<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-QSB
------------------------
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________ TO _________________
------------------------
COMMISSION FILE NUMBER: 0-26381
------------------------
WATTAGE MONITOR INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEVADA 86-0882633
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
1100 KIETZKE LANE
RENO, NEVADA 89502
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(775) 327-6000
(ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
------------------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes / /
No /x/
As of November 1, 1999, 12,540,520 shares of common stock of the issuer
were outstanding.
Transitional Small Business Disclosure Format (check one): Yes / / No /x/
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1--FINANCIAL STATEMENTS.
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
(UNAUDITED)
----------
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents......................................................................... $3,467,765
Prepaid expenses.................................................................................. 43,282
----------
Total current assets...................................................................... 3,511,047
----------
PROPERTY AND EQUIPMENT, net......................................................................... 891,905
----------
OTHER ASSETS
Software licenses................................................................................. 30,000
Patents and trademarks............................................................................ 31,809
Deposits.......................................................................................... 3,533
----------
Total other assets........................................................................ 65,342
----------
$4,468,294
----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable.................................................................................. $ 295,498
Accrued liabilities............................................................................... 37,651
Accrued interest.................................................................................. 57,113
Notes payable--related parties.................................................................... 425,000
----------
Total current liabilities................................................................. 815,262
----------
COMMITMENTS......................................................................................... --
----------
STOCKHOLDERS' EQUITY
Preferred stock, Series B, convertible; $0.01 par value, 5,000,000 shares authorized, 2,625,000
shares issued and outstanding.................................................................. 26,250
Common stock, $0.01 par value, 25,000,000 shares authorized, 12,212,466 shares issued and
outstanding.................................................................................... 122,125
Additional paid-in capital........................................................................ 10,210,085
Deficit accumulated during the development stage.................................................. (6,705,428)
----------
Total stockholders' equity................................................................ 3,653,032
----------
$4,468,294
----------
----------
</TABLE>
The accompanying notes are an integral part of these statements.
1
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CUMULATIVE
THREE MONTHS ENDED NINE MONTHS ENDED FROM INCEPTION
SEPTEMBER 30, SEPTEMBER 30, (JULY 1, 1997) TO
-------------------------- -------------------------- SEPTEMBER 30,
1998 1999 1998 1999 1999
----------- ----------- ----------- ----------- -----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Operating expenses
Telecommunications................. $ 63,193 $ 171,990 $ 111,109 $ 600,341 $ 949,587
System development................. 63,900 190,208 171,750 469,196 927,189
Marketing.......................... 79,233 159,993 235,619 514,539 977,003
General and administrative......... 212,865 321,791 509,184 1,024,751 1,985,241
Depreciation and amortization...... 5,225 40,997 12,985 84,009 113,561
----------- ----------- ----------- ----------- -----------
Net loss from operations........ (424,416) (884,979) (1,040,647) (2,692,836) (4,952,581)
----------- ----------- ----------- ----------- -----------
Other income (expense)
Interest expense................... -- (12,750) -- (1,298,360) (1,818,749)
Interest and dividend income....... 2,307 18,717 7,893 55,102 65,902
----------- ----------- ----------- ----------- -----------
2,307 5,967 7,893 (1,243,258) (1,752,847)
----------- ----------- ----------- ----------- -----------
Net Loss........................ $ (422,109) $ (879,012) $(1,032,754) $(3,936,094) $(6,705,428)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Loss per common share................ $ (0.06) $ (0.08) $ (0.14) $ (0.38) $ (0.82)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Weighted average number of common
shares outstanding................. 7,500,000 11,296,719 7,204,428 10,414,042 8,147,627
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED CUMULATIVE
SEPTEMBER 30, FROM INCEPTION
-------------------------- (JULY 1, 1997) TO
1998 1999 SEPTEMBER 30, 1999
----------- ----------- ------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss...................................................... $(1,032,754) $(3,936,094) $ (6,705,428)
----------- ----------- ------------
Adjustments to reconcile net loss to net cash
used in operating activities:
Write off of software license.............................. -- -- 184,875
Amortization of discount on debt........................... -- 1,265,000 1,760,000
Depreciation and amortization.............................. 12,985 84,009 113,561
Changes in:
Prepaid expenses......................................... 57,957 (39,896) (43,281)
Other assets............................................. (56,763) (12,359) (35,342)
Accounts payable......................................... (74,768) (16,882) 96,177
Accrued liabilities...................................... 17,738 25,151 37,651
Accrued interest......................................... -- 31,724 57,113
----------- ----------- ------------
Total adjustments..................................... (42,851) 1,336,747 2,170,754
----------- ----------- ------------
Net cash used in operating activities................. (1,075,605) (2,599,347) (4,534,674)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment........................ (341,336) (471,996) (979,021)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred offering costs....................................... -- 48,670 --
Issuance of membership units.................................. 949,710 -- 1,399,710
Issuance of notes payable to related parties.................. 425,000 500,000 1,729,000
Acquisition of Wattage Monitor Inc............................ -- 2,819,284 2,819,284
Common stock issued........................................... -- 707,366 707,366
Series B preferred stock warrants exercised................... -- 2,625,000 2,625,000
Stock options exercised....................................... -- 5,100 5,100
Payments on notes payable to related parties.................. -- (304,000) (304,000)
----------- ----------- ------------
Net cash provided by financing activities............. 1,374,710 6,401,420 8,981,460
----------- ----------- ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS................................ (42,231) 3,330,077 3,467,765
CASH AND CASH EQUIVALENTS--BEGINNING OF PERIOD.................. 95,794 137,688 --
----------- ----------- ------------
CASH AND CASH EQUIVALENTS--END OF PERIOD........................ $ 53,563 $ 3,467,765 $ 3,467,765
----------- ----------- ------------
----------- ----------- ------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Software license agreement and development costs included in
accounts payable........................................... $ 105,112 $ -- $ 373,129
----------- ----------- ------------
----------- ----------- ------------
Notes payable converted to equity............................. $ -- $ 1,000,000 $ 1,000,000
----------- ----------- ------------
----------- ----------- ------------
Common stock warrants issued for services..................... $ -- $ 42,000 $ 42,000
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE A--SUMMARY OF ACCOUNTING POLICIES AND NATURE OF BUSINESS
1. ORGANIZATION AND NATURE OF BUSINESS
The Company was organized by its members on July 1, 1997 in Delaware. The
Company is a development stage enterprise and provides electrical rate
information to commercial and residential consumers nationwide. Revenue is
anticipated to come primarily from referral fees and commissions charged to
electricity suppliers who offer their products and service through the Company.
On February 26, 1999, Wattage Monitor Inc. (a Nevada corporation) acquired all
of the membership units of the Company. For accounting purposes, the acquisition
is treated as a recapitalization with the Company as the acquirer (a reverse
acquisition). Pro forma information is not presented since the acquisition is
not a business combination. The financial statements give retroactive effect to
the conversion of members' equity into common stock to reflect the
recapitalization.
2. INTERIM FINANCIAL STATEMENTS
The accompanying financial statements for the three month and nine month
periods ended September 30, 1999 and 1998 are unaudited. In the opinion of
management, all adjustments, consisting of normal recurring adjustments
necessary for a fair presentation of the Company's financial position and
results of operations for such periods have been included. The accompanying
unaudited financial statements should be read in conjunction with the Company's
audited financial statements for the year ended December 31, 1998 included in
Form SB-2. The results for the three and nine months ended September 30, 1999
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1999, or for any other period.
3. CASH EQUIVALENTS
The Company considers all short-term investments with original maturities
of ninety days or less to be cash equivalents.
4. DEPRECIATION AND AMORTIZATION
Depreciation and amortization sufficient to relate the cost of depreciable
assets to operations over their estimated service lives is provided using the
straight-line method of depreciation.
5. SOFTWARE LICENSE AND DEVELOPMENT COSTS
The Company has entered into several software license agreements to enable
customers to access information and order services provided via the internet.
Some of these agreements require the Company to pay an annual maintenance fee.
Additionally, the Company incurs software development costs to tailor such
software to its specific requirements. Such customization costs when internally
incurred are expensed and when purchased from third parties are capitalized.
License and development costs are amortized straight-line over three years while
maintenance fees are charged to expense ratably over the contract period.
Periodically, management evaluates the estimated useful life of intangible
assets based on projected future undiscounted cash flows. The Company intends to
provide its information services principally over the internet through both
licensed and custom software.
6. PATENTS AND TRADEMARKS
The Company has filed for a patent relating to its computer-based system
and methods for collecting and providing information regarding the electric
power industry and available electric supply options. The Company has also
applied for trademarks to limit the use by others of WM, Wattage Monitor,
Kilowatt Monitor and Watt Monitor. Patent and trademark expenses will be
amortized on the straight-line method over ten years.
4
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
SEPTEMBER 30, 1999
NOTE A--SUMMARY OF ACCOUNTING POLICIES AND NATURE OF BUSINESS--(CONTINUED)
7. ADVERTISING
The Company expenses advertising costs as incurred.
8. USE OF ESTIMATES
In preparing these financial statements in conformity with generally
accepted accounting principles, management is required to make estimates and
assumptions. These affect the carrying value of the Company's assets and
liabilities, revenues and expenses during the reporting period and disclosures
relating to contingent assets and liabilities. Actual results may differ from
these estimates.
9. CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to credit risk
consist primarily of cash and cash equivalents. The Company maintains its cash
in bank deposit accounts which, at times, may exceed federally insured limits.
The Company believes it is not exposed to any significant credit risk related
thereto.
10. INCOME TAXES
The Company, through February 26, 1999, is not subject to income tax.
Income is taxed directly to its members. Accordingly, no provision has been made
for federal income tax. Further, because losses incurred have been reported by
the members, no operating losses are available to offset future income.
After February 26, 1999, the Company will provide for income taxes based
upon income reported for financial reporting purposes. Certain charges to
earnings will differ as to timing from those deducted for tax purposes. The tax
effect of those differences will be recorded as deferred income taxes. At
September 30, 1999, the Company has a deferred tax asset of approximately
$700,000 resulting from a net operating loss for the period February 27, 1999
through September 30, 1999. The Company has provided for a valuation allowance
of $700,000 at September 30, 1999.
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
Management believes the fair value of financial instruments other than
notes payable approximates their carrying amounts. Management believes the fair
values of notes payable can not be determined due to the related party nature of
the transactions.
12. DEFERRED OFFERING COSTS
Costs associated with the recapitalization are deferred to the period in
which the recapitalization occurs.
13. DISCOUNT ON DEBT
Costs incurred in connection with the issuance of debt are amortized over
the expected life of the debt. The beneficial conversion feature has been
accounted for as additional paid-in capital and associated unamortized discount
on debt recorded as a component of stockholders' equity.
5
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
SEPTEMBER 30, 1999
NOTE A--SUMMARY OF ACCOUNTING POLICIES AND NATURE OF BUSINESS--(CONTINUED)
14. LOSS PER SHARE
Loss per common share is computed based upon the weighted average shares
outstanding giving retroactive effect of common shares issued to members of
WattMonitor LLC upon completion of the recapitalization. Convertible equity
instruments are not considered in the calculation of net loss per share as their
inclusion would be antidilutive at September 30, 1998 and 1999.
NOTE B--PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999 LIVES
------------- ---------
<S> <C> <C>
Furniture and equipment............................................ $ 161,387 5-7 years
Software........................................................... 829,078 3 years
---------
990,465
Less accumulated depreciation and amortization..................... (98,560)
---------
$ 891,905
---------
---------
</TABLE>
NOTE C--NOTES PAYABLE--RELATED PARTIES
Notes payable to related parties are as follows at:
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999
-------------
<S> <C>
Note payable, due September 1, 2000, with interest at 12%
due semiannually. Interest may be paid in common stock at
$1.50 per share at the option of the lender. As part of
the loan, the related party was issued one warrant for
the purchase of 283,333 shares of common stock at $1.50
per share. The warrant expires August 2005............... $ 425,000
Less: Current maturities................................... (425,000)
---------
Notes payable long-term.................................... $ 0
---------
---------
</TABLE>
Subsequent to September 30, 1999, this note payable plus all outstanding
accrued interest was converted to 325,054 shares of common stock.
NOTE D--STOCKHOLDERS' EQUITY (DEFICIT)
In January 1999, WattMonitor LLC sold 37,777 membership units.
On February 26, 1999, Wattage Monitor Inc. (a Nevada corporation) acquired
all of the equity (membership units) of the Company. For accounting purposes,
the acquisition is treated as a recapitalization with the Company as the
acquirer (a reverse acquisition). Pro forma information is not presented since
the acquisition is not a business combination. The members exchanged their
membership units for 7,550,450 shares of common stock (approximately 72% of the
outstanding common stock) of Wattage Monitor Inc. In addition, each member,
other than the controlling members, was entitled to acquire such number of
shares of common stock at $1.00 per share
6
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
SEPTEMBER 30, 1999
NOTE D--STOCKHOLDERS' EQUITY (DEFICIT)--(CONTINUED)
as necessary to maintain the same ownership percentage in Wattage Monitor Inc.
as such member held in the Company. In connection with this right, 657,366
shares were issued. Also, in connection with the recapitalization, all employees
exchanged their contingent membership interests for stock options to purchase
918,000 shares of Wattage Monitor Inc. exercisable at $1.00 per share.
Certain stockholders of Wattage Monitor Inc. advanced approximately
$500,000 in January 1999, which, along with $500,000 advanced in 1998, were
converted into 2,750,000 shares of common stock in 1999.
In connection with its recapitalization, Wattage Monitor Inc. issued
1,000,000 shares of Series A 6% Convertible Preferred Stock for $3,000,000. The
Series A 6% Preferred Stock accrues dividends at 6% per annum, payable annually,
commencing on February 26, 2000. The dividend at the option of the Company may
be paid in common stock. Each share of Series A 6% Preferred Stock was
convertible into one share of common stock. Such shares convert: (1) upon the
exercise of the warrant to purchase Series B Preferred Stock; (2) upon Wattage
Monitor Inc. raising $5,000,000 in an offering of common stock at $1.00 per
share or greater; or (3) at the option of the holder. In connection with the
issuance of the Series A 6% Preferred Stock, each purchaser received one Series
B warrant to purchase 3.5 shares of Series B Preferred Stock at $1.00 per share
exercisable 181 days after closing through December 15, 1999 or within 30 days
of a notice of a sale of at least $7,000,000 in equity securities of Wattage
Monitor Inc. for each share of Series A 6% Preferred Stock purchase.
In September 1999, 750,000 Series B warrants were exercised to purchase
2,625,000 shares of Series B Convertible Preferred Stock at $1.00 per share.
Subsequent to September 30, 1999, 216,700 Series B warrants were exercised to
purchase 758,450 shares of Series B Convertible Preferred Stock at $1.00 per
share. Each share of Series B Preferred Stock is convertible into one share of
common stock. Upon the exercise of the warrants the Series A Convertible
Preferred Stock was converted to 1,000,000 shares of common stock.
In the event of liquidation, the Series A and B Preferred stock ranks
senior to all of the common stock. The preferred stockholders shall be entitled
to receive an amount equal to the sum of the original issue price and any
accrued but unpaid dividends.
In connection with the merger, a warrant was issued to the holder of
250,000 shares of preferred stock which represents the right to purchase 100,000
shares of common stock at $1.00 per share.
NOTE E--CONTINGENT MEMBERSHIP INTERESTS/STOCK OPTIONS
Contingent membership interests in an LLC are similar to stock options in a
corporation. Pursuant to a formal plan, the Board granted various employees and
other individuals contributing to the success of the organization, contingent
membership interests. In conjunction with the reverse acquisition of Wattage
Monitor Inc., all such contingent membership interests were exchanged for stock
options under Wattage Monitor Inc.'s incentive stock option plan. The plan
allows for 1,500,000 shares of common stock to be granted. In the three months
prior to the reverse acquisition, Wattage Monitor issued employee stock options
totaling 370,000 exercisable at $1.00 per share. Compensation expense related
thereto is immaterial.
The Company has adopted the disclosure-only provisions of SFAS No. 123,
Accounting for Stock-Based Compensation, but applies Accounting Principles Board
Opinion No. 25 and related interpretations in accounting for stock options.
The fair value of the Company's stock options was estimated as of the grant
date using the Black-Scholes option pricing model with the following weighted
average assumptions for the three and nine months ended September 30, 1999:
dividend yield of 0.0%, expected volatility of 0.0%, risk free interest rate of
6%, and an expected holding period from three to four years. Based on these
assumptions, compensation expense was
7
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
SEPTEMBER 30, 1999
NOTE E--CONTINGENT MEMBERSHIP INTERESTS/STOCK OPTIONS--(CONTINUED)
immaterial for the three and nine months ended September 30, 1999. Compensation
expense was also immaterial for the three and nine months ended September 30,
1998.
Presented below is a summary of the status of the stock options after
giving retroactive effect to the recapitalization.
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
PRICE
--------
<S> <C> <C>
BALANCE AT DECEMBER 31, 1998...................................................... 845,850 1.00
Granted......................................................................... 157,500 3.55
Forfeited/expired............................................................... (66,200) 1.1
Exercised....................................................................... (5,100) 1.00
-------
BALANCE AT SEPTEMBER 30, 1999..................................................... 932,050
-------
-------
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED
RANGE OF AVERAGE
EXERCISE OPTIONS CONTRACTUAL OPTIONS
PRICES OUTSTANDING LIFE EXERCISABLE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
September 30, 1999................................ $1.00 835,550 8.81 238,517
$3.00-$4.00 2,500 9.93 0
$4.00- 5.00 60,000 10.00 0
$6.00- 7.00 32,000 9.48 0
$7.00- 8.00 2,000 9.72 0
</TABLE>
NOTE F--EMPLOYEE BENEFIT PLANS
The Company adopted a 401(k) retirement plan (the "Plan") effective
January 1, 1998, which provides for employee salary deferrals limited to 25% of
a participant's compensation and discretionary Company contributions. The Plan
year ends on December 31st. The Plan covers employees who have completed one
month of service and have attained the minimum age requirement, as defined in
the Plan.
NOTE G--LEASE COMMITMENTS
The Company leases its office space under operating leases, which expire
through 2001. The Company has options to extend the leases for additional lease
periods. The leases require monthly rental payments totaling approximately
$3,100.
The Company entered into operating leases for computer equipment in March
and June 1999 that require monthly payments of $6,331 expiring on various dates
through March 2002.
8
<PAGE>
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
As of November 3, 1999, we had $3,948,415 of cash in our accounts. At
today's expenditure levels that would carry us through the year 2000, assuming
no revenue. Of course, we expect to begin to generate revenues during that
period.
PLAN OF OPERATION
During the next year, we expect monthly expenditures to remain consistent
with those in 1999, or approximately $300,000 per month. Current monthly
expenditures are approximately $45,000 for system development, $65,000 for
marketing to suppliers, $75,000 to operate our toll free telephone service and
$110,000 for general and administrative expenses. Of these amounts approximately
$35,000, $35,000, $0 (these services are contracted to a third party) and
$35,000, respectively, are for salaries of our employees.
We expect to operate for the next twelve months largely as we have in 1999.
Principally, this means:
o We expect to maintain current information about electric rates and
services in all states with active competition among suppliers.
o We expect to offer Internet access and telephone service through our
call center for the entire year. Neither an increase in staffing nor
a significant purchase of equipment is required to do so.
o We expect to begin realizing revenue from offering our service.
o We expect to continue to actively market our information to
suppliers through our direct sales force. No addition of sales
personnel is anticipated.
o We expect to refine our information system, Wattage Monitor v2.0,
and secure the additional software and systems necessary to support
WM v2.0 and our business. Any purchase of equipment in this effort
is not anticipated to be significant, and no additions to our system
development group will be required.
o In sum, we expect current cash reserves and staffing to carry us
through 2000 as we continue to market our service and begin
realizing revenue.
9
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------------------------------------------------------------------------------------------------------
<S> <C>
2.1* -- Agreement and Plan of Merger by and between WattMonitor LLC and Wattage Monitor, dated as of
February 26, 1999 (filed without exhibits or schedules) (filed as Exhibit 2.1 to Amendment No. 4 to
Form SB-2 Registration Statement filed October 13, 1999).
3.1* -- Amended and Restated Articles of Incorporation of Wattage Monitor as filed with the Secretary of
State of the State of Nevada on February 24, 1999 (filed as Exhibit 3.1 to Amendment No. 4 to Form
SB-2 Registration Statement filed October 13, 1999).
3.2* -- Amended and Restated By-Laws of Wattage Monitor, adopted as of February 19, 1999 (filed as
Exhibit 3.2 to Amendment No. 4 to Form SB-2 Registration Statement filed October 13, 1999).
4.1* -- Specimen Stock Certificate (filed as Exhibit 4.1 to Amendment No. 4 to Form SB-2 Registration
Statement filed October 13, 1999).
4.2* -- Certificate of Designation of Series A Preferred Stock, as filed with the Secretary of State of the
State of Nevada on February 26, 1999 (filed as Exhibit 4.2 to Amendment No. 4 to Form SB-2
Registration Statement filed October 13, 1999).
4.3* -- Certificate of Amendment of Certificate of Designation of Series A Preferred Stock as filed with the
Secretary of State of the State of Nevada on February 26, 1999 (filed as Exhibit 4.3 to Amendment
No. 4 to Form SB-2 Registration Statement filed October 13, 1999).
4.4* -- Certificate of Designation of Series B Preferred Stock, as filed with the Secretary of State of the
State of Nevada on September 9, 1999 (filed as Exhibit 4.4 to Amendment No. 4 to Form SB-2
Registration Statement filed October 13, 1999).
10.1* -- Stock Purchase Agreement by and among Knowledge Network Acquisitions, Inc., Intrepid International
S.A. and Certain Purchasers, dated February 5, 1999 (filed as Exhibit 10.1 to Amendment No. 4 to Form
SB-2 Registration Statement filed October 13, 1999).
10.2* -- Registration Rights Agreement by and among Wattage Monitor and Certain Shareholders, dated as of
February 26, 1999 (filed as Exhibit 10.3 to Amendment No. 4 to Form SB-2 Registration Statement filed
October 13, 1999).
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------------------------------------------------------------------------------------------------------
<S> <C>
10.3* -- Employment agreement by and between WattMonitor LLC and Gerald R. Alderson, dated January 1, 1998, as
assumed by Wattage Monitor on February 26, 1999 (filed as Exhibit 10.4 to Amendment No. 4 to Form
SB-2 Registration Statement filed October 13, 1999).
10.4* -- Warrant to Stephen D. Klein to purchase 33,333 Class II Membership Units of WattMonitor LLC, dated
December 29, 1998 (filed as Exhibit 10.5 to Amendment No. 4 to Form SB-2 Registration Statement filed
October 13, 1999).
10.5* -- Warrant to RHL Ventures LLC to purchase 100,000 Class II Membership Units of WattMonitor LLC, dated
December 29, 1998 (filed as Exhibit 10.6 to Amendment No. 4 to Form SB-2 Registration Statement filed
October 13, 1999).
10.6* -- Warrant to Gerald R. Alderson to purchase 33,333 Class II Membership Units of WattMonitor LLC, dated
December 29, 1998 (filed as Exhibit 10.7 to Amendment No. 4 to Form SB-2 Registration Statement filed
October 13, 1999).
10.7* -- Warrant to RHL Ventures LLC to purchase 283,333 Class II Membership Units of WattMonitor LLC, dated
August 14, 1998 (filed as Exhibit 10.8 to Amendment No. 4 to Form SB-2 Registration Statement filed
October 13, 1999).
10.8* -- Form of Lock-Up Agreement, executed by Gerald R. Alderson, Stephen D. Klein, Robert H. Lessin and RHL
Ventures LLC (filed as Exhibit 10.9 to Amendment No. 4 to Form SB-2 Registration Statement filed
October 13, 1999).
10.9* -- Wattage Monitor 1999 Incentive Compensation Plan (filed as Exhibit 10.10 to Amendment No. 4 to Form
SB-2 Registration Statement filed October 13, 1999).
</TABLE>
- ------------------
* Exhibits designated with an asterisk (*) have previously been filed with the
Commission and are incorporated herein by reference to the document referenced
in parentheticals following the descriptions of such exhibits.
(b) Reports on Form 8-K. None.
11
<PAGE>
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
WATTAGE MONITOR INC.
Date: November 12, 1999 By: /s/ GERALD R. ALDERSON
---------------------------------
Gerald R. Alderson
(CEO & Principal Financial Officer)
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