<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
March 15, 2000
Date of Report
(Date of Earliest Event Reported)
FINDEX.COM, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0379462
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
(Commission File Number)
11640 Arbor Street
Suite 201
Omaha, Nebraska 68144
(Address of principal executive offices (zip code))
(402) 333-1900
(Registrant's telephone number, including area code)
<PAGE> 2
Item 7. FINANCIAL STATEMENTS PRO FORMA INFORMATION AND EXHIBITS
By current report on Form-K dated March 15, 2000, Registrant became a reporting
company under the Securities Exchange Act of 1934 pursuant to Rule 13g-3(a)
thereof. Registrant files herewith the following audited financial statements
which wre not filed with Form 8-K dated March 15, 2000:
EXHIBIT INDEX
27.0 Financial Data Schedule
SIGNATURES
Pursuant to 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 hereunto duly authorized.
FINDEX.COM, INC.
By: /s/Joseph V. Szczepaniak
------------------------------
Joseph V. Szczepaniak
President
May 18, 2000
2
<PAGE> 3
FINDEX.COM, INC.
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
<PAGE> 4
C O N T E N T S
<TABLE>
<S> <C>
Independent Auditors' Report ........................................................... 3
Consolidated Balance Sheets ............................................................ 4
Consolidated Statements of Operations .................................................. 5
Consolidated Statements of Stockholders' Equity ........................................ 6
Consolidated Statements of Cash Flows .................................................. 7
Notes to the Consolidated Financial Statements ......................................... 8
</TABLE>
<PAGE> 5
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of FindEx.com, Inc.
We have audited the accompanying consolidated balance sheet of FindEx.com, Inc.
as of December 31, 1999 and the related consolidated statements of operations,
stockholders' equity and cash flows for the years ended December 31, 1999 and
1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of FindEx.com, Inc. as
of December 31, 1999 and the results of its operations and cash flows for the
years ended December 31, 1999 and 1998 in conformity with generally accepted
accounting principles.
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
May 5, 2000
3
<PAGE> 6
FINDEX.COM, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31,
1999
----------
<S> <C>
ASSETS
Current assets
Cash and Cash Equivalents $ 147,272
Accounts Receivable (net of allowance of $11,000) 942,568
Inventory 545,348
Prepaid Expenses 13,603
----------
Total Current Assets 1,648,791
----------
Property and Equipment (Note 2) 97,973
----------
Other Assets
Deposits 9,108
Licenses (Note 4) 4,858,695
----------
Total Other Assets 4,867,803
----------
Total Assets $6,614,567
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $1,153,561
Accrued Royalties 754,825
Accrued Income Taxes 770,000
Accrued Technical Support 235,300
Accrued Expenses 253,011
License FeePayable (Note 4) 744,360
----------
Total current Liabilities 3,911,057
Long Term Liabilities
Notes Payable (Note 3) 200,000
----------
Total Liabilities 4,111,057
----------
Stockholders' Equity
Preferred Stock, Series A, 5,000,000 shares of $.001 par
value, 20,000 shares, issued and outstanding 20
Preferred Stock, Series B, 5,000,000 shares of $.001 par
value, 67,500 shares, issued and outstanding 68
Common Stock, authorized 50,000,000 shares of
$.001 par value, issued and outstanding 9,072,312 shares 9,072
Paid in Capital 2,248,618
Retained Earnings 245,732
----------
Total Stockholders' Equity 2,503,510
----------
Total Liabilities and Stockholders' Equity $6,614,567
==========
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE> 7
FINDEX.COM, INC.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the
Years Ended
December 31,
-----------------------------
1999 1998
----------- -----------
<S> <C> <C>
Gross Revenue (Net of Reserves) $ 6,513,408 $ --
Cost of Sales 1,800,021 --
----------- -----------
Gross Profit 4,713,387 --
----------- -----------
Expenses:
Sales 918,648 --
General & Administrative 1,682,462 --
----------- -----------
Total Expenses 2,601,110 --
----------- -----------
Earnings before Interest, Taxes,
Depreciation and Amortization (EBITDA) 2,112,277 --
Other Income (Expenses)
Interest Expense (4,024) --
Interest Income 4,405 --
Loss on abandonment of Property -- (38,803)
Depreciation and Amortization (285,306) (15,521)
----------- -----------
Net Income (Loss)
Before income taxes 1,827,352 (54,324)
Income Taxes 770,000 --
----------- -----------
Net Income (Loss) $ 1,057,352 $ (54,324)
=========== ===========
Net Earnings (Loss) Per Share
Primary $ .14 $ (.01)
=========== ===========
Fully Diluted $ .12 $ (.01)
----------- -----------
Weighted average shares outstanding 7,767,416 5,157,625
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE> 8
FINDEX.COM, INC.
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Preferred Stock Common Stock Retained
---------------------------- ---------------------------- Paid in Earnings
Series A Series B Shares Amount Capital (Deficit)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 $ -- $ -- 5,157,625 $ 5,157 $ 722,620 $ (757,296)
Net loss December 31, 1998 -- -- -- -- -- (54,324)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 1998 -- -- 5,157,625 5,157 722,620 (811,620)
April 30 Reverse merger & reorganization
adjustment for minority stockholders
of EJH -- -- 3,914,687 3,915 (3,915) --
Preferred series A shares issued for cash 20 -- -- -- 199,980 --
Preferred series B shares issued for cash -- 68 -- -- 1,349,933 --
Offering Cost -- -- -- -- (20,000) --
Net Income December 31, 1999 -- -- -- -- -- 1,057,352
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 1999 $ 20 $ 68 9,072,312 $ 9,072 $ 2,248,618 $ 245,732
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE> 9
FINDEX.COM, INC.
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
For the
Years Ended
December 31,
-----------------------------
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows form Operating Activities:
Net Income (loss) $ 1,057,352 $ (54,324)
Adjustments to reconcile
net income (loss) to net cash
provided by operations
Depreciation & Amortization 285,306 15,521
Bad Debt expense 11,000 --
Loss on Disposal of assets -- 38,803
Change in assets and liabilities:
Accounts receivable (952,070) --
Inventory (545,469) --
Accounts Payable and accrued expenses 3,073,017 --
Prepaid expenses (13,603) --
----------- -----------
Net Cash Flows provided (used) in Operating Activities 2,915,533 --
----------- -----------
Cash Flows from Investing Activities:
Cash paid for property and equipment (106,400) --
Cash paid for deposits (859) --
Cash paid for a Licence agreement (4,391,214) --
----------- -----------
Net Cash Used for Investing Activities (4,498,473) --
----------- -----------
Cash Flows from Financing Activities:
Cash from Preferred Stock 1,550,000 --
Cash received from debt financing 200,000 --
Offering Costs (20,000) --
----------- -----------
Net Cash Flows Provided by Financing Activities 1,730,000 --
----------- -----------
Net increase in cash 147,060 --
Cash and Cash Equivalents, beginning of period 212 212
----------- -----------
Cash and Cash Equivalents, end of period $ 147,272 $ 212
=========== ===========
Supplemental Cash Flow Information
Cash Paid for:
Interest $ 4,024 $ --
Taxes $ -- $ --
</TABLE>
The accompanying notes are an integral part of these financial statements
7
<PAGE> 10
FINDEX.COM, INC.
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
FindEx.com, Inc ("the Company") was incorporated under the laws of the
State of Delaware on December 26,1995 as FinSource, Ltd. In April 1999 the
company merged with FINdex Acquisition Corporation, (FAC) a Delaware
corporation in a stock for stock transaction. Then on April 30, 1999 the
Company was acquired by EJH Entertainment, Inc.(EJH) a Nevada corporation
in a stock for stock transaction and the name of the Company was changed to
FindEx.com, Inc. Both the merger with FAC and the acquisition by EJH were
treated as reorganization mergers with the Company and the accounting
history is that of FinSource (the accounting acquirer).
The Company is a retail, wholesale and internet supplier of software
products to business and religious organizations and individuals. In July
of 1999 the Company completed an exclusive license agreement with Mattel
Corporation for the Parsons Church Division of Mattel. In so doing,
FindEx.com obtained the exclusive right to market, sell and continue to
develop several bible study software products. The Company develops and
publishes church and bible study software products designed to simplify
biblical research, and streamline church office tasks.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements. The following data shows the amounts used in computing earnings
per share and the effect on income and the average number of shares of
dilutive potential common stock:
Net Income $1,057,352
Less preferred dividends --
----------
Income available to common
Shareholder $1,057,352
----------
Weighted average shares used in
Basic EPS 7,767,416
Effects of dilutive securities:
Stock Options 588,000
Convertible preferred stock-A 200,000
Convertible preferred stock-B 67,500
----------
Weighted average number of common
Shares and dilutive potential common
Stock used in diluted EPS 8,622,916
==========
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
8
<PAGE> 11
FINDEX.COM, INC.
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 1 - Summary of Significant Accounting Policies (continued)
e. Provision for Income Taxes
At December 31, 1998 the Company had net operating loss carryforwards
totaling approximately $800,000 that may be offset against future taxable
income through 2013. No tax benefit has been reported in the 1999 financial
statements since the loss carryforwards are limited to use due to the
acquisition with EJH.
December 31,
1999
------------
Current provision for income taxes:
Federal $625,000
State 145,000
Deferred --
--------
Total provision for income taxes $770,000
========
f. Property and Equipment
Expenditures for property and equipment and for renewals and betterments,
which extend the originally estimated economic life of assets or convert
the assets to a new use, are capitalized at cost. Expenditures for
maintenance, repairs and other renewals of items are charged to expense.
When items are disposed of, the cost and accumulated depreciation are
eliminated from the accounts, and any gain or loss is included in the
results of operations.
g. Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the reporting period.
In these financial statements, assets, liabilities, revenues and expenses
involve extensive reliance on management's estimates. Actual results could
differ from those estimates.
h. Revenue Recognition
The Company recognizes income and expense on the accrual basis of
accounting. The Company generates revenues from the sale of software
technology. This product is sold separately without future performance such
as upgrades or maintenance, and is sold with PCS services, therefore
according to SOP 97-2 revenue is recorded upon the sale and delivery of or
access to the product once an agreement exists, the price is fixed and
collectability is probable.
Gross sales for the year ended December 31,1999 was $6,802,330 and returns
and discounts totaled $288,922, for net sales of $6,513,408.
Trade receivables are due upon the terms of the invoice. An allowance has
been made from potentially uncollectable accounts in the amounts of $11,000
for the period ended December 31, 1999.
9
<PAGE> 12
FINDEX.COM, INC.
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 1 - Summary of Significant Accounting Policies (continued)
i. Depreciation
The provision for depreciation is calculated using the straight-line method
over the estimated useful lives of the assets. Depreciation expense for the
period ended December 31, 1999 and 1998 is $ 8,427 and $15,521
respectively.
j. Major Customers/Suppliers
During 1999 the Company had major customers that individually accounted for
10% of more of the annual sales. During 1999, two customers generated sales
in the amount of 69% of total sales as follows:
Customer %
-------- ------
A 44
B 25
During 1999, three vendors provided purchases individually of 10% or more
of the total purchases as follows:
Vendor %
------ ------
A 47
B 14
C 12
k. Impairment of Long Lived Assets
Fixed assets are evaluated annually by management and if impaired are
written down to the fair market value
l. Inventory
Inventory consists of various software products, including disks, CDs,
manuals and packaging. Inventory is recorded at the lower of cost or
market, using the FIFO method.
NOTE 2 - Property and Equipment
Property and Equipment consists of the following at December 31, 1999.
December 31,
1999
---------
Computer Equipment $ 40,107
Furniture and Fixtures 51,461
Software 14,833
---------
Total $ 106,400
Less Accumulated Depreciation (8,427)
---------
$ 97,973
=========
10
<PAGE> 13
FINDEX.COM, INC.
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 3 - Long Term Liabilities
Long term liabilities are detailed in the following schedule as of
December 31, 1999:
Note payable to a corporation bears
interest at 9%, due in 2 years, unsecured. $200,000
========
Future minimum principal payments are as follows at December 31, 1999:
Year 2000 $ 0
Year 2001 200,000
--------
Total $200,000
========
NOTE 4 - Software License Agreement
In July 1999, the Company completed an exclusive license agreement with Mattel
(MAT) Corporation for the Parsons Church Division of Mattel. In so doing,
FindEx.com obtained the exclusive right to market, sell, and continue to develop
several top-selling Bible study software products including the Zondervan NIV
Bible and QuickVerse. The agreement calls for a non-refundable license fee in
the amount of $5,000,000, payable in installments of: (1)$1,000,000 upon
execution of the agreement, (2)$500,000 on August 1, 1999, (3)$500,000 on
September 7, 1999, (4)$1,500,000 on December 7, 1999, (5)$1,000,000 on March 7,
2000, and (6)$500,000 on June 7, 2000. The agreement carries a ten year term
from the date of execution and also includes a five year non-compete provision.
Note 5 - Stock-based Compensation
The Stock Incentive Plan (the "Plan") authorizes the issuance of various forms
of stock-based awards including incentive and nonqualified stock options, stock
appreciation rights attached to stock options, and restricted stock awards to
directors, officers and other key employees of the Company. Stock options are
granted at an exercise price as determined by the Board at the time the Option
is granted and shall not be less than the par value of such shares of common
stock. Stock options vest quarterly over three years and have a term of ten
years. At December 31, 1999, 8,412,000 shares were available for future issuance
under the Plan.
Activity under the Company's stock option plan is summarized as follows:
<TABLE>
<CAPTION>
Outstanding Options
--------------------------
Weighted
Shares Average
Available Number Exercise
for Grant of Shares Price
------------- ------------ -----------
<S> <C> <C> <C>
Balance at December 31, 1998 -- -- --
Shares authorized for issuance 9,000,000 -- --
Options granted (588,000) 588,000 $ 10.47
------------- ------------
Balance at December 31, 1999 8,412,000 588,000 $ 10.47
============= ============
</TABLE>
11
<PAGE> 14
FINDEX.COM, INC.
Notes to the Consolidated Financial Statements
December 31, 1999
Note 5 - Stock-based Compensation (continued)
The weighted average estimated fair value of the Company's employee stock
options granted at grant date market prices during the year ended December 31,
1999, was $10.47. The fair value of each option is estimated on the date of
grant using the closing stock price.
The Company applies APB Opinion No. 25 and related interpretations in accounting
for its stock options. Accordingly, no compensation cost has been recognized for
outstanding stock options. Had compensation cost for the Company's outstanding
stock options been determined based on the fair value at the grant dates for
those options consistent with SFAS No. 123, the Company's net earnings and
primary and diluted earnings per share would have differed as reflected by the
pro forma amounts indicated below:
Net earnings (loss):
As reported $ 1,057,352
Pro forma 477,674
Primary earnings (loss) per share:
As reported $ 0.14
Pro forma 0.06
Fully diluted earnings (loss) per share:
As reported $ 0.12
Pro forma 0.05
The following table summarizes information about stock options outstanding at
December 31, 1999:
<TABLE>
<CAPTION>
Weighted-
Average Weighted-
Number Remaining Average
Outstanding at Contractual Life Exercise
Range of Exercise Prices 12-31-99 (Years) Price
- ------------------------------ ----------------- -------------------- -------------
<S> <C> <C> <C>
$6.00 to $8.00 60,000 9.6 $ 6.39
$8.01 to $10.00 18,000 9.8 $ 9.19
$10.01 to $12.00 510,000 9.6 $ 11.00
</TABLE>
NOTE 6 - Reverse Merger/Stock Split
Effective April 30, 1999, EJH Entertainment, Inc. (EJH) (a public
Company) entered into an agreement and Plan of Reorganization with
FindEx.com, Inc., (FindEx) (a private company). The agreement provides
for the merger of EJH into FindEx to be treated as a reverse merger,
thus making FindEx the accounting survivor. Pursuant to the agreement
EJH issued 5,157,625 shares of common stock to the shareholders of
FindEx for all shares of their Company. Because the historical
financial information in these financial statements prior to the
reverse merger (April 30, 1999) is that of the accounting acquirer
(FindEx), a reorganization adjustment has been shown on the book at
April 30, recording the shares held by the minority shareholders of
EJH. The 5,157,625 shares issued to the shareholders of FindEx have
been shown retroactively to the beginning of 1998, as though a stock
split had occurred. The management of EJH resigned and the management
and board of FindEx filled the vacancy. This business combination was
accounted for using the purchase method. EJH had no assets or
liabilities and was an inactive public company.
12
<PAGE> 15
FINDEX.COM, INC.
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 7 - Commitments and Contingencies
The Company leases office space and warehouse facilities under
operating leases with third-parties with terms extending through 2002.
The Company in general is responsible for all taxes, insurance and
utility expenses associated with these leases. Lease renewal options
are present for a period of one year. At December 31, 1999, the future
minimum rental payments required under these leases are as follows:
2000 $ 124,408
2001 113,724
2002 73,311
------------
Total $ 311,443
============
NOTE 8 - Fair Value of Financial Instruments
Unless otherwise indicated, the fair values of all reported assets
and liabilities which represent financial instruments (none of which
are held for trading purposes) approximate the carrying values of such
instruments.
NOTE 9 - Stockholders' Equity
During 1999, the Company issued common pursuant to the merger with
FindEx Acquisition Corporation and EJH Entertainment, Inc. 5,157,625
shares were issued in these two reorganizations.
In April 1999, the Company issued Preferred Series A stock for cash of
$200,000.
The Company also issued Preferred Series B shares for $1,350,000. The
description of these securities follows:
CONVERTIBLE PREFERRED STOCK (SERIES A)
The rights, preferences and privileges of the preferred
shareholders are as follows:
DIVIDENDS
Holders of Series A Preferred Stock (the Preferred Stock) are entitled
to receive common stock dividends of $.50 per share per annum, in
preference to any payment of cash dividends declared or paid on shares
of common stock. Dividends on Preferred Stock are fully cumulative and
are payable as determined by the Board of Directors. As of December 31,
1999, no dividends have been declared.
LIQUIDATION
Holders of Preferred Stock are entitled to liquidation preferences over
common shareholders to the extent of $10.0 per share of Preferred
Stock, plus all declared but unpaid dividends. If funds are
insufficient to make a complete distribution to the preferred
shareholders, such shareholders will share in the distribution of the
Company assets on a pro rata basis in proportion to the aggregate
preferential amounts owed each shareholder. After payment has been made
to the preferred shareholders, any remaining assets and funds are to be
distributed equally among the holders of the Common Stock based upon
the number shares of the Common Stock held by each.
CONVERSION
Each share of Convertible Preferred Stock shall be convertible at the
option of the holder thereof, at any time prior to the close of
business on the date fixed by the Corporation for redemption or
conversion of such shares as herein provided, into fully paid and
nonassessable shares of common stock and such other securities and
property as hereinafter provided, initially at the rate of 10 shares of
common stock for each full share of convertible Preferred Stock..
13
<PAGE> 16
FINDEX.COM, INC.
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 9 - Stockholders' Equity (continued)
REDEMPTION
At the election of the Board of Directors, the Company may redeem all
or part of the shares of the Preferred Stock (pro rata based upon the
total number of shares of the Preferred Stock held by each holder) by
paying in cash a sum per share equal to $10.0 plus accrued and unpaid
dividends per annum.
VOTING RIGHTS
The holder of each share of Preferred Stock is not entitled to
vote except as required by law.
CONVERTIBLE PREFERRED STOCK (SERIES B)
The rights, preferences and privileges of the preferred
shareholders are as follows:
DIVIDENDS
The holders are entitled to receive cash dividends at the rate of $1.60
per annum per share, and no more, which shall be fully cumulative,
shall accrue without interest from the date of first issuance and shall
be payable quarterly in arrears on March 15, June 15, September 15 and
December 15 of each year commencing September 15, 1999, to holders of
record as they appear on the stock books of the corporation on such
record dates, not more than 60 nor less than 10 days preceding the
payment dates for such dividends, as are fixed by the Board of
Directors.
LIQUIDATION
The holders are entitled to a liquidation preference of an amount equal
to the dividends accrued and unpaid, whether or not declared, without
interest, and a sum equal to $20.00 per share, and no more, before any
payment shall be made or any assets distributed to the holders of
Common Stock or any other class or series of the Corporation's capital
stock ranking junior as to liquidation rights to the Convertible
Preferred Stock.
CONVERSION
Each share of convertible Preferred Stock shall be convertible at the
option of the holder thereof, at any time prior to the close of
business on the date fixed by the Corporation for redemption of such
share as herein provided, into fully paid and nonassessable shares of
Common Stock and such other securities and property as hereinafter
provided, initially at the rate of one (1) share of Common Stock for
each full share of Convertible Preferred Stock..
REDEMPTION
Subject to restrictions, shares of this Series shall be redeemable at
the option of the Corporation at any time at the redemption price of
$20.00 per share plus, in each case, an amount equal to the dividends
accrued and unpaid thereon to the redemption date. The Corporation may
not redeem any shares of Preferred Stock unless the current market
value of the Corporation's Common Stock, as defined, immediately prior
to the redemption date is not less than $18.00 per share.
VOTING RIGHTS
The holder of each share of Preferred Stock is not entitled to vote,
except as required by law.
Note 10 - Subsequent Events
The Company received $300,000 of additional financing under the
agreement with a management company in January, 2000.
14
<PAGE> 17
FINDEX.COM, INC.
Notes to the Consolidated Financial Statements
December 31, 1999
Note 10 - Subsequent Events (continued)
On April 20, 2000, the Company entered into a Corporate Development
Consulting Agreement with Ardt Investment Management, Inc. ("AIM") to
provide support for the Company's further development and growth. The
Agreement provides for a retainer fee of 50,000 shares of Common Stock
and a monthly payment of $2,000 for a period of twelve months
commencing one month from the date of execution of the agreement. The
Agreement further provides that delinquent monthly installments may be
paid in cash or by transferring an appropriate number of free-trading
common stock shares valued at a 50% discount to the market Bid price to
AIM per month, upon the due date, in lieu of cash, at AIM's option. The
50,000 shares are due and paid in two installments of 25,000 shares,
commencing with the execution of the Agreement and the second payment
of 25,000 due upon completion of term negotiation and documentation.
The Agreement further provides for 100,000 warrants on the Common Stock
shares which were due and vested immediately upon execution of the
agreement. The exercise price is fixed at $3.00 per share with each
warrant being convertible upon exercise into one share of common stock
for a period of one year from the effective date of the agreement. AIM
may, at the time for each payment and at its sole option, elect to
receive all or a portion of said fees in the form of securities,
equity, or financing instruments issued by FindEx to AIM on terms
agreed to in writing. In addition, FindEx agrees to pay AIM various
finder fees and/or placement agent commissions ranging from 2% - 10%
according to industry standards.
On April 27, 2000, FindEx signed a Term Sheet with AIM Securities, Inc.
to provide Bridge Financing in the amount of $1M - $5,000,000 through
the issuance of Convertible Debentures with interest accruing on the
unpaid principal at a rate of up to 12%. The Debentures will be
structured as senior subordinated convertible redeemable debentures due
three to five years from date of issuance. The Holder(s) of the
Debentures will have a right to convert the Debentures, any time after
funding, into the then restricted outstanding Common Stock of FindEx at
a conversion price equal to the greater of $4 or 80% of the lowest
closing bid price of the Common Stock as reported on the OTC Bulletin
Board of the three business days immediately preceding the receipt by
FindEx of the conversion notice. The holder may not convert notes at a
price of less than $4 per share, or purchase common for less than $2
per share in the first tranche. FindEx may redeem the Debenture at any
time after 90 days from the issuance by paying to the holder(s) 125% of
the principal amount of the Debenture, although the holder(s) will have
five days from the date of notice, to convert the Debenture at their
election.
The Company received $300,000 from a stock subscription agreement dated
April 28, 2000.The agreement is for 150,000 restricted shares of
FindEx.com, Inc. Common Stock at a price of $2.00 per share. These
shares do carry piggyback registration rights
On March 4, 2000, the Company ("FindEx") entered into a Service
Agreement ("Agreement") with TM Capital Partners LLC ("TM Capital") to
effect transactions intended to merge or otherwise combine FindEx with
a United States reporting company and for related matters. The
Agreement calls for FindEx to pay TM Capital $150,000 for its services.
As a result of the Service Agreement, on March 7, 2000, FindEx entered
into a Share Exchange Agreement with the shareholders ("Shareholders")
of all of the issued and outstanding stock of Reagan Holdings, Inc., a
Delaware corporation ("Reagan") whereby the Company agreed to purchase
the Reagan Shares from the Shareholders in exchange for 150,000 shares
of FindEx common stock. As a result of this exchange, Reagan became a
wholly-owned subsidiary of FindEx.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DECEMBER 31,
1999 AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH 8K-A FILED HEREWITH ON MAY 18, 2000.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 147,272
<SECURITIES> 0
<RECEIVABLES> 953,368
<ALLOWANCES> 11,000
<INVENTORY> 545,348
<CURRENT-ASSETS> 1,648,791
<PP&E> 106,400
<DEPRECIATION> 8,427
<TOTAL-ASSETS> 6,614,567
<CURRENT-LIABILITIES> 3,911,057
<BONDS> 200,000
0
88
<COMMON> 9,072
<OTHER-SE> 2,494,350
<TOTAL-LIABILITY-AND-EQUITY> 6,614,567
<SALES> 6,513,408
<TOTAL-REVENUES> 6,802,330
<CGS> 1,800,021
<TOTAL-COSTS> 2,601,110
<OTHER-EXPENSES> 285,306
<LOSS-PROVISION> 11,000
<INTEREST-EXPENSE> 4,024
<INCOME-PRETAX> 1,827,352
<INCOME-TAX> 770,000
<INCOME-CONTINUING> 1,057,352
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,057,352
<EPS-BASIC> .14
<EPS-DILUTED> .12
</TABLE>
