<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-26381
WATTAGE MONITOR INC.
(Name of Small Business Issuer as Specified in Its Charter)
NEVADA 86-0882633
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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 [X] No [ ]
As of August 1, 2000, 13,421,520 shares of common stock of the issuer
were outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
WATTAGE MONITOR INC.
QUARTERLY REPORT ON FORM 10-QSB
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I -FINANCIAL INFORMATION.....................................................................................3
ITEM 1. FINANCIAL STATEMENTS...................................................................................3
NOTES TO FINANCIAL STATEMENTS..................................................................................6
ITEM 2. PLAN OF OPERATION.....................................................................................12
PART II -OTHER INFORMATION.......................................................................................14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................................................14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................................................15
SIGNATURES.......................................................................................................17
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
June 30, 2000
<TABLE>
<CAPTION>
(UNAUDITED)
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,121,579
Accounts receivable 4,550
Prepaid expenses 95,449
-----------------
Total current assets 1,221,578
-----------------
PROPERTY AND EQUIPMENT, NET 992,268
-----------------
OTHER ASSETS
Software licenses 18,750
Patents and trademarks 35,990
Deposits 11,262
-----------------
Total other assets 66,002
-----------------
$ 2,279,848
-----------------
-----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 353,182
Accrued liabilities 68,592
-----------------
Total current liabilities 421,774
-----------------
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, 13,421,520 shares issued and
outstanding 134,216
Additional paid-in capital 11,527,574
Deficit accumulated during the development stage (9,829,966)
-----------------
Total stockholders' equity 1,858,074
-----------------
$ 2,279,848
-----------------
, -----------------
</TABLE>
The accompanying notes are an integral part of this
statement.
3
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CUMULATIVE
FROM INCEPTION
SIX MONTHS ENDED JUNE 30, (JULY 1, 1997) TO
1999 2000 JUNE 30, 2000
----------------- ---------------- -----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
REVENUE $ - $ 6,451 $ 6,451
OPERATING EXPENSES
Telecommunications $ 428,358 $ 402,230 $ 1,532,906
System development 278,989 489,204 1,635,608
Marketing 354,545 419,260 1,557,084
General and administrative 703,076 771,850 3,094,978
Depreciation and amortization 43,012 167,080 361,324
----------------- ---------------- -----------------
Net loss from operations (1,807,980) (2,243,173) (8,175,449)
----------------- ---------------- -----------------
OTHER INCOME (EXPENSE)
Interest expense (1,285,486) - (1,824,297)
Interest and dividend income 36,385 66,947 185,099
Gain (loss) on disposal of assets - - (15,319)
----------------- ---------------- -----------------
(1,249,101) 66,947 (1,654,517)
----------------- ---------------- -----------------
NET LOSS $ (3,057,081) $ (2,176,226) $ (9,829,966)
----------------- ---------------- -----------------
----------------- ---------------- -----------------
LOSS PER COMMON SHARE $ (0.31) $ (0.16) $ (1.05)
----------------- ---------------- -----------------
----------------- ---------------- -----------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 10,006,254 13,397,079 9,360,735
----------------- ---------------- -----------------
----------------- ---------------- -----------------
</TABLE>
The accompanying notes are an integral part of these
statements.
4
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
CUMULATIVE
FROM INCEPTION
SIX MONTHS ENDED JUNE 30, (JULY 1, 1997) TO
1999 2000 JUNE 30, 2000
-------------------- ------------------ -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,057,081) $ (2,176,226) $ (9,829,966)
----------------- ----------------- -----------------
Adjustments to reconcile net loss to
net cash used in operating activities:
Write off of software license - - 184,875
Loss on disposal of assets - - 15,319
Amortization of discount on debt 1,265,000 - 1,760,000
Depreciation and amortization 43,012 167,080 361,324
Changes in:
Accounts receivable - (4,550) (4,550)
Prepaid expenses (57,469) (65,793) (95,448)
Other assets (8,835) (11,673) (47,439)
Accounts payable (109,350) (76,642) 111,859
Accrued liabilities 26,063 21,556 68,593
Accrued interest 18,974 - 62,580
----------------- ----------------- -----------------
Total adjustments 1,177,395 29,978 2,417,113
----------------- ----------------- -----------------
Net cash used in operating activities (1,879,686) (2,146,248) (7,412,853)
----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment (355,163) (288,896) (1,331,028)
----------------- ----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred offering costs 48,670 - -
Issuance of membership units - - 1,399,710
Issuance of notes payable to related parties 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 - - 3,500,000
Stock options exercised 600 - 14,100
Payments on notes payable to related parties (304,000) - (304,000)
----------------- ----------------- -----------------
Net cash provided by
financing activities 3,771,920 - 9,865,460
----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 1,537,071 (2,435,144) 1,121,579
Cash and cash equivalents beginning of period 137,688 3,556,723 -
----------------- ----------------- -----------------
Cash and cash equivalents end of period $ 1,674,759 $ 1,121,579 $ 1,121,579
----------------- ----------------- -----------------
----------------- ----------------- -----------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Software license agreement and development
costs included in accounts payable $ 25,309 $ - $ 373,129
----------------- ----------------- -----------------
----------------- ----------------- -----------------
Notes payable converted to common stock $ 1,000,000 $ - $ 1,487,580
----------------- ----------------- -----------------
----------------- ----------------- -----------------
</TABLE>
The accompanying notes are an integral part of these
statements.
5
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
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 services 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 six month period ended
June 30, 2000 and 1999 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, 1999 included in Form 10-KSB. The results for
the six months ended June 30, 2000 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2000, 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 or purchased from third parties are capitalized until the
project is substantially complete and ready for its intended use. 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
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF BUSINESS - (CONTINUED)
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. During the six months ended June 30, 2000,
the Company received certificates of registration from the U.S. Patent and
Trademark Office for WM and Wattage Monitor. Patent and trademark expenses will
be amortized on the straight-line method over fifteen years.
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, was not subject to income tax.
Income was 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 provides 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 June
30, 2000, the Company has a deferred tax asset of $2,120,000 resulting from a
net operating loss for the period February 27, 1999 through June 30, 2000. The
Company has provided for a valuation allowance of $2,120,000 at June 30, 2000.
7
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF BUSINESS - (CONTINUED)
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
Management believes the fair value of financial instruments
approximates their carrying amounts.
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.
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 June 30, 1999 and 2000.
NOTE B - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
JUNE 30,
2000 LIVES
------------------- -------------
<S> <C> <C>
Furniture and equipment $ 265,056 5-7 years
Software 1,052,878 3 years
-------------------
1,317,934
Less accumulated depreciation
and amortization (325,666)
-------------------
$ 992,268
===================
</TABLE>
8
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
NOTE C - STOCKHOLDERS' EQUITY (DEFICIT)
In January 1999, Watt Monitor LLC sold 37,777 membership units.
On February 26, 1999, Wattage Monitor Inc. (a Nevada corporation)
acquired all of the equity (membership units) of WattMonitor LLC. 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 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 October 1999, notes
payable and accrued interest of $487,580 were converted to 325,054 shares of
common stock.
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 is
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.
During the year ended December 31, 1999, 1,000,000 Series B warrants
were exercised to purchase 3,500,000 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. In January 2000, 875,000 shares of the Series B
Preferred Stock were converted into common stock. Upon 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.
9
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
NOTE C - STOCKHOLDERS' EQUITY (DEFICIT) - (CONTINUED)
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. Also, warrants to purchase 449,999
shares of common stock at $1.50 per share are outstanding. These warrants were
issued in connection with notes payable to related parties which were repaid
during the year ended December 31, 1999.
NOTE D - 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 2,500,000 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.
Presented below is a summary of the status of the Company's stock
options and the related transactions.
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
PRICE
--------------
<S> <C> <C>
BALANCE AT DECEMBER 31, 1999 980,150 1.54
Granted 274,000 1.62
Forfeited/expired (30,100) 1.19
-------------
BALANCE AT JUNE 30, 2000 1,224,050
=============
</TABLE>
10
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
NOTE E - 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 F - LEASE COMMITMENTS
The Company leases its office space and certain computer equipment
under operating leases, which expire through 2003. The Company has options to
extend the leases for additional lease periods. The leases require monthly
rental payments totaling approximately $20,620.
11
<PAGE>
Certain statements in this Form 10-QSB, including information set forth
under Item 2 "Plan of Operation" constitute or may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Act"). We desire to avail ourselves of certain "safe harbor"
provisions of the Act and are therefore including this special note to enable us
to do so. Forward-looking statements included in this Form 10-QSB or hereafter
included in other publicly available documents filed with the Securities and
Exchange Commission, reports to our stockholders and other publicly available
statements issued or released by us involve known and unknown risks,
uncertainties, and other factors which could cause our actual results,
performance (financial or operating) or achievements to differ from the future
results, performance (financial or operating) achievements expressed or implied
by such forward-looking statement. Such future results are based upon
management's best estimates based upon current conditions and the most recent
results of operations.
ITEM 2. PLAN OF OPERATION
As of August 1, 2000, we had $802,933 of cash in our accounts. At
today's expenditure levels that would carry us into October 2000, assuming no
material revenue. We began to generate revenue during the first quarter of
2000, and although we expect our revenues to grow consistently throughout the
year, we believe we will need to obtain additional financing in the next
three months to cover the shortfall between that expected revenue and our
expenditures through 2001. At present, we are in discussions with several
parties regarding multiple possible transactions and are confident that an
acceptable financing will be closed prior to the expenditure of our current
funds.
Our goal is to be the preeminent electric rate and service information
source in the competitive electricity market. To do so, our initial focus was to
become the industry standard for objective information regarding an electric
consumer's specific choices. We derive our revenue principally from electricity
suppliers for presenting consumers with information about electric rates and
allowing consumers to order electricity from their chosen supplier. We also
expect to receive commissions on electricity sales to consumers who order
through our system, to provide electric marketing research, industry news and
information, statistical indices reflecting industry performance and to offer a
variety of related services.
From our inception, we thought and still believe there are three
requirements necessary to prove our business model:
1. Creation of the Wattage Monitor information system;
2. Demonstration that consumers use the Wattage Monitor service; and
3. Electricity supplier participation.
With our success enrolling suppliers - a total of 28 competitive
electricity suppliers in the first quarter of 2000 - we have successfully
demonstrated our ability to achieve each of these requirements. Now the
challenge is to scale our business as competition spreads to additional states
to capitalize on our market leading position.
The first step in scaling our business was to secure a strong market
share of participating suppliers in each of the regulated utility territories in
each of the states with active (more than one or two suppliers) competition:
California, New Jersey, New York and Pennsylvania. Through the second quarter of
2000, our market share - defined as the percentage of competing suppliers in a
territory that are actively participating in our system - was greater than 50%
in all cases, as much as 85% in some cases, and averaged approximately 70%.
12
<PAGE>
PLAN OF OPERATION
During the next year, we expect monthly expenditures, which grew from
approximately $300,000 to approximately $400,000 during the quarter, to remain
consistent at the roughly $400,000 level as we scale our business. Current
monthly expenditures are approximately $110,000 for system development, $80,000
for marketing to suppliers, $70,000 to operate our toll free telephone service
and $140,000 for general and administrative expenses. Of these amounts
approximately $85,000, $50,000, $0 (these services are contracted to a third
party) and $40,000, respectively, are for salaries of our employees.
We expect to operate for the next twelve months principally as follows:
- We expect to maintain current information about electric
rates and services in all states with active competition
among suppliers.
- We expect to offer Internet access and telephone service
through our call center for the entire year, the cost of
which is included in the monthly expenditures discussed
above.
- We expect to realize increasing revenue from offering our
service.
- We expect to secure additional funding as necessary to
meet our operational needs.
- We expect to continue to actively market our service to
suppliers through our direct sales force.
- We expect to expand and refine our information system,
Wattage Monitor v2.0, and secure the related additional
software and systems necessary.
- We expect to actively pursue co-branding opportunities to
increase the exposure of our service and have recently added
one marketing employee to focus exclusively on this effort.
- We expect to pursue additional revenue generating
activities.
- In sum, we expect current cash reserves to carry us into
October 2000. As we begin to scale our business to
capitalize on our market leading position, we expect to
secure the additional financing required to continue that
process and carry us through the year 2001.
13
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 23, 2000, the Company held its Annual Meeting of Stockholders.
The stockholders elected elect five (5) Directors to the Company's
Board of Directors. Set forth below are (i) the names of the persons elected to
serve on the Company's Board of Directors until the 2001 Annual Meeting of
Stockholders and until their successors are duly elected and qualified and (ii)
the results of the voting for the nominees.
<TABLE>
<CAPTION>
Name For % For Withheld % Withheld
---- --- ----- -------- ----------
<S> <C> <C> <C> <C>
Stephen Klein 7,515,814 99.991% 650 .009%
Gerald Alderson 7,515,814 99.991% 650 .009%
Joel Dumaresq 7,515,814 99.991% 650 .009%
Alexander Ellis III 7,515,814 99.991% 650 .009%
Daniel DeWolf 7,515,814 99.991% 650 .009%
</TABLE>
The stockholders also approved an amendment to the 1999 Incentive
Compensation Plan increasing the number of shares of Common Stock authorized and
available for issuance thereunder from 1,500,000 to 2,500,000. Set forth below
is the results of the vote to amend the 1999 Incentive Compensation Plan.
<TABLE>
<CAPTION>
For % For Against % Against Abstain % Abstain
--- ----- ------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
7,490,364 99.653% 26,000 .346% 100 .001%
</TABLE>
The stockholders also ratified the appointment of Grant Thornton LLP as
the independent auditors of the Company for the fiscal year ended December 31,
2000. Set forth below are the results of such vote.
<TABLE>
<CAPTION>
For % For Against Abstain % Abstain
--- ----- ------- ------- ---------
<S> <C> <C> <C> <C>
7,515,364 99.985% -- 1,100 .015%
</TABLE>
14
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- ----------------
<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 7, 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 7, 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 7, 1999).
4.1* Specimen Common Stock certificate (filed as Exhibit 4.1 to
Amendment No. 4 to Form SB-2 Registration Statement, filed
October 7, 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 24,
1999 (filed as Exhibit 4.2 to Amendment No. 4 to Form SB-2
Registration Statement, filed October 7, 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 7,
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 7, 1999).
10.1* Stock Purchase Agreement by and among Knowledge Networks
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
7, 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 7, 1999).
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- ----------------
<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 7, 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 7, 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 7, 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 7, 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 7, 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 7, 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 7, 1999).
27 Financial Data Schedule.
</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.
16
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
WATTAGE MONITOR INC.
Date: August 10, 2000 By: /s/ Gerald R. Alderson
----------------------
Gerald R. Alderson
President, Chief Executive Officer and
Principal Financial Officer
17
