<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 March 31, 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 May 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>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS.
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
March 31, 2000
<TABLE>
<CAPTION>
(Unaudited)
-----------------
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,477,374
Accounts receivable 2,140
Prepaid expenses 100,917
-----------------
Total current assets 2,580,431
-----------------
PROPERTY AND EQUIPMENT, NET 905,495
-----------------
OTHER ASSETS
Software licenses 22,500
Patents and trademarks 34,731
Deposits 11,262
-----------------
Total other assets 68,493
-----------------
$ 3,554,419
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 365,703
Accrued liabilities 57,765
-----------------
Total current liabilities 423,468
-----------------
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 (8,557,089)
-----------------
Total stockholders' equity 3,130,951
-----------------
$ 3,554,419
=================
</TABLE>
The accompanying notes are an integral part of this statement.
2
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CUMULATIVE
FROM INCEPTION
THREE MONTHS ENDED MARCH 31, (JULY 1, 1997) TO
1999 2000 MARCH 31, 2000
------------------ ---------------- -----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
REVENUE $ - $ 1,790 $ 1,790
OPERATING EXPENSES
Telecommunications $ 238,951 $ 183,181 $ 1,313,857
System development 118,401 132,370 1,278,775
Marketing 195,178 196,252 1,334,076
General and administrative 309,051 349,926 2,673,054
Depreciation and amortization 22,418 80,378 274,622
----------------- ----------------- ------------------
Net loss from operations (883,999) (940,317) (6,872,594)
----------------- ----------------- ------------------
OTHER INCOME (EXPENSE)
Interest expense (1,272,736) - (1,824,297)
Interest and dividend income 6,501 36,969 155,121
Gain (loss) on disposal of assets - - (15,319)
----------------- ----------------- ------------------
(1,266,235) 36,969 (1,684,495)
----------------- ----------------- ------------------
NET LOSS $ (2,150,234) $ (903,348) $ (8,557,089)
================= ================= ==================
LOSS PER COMMON SHARE $ (0.25) $ (0.07) $ (0.95)
================= ================= ==================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 8,680,059 13,363,828 9,029,845
================= ================= ==================
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
CUMULATIVE
FROM INCEPTION
THREE MONTHS ENDED MARCH 31, (JULY 1, 1997) TO
1999 2000 MARCH 31, 2000
----------------- ----------------- -----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,150,234) $ (903,348) $ (8,557,089)
----------------- ----------------- -----------------
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 22,418 80,378 274,622
Changes in:
Accounts receivable - (2,140) (2,140)
Prepaid expenses (66,635) (71,261) (100,916)
Other assets (8,870) (10,227) (45,993)
Accounts payable 71,736 (64,120) 124,381
Accrued liabilities 23,940 10,729 57,766
Accrued interest 6,224 - 62,580
----------------- ----------------- -----------------
Total adjustments 1,313,813 (56,641) 2,330,494
----------------- ----------------- -----------------
Net cash used in operating activities (836,421) (959,989) (6,226,595)
----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment (12,209) (119,360) (1,161,491)
----------------- ----------------- -----------------
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 450 - 14,100
Payments on notes payable to related
parties (304,000) - (304,000)
----------------- ----------------- -----------------
Net cash provided by
financing activities 3,771,770 - 9,865,460
----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 2,923,140 (1,079,349) 2,477,374
Cash and cash equivalents beginning of period 137,688 3,556,723 -
----------------- ----------------- -----------------
Cash and cash equivalents end of period $ 3,060,828 $ 2,477,374 $ 2,477,374
================= ================= =================
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Software license agreement and development
costs included in accounts payable $ 48,955 $ - $ 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.
4
<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
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 period
ended March 31, 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 three months ended March 31, 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.
5
<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 three months ended
March 31, 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 ten
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
March 31, 2000, the Company has a deferred tax asset of $1,380,000 resulting
from a net operating loss for the period February 27, 1999 through March 31,
2000. The Company has provided for a valuation allowance of $1,380,000 at
March 31, 2000.
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)
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 March 31, 1999 and
2000.
NOTE B - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
MARCH 31,
2000 LIVES
------------------- -------------
<S> <C> <C>
Furniture and equipment $197,437 5-7 years
Software 950,959 3 years
-------------------
1,148,396
Less accumulated depreciation
and amortization (242,901)
-------------------
$905,495
===================
</TABLE>
7
<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.
8
<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 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 months ended March 31,
1999 and 2000: dividend yield of 0.0%, expected volatility of 0% and 150%,
respectively, risk free interest rate of 6%, and an expected holding period
from three to four years. Based on these assumptions, compensation expense
was immaterial for the three months ended March 31, 1999 and 2000.
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 123,300 1.72
Forfeited/expired (1,800) 2.88
-------------
BALANCE AT MARCH 31, 2000 1,101,650
=============
</TABLE>
9
<PAGE>
WATTAGE MONITOR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
NOTE D - CONTINGENT MEMBERSHIP INTERESTS/STOCK OPTIONS - (CONTINUED)
<TABLE>
<CAPTION>
WEIGHTED
RANGE OF AVERAGE
EXERCISE OPTIONS CONTRACTUAL OPTIONS
PRICES OUTSTANDING LIFE EXERCISABLE
---------------- ------------------ --------------- -------------------
<S> <C> <C> <C> <C>
March 31, 2000 $1.00-1.70 944,050 8.50 480,533
============ ======= ==== =======
$2.13-2.88 8,600 9.89 -0-
============ ======= ==== =======
$3.13-3.78 55,000 9.52 11,625
============ ======= ==== =======
$4.50 60,000 9.51 60,000
============ ======= ==== =======
$6.13 - 7.87 34,000 8.99 8.500
============ ======= ==== =======
</TABLE>
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 2002. The Company has options to
extend the leases for additional lease periods. The leases require monthly
rental payments totaling approximately $13,916.
10
<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 May 2, 2000, we had $2,089,057 of cash in our accounts. At
today's expenditure levels that would carry us through October 2000, assuming
no 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 six months
to cover the shortfall between that expected revenue stream and our necessary
expenditures through 2001.
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 recent 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.
PLAN OF OPERATION
During the next year, we expect monthly expenditures to grow
gradually from the current level of approximately $300,000 per month to
approximately $400,000 per month as we scale our business. Current monthly
expenditures are approximately $60,000 for system development, $65,000 for
marketing to suppliers, $65,000 to operate our toll free telephone service
and $115,000 for general and administrative expenses. Of these amounts
approximately $45,000, $35,000, $0 (these services are contracted to a third
party) and $40,000, respectively, are for salaries of our employees.
11
<PAGE>
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 have recently added one operations
employee to keep pace with the increasing number of states
with competition.
- 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 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 have hired one marketing,
three system development and two operations employees to
concentrate on these efforts.
- 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 and have added three system development
employees to focus on the system capabilities these efforts
require.
- In sum, we expect current cash reserves to carry us
through October 2000 as we begin to scale our business to
capitalize on our market leading position, and we expect
to secure additional funding which we believe will be
required to continue that process and carry us through
the year 2001.
12
<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
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 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 Common 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 24,
1999 (filed as Exhibit 4.2 to Amendment No. 4 to Form SB-2
Registration Statement, filed October 13, 1999).
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- ----------------
<S> <C>
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 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
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).
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).
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.
14
<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: May 9, 2000 By: /s/ Gerald R. Alderson
----------------------
Gerald R. Alderson
President, Chief Executive Officer and
Principal Financial Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH 31,
2000 QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,477,374
<SECURITIES> 0
<RECEIVABLES> 2,140
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,580,431
<PP&E> 1,148,396
<DEPRECIATION> 242,901
<TOTAL-ASSETS> 3,554,419
<CURRENT-LIABILITIES> 423,468
<BONDS> 0
0
26,250
<COMMON> 134,216
<OTHER-SE> 2,970,485
<TOTAL-LIABILITY-AND-EQUITY> 3,554,419
<SALES> 1,790
<TOTAL-REVENUES> 1,790
<CGS> 0
<TOTAL-COSTS> 942,107
<OTHER-EXPENSES> (36,969)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (903,348)
<INCOME-TAX> 0
<INCOME-CONTINUING> (903,348)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (903,348)
<EPS-BASIC> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
