill, Inform served Global Crossing Ltd. and
Cablevision Systems Corporation.
International Fibercom, Inc. - Inform customized it's Magic J software toolkit
to create an Internet- and map-based tracking tool to be used in monitoring the
build-out of telecommunications networks. International Fibercom is a leading
provider of broadband and fiber engineering and construction services.
Utilicorp United, Inc. - Inform customized it's Magic J software toolkit to
create an Internet- and map-based project tracking tool. Utilicorp United
provides electric distribution services throughout the Midwest.
Compaq Computer Corporation - As part of a large systems integration project led
by Compaq, Inform customized it's LoadMAN software for use by Bord Gais, the
national gas distribution company. The LoadMAN application links commonly used
network simulation packages with a geographical information system. The outputs
of LoadMAN allow engineers to analyzes the results of simulation in a
geographical context.
Licensing Rights
-----------------
With acquisition of Inform Worldwide, Inc., the Company acquired a Technology
Agreement between Inform Worldwide, Inc. and Mapas y Datos of Bogota, Colombia.
The Technology Agreement provides the Company with exclusive rights throughout
United States and Canada to all intellectual property rights in Mapas y Datos's
technology developed prior to June 15th , 2000, including Internet Vehicle
Locating, Map Portal and Emergency Response Information Systems as well as other
geo referenced technology.
As part of the closing agreement between Inform and the Company, the President
of Mapas y Datos joined Inform as VP of Technical Operations. Mapas y Datos is a
Latin American provider of digital mapping and destination information on the
Internet. Mapas y Datos developed and owns proprietary software applications
including Internet Vehicle Location, Internet Geographical Information System
and a map portal called www.mapaslatinos.com.
Markets & Revenue Sources
----------------------------
During fiscal 1999, the Company's revenues derived from its E-Commerce
storefronts. These Internet retail sites served general consumers. We have since
changed our business focus to the business to business market. Inform's
revenues during this same time period were generated through sale of its
proprietary software products and consulting projects.
The combined operations will generate revenue predominantly from fixed
subscriber access fees, variable usage fees and charges for support services.
The Company expects additional income from shared advertising revenues,
value-added resale (VAR) of third-party technology and information and royalties
from company owned software. Our focused industries include transportation,
utilities, web portals, governmental agencies and on-line e-commerce merchants.
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Competition
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As the market for location-based services evolves, the Company expects
competition from organizations falling within the following areas:
Location-based servers -
Several organizations plan to provide services overlapping with some or all
of the Company's services. Examples include Phone.com and SignalSoft.
Wireless Communications Providers -
Most wireless carriers are investigating opportunities to provide
location-based services that piggy-back off of the infrastructure required
to satisfy the FCCrequirement to support location of wireless 911 calls.
Qualcomm, through its Omnitracks vehicle-locating service and Snaptrack GPS
division, has the most aggressive strategy among wireless carriers.
Roadside Assistance Providers -
Over the next several years, existing (e.g., OnStar and ATX) and new
providers of roadside assistance services are expected to extend their
offerings with services dependent upon location-awareness. These
organizations and their owners/partners within the automotive industry have
begun deploying traffic-alert systems, concierge services and
next-generation telematics applications.
Content Providers -
Owners of map data and other location-based content may offer competitive
services. Presently these organizations act as suppliers to companies such
as Inform Worldwide. However, as demand for location-based services grows,
content providers may seek to expand their role. The primary content
providers for North and South America are Navtech, GDT and ETAK. The
Company is presently negotiating supplier contracts with Navtech and GDT.
GIS Vendors -
Organizations offering the core software (e.g., ESRI, Autodesk and MapInfo)
for visualizing and analyzing location-based information may offer
ASP-based platforms that compete with portions of the Company's offerings.
Vertical Applications Software Providers -
There are many companies focusing on specific applications of
location-based capabilities. These include applications such as vehicle
location monitoring (e.g., @Road) and mobile workforce management (e.g.,
Imedeon).
FORWARD-LOOKING STATEMENTS
Some of the information in this Form 10-KSB are forward looking statements which
are subject to risks and uncertainties. Actual future results and trends may
differ materially depending on a variety of factors, including, but not limited
to, obtaining product and raw materials at favorable prices, successful
execution of internal performance and expansion plans, impact of competition,
financing activities, possible legal proceedings, domestic and global economic
conditions, changes in federal or state tax laws, and other risks detailed in
the Company's Securities and Exchange Commission filings and the documents
incorporated by reference therein.
Item 2. Description of Property
At present the Company does not own any property. The Company maintains its
headquarters in Englewood, Colorado at 10333 E. Dry Creek, Suite 270, in an
8,000 square foot office space through a five-year lease that commenced in May
1997. The Company pays $16,920 a month, utilities included, for this leased
office space.
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The Company also has a support office located in Colorado Springs, CO. This
facility encompasses approximately 1,080 square feet and is secured by a
one-year lease that commenced on June 3, 2000. The Company pays $1,275.16 a
month, utilities included, for this leased office space.
Item 3. Legal Proceedings
There are no material legal proceedings pending or, to the Company's knowledge,
threatened against the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal year 1999/2000.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company's Common Stock is quoted on the NASDAQ Over-The-Counter Bulletin
Board under the symbol "ANYI". The Company's Common Stock began trading on July
15, 1999 with an opening bid price of $4.00 a share. As of June 30, 2000, there
were approximately 778 record holders of the Company's outstanding Common Stock.
The following table sets forth the quarterly high and low sale prices of the
Company's Common Stock in each of the last four quarters.
High Sales Price Low Sale Price
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Fiscal 1999/2000
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Third Quarter $28.00 $4.75
Fourth Quarter $5.31 $0.88
First Quarter $10.06 $2.13
Second Quarter $5.50 $2.44
The Company has never declared or paid cash dividends on its capital stock and
the Company's Board of Directors intends to continue its policy for the
foreseeable future. Earnings, if any, will be used to finance the development
and expansion of the Company's business. Future dividend policy will depend upon
the Company's earnings, capital requirements, financial condition and other
factors considered relevant by the Company's Board of Directors and may be
subject to limitations imposed by federal and state laws.
Item 6. Management's Discussion and Analysis or Plan of Operation
On July 15th, 1999, the Company's Common Stock started to trade on the NASDAQ
Over-The-Counter Bulletin Board under the symbol "ANYI". This is the first step
the Company's management took to provide shareholders liquidity in their
investments.
In March 2000, Larry Arnold joined the Company's management team as President
and subsequently the Chief Executive Officer and Chairman of the Board.
Anything Internet Corporation then moved its corporate headquarter from Colorado
Springs to 10333 E. Dry Creek Road, Suite 270, Englewood, CO 80112. Under the
direction of the new management team, Anything Internet Corporation began to
transform its business model from generalized E-Commerce to highly specialized
location based services.
On June 30, 2000, the Company acquired Inform Worldwide, Inc. in a
stock-for-stock transaction, in which the former shareholders of Inform
Worldwide Inc. received a total of 3 million shares of Anything Internet in
exchange for all outstanding common shares of Inform Worldwide, Inc. Inform
Worldwide, Inc. became a wholly owned subsidiary of Anything Internet as of the
merger date. The purchase is valued at $9,126,949 for the acquisition of
licensing rights from Inform Worldwide, Inc.
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The Company has also signed a definitive agreement to acquire Mapas Y Datos and
Mapas Latinos of Bogota, Colombia. The company intends to acquire both Mapas Y
Datos and Mapas Latinos in a stock-for-stock transaction.
The management believes that the synergy of Anything Internet, Inform Worldwide
Inc. and Mapas y Datos/Mapas Latinos will provide us with the foundation to
become a leading provider of location services, a highly specialized and growth
oriented industry.
RESULTS OF OPERATIONS
Fiscal Year Ending June 30, 2000 Compared to Fiscal Year Ending June 30, 1999
Net sales for the fiscal year ending June 30, 2000 were $685,268, a decrease of
433% over $3,503,822 for the same period a year ago. All of these sales were a
result of sales generated through the Company's Internet storefronts
AnythingPC.com, AnythingMAC.com and AnythingUNIX.com. which the Company has now
closed as part of its new direction and plan.
Gross profits for the fiscal year ending June 30, 2000 were $67,691. This
represents a decrease in gross profits of 21% over $84,436 for the same period a
year ago. Gross profit margins increased from 2.4% of sales to 9.8% of sales as
a result of the Company's decision to forego selling to match competition and to
sell at a profit. This decision resulted in a large drop in sales and the
closure of the store fronts.
Selling, general and administrative (SG&A) expenses for the fiscal year ending
June 30, 2000 were $2,008,226 which represents a 299% increase from $672,293 for
the same period a year ago. The major components of these expenses for the
fiscal year were the hiring of additional staff, development of
Anyreminder.com., development of the new management team and business plan,
acquisition of Inform Worldwide, Inc., acquisition costs of office and computer
equipment and software development costs.
The net loss for the fiscal year ending June 30, 2000 amounted to ($1,884,016),
or ($0.65) a share. This represents an increase of 318% compared to ($591,688),
or ($0.24) a share, for the same period a year ago. The increase in net loss
was the result of lower gross profit margins and increased cost of operations
from expansion activities. There were a total of 5,823,802 shares and 3,074,400
shares issued and outstanding as of June 30, 2000 and 1999, respectively.
Liquidity and Capital Resources
The Company's operations to date have concentrated on developing its Internet
storefronts, building brand recognition and a loyal customer following, and
securing the financing necessary to fund the development, operations and
expansion of its business. The Company now is developing its new business plan
described earlier and is continuing to raise money to fund this development.
As of June 30, 2000, the Company had cash on hand of $199,793, accounts
receivable of $78,717, and receivable notes of $200,000. The Company also had
bank credit lines totaling $185,000. In addition, the Company had several
supplier-based revolving lines of credit, including Tech Data, $250,000; Ingram
Micro, $150,000; Merisel, $85,000; and Pinacor, $5,000. These lines are either
paid off or pay-out agreements have been reached and will be paid in the first
quarter of fiscal 2001.
Net cash used by operating activities for the fiscal year ending June 30, 2000
totaled ($1,386,088) compared to ($228,909) for the same period a year ago. The
majority of the increase in cash flow used in these operating activities was the
result of higher SG&A expenses, as described above.
Net cash used by investing activities totaled ($22,744) for the fiscal year
ending June 30, 2000 compared to ($ 80,318) for the same period a year ago. We
issued three million common shares to purchase Inform Worldwide, Inc. which was
a non-cash transaction. The decrease in investing activities was the result of
changes in operational direction.
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Net cash provided by financing activities totaled $1,561,184 for the fiscal year
ending June 30, 2000 compared to $200,516 for 1999. The increase in cash
provided for by financing activities was the result of sale of common and
preferred stock, exercise of founders options, exercise of warrants registered
last year, and common stock issued for services performed. Other financing came
from borrowing activities and utilizing existing credit facilities. The Company
expects to continue making significant investments in the future to support its
overall growth. The Board of Directors has approved 2,000,000 additional common
shares to be issued in a private placement. The private placement is expected
to bring in $5,000,000 in funding to help the Company facilitate its growth
plan.
The above analysis does not reflect the combined operating results of Inform
Worldwide Inc. and Anything Internet Corporation. Had these two companies
combined their operations as of July 1st, 1999, the combined revenue and losses
would have been approximately $1.5 million and ($2.2 million), with a loss per
share of ($0.77). However, we believe that the pro forma combined results of
operations are not indicative of the actual results that would have occurred had
the acquisitions been consummated at the beginning of fiscal years 1999 or of
future operations of the combined entities under the ownership and operation of
the Company.
Currently, it is anticipated that ongoing operations will be financed from the
net proceeds of the anticipated private placement of the company's common stock,
cash on hand, accounts receivable, the various credit facilities available to
the Company, and from internally generated funds. However, as indicated in the
Company's most recent financial statements available herein, while operating
activities provide some cash flow, the Company is currently cash flow negative.
There can be no assurances that the Company's ongoing operations will begin to
generate a positive cash flow or that unforeseen events may not require more
working capital than the Company currently has at its disposal.
Item 7. Financial Statements
The information required by this item is presented as a separate section
commencing on page F-1.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
There were no changes in or disagreements with Accountants on Accounting and
financial disclosures during the fiscal year of 1999/2000.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
The directors, executive officers of the Company as of the date of June 30,
2000 are as follows:
Name Age Position
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Larry G. Arnold 56 Chief Executive Officer & Chairman of the Board
Edgar P. Odenwalder, III 44 Director & President of Inform Worldwide, Inc.
Donald W. Prosser 51 Prior CFO, Treasurer & Secretary
Carole Baumbusch 51 Chief Operating Officer of Inform Worldwide, Inc.
Gabe Coch 37 VP-Technical Operations of Inform Worldwide Inc.
Alfred Delisle 36 Director & VP-Channel Development
Lawrence Stanley 53 Director
Karen Sebastiani 46 Director
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MR. PROSSER RESIGNED AS CFO AND A DIRECTOR OF THE COMPANY AS OF SEPTEMBER 19TH,
2000.
MR. STANLEY, MS. SEBASTIANI AND MR. DELISLE WILL NOT STAND FOR REELECTION AS A
MEMBER OF THE BOARD OF DIRECTORS IN THE UPCOMING ANNUAL MEETING.
The following is a brief account of the business experience of each director and
executive officer of the Company. There is no family relationship between any
Director or Executive Officer of the Company.
Larry G. Arnold
-----------------
Larry Arnold has over thirty years of experience in corporate turnarounds and
capitalization of four public companies. From 1996 until joining the Company,
Mr. Arnold served as Chairman and CEO of Online Power Supply (OTC BB: OPWR).
From 1990 until 1996, Mr. Arnold served as President, CEO and Chairman of the
Board for Glitch Master, Inc., a PC power supply manufacturing and distribution
company. In 1996, Glitch Master, Inc. merged with the now OnLine Power Supply,
Inc. Mr. Arnold has also served as a Director of Hillsboro State Bank,
Hillsboro, Kansas, for the past five years and is presently Vice Chairman of the
Board. From February 1989 until July 1990, he served as Vice President,
Treasurer and Director of Ryan-Murphy, Inc., a public company. From April 1988
to February 1989, he served as a financial consultant to Postmark Stores of
America, Denver, Colorado. From January 1987 to April 1988, he was the
President of Discount Converter Supply Company, Colorado Springs, Colorado, a
private Colorado corporation, and from May 1985 to November 1986, Mr. Arnold was
President of Nova Resources Corporation, Colorado Springs, Colorado, a public
corporation. He holds a B.A. degree in Business Administration and has done
graduate work at the University of Kansas and University of Colorado, Colorado
Springs.
Edgar P. Odenwalder III
--------------------------
Mr. Odenwalder founded Inform Worldwide Inc. in 1996 and served as the President
of Inform Worldwide, Inc. before joining the Company on June 29th, 2000. Prior
to 1996, Mr. Odenwalder held senior positions with Convergent Group, a leading
provider of geo-technology services and McDonnell Douglas Communications Company
(MDCC). At MDCC he launched a location technology product group that grew,
within an eighteen-month span, to over eighty software engineers with annual
revenues in excess of $10 million. Mr. Odenwalder holds BS and MS degrees in
forestry and computer science from Colorado State University.
Donald W. Prosser
-------------------
Mr. Prosser served as CFO and a Director of the company since October 30th,
1999. Prior to joining the Company, he served as a financial consultant to the
Company. Prior to Anything Internet Corporation, Mr. Prosser held partner
positions at two leading CPA firms and served as Managing Director of American
Express Tax and Business Services. At American Express, Mr. Prosser had full
responsibility for Colorado operations and grew his unit into the largest CPA
tax practice in the state. Mr. Prosser is holds a BS degree in Business
Accounting and MS in Taxation from Western State College.
Mr. Prosser resigned as CFO and a Director of the Company as of September 19th,
2000. To pursue other business interests.
Carole A. Baumbusch
---------------------
Ms. Baumbusch joined Inform Worldwide, Inc. in February 2000 as Chief Operating
Officer. Prior to Inform, she was Vice President of Operations for ING Group.
Ms. Baumbusch began her career as an engineer, working in both the defense and
utility industries. Upon completion of her MBA, she became a consultant for the
Weston Group. Ms. Baumbusch graduated with highest honors from both Bucknell
University where she earned a B.S. degree in Civil Engineering and from New York
University where she earned an MBA from the Stern School of Business. She also
recently attended the Executive Program for Growing Companies at Stanford
University Graduate School of Business.
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Gabriel Coch
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Mr. Coch is founder of Mapas y Datos and Mapas Latinos, Latin American
geo-technology companies based in Bogot , Colombia. From 1991 until the
present, Mr. Coch has presided over these companies. Mr. Coch has been an
international consultant in assignments in Costa Rica, Venezuela and Peru. Mr.
Coch obtained his bachelor's degree in Urban Planning and Design from Southern
Illinois University and his master's degree in Urban and Regional Planning from
the University of Florida.
Alfred W. Delisle
-------------------
Mr. Delisle co-founded the Company in August 1997. He has been VP, Channel
Development since June 30, 2000 and Director for Anything Internet, Anything PC
Corporation and Anything Coffee Corporation since August 1997. Prior to
starting Anything Internet Corporation, Mr. Delisle held a variety of positions
with Tech Data Corporation's high volume sales division. Mr. Delisle also
serves as a Director of Web-Designs.net, Inc., a privately held firm, since
December 1999.
Mr. Delisel holds a Bachelor of Science Degree in Business Administration from
Babson College, Wellesley, MA. and a certificate in Strategies for E-Business
Success from the Management Development Institute at Eckerd College, St.
Petersburg, Florida.
Lawrence Stanley
-----------------
Mr. Stanley served as interim CEO and held the position of director from October
20, 1999 to October 29, 2000. From October 20, 1999 to December 9, 1999, Mr.
Stanley served as our interim co-president and chief executive officer. Mr.
Stanley currently serves as CEO of Banyan Corporation of Colorado Springs,
Colorado, a majority shareholder of Anything Internet Corporation.
Karen Sebastiani
-----------------
Ms. Sebastiani has been our secretary, treasurer and a director from October 20,
1999 to October 29th, 2000. Ms. Sebastiani is currently the business manager at
Banyan Corporation of Colorado Springs.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities
(collectively the "Reporting Persons") to file reports and changes in ownership
of such securities with the Securities and Exchange Commission and the Company.
Based solely upon a review of (i) Forms 3 and 4 and amendments thereto furnished
to the Company pursuant to Rule 16a-3(e), promulgated under the Exchange Act,
during the Company's fiscal year ended June 30, 2000 and (ii) Forms 5 and any
amendments thereto and/or written representations furnished to the Company by
any Reporting Persons stating that such person was not required to file a Form 5
during the Company's fiscal year ended June 30, 2000, it has been determined
that, other than disclosed below, no Reporting Persons were delinquent with
respect to such person's reporting obligations set forth in Section 16(a) of the
Exchange Act.
The following table as of June 30, 2000, includes the name and positions of
each Reporting Person that failed to file on a timely basis any reports required
pursuant to Section 16(a) during the most recent fiscal year or prior years.
<TABLE>
<CAPTION>
Name Position Report Filed Late
---- -------- -----------------
<S> <C> <C>
Larry G Arnold Chief Executive Officer and Chairman of the Board Forms 3 and 5
Edgar P Odenwalder III President and Director Forms 3 and 5
Donald W. Prosser Prior Secretary, Treasurer and Director Forms 3 and 5
Alfred W. Delisle Business Development Manager and Director Forms 3 and 5
Banyan Corporation Beneficial Owner Forms 3 and 5
</TABLE>
Page 10
<PAGE>
Item 10. Executive Compensation
The following table sets forth the compensation paid during the fiscal year
ending June 30, 2000 to the Company's Chief Executive Officer and each of the
Company's officers and directors. No executive officers received any
compensation in fiscal 1998, no person received compensation exceeding $200,000
in fiscal 1999, no bonuses were awarded during fiscal 1999, and no persons
received compensation from the Company prior to fiscal 1999.
<TABLE>
<CAPTION>
Annual Compensation Awards Payouts
----------------------- ---------------------------- -------
Bonus &
Other Securities
Annual Restricted Underlying LTIP
Name and Principal Compen- Stock Award(s) Options/SAR Payouts All Other
Position Year Salary ($) sation ($) ($) (#) ($) ($)
------------------ ---- ---------- --------- -------------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Larry G. Arnold
CEO and Chairman 1,000,000
of the Board 2000 $200,000 0 50,000
1999 N/A N/A N/A N/A N/A
Edgar P.
Odenwalder III
President and
Director 2000 $200,000 0 1,000,000
1999 N/A N/A N/A N/A N/A
Donald W. Prosser
Prior CFO,
Secretary &
Treasurer 2000 $150,000 0 700,000
1999 N/A N/A N/A N/A N/A
Carole Baumbusch
Chief Operating
Officer 2000 $150,000 0 500,000
1999 N/A N/A N/A N/A N/A
Gabriel Coch
VP, Technical
Operations 2000 $130,000 0 130,000
1999 N/A N/A N/A N/A N/A
Alfred W. Delisle
Business
Development
Manager and
Director 2000 $ 75,000 0
1999 $ 60,000 N/A 35,000 N/A N/A
100,000
</TABLE>
The following table sets forth information on executive stock options granted to
the executive officers of the Company as of October 10, 2000.
Page 11
<PAGE>
<TABLE>
<CAPTION>
Name Number of Securities Percent of Total Exercise of Base Expiration Date
Underlying Options/SARs Price($/share)
Options/SARs Granted to Employees
Granted (#) as of October 10,
2000(1)
<S> <C> <C> <C> <C>
Larry G. Arnold 1,000,000 18% $3.00 April 18th, 2003
50,000 $2.00 April 16th, 2003
Edgar P. Odenwalder 1,000,000 18% $2.97 June 30th, 2003
Donald W. Prosser 500,000 12% $3.00 April 18th, 2003
200,000 $1.00 November 15th, 2002
Carole Baumbusch 500,000 9% $2.97 June 30th, 2003
Gabriel Coch 130,000 2% $3.06 June 30th, 2003
Alfred W. Delisle 35,000 2% $1.00 November 15th, 2002
100,000 $1.00 November 15th, 2002
J. Scott Sitra (2) 700,000 12% $1.00 October 18th, 2002
</TABLE>
(1) Based on total of 5,703,333 options granted and outstanding.
(2) Mr. Sitra served as the Company's CEO & Chairman of the Board from March
30, 1999 to October 10, 1999. The options were granted in lieu of salary,
expenses and consulting fees due from the company.
DIRECTOR COMPENSATION
Directors are compensated $5,000 annually, which, as determined by the
Board, may be taken in the form of cash or securities of the Company.
Additionally, the Company reimburses its Directors for reasonable out-of-pocket
expenses incurred in attending meetings of the Board of Directors.
Item 11. Security Ownership of Beneficial Owners and Management
The following table sets forth certain information known to the Company
regarding the beneficial ownership of common stock as of June 30, 2000, by (i)
each Director of the Company, (ii) each executive officer of the Company, (iii)
all directors and executive officers as a group, and (iv) each person known to
the Company to be the beneficial owner of more than 5% of its outstanding shares
of common stock. Percentage of ownership is based on 5,823,802 shares of common
stock issued and outstanding as of June 30, 2000.
<TABLE>
<CAPTION>
Percent of Class Percent of Class
Shares Preferred before Preferred after Preferred
Directors and Executive Officers Owned Owned (2) (3) Ownership
-------------------------------- --------- --------- --------- ----------
<S> <C> <C> <C> <C>
Larry G. Arnold, Chief Executive Officer & 192,500 0 3% 2%
Chairman of the Board (1)
Edgar P. Odenwalder III, President & Director 2,316,600 0 40% 29%
Donald W. Prosser ** 50,000 20,000 1% 1%
Carole Baumbusch, Chief Operating Officer 240,000 0 4% 3%
Gabriel Coch, VP Technical Operations 240,000 0 4% 3%
Page 12
<PAGE>
Alfred W. Delisle, VP Channel Development & 70,005 60,000 1% 2%
Director
Lawrance Stanley, Director 0 9,105 * *
Karen Sebastiani, Director 0 3,500 * *
---------- ---------- ---------- ----------
All current directors and executive officers as a 3,059,105 72,605 53% 41%
group
Five Percent Shareholders(4)
-------------------------
Banyan Corporation
4740 Forge Rd., Bldg. 112
Colorado Springs, CO 80907 48,000 236,470 1% 6%
Scott Sitra (An Agent) 379,751 462,417 6% 16%
4301 Beau Rivage Cir.
Lutz, FL 33549 (5)
</TABLE>
*Less than 1% or no holdings as of June 30, 2000.
**Donald W. Prosser resigned as of September 19, 2000.
(1) Mr. Arnold disclaims any ownership benefit from 132,000 shares owned by Mr.
Arnold's spouse & children.
(2) There are 1,106,154 preferred shares outstanding. All preferred shares have
two votes in any voting matters.
(3) Based on 5,823,802 shares issued and outstanding as of June 30, 2000.
(4) Beneficial ownership is determined in accordance with the 13d-3 of the
Securities Exchange Act of 1934. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are
currently exercisable or become exercisable within 60 days of this report,
but not included in the table above, are not deemed outstanding for the
purpose of computing the percentage ownership of any other person.
(5) Mr. Sitra serves as an agent for various corporate shareholders of the
Company. The shares shown above are a total of the shares owned by various
entities. Mr. Sitra personally owns only 5,000 shares.
Item 12. Certain Relationships and Related Transactions.
On June 16, 1999, the Company borrowed $75,000 from a related corporation
with an ownership interest in Anything Internet Corporation. The short-term
loan was made at a rate of 12% per annum, and was due July 30, 1999. This note
was paid-off in March 2000.
Page 13
<PAGE>
Item 13. Exhibits and Reports on Form 8-K
Exhibits designated with an asterisk (*) have previously been filed with
the Securities and Exchange Commission and are incorporated herein by reference
to the document referenced in the parentheticals following the descriptions of
such exhibits.
Exhibit No. Description
----------- -----------
(a) 1. Financial Statements
(a) 2. Exhibits
21.1 Subsidiaries of the registrant.
23.1 September 28, 2000 consent letter of Ronald R. Chadwick, P.C.
27.1 Financial Data Schedule for Fiscal Year Ending June 30, 2000.
Reports on Form 8-K
During the period commencing during last quarter of the period covered by
this Report to date, there were no Form 8-Ks filed with the SEC.
Page 14
<PAGE>
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Colorado Springs, State of Colorado on this 13th day of October, 2000.
Anything Internet Corporation
By: /s/ Larry G Arnold
-------------------------------------
Larry G Arnold
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Larry G. Arnold
---------------------- Chief Executive Officer and Chairman
Larry G. Arnold of the Board October 13, 2000
/s/ Edgar P. Odenwalder III
---------------------- President and Director
Edgar P. Odenwalder III October 13, 2000
/s/ Mitzi Qin Mitchell
---------------------- Assistant Secretary, Treasurer and October 13, 2000
Mitzi Qin Mitchell Controller
/s/ Alfred W. Delisle October 13, 2000
---------------------- VP Business Development and Director
Alfred W. Delisle
</TABLE>
Page 15
<PAGE>
ANYTHING INTERNET CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDING JUNE 30, 2000 and 1999
With
Independent Auditor's Report
<PAGE>
CONTENTS
Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . F-1
FINANCIAL STATEMENTS
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . .F-2
Consolidated Statements of Operations . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Stockholders' Equity . . . . . . . . . . . . .F-5
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . .F-6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . F-7
F - 0
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Anything Internet Corporation
Englewood, Colorado
I have audited the accompanying consolidated balance sheets of Anything Internet
Corporation and subsidiaries as of June 30, 2000 and 1999 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Anything Internet
Corporation and Subsidiaries at June 30, 2000 and 1999 and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ RONALD R. CHADWICK, P.C.
--------------------------------
RONALD R. CHADWICK, P.C.
Aurora, Colorado
September 28, 2000
F - 1
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30,
2000 1999
---------------- --------------
<S> <C> <C>
Current assets:
Cash $ 199,755 $ 1,454
Accounts Receivable 78,717 188,689
Inventory 0 12,277
Prepaid Expenses 0 8,091
Notes Receivable-Related Party 208,762 18,023
Other 0 3,938
---------------- --------------
Total current assets 487,234 232,472
---------------- --------------
Furniture and Equipment, less accumulated
depreciation of $266,602 and $14,859. 139,551 48,303
Software development costs, less
Accumulated amortization of
$78,871 and $18,039 49,359 39,600
Licensing Rights 9,126,949 0
Deposits 16,884 2,741
---------------- --------------
9,332,743 90,644
---------------- --------------
$ 9,819,977 $ 323,116
= ================ ==============
</TABLE>
F - 2
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30,
2000 1999
---------------- --------------
<S> <C> <C>
Current liabilities:
Accounts Payable $ 234,098 $ 400,721
Accrued expenses 62,616 52,840
Bank reserve 0 22,051
Bank Lines of Credit 128,427 29,054
Notes payable - current portion 60,168 0
Notes payable - related party 0 75,000
---------------- --------------
Total current liabilities 485,309 579,666
---------------- --------------
Total Liabilities 485,309 579,666
Stockholder's Equity:
Preferred stock, Class A, no par value
10,000,000 shares authorized;
1,106,154 and 0 shares issued
and outstanding 629,418 0
Common stock, Class A, no par value;
50,000,000 shares authorized;
5,823,802 and 3,040,400 shares
Issued and outstanding 11,205,716 359,900
Common stock subscribed 0 68,000
Stock subscription receivable 0 (68,000)
Accumulated deficit (2,500,466) (616,450)
---------------- --------------
Total stockholders' equity 9,334,668 (256,550)
---------------- --------------
Total liabilities and stockholders' equity $ 9,819,977 $ 323,116
================ ==============
</TABLE>
F - 3
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
- For The Years Ending -
June 30, 2000 June 30, 1999
----------------- ----------------
<S> <C> <C>
Sales $ 685,268 $ 3,503,822
Cost of sales 617,577 3,419,386
----------------- ----------------
Gross profit 67,691 84,436
----------------- ----------------
Selling, general and administrative
expenses 1,184,992 559,093
Stock based compensation 755,234 113,200
----------------- ----------------
(Loss) from operations (1,872,535) (587,857)
----------------- ----------------
Other income (expense):
Interest expense (16,367) (3,831)
Interest income 4,886 0
----------------- ----------------
Income (loss) before provision for income
taxes (1,884,016) (591,688)
Provision for income tax - -
----------------- ----------------
Net income (loss) ($1,884,016) ($591,688)
================= ================
Basic/Diluted Net loss per share ($0.65) ($0.24)
================= ================
Basic/Diluted weighted average number of
common shares outstanding 2,918,842 2,458,533
================= ================
</TABLE>
F - 4
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the year ended June 30, 2000 and 1999
Stock Stock-
Preferred Stock Common Stock Subscrip. Accum. Holders'
Shares Amount Shares Amount Receivable Deficit Equity
--------- -------- ----------- ------------ --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at July 1, 1998 - $ - 5,800 $ 36,200 $ - ($24,762) $ 11,438
Debt retirement 1,950 10,500 10,500
Stock retirement (7,750) -
and reissuance 500,000 -
Compensatory stock issuance 2,340,400 113,200 113,200
Sales of common stock 200,000 200,000 200,000
Common stock subscribed 68,000 (68,000)
Net loss for the year ended June 30, 1999 (591,688) (591,688)
--------- -------- ----------- ------------ --------- ------------ -----------
Balances at June 30, 1999 - - 3,040,400 427,900 (68,000) (616,450) (256,550)
--------- -------- ----------- ------------ --------- ------------ -----------
Subscription Received 34,000 - 68,000 68,000
Compensatory stock issuance 55,000 141,000 614,234 614,234 755,234
Shares Issued on Warrant exercise 200,000 600,000 600,000
Shares Issued on Option exercise 500,000 500,000 500,000
Sales of Common & Preferred Stock 145,500 185,000 205,000 405,000 590,000
Offering Expense (38,000) (38,000)
Common Stock Converted to Preferred
Stock 905,654 303,418 (1,769,832) (303,418) -
Shares Issued in acquisition 3,000,000 9,000,000 9,000,000
Net loss for the year ended June 30, 2000 (1,884,016) (1,884,016)
--------- -------- ----------- ------------ --------- ------------ -----------
Balances at June 30, 2000 1,106,154 $629,418 5,823,802 $11,205,716 $ - ($2,500,466) $9,334,668
========= ======== =========== ============ ========= ============ ===========
</TABLE>
F - 5
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
- For the Years Ended -
June 30, 2000 June 30, 1999
-------------- -------------
<S> <C> <C>
Cash flows from operating
activities:
Net (loss) ($1,884,016) ($591,688)
Adjustments to reconcile net
Income to net cash provided by
(used for)operating activities:
Depreciation and Amortization 42,083 25,968
Stock based compensation 755,234 113,200
Debt retirement 0 10,500
Current assets (60,399) (216,427)
Deposits (14,143) (1,361)
Current liabilities (156,847) 430,899
-------------- -------------
Net cash used by (used for)
Operations activities (1,318,088) (228,909)
-------------- -------------
Cash flows from investing
activities:
Acquisition of office equipment (12,844) (48,701)
Software development costs (9,900) (31,617)
-------------- -------------
Net cash used by (used for)
Investing activities (22,744) 80,318
-------------- -------------
Cash flow from financing
activities:
Proceeds from borrowing 132,706 46,516
Sale of common and preferred stock 1,563,051 200,000
Offering expenses (38,000) 0
Payments on borrowings (96,573) 0
-------------- -------------
Net cash provided by (used for)
Financing activities 1,561,184 200,516
-------------- -------------
Net increase (decrease) in cash 220,352 (62,711)
Cash at beginning of the Period (20,597) 42,114
-------------- -------------
Cash at end of the period $ 199,755 ($20,597)
============== =============
</TABLE>
Schedule of non-cash investing and financing activities:
In fiscal year 2000, the Company issued 3,000,000 Series A Common Stock
in exchange for licensing rights valued at $9,126,949.
Supplemental Disclosure:
Cash paid in 2000 and 1999 for interest: $15,996 and $3,831.
F - 6
<PAGE>
ANYTHING INTERNET CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended June 30, 1999 & 2000
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Anything Internet Corporation ("Anything Internet", the "Company"), formerly
known as Anything Corporation, was incorporated in the State of Colorado on
August 15, 1997. The Company markets and distributes computers and related
accessory products by using the Internet as the exclusive distribution channel.
On August 28, 1998, Anything, Inc. changed its name to Anything Internet
Corporation, which was made effective through an amendment to its Articles of
Incorporation filed with the Secretary of State of Colorado on August 31, 1998.
On June 30, 2000, the Company acquired Inform Worldwide, Inc. and its subsidiary
Inform Latin America, Inc. Inform Worldwide, Inc. was incorporated in the State
of Colorado on February 5th, 1996. Inform Worldwide, Inc.'s business is in the
development of business applications that combine geographical information
systems and the Internet. Inform Worldwide, Inc. operates as a wholly owned
subsidiary of Anything Internet Corporation.
The Company also conducts its businesses through two other subsidiaries,
AnythingPC Internet Corporation and Anything Coffee Corporation.
Principal of consolidation
----------------
The consolidated financial statements include the accounts of Anything Internet
Corporation, formerly known as Anything, Inc. and its wholly owned subsidiaries,
Inform Worldwide, Inc., AnythingPC Internet Corporation and Anything Coffee
Corporation (collectively, the "Company"). All significant intercompany
transactions and accounts were eliminated in the consolidated financial
statements.
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 revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Income tax
----------
F - 7
<PAGE>
Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss
carryforwards and deferred tax liabilities are recognized for taxable temporary
differences. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.
Cash and cash equivalents
-------------------------
The Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
Net income (loss) per share
---------------------------
The net income (loss) per share is computed by dividing the net income (loss) by
the weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon conversion of the Company's preferred
stock are not included in the computation if the effect of such inclusion would
be anti-dilutive and would increase the earnings or decrease loss per share. If
included, the diluted weighted average outstanding shares would have been
2,918,842 and 2,458,533 for 2000 and 1999.
Inventory
---------
Inventory consists of consigned finished goods. Inventories are valued at the
lower of cost or market using the first-in, first-out (FIFO) method.
Property and equipment
----------------------
Property and equipment are recorded at cost and depreciated under accelerated
methods over an estimated life of five to seven years. The Company's cost basis
of property and equipment, consisting of furniture, equipment and leasehold
improvements was $406,152 and $63,162 at the end of June 30, 2000 and 1999
respectively, with corresponding accumulated depreciation of $266,602 and
$14,959. Depreciation expense for the years ended June 30, 2000 and 1999 was
$19,759 and $14,959.
Other Assets
------------
Intangible assets, consisting primarily of software, are recorded at cost and
amortized on the straight line method over three to five years. The Company's
cost basis of intangible assets was $9,255,179 and $57,689 as of June 30, 2000
and 1999 respectively, with corresponding accumulated amortization of $78,871
and $18,089. Amortization expense for the years ended June 30, 2000 and 1999 was
$22,324 and $11,009.
F - 8
<PAGE>
Accounts receivable
-------------------
The Company reviews accounts receivable periodically for collectibility and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed necessary.
Products and services, geographic areas and major customers
-----------------------------------------------------------
Company sales were derived from marketing and distributing computers and related
products over the Internet, were to external customers, and were domestic. The
Company had no one major customer accounting for over 10% of its sales. The
Company's long-term assets are all held domestically.
Revenue Recognition
-------------------
The Company recognizes revenue when a product is shipped to customers either
from the Company's inventory or when shipped from distributors' warehouses
directly to the customer. The Company assumes title to the product when it is
shipped either to the Company or directly to the Company's customer.
NOTE 2. ACQUISITION
On June 30, 2000, the Company acquired Inform Worldwide, Inc. in a
stock-for-stock transaction, in which the former shareholders of Inform
Worldwide Inc. received a total of 3 million shares of Anything Internet in
exchange for all outstanding common shares of Inform Worldwide, Inc. The merger
is being accounted for as a purchase. Inform Worldwide, Inc. became a wholly
owned subsidiary of Anything Internet as of the merger date. The purchase is
valued at $9,126,949 for the acquisition of licensing rights from Inform
Worldwide, Inc.
Licensing Rights
-----------------
Inform Worldwide, Inc. is a geographical information system (GIS) related
training, consulting and software development company based in Colorado. Inform
Worldwide, Inc. has developed proprietary geographic/location related software
and contractual relationships. The licensing rights acquired from Inform
Worldwide Inc. provide the Company the ability to transact business in the name
of Inform Worldwide Inc. and all other rights to sell and promote Inform
Worldwide Inc.'s proprietary technology.
Pro Forma
---------------
The following table reflects condensed audited pro forma combined balanced sheet
and results of the operations of the Company and Inform Worldwide, Inc. on the
basis that the acquisition had taken place at the beginning of the fiscal year
for all periods presented:
F - 9
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
June 30,
2000 1999
-------------- --------------
ASSETS
<S> <C> <C>
Current assets: $ 487,234 $ 406,644
Equipment & Software: 139,551 178,179
Other assets: 9,193,192 74,451
-------------- --------------
$ 9,819,977 $ 659,274
============== ==============
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current liabilities: $ 485,309 $ 903,473
Long-term liabilities 0 30,168
Stockholders' equity: 9,334,668 (274,367)
-------------- --------------
$ 9,819,977 $ 659,274
============== ==============
</TABLE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
- Fiscal Years Ending -
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Sales $ 1,527,325 $ 5,306,764
Cost of sales 884,402 3,894,293
Selling, general and administrative expenses
2,123,796 2,226,428
Stock Based Compensation 755,234 113,200
Other expenses 11,481 3,831
Provision for income tax - -
------------- -------------
Net income (loss) ($2,247,587) ($930,988)
============= =============
Basic & Diluted Net loss per share ($0.77) ($0.24)
============= =============
Basic & Diluted weighted average number
of common shares outstanding 2,918,842 2,458,533
</TABLE>
F - 10
<PAGE>
In management's opinion, the pro forma combined results of operations are not
indicative of the actual results that would have occurred had the acquisition
been consummated at the beginning of fiscal years 1999 or 2000 or of future
operations of the combined entities under the ownership and operation of the
Company. In addition, the pro forma financial results contain estimates since
Inform Worldwide Inc. did not maintain information on a period comparable with
the Company's fiscal year end.
NOTE 3. RELATED PARTY TRANSACTIONS
On December 31, 1998 the Company loaned an officer $18,023 at a rate of 3% per
annum. The note was paid in full as of June 30, 2000.
On June 16, 1999, the Company borrowed a 15-day loan of $75,000 at 12% per annum
from a related corporation with an ownership interest in Anything Internet
Corporation. The note carried a penalty of $50/per day late fee. The note was
paid in full by June 30, 2000.
NOTE 4. LEASE COMMITMENT
Effective June 3, 1999, the Company extended its lease agreement for office
space in Colorado Springs, Colorado, and effective March 1999, entered into a
lease agreement for office space in Tampa, Florida. Both leases are for a
period of twelve-months and can be renewed at terms and conditions to be
established at expiration date. Lease expense incurred for the year ended June
30, 2000 and 1999 was approximately $19,000 each year. The remaining minimum
future rental payments, all in 2000 and 1999, are $26,569.
Inform Worldwide, Inc. has leased office space, equipment, and a vehicle under
various lease agreements through May 2003. Lease expense incurred for the years
ended June 30, 2000 and 1999 was $214,224 and $214,224 respectively. The
remaining minimum future lease payments through 2003 are approximately $624,820.
NOTE 5. NOTES PAYABLE & LINES OF CREDIT
The Company has also established a $50,000 line of credit with US Bank of
Colorado Springs, Colorado. Payments are due on the 15th of each month and
interest accrues at the rate of 10.45% per annum. At June 30, 2000 and 1999 the
Company's outstanding balance on this credit line was $46,828 and $27,762.
Inform Worldwide Inc. has established a line of credit with a bank providing for
borrowing to $100,000 as of June 30, 2000. This line of credit expired on July
10, 2000. At June 30, 2000 the Company's outstanding balance on this credit line
was $ 81,599.
F - 11
<PAGE>
At June 30, 2000 and 1999, the Company had the following notes payable
outstanding:
June 30, 2000 June 30, 1999
Notes Payable $ 60,168 $ 75,000
Line of Credit 128,427 29,054
--------------- ---------------
Total (Current) 188,595 104,054
=============== ===============
NOTE 6. INCOME TAXES
Deferred income taxes arise from the temporary differences between financial
statement and income tax recognition of net operating losses. These loss
carryovers are limited under the Internal Revenue Code should a significant
change in ownership occur.
At June 30, 2000 and 1999 the Company had approximately $2,482,000 and $615,000
of unused federal net operating loss carryforwards, which begin to expire in
year 2000 through 2019. A deferred tax asset has been offset by 100% valuation
allowance. The Company accounts for income taxes pursuant to SFAS 109. The
components of the Company's assets and liabilities are as follows:
June 30,2000 June 30, 1999
------------ -------------
Deferred tax liability $ - $ -
Deferred tax asset arising from:
Net operating loss carryforwards 893,895 240,417
------------ -------------
893,895 240,417
Valuation allowance (893,895) (240,417)
------------ -------------
Net Deferred Taxes $ - $ -
The income tax (benefit) consists of the following:
Current:
Federal $ - $ -
State - -
------------ -------------
Deferred:
Federal (782,205) (209,595)
State (111,690) (30,822)
------------ -------------
($893,895) ($240,417)
============ =============
F - 12
<PAGE>
No difference exists between these amounts and amounts computed at federal and
state statutory rates. The net change in 2000 and1999 in the total valuation
allowance was $653,478 and $233,096.
Inform Worldwide, Inc. has been organized as an S-Corporation and paid no income
tax at the corporate level. Inform was reorganized as a C-Corporation as of
June 30, 2000.
NOTE 7. STOCKHOLDERS' EQUITY
The Company is authorized by its Articles of Incorporation, as amended, to issue
an aggregate of 50,000,000 shares of class 'A' common stock, no par value,
("common stock"); 25,000,000 shares of class 'B' common stock, no par value
("class B common stock"); 10,000,000 shares of class 'A' preferred stock, no par
value, $15 stated value ("class A preferred stock"); and 10,000,000 shares of
class 'B' preferred stock, no par value ("class B preferred stock"). No class B
common or preferred stock is currently issued or outstanding.
Class A Preferred Stock
----------------------
During the period from November to December 1999, the Company converted
1,769,832 shares of class A common stock into 905,654 shares of class A
preferred stock. The Company issued an additional 200,500 preferred shares for
$185,000 and $114,000 worth of services performed.
Class A preferred stock has a stated value of $15 per share and bears a 12%
annual coupon rate. Each share of class A preferred carries two votes in any
voting matter. Class A preferred shares are convertible to three registered
common shares after one year holding period at the choice of the shareholders.
The Company may also call for the conversion of the preferred stock at any time
with a maximum of 60 days notice. Accrued interest is payable in common or
preferred stock.
Class A Common Stock
-------------------
The Company has 5,823,802 and 3,040,400 shares of class A common stock issued
and outstanding on June 30, 2000 and 1999 respectively.
A. Debt Retirement
In August 1998, the Company exchanged 1,950 shares of common stock for debt
cancellation by an officer in the amount of $10,500.
B. Reissuance
In August 1998, the Company retired all 7,750 then outstanding shares, in
addition to 4,200 retired earlier in the year, in exchange for 500,000 shares of
new Class A common stock.
F - 13
<PAGE>
Also in August 1998, the Company purchased 200,000 Class A common shares of
Banyan Corporation valued at $40,000 in exchange for 1,000,000 Class A common
shares of the Company. The 200,000 Banyan shares were distributed among the
Company's founders. No additional paid in capital was recorded.
C. Stock Based Compensation
The Company periodically issues stock to various service providers as a form of
compensation. The services are valued at the fair market value of the service
performed.
<TABLE>
<CAPTION>
Common Shares Issued Preferred Shares Issued Value of Services Received
<S> <C> <C> <C>
1998 fiscal 1,340,400 $ 113,200
1999 fiscal 614,234 55,000 $ 755,234
-------------------- ------------------------
Total : 1,954,634 $ 868,434
</TABLE>
D. Private Placement
In December 1998 and January 1999, the Company sold 200,000 shares of Class A
common stock for $200,000 in a private placement.
E. Warrants
The Company issued 200,000 Class A Common Stock Purchase Warrants (the
"Warrants") in conjunction with a private placement completed in January 1999.
Each Warrant entitles the holder to purchase one share of the Company's Class A
common stock at an exercise price of $3.00 per share through January 15, 2000,
at which time the Warrants expire. The Company may redeem the Warrants at a
price of $0.01 per Warrant, at any time through January 15, 2000 upon not less
than 30 days, nor more than 60 days, prior written notice, provided that the
closing bid quotation for the common stock as reported by any quotation service
on which the common stock is quoted is at least $4.00 for ten consecutive
trading sessions ending on the two days prior to the day on which notice is
given.
As of June 30, 2000, 200,000 warrants have been exercised. Due to warrant
exercise, 200,000 shares of class A common stock were issued for $600,000.
Additional 89,500 warrants were issued in conjunction with the warrant exercise
and carry the same rights as previous 200,000 warrants.
F. Stock options
In order to retain highly skilled employees, officers and directors, outsider
service providers and obtain general funding, the Company's Board of Directors
granted unqualified stock options periodically to various individuals. Among all
2,919,333 shares of outstanding options, 2,909,333 shares are non-qualified
stock options granted to officers, directors, employees and consultants to the
Company. They are generally granted at equal or above market price and have a
life of two to three years and vested immediately.
F - 14
<PAGE>
Employee Stock Benefit Plan
The Company established a employee stock benefit plan on January 10, 1999.
200,000 common shares were reserved under the plan at $1 exercise price and the
plan expires in June 2007. The options granted under this plan vest over a
period of five years and expire in eight years. On June 4th, 1999, 10,000
options were granted and 7,500 options are outstanding under this plan at an
exercise price of $3 per share.
G. Rights Plan
On September 20, 1999, the Board of Directors approved a rights dividend plan to
be issued to shareholders of record as of September 29, 1999, payable on
November 15, 1999. For every thirty shares held, one right will be issued and
entitle the holder to purchase one right unit at $7.50. Each right unit will
consist of one share of ANYI class A common stock, one share of Anything Coffee
Corporation (anyCoffee.com) that will have a transfer clause, and three warrants
to purchase one share of ANYI common stock at the respective price levels of
$15, $22.50 and $30. Shareholders will have 60 days from the effective
registration date to exercise their rights. The warrants are effective for 2
years from the date of issue. Currently, no rights have been exercised.
Summary
A summary of the status of the Company's stock options as of June 30, 2000 and
1999, and changes during the years ending on these dates are presented below:
Options Weighted
------- Avg. Excerci- Weighted
Exercise sable Avg.
Shares Price Options Fair value
--------- --------- --------- ----------
Outstanding at July 1, 1998 - $ -
Granted 620,000 $ 11.19
Exercised - -
Forfeited/Cancelled - -
--------- ---------
Outstanding at June 30, 1999 620,000 $ 11.19 603,333 $ 1.48
Granted 3,597,500 $ 1.98
Exercised 500,000 $ 1.00
Forfeited/Cancelled 544,167 $ 1.17
--------- ---------
Outstanding at June 30, 2000 3,173,333 $ 4.08 3,117,333 $ 0.39
========= =========
F - 15
<PAGE>
The following table summarizes information about stock options outstanding at
June 30, 2000.
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------- -------------------
Number Weighted Avg. Weighted Number Weighted Avg.
Range of Outstanding Remaining Avg. Exercise Exercisable at Exercise Price
Exercise Prices at 6/30/00 Contractual Life Price 6/30/00
--------------- ----------- ---------------- ------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
1.00-$3.50 3,073,000 37 months $ 2.13 3,017,333 $ 2.15
40.00-$100.00 100,000 21 months $ 63.75 100,000 $ 63.75
</TABLE>
The Company applies APB Opinion 25 and related Interpretations in accounting for
stock options. Accordingly, no compensation cost has been recognized for its
stock option award to directors and its employee stock option plan, nor was any
compensation cost charged against income under the award or plan in 1999. Had
compensation cost for the Company's stock option award and employee stock option
plan been determined based on the fair value at the grant dates for awards under
the stock option award and employee stock option plan consistent with the method
of FASB Statement 123, the Company's net income and earnings per share would
have been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
June 30,
2000 1999
----------- -----------
<S> <C> <C> <C>
Net income (loss) As reported ($1,884,016) ($591,688)
Pro forma ($3,073,870) ($1,497,389)
Basic/diluted earnings per share As reported ($0.65) ($0.24)
Pro form ($1.05) ($0.61)
</TABLE>
The fair value of each stock option granted in 1999 and 2000 under Anything
Internet Corporation stock award and option plans was estimated on the date of
grant using the Black-Scholes option-pricing model. The following key
assumptions were used to value grants issued for each year:
Weighted Average
Average Risk Expected Dividend
Free Rate Life Volatility Yield
------------ ----------- ---------- ---------
2000 5.710% 3-5 Years 12.92% 0.00%
1999 5.00% 3 Years N/A 0.00%
F - 16
<PAGE>
It should be noted that the option-pricing model used was designed to value
readily tradable stock options with relatively short lives. The options granted
to employees are not tradable and have contractual lives of up to ten years.
However, management believes that the assumptions used and the model applied
to value the awards yields a reasonable estimate of the fair value of the
grants made under the circumstances.
NOTE 8. SUBSEQUENT EVENT
On July 1st, 2000, the Company signed a letter of intent to acquire Mapas Y
Datos and Mapas Latinos of Bogota, Colombia. The company intends to acquire both
Mapas Y Datos and Mapas Latinos in a stock-for-stock transaction.
Mapas Y Datos and Mapas Latinos are Latin American geo-technology companies
based in Bogot , Colombia. They focus their businesses in the areas of
Internet-based mapping, Java programming, geospatial data processing, GPS,
wireless communications and the Wireless Application Protocol (WAP). They own
proprietary geo-web related software packages and web enabled mapping services
for Latin America.
F - 17
<PAGE>
