SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report: July 13, 2000
Anything Internet Corporation
(Exact name of registrant as specified in its charter)
Colorado
(State or other jurisdiction of incorporation of organization)
000-29994
(Commission File Number)
841425882
(IRS Employer Identification Number)
10333 East Dry Creek Road, Suite 270, Englewood, Colorado 80112
(Business address and zip code)
(303) 662-0900
(Registrant's telephone number, including area code)
3020 North El Paso, Suite 103, Colorado Springs, Colorado 80907-5454
(Former Address)
Item 2. Acquisition or Disposition of Assets
On June 30, 2000, Anything Internet Corporation ("ANYI"), a Colorado
corporation, acquired all of the shares of Inform Worldwide, Inc. ("Inform"),a
Colorado corporation, for 3,000,000 outstanding shares of ANYI's common stock
issued to the shareholders of Inform. The 3,000,000 ANYI shares represents
54.12% of the total outstanding common stock of ANYI.
Item 5. Other Events
Effective July 1, 2000, Edgar P. Odenwalder, III an Carole A Baumbusch were
elected members of the ANYI Board of Directors. Effective July 1, 2000, Larry
G. Arnold was named Chief Executive Officer of Inform and Donald Prosser was
named Chief Financial Officer of Inform.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
a) The consolidated audited financial statements of ANYI for the period fiscal
year ended June 30, 1999;
b) The consolidated audited financial statements of Inform for the periods ended
December 31, 1998 & 1999 and March31, 2000;
c) Pro forma ANYI unaudited financial information;
Exhibits:
a) Attached hereto as Exhibit 1 is a copy of the Agreement; and
b) Attached hereto as Exhibit 2 is a copy of the Press Release sent out at the
time of closing of this transaction.
July 13, 2000
Anything Internet Corporation
(Registrant)
/S/ Donald W Prosser
-----------------------------
By: Donald W Prosser, CFO
Englewood, Colorado
<PAGE>
FINANCIAL STATEMENTS
--------------------
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING JUNE 30, 1999
CONTENTS
Independent Auditor's Report on
the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . F-2
FINANCIAL STATEMENTS
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Statement of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Statement of Stockholders' Deficit . . . . . . . . . . . . . . . . . . . . F-6
Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . F-7
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . F-8
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Anything Internet Corporation
Colorado Springs, Colorado
I have audited the accompanying consolidated balance sheet of Anything Internet
Corporation as of June 30, 1999 and the related consolidated statements of
operations, stockholders' equity and cash flows for the period from August 15,
1997 (inception) to June 30, 1998, and for the year ended June 30, 1999. 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 financial statements referred to above present fairly, in all
material respects, the financial position of Anything Internet Corporation at
June 30, 1999 and the results of its operations and its cash flows for the
period from August 15, 1997 (inception) to June 30, 1998, and for the year ended
June 30, 1999 in conformity with generally accepted accounting principles.
/s/ Ronald R. Chadwick, P.C.
RONALD R. CHADWICK, P.C.
Aurora, Colorado
August 19, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
BALANCE SHEET
(audited)
June 30, 1999
ASSETS
Current assets:
<S> <C>
Cash $ 1,454
Accounts receivable 188,689
Inventory 12,277
Prepaid expenses 8,091
Notes receivable 18,023
Other 3,938
---------
232,472
---------
Furniture and fixtures:
Office furniture and equipment 63,162
Less accumulated depreciation (14,859)
---------
48,303
---------
Other assets:
Software development costs, net of
Accumulated amortization of $18,039 39,600
Deposits 2,741
---------
42,341
---------
$323,116
=========
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
BALANCE SHEET
(audited)
June 30, 1999
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
<S> <C>
Accounts payable $ 400,721
Accrued expenses 52,840
Bank reserve 22,051
Notes payable - line of credit 29,054
Notes payable - related party 75,000
----------
579,666
----------
Stockholders' equity:
Common stock, Class A, no par value;
50,000,000 shares authorized;
3,040,400 issued and outstanding 359,900
Common stock subscribed (34,000) 68,000
Stock subscription receivable (68,000)
Accumulated deficit (616,450)
----------
(256,550)
----------
$ 323,116
==========
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
STATEMENT OF OPERATIONS
(audited)
- Fiscal Years Ending -
June 30, 1998 June 30, 1999
--------------- ---------------
<S> <C> <C>
Sales $ 657,988 $ 3,503,822
Cost of sales 613,322 3,419,386
--------------- ---------------
Gross profit 44,666 84,436
Selling, general and administrative expenses 69,428 672,293
(Loss) from operations (24,762) (587,857)
Other income (expense):
Interest expense - (3,831)
Income (loss) before provision for income taxes (24,762) (591,688)
Provision for income tax - -
Net income (loss) (24,762) (591,688)
=============== ===============
Net income (loss) per share
(basic and fully diluted) ($4.27) ($0.24)
=============== ===============
Weighted average number of common shares outstanding 5,800 2,458,533
</TABLE>
F-5
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
(audited)
For the period from August 15, 1997 (inception) to June 30, 1998,
And For The Year Ended June 30, 1999
Stock Stock-
Common Stock Subscrip. Accum. Holders'
Shares Amount Receivable Deficit Equity
------------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance at - $ - $ - $ - $ -
August 15, 1997
Sales of 5,800 36,200 36,200
common stock
Net gain (loss) for
the period ended
June 30, 1998 (24,762)
Balances at
June 30, 1998 5,800 $ 36,200 $ - ($24,762) $ 36,200
Compensatory stock
Issuances 2,340,400 113,200 113,200
Debt retirement 1,950 10,500 10,500
Stock retirement and
reissuance (7,750)
500,000
Sales of
common stock 200,000 200,000 200,000
Common stock
subscribed (34,000
shares) 68,000 (68,000)
Net gain (loss) for
the period ended
June 30, 1999 (591,688) (591,688)
------------- ----------- ---------- ----------- -----------
Balances at
June 30, 1999 3,040,400 $ 427,900 ($68,000) ($616,450) ($256,550)
============= =========== ========== =========== ===========
</TABLE>
F-6
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(audited)
- For the Years Ended -
June 30, 1998 June 30, 1999
--------------- --------------
<S> <C> <C>
Cash flows from operating
activities:
Net income (loss) ($24,762) ($591,688)
Adjustments to
Reconcile net income to
Net cash provided by (used for)
operating activities:
Depreciation and
amortization 6,980 25,968
Compensatory stock
issuances - 113,200
Debt retirement - 10,500
Accounts receivable (14,591) (174,098)
Prepaids and other assets - (12,029)
Inventory - (12,277)
Deposits (1,380) (1,361)
Accounts payable
and accrued expenses 22,662 430,899
--------------- --------------
Net cash used by (used for)
Operations activities (11,091) (210,886)
--------------- --------------
Cash flows from investing
activities:
Acquisition of office equipment (14,461) (48,701)
Software development costs (26,072) (31,617)
Note receivable - (18,023)
--------------- --------------
Net cash used by (used for)
Investing activities (40,533) (98,341)
Cash flow from financing
activities:
Proceeds from borrowing 57,538 46,516
Sale of common stock 36,200 200,000
--------------- --------------
Net cash provided by (used for)
financing activities 93,738 246,516
Net increase (decrease)
in cash 42,114 (62,711)
Cash at beginning of the
Period - 42,114
--------------- --------------
Cash at end of the period $ 42,114 ($20,597)
=============== ==============
Schedule of Non-Cash Investing and Financing Activities:
-------------------------------------------------------------------
During the year ended June 30, 1998, the Company issued 830 common
shares for software development services valued at $16,600.
Supplemental Disclosure:
-------------------------------------------------------------------
Cash paid in 1999 for interest: $3,831.
</TABLE>
F-7
<PAGE>
ANYTHING INTERNET CORPORATION
NOTES TO FINANCIAL STATEMENTS
(audited)
For the year ended June 30, 1999
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Anything Internet Corporation ("Anything Internet", the "Company"), 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.
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
-----------
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.
F-8
<PAGE>
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.
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.
Software development costs
----------------------------
It is the Company's policy to capitalize major software development activities
to reflect the value of the software over its anticipated useful life. The
Company amortizes this software over a three year period from the implementation
of the software.
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. RELATED PARTY TRANSACTIONS
On December 31, 1998 the Company loaned Robert C. Schick, an officer, $18,023 at
a rate of 3% per annum. The note matures and is payable in full on December 31,
1999.
F-9
<PAGE>
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 comes due July 30, 1999.
NOTE 3. 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, 1999 was approximately $19,000. The remaining minimum future rental
payments, all in 1999, are $26,569.
NOTE 4. LINES OF CREDIT
To help finance the cost of inventory, Nations Credit Distribution Finance,
Inc., has extended the Company a credit line not to exceed $35,000. The
interest rate applicable to each transaction depends upon the vendor and the
timeliness of repayment, and ranges from 0% to 18%. The credit line is
unsecured. At June 30, 1999 the Company's outstanding balance on this credit
line was $1,292.
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, 1999 the
Company's outstanding balance on this credit line was $27,762.
NOTE 5. 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, 1999 the Company had approximately $615,000 of unused federal net
operating loss carryforwards, which begin to expire in the year 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 as follows:
F-10
<PAGE>
<TABLE>
<CAPTION>
June 30,1998 June 30, 1999
-------------- ---------------
<S> <C> <C>
Deferred tax liability $ - $ -
Deferred tax asset arising from:
Net operating loss carryforwards 7,321 240,417
-------------- ---------------
7,321 240,417
Valuation allowance (7,321) (240,417)
-------------- ---------------
Net Deferred Taxes $ - $ -
The income tax (benefit) consists of the following:
Current:
Federal $ - $ -
State - -
-------------- ---------------
Deferred:
Federal ($6,382) ($209,595)
State (939) (30,822)
-------------- ---------------
($7,321) ($240,417)
</TABLE>
No difference exists between these amounts and amounts computed at federal and
state statutory rates. The net change in 1999 in the total valuation allowance
was $233,096.
NOTE 6. STOCKHOLDERS' EQUITY
Common stock
-------------
The Company as of June 30, 1999 had 50,000,000 shares of authorized common
stock, no par value, with 3,040,400 shares issued and outstanding.
In May, 1998 an officer provided the company with $1,400 in cash and web page
design and development valued at $16,600. In August, 1998 the Company exchanged
1,950 shares of common stock for debt cancellation by an officer in the amount
of $10,500. Later in August, 1998, the Company retired all its 7,750 currently
outstanding shares, in addition to 4,200 retired earlier in the year, in
exchange for 500,000 shares of new Class A common stock. 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. In
addition the Company issued 1,300,000 shares of Class A common stock for
management consulting, legal and investor relations services valued at $52,000
to parties unrelated to the Company or Banyan Corporation. In September, 1998,
the Company issued to the members of its Board of Directors 20,000 shares of
Class A common stock for services. In December, 1998 and January, 1999 the
Company sold 200,000 shares of Class A common stock for $200,000 in a private
placement. In January, 1999 the Company issued 20,400 common shares to
directors and others for compensation valued at $20,400.
Warrants
--------
As of June 30, 1999, the Company had 200,000 Common Stock Purchase Warrants
outstanding (the "Warrants"), issued 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.
F-11
<PAGE>
Stock options
--------------
As of June 30, 1999, the Company made a stock option award to directors and
others and adopted an employee stock benefit plan, which are described below.
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 benefit 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 benefit plan been
determined based on the fair value at the grant dates for awards under the stock
option award and employee stock benefit 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:
1999
------------
Net income (loss) As reported ($591,688)
Pro forma ($1,497,389)
Basic and fully diluted earnings per share As reported ($0.24)
Pro form ($0.61)
Stock option award
--------------------
In August, 1998, the Company granted stock options, exercisable immediately
(except as noted below), to certain officers and directors as compensation for
services, to purchase common shares of the Company as follows:
mount Price/Share Expiration Date
------- ------------ -------------------
500,000 $ 1 February 29, 2000
50,000 $ 40 April 1, 2002
25,000 $ 75 April 1, 2002
25,000 $ 100 April 1, 2002
*10,000 $ 3 March 31, 2003
* Option vests over 3 years.
Employee stock option plan
--------------------------
On June 4, 1999 the Company awarded stock options to four employees under an
employee stock option plan. 200,000 common shares were reserved under the plan,
which expires in June, 2007. Each employee received options to purchase 2,500
common shares (10,000 shares total). The options vest at 500 shares per year
per employee, beginning June 4, 2000, at an exercise price of $3 per share.
A summary of the status of the Company's stock options as of June 30, 1999, and
changes during the year ending on that date is presented below:
F-12
<PAGE>
<TABLE>
<CAPTION>
June 30, 1999
--------------
Weighted Avg.
Options Shares Exercise Price
---------------------------------- -------------- ---------------
<S> <C> <C>
Outstanding at beginning of period - $ -
Granted 620,000 $ 11.19
Exercised - -
Forfeited - -
------- ------
Outstanding at end of period 620,000 $ 11.19
Options exercisable at period end 603,333
Weighted average fair value of
Options granted during the
Period $ 1.48
</TABLE>
F-13
<PAGE>
The following table summarizes information about stock options outstanding at
June 30, 1999.
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------- ----------------------
Weighted Avg. Weighted Weighted
Range of Number Remaining Avg. Number Avg.
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices at 6/30/99 Life Price at 6/30/99 Price
------------- ------------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
1.00-$100.00 620,000 13.2 months $ 11.19 603,333 $ 11.44
</TABLE>
F-14
<PAGE>
INFORM WORLDWIDE, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1998 & 1999,
& MARCH 31, 2000
<PAGE>
INFORM WORLDWIDE, INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Page
----
INDEPENDENT AUDITOR'S REPORT ON
THE FINANCIAL STATEMENTS F-1
FINANCIAL STATEMENTS
Balance sheet F-2
Statement of operations F-3
Statement of stockholders' deficit F-4
Statement of cash flows F-5
Notes to Financial statements F-6
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Inform Worldwide, Inc.
Englewood, Colorado
I have audited the accompanying balance sheets of Inform Worldwide, Inc. as of
December 31, 1998, December 31, 1999 and March 31, 2000 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years ended December 31, 1998 and 1999, and for the three months ended March
31, 2000. 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 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Inform Worldwide, Inc. as of
December 31, 1998, December 31, 1999 and March 31, 2000, and the results of its
operations and its cash flows for the years ended December 31, 1998 and 1999,
and for the three months ended March 31, 2000 in conformity with generally
accepted accounting principles.
Aurora, Colorado
June 22, 2000 RONALD R. CHADWICK, P.C.
F-1
<PAGE>
<TABLE>
<CAPTION>
INFORM WORLDWIDE, INC.
BALANCE SHEETS
DEC. 31, DEC. 31, MARCH 31,
1998 1999 2000
--------- ---------- -----------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ - $ 9,141 $ 27,445
Accounts receivable 305,638 117,515 55,166
Related party receivables 13,082 10,804 11,132
--------- ---------- -----------
TOTAL CURRENT ASSETS 318,720 137,460 93,743
Property, plant & equipment (net) 148,141 113,857 106,891
Intangible assets (net) 20,564 11,140 9,076
Deposits 14,143 14,143 14,143
--------- ---------- -----------
TOTAL ASSETS $ 501,568 $ 276,600 $ 223,853
========= ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ 20,159 $ - $ -
Accrued payables 19,929 111,537 84,943
Line of credit 106,896 81,599 81,599
Deferred revenue 16,080 22,467 19,038
Note payable - current portion 21,409 46,052 41,801
Related party payable 41,420 72,240
--------- ---------- -----------
TOTAL CURRENT LIABILTIES 184,473 303,075 299,621
Note payable 53,174 7,122
--------- ---------- -----------
TOTAL LIABILITIES 237,647 310,197 299,621
--------- ---------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value;
500,000 shares authorized;
20,000 shares issued & outstanding 200 200 200
Paid in capital 6,188 6,188 6,188
Retained earnings (deficit) 257,533 (39,985) (82,156)
--------- ---------- -----------
TOTAL STOCKHOLDERS' EQUITY 263,921 (33,597) (75,768)
--------- ---------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 501,568 $ 276,600 $ 223,853
========= ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
INFORM WORLDWIDE, INC.
STATEMENTS OF OPERATIONS
THREE MONTHS
YEAR ENDED YEAR ENDED ENDED
DEC. 31, DEC. 31, MARCH 31,
1998 1999 2000
-------------- ------------ -----------
<S> <C> <C> <C>
Sales $ 2,448,836 $ 1,167,870 $ 249,944
Cost of sales 707,552 292,989 91,311
-------------- ------------ -----------
Gross margin 1,741,284 874,881 158,633
Operating expenses 1,617,491 1,155,450 197,426
-------------- ------------ -----------
Income (loss) from operations 123,793 (280,569) (38,793)
Other income (expense)
Gain on asset sales 65,433
Interest expense (11,676) (16,949) (3,378)
-------------- ------------ -----------
Income (loss) before provision
for income taxes 177,550 (297,518) (42,171)
Provision for income tax - - -
-------------- ------------ -----------
NET INCOME (LOSS) $ 177,550 $ (297,518) $ (42,171)
============== ============ ===========
NET INCOME (LOSS) PER SHARE
(Basic and fully diluted) $ 8.88 $ (14.88) $ (2.11)
============== ============ ===========
Weighted average number of
common shares outstanding 20,000 20,000 20,000
============== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
INFORM WORLDWIDE, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Retained Stockholders'
Common Stock Paid in Earnings Equity
Shares Amount Capital (Deficit) (Deficit)
------------ ------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1997 20,000 $ 200 $ 6,188 $ 79,983 $ 86,371
Net gain (loss) for the year
ended December 31, 1998 177,550 177,550
---------- ---------------
Balances at December 31, 1998 20,000 $ 200 $ 6,188 $ 257,533 $ 263,921
Net gain (loss) for the year
ended December 31, 1999 (297,518) (297,518)
---------- ---------------
Balances at December 31, 1999 20,000 $ 200 $ 6,188 $ (39,985) $ (33,597)
Net gain (loss) for the period
ended March 31, 2000 (42,171) (42,171)
---------- ---------------
Balances at March 31, 2000 20,000 $ 200 $ 6,188 $ (82,156) $ (75,768)
============ ======= ======== ========== ===============
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
INFORM WORLDWIDE, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS
YEAR ENDED YEAR ENDED ENDED
DEC. 31, DEC. 31, MARCH 31,
1998 1999 2000
------------ ------------ --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 177,550 $ (297,518) $ (42,171)
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities:
Depreciation 66,707 36,917 6,966
Amortization 7,415 9,424 2,089
Accounts receivable (14,123) 188,123 62,349
Related party receivables (12,476) 2,278 (328)
Prepaid expenses 10,359 - -
Accrued payables (2,261) 91,608 (26,594)
Related party payable 41,420 30,820
Deferred revenue (126,803) 6,387 (3,429)
Deposits (6,198) - -
Gain on asset sales (65,433) - -
------------ ------------ --------------
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES 34,737 78,639 29,702
------------ ------------ --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from asset sales 75,278 - -
Purchase of fixed assets (102,366) (2,633) -
Purchase of intangible assets (21,672) - (25)
------------ ------------ --------------
NET CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES (48,760) (2,633) (25)
------------ ------------ --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line-of-credit 6,896 (25,297) -
Proceeds from notes payable 66,719 21,586 -
Payments on notes payable (49,959) (42,995) (11,373)
------------ ------------ --------------
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES 23,656 (46,706) (11,373)
------------ ------------ --------------
NET INCREASE (DECREASE) IN CASH 9,633 29,300 18,304
CASH AT THE BEGINNING OF THE PERIOD (29,792) (20,159) 9,141
------------ ------------ --------------
CASH AT THE END OF THE PERIOD $ (20,159) $ 9,141 $ 27,445
============ ============ ==============
</TABLE>
SUPPLEMENTAL DISCLOSURE
------------------------
Cash paid for interest in 1998, 1999, and three months ended March 31, 2000:
$11,676, $16,949, and $3,378.
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
INFORM WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Inform Worldwide, Inc. (the "Company"), was incorporated in the State of
Colorado on February 5, 1996. The Company's business is in the development of
business applications that combine geography and the Internet. The Company
provides software products for the delivery of location information in Internet
applications to the telecommunications and utilities industries.
Principles of consolidation
-----------------------------
The accompanying consolidated financial statements include the accounts of
Inform Worldwide, Inc. and its wholly owned subsidiary. All intercompany
accounts and transactions have been eliminated in consolidation.
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
-----------
The Company is designated for tax purposes as an S-Corporation and pays no
income tax at the corporate level.
Cash and cash equivalents
----------------------------
The Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
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. At December 31, 1999 the Company had no balance in its
allowance for doubtful accounts.
F-6
<PAGE>
INFORM WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED):
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.
Inventory
---------
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 thirty nine years. The Company's cost
basis of property and equipment, consisting of furniture, equipment and
leasehold improvements was $327,513, $330,146, and $330,146 at December 31,
1998, December 31, 1999 and March 31, 2000 respectively, with corresponding
accumulated depreciation of $179,372, $216,289, and $223,255. Depreciation
expense for the years ended December 31, 1998 and December 31, 1999, and the
three months ended March 31, 2000 was $66,707, $36,917, and $6,966.
Other assets
-------------
Intangible assets, consisting primarily of software, are recorded at cost and
amortized based on the straight line method over three to five years. The
Company's cost basis of intangible assets was $45,947, $45,947, and $45,972 at
December 31, 1998, December 31, 1999 and March 31, 2000 respectively, with
corresponding accumulated amortization of $25,383, $34,807, and $36,896.
Amortization expense for the years ended December 31, 1998 and December 31,
1999, and the three months ended March 31, 2000 was $7,415, $9,424, and $2,089.
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
F-7
<PAGE>
INFORM WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED):
had no one major customer accounting for over 10% of its sales. The Company's
long term assets are all held domestically.
Revenue recognition
--------------------
Revenue is recognized by the Company when services have been completed.
AICPA Statement of Position 98-5
------------------------------------
Effective January 1, 1999 the Company has adopted AICPA Statement of Position
("SOP") 98-5, which requires nongovernmental entities to expense startup costs
as incurred. The adoption by the Company of SOP 98-5 is not expected to have a
material impact on the Company's financial statements.
Financial Instruments
----------------------
The carrying value of the Company's financial instruments, including cash and
cash equivalents, accounts receivable, accounts payable, and long term debt, as
reported in the accompanying balance sheet, approximates fair value.
NOTE 2. RELATED PARTY TRANSACTIONS
The Company has periodically borrowed funds from an officer to meet operating
needs, which are accounted for as a related party payable. These advanced funds
are unsecured, due on demand, and bear interest at 7% per annum on the
outstanding balance. The balance in related party payable was $41,410 and
$72,240 at December 31, 1999 and March 31, 2000. The Company also carries a
related party receivable account for various advances to employees.
NOTE 3. LEASE COMMITMENTS
The Company has leased office space, equipment, and a vehicle under various
lease agreements through May, 2003. Lease expense incurred for the years ended
December 31, 1998 and 1999, and the three months ended March 31, 2000 was
$162,337, $209,794, and $51,950 respectively. The remaining minimum future lease
payments through 2003 are approximately $825,000.
F-8
<PAGE>
INFORM WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 4. NOTES PAYABLE AND CREDIT LINES
The Company has established a line of credit with a bank providing for borrowing
amounts ranging from $150,000 in 1998 to $100,000 as of March 31, 2000. The line
of credit, which expires on May 1, 2000, is collateralized by substantially all
the assets of the Company and is guaranteed by an officer of the Company.
Interest is accrued at 2% points above the bank's prime rate (8.75% in 1998,
10.5% in 1999, and 10.5% in 2000).
At December 31, 1998, 1999 and March 31, 2000 the Company had the following
notes payable outstanding:
<TABLE>
<CAPTION>
Dec. 31, Dec. 31, March 31,
1998 1999 2000
---------- ---------- -----------
<S> <C> <C> <C>
Note payable to a bank, monthly payments of
4,195, secured by all Company assets,
interest at 9.50% per annum,
maturing July 15, 2001 $ 74,583 $ 53,174 $ 41,801
Line of credit (as described above) 106,896 81,599 81,599
---------- ---------- -----------
Total 181,479 134,773 123,400
less current portion
128,305 127,651 123,400
---------- ---------- -----------
Long term debt $ 53,174 $ 7,122 $ -
========== ========== ===========
</TABLE>
At March 31, 2000 the schedule of maturities by fiscal year for all notes and
credit lines outstanding is as follows:
Years ending December 31,
2000 $ 119,166
2001 4,234
------------
Total $ 123,400
============
The fair value of the Company's long term notes payable is estimated based on
the current rates offered to the Company for debt of the same remaining
maturity. At December 31, 1998, 1999 and March 31, 2000 the fair value of the
notes payable approximated the amount recorded in the financial statements.
F-9
<PAGE>
INFORM WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 5. STOCKHOLDERS' EQUITY
Common stock
-------------
The Company as of December 31, 1998, 1999 and March 31, 2000 had 500,000 shares
of authorized common stock, $.01 par value, with 20,000 shares issued and
outstanding.
NOTE 6. SUBSEQUENT EVENTS
On June 30, 2000 all of the Company's outstanding stock was acquired by Anything
Internet Corporation.
F-10
<PAGE>
ANYTHING INTERNET CORPORATION (AND SUBSIDIARY), AND
INFORM WORLDWIDE, INC (AND SUBSIDIARY)
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999 AND MARCH 31, 2000
BASIS OF PRESENTATION
The following pro forma consolidated balance sheet as of March 31, 2000, and pro
forma consolidated statements of operations for the year ended June 30, 1999 and
nine months ended March 31, 2000 between Anything Internet Corporation and
Inform Worldwide, Inc., are presented to show what effects the purchase of
Inform Worldwide, Inc. by Anything Internet Corporation on May 31, 2000 might
have had on historical financial information had the transaction taken place on
an earlier date. The pro forma consolidated financial statements are derived
from the historical financial statements of Anything Internet Corporation and
Inform Worldwide, Inc., and assume that for balance sheet purposes the
transaction occurred on March 31, 2000 and for statement of operations purposes
on July 1, 1998 with resulting effects through March 31, 2000. The pro forma
consolidated financial statements should be read in conjunction with the
historical financial information. The pro forma consolidated financial
statements are not necessarily indicative of the result that would have been
attained had the transaction actually taken place earlier.
F-11
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION (AND SUBSIDIARY), AND
INFORM WORLDWIDE, INC. (AND SUBSIDIARY)
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
Anything Inform
Internet World - Adjustments End
Corporation wide, Inc. (Note 1) Balance
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 479,942 $ 27,445 $ - $ 507,387
Accounts receivable 7,061 55,166 62,227
Related party receivables 11,132 11,132
Prepaid expenses 38,000 38,000
------------- ------------
TOTAL CURRENT ASSETS 525,003 93,743 - 618,746
------------- ------------ ------------- ------------
FIXED ASSETS
Property, plant & equipment 70,369 330,146 400,515
------------- ------------ ------------
70,369 330,146 - 400,515
less accumulated depreciation (28,150) (223,255) (251,405)
------------- ------------ ------------
42,219 106,891 - 149,110
------------- ------------ ------------- ------------
OTHER ASSETS
Licensing rights, net 9,825,768 9,825,768
Software costs, net 42,276 9,076 51,352
Deposits 1,280 14,143 15,423
------------- ------------ ------------
43,556 23,219 9,825,768 9,892,543
------------- ------------ ------------- ------------
TOTAL ASSETS $ 610,778 $ 223,853 $ 9,825,768 $10,660,399
============= ============ ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued payables $ 439,200 $ 84,943 $ - $ 524,143
Lines of credit 46,780 81,599 128,379
Deferred revenue 19,038 19,038
Related party payable 72,240 72,240
Note payable - current portion 41,801 41,801
------------ ------------
TOTAL CURRENT LIABILTIES 485,980 299,621 - 785,601
------------- ------------ ------------- ------------
TOTAL LIABILITIES 485,980 299,621 - 785,601
------------- ------------ ------------- ------------
STOCKHOLDERS' EQUITY
Preferred stock, Class A: no par value;
10,000,000 shares authorized;
1,106,716 issued and outstanding 488,355 488,355
Common stock, Class A: no par value;
50,000,000 shares authorized;
3,074,400 issued and outstanding 1,488,776 6,388 9,743,612 11,238,776
(6,074,400 after adjustments)
Accumulated deficit (1,852,333) (82,156) 82,156 (1,852,333)
------------- ------------ ------------- ------------
TOTAL STOCKHOLDERS' EQUITY 124,798 (75,768) 9,825,768 9,874,798
------------- ------------ ------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 610,778 $ 223,853 $ 9,825,768 $10,660,399
============= ============ ============= ============
</TABLE>
F-12
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION AND
INFORM WORLDWIDE, INC. (AND SUBSIDIARY)
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1999
Anything Inform
Internet World- Adjustments End
Corporation wide, Inc. (Note 1) Balance
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Sales, net $ 3,503,822 $ 1,802,510 $ - $ 5,306,332
Cost of sales 3,419,386 474,907 3,894,293
------------- ------------ ------------
Gross margin 84,436 1,327,603 - 1,412,039
Operating expenses 672,293 1,653,864 2,005,543 4,331,700
------------- ------------ ------------- ------------
Gain (loss) from operations (587,857) (326,261) (2,005,543) (2,919,661)
Other income (expense)
Interest expense (3,831) (13,472) (17,303)
Gain (loss) on sale of assets 433 433
------------ ------------
Income (loss) before provision for income taxes (591,688) (339,300) (2,005,543) (2,936,531)
Provision for income tax - - - -
------------- ------------ ------------- ------------
NET INCOME (LOSS) $ (591,688) $ (339,300) $ (2,005,543) $(2,936,531)
============= ============ ============= ============
NET INCOME (LOSS) PER SHARE
(Basic and fully diluted) $ (0.24) $ (0.54)
============= ============
Weighted average number of
common shares outstanding 2,458,533 5,458,533
============= ============
</TABLE>
F-13
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION (AND SUBSIDIARY) AND
INFORM WORLDWIDE, INC. (AND SUBSIDIARY)
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31, 2000
Anything Inform
Internet World- Adjustments End
Corporation wide, Inc. (Note 1) Balance
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Sales, net $ 588,436 $ 803,813 $ - $ 1,392,249
Cost of sales 596,016 223,954 819,970
------------- ------------ ------------
Gross margin (7,580) 579,859 - 572,279
Operating expenses 1,200,418 624,722 1,504,158 3,329,298
------------- ------------ ------------- ------------
Gain (loss) from operations (1,207,998) (44,863) (1,504,158) (2,757,019)
Other income (expense)
Interest income 1,425 1,425
Interest expense (15,143) (13,089) (28,232)
Bad debt write-off (14,167) (14,167)
------------- ------------
Income (loss) before provision for income taxes (1,235,883) (57,952) (1,504,158) (2,797,993)
Provision for income tax - - - -
------------- ------------ ------------- ------------
NET INCOME (LOSS) $ (1,235,883) $ (57,952) $ (1,504,158) $(2,797,993)
============= ============ ============= ============
NET INCOME (LOSS) PER SHARE
(Basic and fully diluted) $ (0.45) $ (0.49)
============= ============
Weighted average number of
common shares outstanding 2,739,601 5,739,601
============= ============
</TABLE>
F-14
<PAGE>
ANYTHING INTERNET CORPORATION (AND SUBSIDIARY), AND
INFORM WORLDWIDE, INC. (AND SUBSIDIARY)
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999 AND MARCH 31, 2000
NOTE 1. SUMMARY OF TRANSACTION
Effective May 31, 2000 Anything Internet Corporation issued 3,000,000 shares of
common stock valued at $9,750,000 to purchase all the common stock of Inform
Worldwide, Inc. The difference between the consideration paid of $9,750,000 and
the net liabilities acquired of $277,717 was allocated to licensing rights in
the amount of $10,027,717. Statement of operations adjustments include
amortization of licensing rights of $2,005,543 in 1999 and $1,504,158 for the
nine months ended March 31, 2000 (included in operating expenses).
F-15
<PAGE>
