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 SEPTEMBER 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR THE
TRANSITION PERIOD FROM _________________ TO _________________
Commission file number : 000-26755
DIGITAL BRIDGE, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 88-0409147
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
21436 N. 20th Avenue, Suite 4, Phoenix, AZ 85027
(Address of principal executive offices) (Zip Code)
(623)-773-3644
(Issuer's telephone number)
1860 El Camino Real, #100, Burlingame, California 94010
(Former name, former address and former fiscal year, if changed since last
report)
Black Stallion Management, Inc.
7432 South Carling Circle, Salt Lake City, Utah 84121
(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 Securities 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 [ ]
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
Applicable only to corporate issuers:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of November 8, 2000, 41,692,000
shares of common stock, par value $.001, were issued and outstanding.
Transitional small business disclosure format (check one): Yes [ ] No [X]
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
Index to Condensed Consolidated Financial Statements
Condensed Consolidated Balance
Sheet as of September 30, 2000 . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statement
of Operations for the Three Months
Ended September 30, 2000 . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statement
of Cash Flows for the Three Months
Ended September 30, 2000 . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Condensed Consolidated
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 5
2
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<TABLE>
<CAPTION>
DIGITAL BRIDGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 2000
Sept 30 June 30 Sept 30
2000 2000 1999
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<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 123,663 $ 167,951 95,965
Receivables 184,992 142,109 43,930
Prepaid expenses 24,748 59,128 5,070
--------------------------------------------------------------------------------------------
333,403 369,188 144,965
FURNITURE AND EQUIPMENT, net 278,491 314,511 38,693
OTHER ASSETS 36,592 39,977 13,581
--------------------------------------------------------------------------------------------
$ 648,486 $ 723,676 197,239
--------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 201,692 $ 256,792 12,056
Accrued expenses 63,010 17,099 9,545
Leases payable 74,569 73,764 -
--------------------------------------------------------------------------------------------
339,271 347,655 21,601
--------------------------------------------------------------------------------------------
LONG-TERM LIABILITIES
Leases payable 1,770 4,551 -
Notes payable 867,620 967,176 -
--------------------------------------------------------------------------------------------
1,208,661 1,319,382 21,601
--------------------------------------------------------------------------------------------
STOCKHOLDERS' (DEFICIT) EQUITY:
--------------------------------------------------------------------------------------------
Common stock, $.001 par value, 50,000,000 authorized
and 41,692,000 issued and outstanding 41,692 41,692 41,692
Stock subscription receivable (20,000) (20,000) -
Additional paid-in capital 2,832,147 2,049,825 59,432
Retained earnings (deficit) (3,414,014) (2,667,223) 74,514
--------------------------------------------------------------------------------------------
(560,175) (595,706) 175,638
--------------------------------------------------------------------------------------------
$ 648,486 $ 723,676 197,239
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</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
3
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<TABLE>
<CAPTION>
DIGITAL BRIDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SEPTEMBER 30, 2000
(UNAUDITED)
Sept 30 June 30
2000 2000
------------------------------------------------
<S> <C> <C>
REVENUE $ 629,395 $ 667,418
COST OF SALES 444,271 280,095
------------------------------------------------
GROSS PROFIT 185,124 387,323
------------------------------------------------
OPERATING EXPENSES:
Salaries and benefits 428,715 632,502
Professional fees 58,799 93,363
Office expenses 405,990 385,008
Depreciation 35,266 5,203
Other 1,545 4,706
Taxes 1,600 800
------------------------------------------------
931,915 1,121,582
------------------------------------------------
NET LOSS $(746,791) $ (734,259)
------------------------------------------------
LOSS PER COMMON SHARE (0.018) (0.018)
------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
4
<PAGE>
<TABLE>
<CAPTION>
DIGITAL BRIDGE, INC.
CONDENSED CONSOLIDATED CASH FLOW FROM OPERATIONS
SEPTEMBER 30, 2000
(UNAUDITED)
Sept 30 Sept 30
2000 1999
----------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss (746,791) $(32,222)
Adjustments to reconcile net loss to
net cash used by operations:
Depreciation 48,675 48
Increase in:
Receivables (42,883) 34,073
Prepaid expenses 34,380 (70)
Other assets 3,385 (246)
Accounts payable (55,028) 2,339
Accrued expenses 32,724 (41)
Other liabilities 8,825 -
----------------------------------------------------------------------
Net cash used by operating activities (716,713) 3,881
----------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of furniture and equipment (12,655) (14,084)
----------------------------------------------------------------------
Net cash used by investing activities (12,655) (14,084)
----------------------------------------------------------------------
FINANCING ACTIVITIES:
Payments on leases payable (1,976)
Proceeds from issuance of debt 91,444
Proceeds from notes payable 53,290 -
Proceeds from issuance of common stock 126,227
and receipt of additional paid-in capital 416,095 28,547
----------------------------------------------------------------------
Net cash provided by financing activities 685,080 28,547
----------------------------------------------------------------------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (44,288) 18,344
CASH AND CASH EQUIVALENTS, beginning of period 167,951 77,621
----------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, end of period 123,663 $ 95,965
----------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DIGITAL BRIDGE, INC.
NOTE 1 - ORGANIZATION AND CONSOLIDATION:
Digital Bridge, Inc. (the Company) is a corporation
organized under the laws of the State of Nevada for the
purpose of doing business as a provider of website
development and management services.
Effective January 31, 2000, the Company and its shareholders
entered into a Reorganization and Stock Purchase Agreement
with Black Stallion Management, Inc. (Black Stallion), a
Nevada corporation. Black Stallion was a publicly traded
shell company which prior to the merger was considered a
development stage company as defined in Statement of
Financial Accounting Standards No. 7. Under the terms of the
agreement, the Company's shareholders agreed to exchange
100% of their common stock for 20 million shares of common
stock of Black Stallion.
Effective September 19, 2000, the Company entered into a
Stock Purchase Agreement with Online Television Network
Services (OTV), a California corporation. Under the terms of
the agreement, OTV's shareholders have agreed to exchange
100% of their common stock for a maximum of 3,250,000 shares
of the Company's stock.
Effective September 20, 2000, the Company entered into an
Agreement and Plan of Merger with 24X7 Development.com, Inc.
(24X7), a Delaware corporation. Under the terms of the
agreement, 24X7's shareholders have agreed to exchange 100%
of their common stock for 10,000,000 shares of the Company's
stock.
Effective September 20, 2000, the Company entered into an
Agreement and Plan of Merger with N2Plus, Inc. (N2Plus), a
Delaware corporation. Under the terms of the agreement,
N2Plus' shareholders have agreed to exchange 100% of their
common stock for 1,000,000 shares of the Company's stock.
The consolidated financial statements of the Company include
the accounts of all of the above entities, with the
exception of the income statement and statement of cash
flows of Online Television Network Services for the
three-month period ended September 30, 1999. The information
necessary to complete these statements is incomplete and
will be reflected in a revised filing. The purchase and
merger transactions which became effective September 19 and
20, 2000, were recorded as a pooling of interest. All
inter-company balances and transactions have been
eliminated.
6
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. Basis of Presentation:
----------------------
The Company maintains its accounts on the accrual basis of
accounting. The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amount of
revenues and expenses during the reported period. Actual
results could differ from those estimates.
b. Cash and Cash Equivalents:
-------------------------
For purposes of the statement of cash flows, the Company
considers all highly liquid instruments purchased with a
maturity of three months or less to be cash equivalents.
c. Depreciation:
------------
Fixed assets are recorded at cost. Property and equipment is
depreciated on a straight-line basis over estimated useful
lives ranging from three to seven years.
7
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
d. Revenue Recognition:
-------------------
The Company records revenue based upon specific contract
rates for website development and management services
rendered.
e. Advertising Costs:
-----------------
The Company expenses all advertising costs, including direct
response advertising costs, as they are incurred.
f. Loss Per Share:
--------------
The computation of loss per share is based on the weighted
average number of shares outstanding during the period
presented in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". (See
Note 8)
g. Recently Enacted Accounting Standards:
-------------------------------------
Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income", SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information",
SFAS No. 132, "Employer's Disclosure about Pensions and
Other Postretirement Benefits", SFAS No.133 (as amended by
SFAS No. 137 and 138), "Accounting for Derivative
Instruments and Hedging Activities", SFAS No. 134,
"Accounting for Mortgage-Backed Securities ", and SFAS 135,
"Rescission of FASB No. 75 and Technical Corrections", were
recently issued. SFAS No. 130, 131, 132, 133 (as amended),
134 and 135 have no current application to the Company or
their effect on the financial statements would not have been
significant.
8
<PAGE>
DIGITAL BRIDGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
NOTE 3 - FURNITURE AND EQUIPMENT
Furniture and equipment, at cost, is summarized as follows
as of September 30 and June 30, 2000:
September 30 June 30
Office equipment $ 387,500 $ 379,182
Furniture and fixtures 73,957 83,028
------------------------------------------------------------
461,457 462,210
Less accumulated depreciation (182,966) ( 147,699)
------------------------------------------------------------
$ 278,491 $ 314,511
============================================================
Depreciation expense amounted to $32,266 and $5,203 for the
three-month periods ended September 30, 2000 and 1999,
respectively.
NOTE 4 - LEASE COMMITMENTS:
The Company leases office space under several operating
lease agreements which expires through. Rent expense
approximated $80,101 and $27,362 for the three-month period
ended September 30, 2000 and 1999, respectively. As of
September 30, 2000, future minimum lease payments, by fiscal
year, are as follows:
Period ended September 30,
2001 $ 90,240
2002 94,080
2003 48,000
------------------------------------------------------------
$232,320
============================================================
9
<PAGE>
NOTE 5 - INCOME TAXES:
No provision for federal and state income taxes has been
recorded because the Company has incurred net operating
losses. As of September 30, 2000, the Company has available
for federal and state purposes net operating loss
carryforwards. The federal and state carryforwards are
available to offset future taxable income and expire
beginning in fiscal 2019 and 2004. Deferred income tax
assets arising from such loss carryforwards have been fully
reserved as of September 30, 2000.
NOTE 6 - NOTES PAYABLE:
Notes payable as of September 30 and June 30, 2000 consist
of the following:
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
<S> <C> <C>
Note 6 - Notes Payable:
Notes payable bearing interest at 8% per
annum 92,804 92,804
Shareholder loans with rates ranging
from 7-18% 83,872 174,372
Note payable from prospective investor
bearing interest at 7% per annum 700,000 700,000
------------------------
876,676 967,176
Less current portion (9,056) 0
Notes Payable 867,620 967,176
========================
</TABLE>
NOTE 7 - STOCK OPTIONS:
The Company had drafted a stock incentive plan for
directors, officers, employees and consultants of the
Company and affiliated companies, which would have provided
for nonqualified and incentive stock options. The plan has
not been finalized as of September 30, 2000 and as such, no
adjustments to the financial statements have been made to
account for any of the plan's proposed provisions.
10
<PAGE>
DIGITAL BRIDGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
[GRAPHIC OMITED]
NOTE 8 - LOSS PER SHARE:
The following information reflects the amount used in
computing income (loss) per share:
<TABLE>
<CAPTION>
For the For
Three Months Ended Three Months Ended
September 30, 2000 September 30, 1999
<S> <C> <C>
Income (loss) from continuing
operations available to
common shareholders
(numerator) $ (746791) ($734259)
Weighted average number of
common shares outstanding
used in loss per share for the
period (denominator) 41,692,000 41,692,000
</TABLE>
11
<PAGE>
NOTE 9 - BUSINESS RISKS:
The Company's failure to secure financing or its ability to
generate sufficient cash flows through operations may have a
material adverse impact on the Company's future operations
and financial position. For the period ended September 30,
2000, the Company had entered into several agreements
wherein it purchased 100% of three separate non-public
companies through the issuance of common stock. (See Note
1 for additional information). The Company may still need to
raise additional funds to develop or enhance its service
offerings and to fund expansion; failure to do so could
affect the Company's ability to pursue future growth.
12
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
The information in this discussion contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Act of 1934, as amended. Such statements are based upon current
expectations that involve risks and uncertainties. Any statements contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements. For example, the words "believes", "anticipates",
"plans", "expects", "intends" and similar expressions are intended to identify
forward-looking statements. The Company's actual results and the timing of
certain events may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such a discrepancy include,
but are not limited to, those discussed in "Ability to Raise Capital Resources"
as well as "Risks Related to Our Business." All forward-looking statements in
this document are based on information available to the Company as of the date
hereof and the Company assumes no obligation to update any such forward-looking
statements.
OVERVIEW
On September 20, 2000, Digital Bridge, Inc., a Nevada corporation ("Company"),
acquired 100% of the outstanding common stock of 24x7 Development.com, Inc., a
Delaware corporation (""24x7"), in a merger transaction pursuant to which the
Company was the surviving entity. As consideration, the Company issued to the
nine holders of 24x7 common stock an aggregate of 10,000,000 shares of the
Company's common stock having a fair market value at the time of issuance of $
2.06 per share or an aggregate value of $ 20,600,000. The consideration was
the product of arms' length negotiations and was based on the prior
operating history of 24x7 and its prospects when integrated into the
operating and business model of DGBI.
24x7 is in Phoenix, Arizona and is staffed by personnel with substantial
experience in developing global, multi-lingual, high-end web businesses. 24x7
was founded in March 2000 by a group of executive and divisional management of
Globalnet Fiancial.com, Inc. (NASDAQ: "GLBN"), who organized 24x7 for the sole
purpose of acquiring the Phoenix office and assets from Globalnet Financial.com,
Inc. During an 18 month period, while working for Globalnet, the 24x7 "team"
developed and matured 18 award winning financial media, online trading and
corporate web sites.
On September 20, 2000, the Company acquired 100 % of the outstanding common
stock of N2Plus, Inc., a Delaware corporation ("N2Plus"), in a merger
transaction pursuant to which DGBI was the surviving entity. As consideration,
the Company issued to the 14 holders of N2Plus common stock an aggregate of
1,000,000 shares of DGBI common stock having a fair market value at the time
of issuance of $ 2.06 per share or an aggregate market value of $2,060,000. The
consideration was the product of arms' length negotiations and was based on
the prior operating history of N2Plus and its prospects when integrated
into the operating and business model of the Company.
N2Plus is likewise a Phoenix based company. N2Plus' flagship product,
n2PlusSynergy, helps businesses create private labeled, instant online
eCommerce stores in a fully integrated solution. n2PlusSynergy will complement
DGBI's suite of Internet Business Applications, enabling business aggregators,
portals and web developers to better serve, monetize and retain their customers.
Founded in 1997 by award winning technologist Brian Pollack, N2Plus is a
business-to-business application service provider. Since its inception, N2Plus'
products and services have helped nearly 1,000 satisfied customers establish an
eCommerce presence.
On September 19, 2000, the Company acquired 100% of the outstanding common
stock of Online Television Network Services, a California corporation
("OTVnet"), in a stock for stock acquisition, pursuant to which OTVnet
became a wholly owned subsidiary of the Company. The Company issued to the
six holders of OTVnet common stock and certain debt holders an aggregate of
3,212,000 shares of the Company's common stock having a market value at the
time of issuance of $ 2.06 per share or an aggregate market value of
$6,616,700. The consideration was the product of arms' length negotiations and
was based on the prior operating history of N2Plus and its prospects when
integrated into the operating and business model of DGBI.
Founded in 1998, OTVnet designs and manages comprehensive Human Resource
Systems for the unionized construction industry, specifically, in the design and
development of benefits Internet sites for multi-employer union pension, health
and welfare trust organizations. OTVnet has created an industry leading
Benefits Trust Web product and is positioning itself to serve unionized trade
organizations on a nationwide basis.
As a result of the merger transactions, the Company relocated its corporate
headquarters and technical operations to Phoenix, Arizona, maintaining an
administrative office in Burlingame, California. OTVnet remains as a wholly
owned subsidiary, with an office in San Diego, California. The combined entity
of DGBI commands expertise in strategic planning, creative design, corporate
brand development, technical architecture and complex information and
integration systems. The Company continues to integrate the acquired operating
units and complementary technology.
13
<PAGE>
The new focus of the Company and its combined entities will be as a global
"eBusiness Builder," which provides Internet enterprise solutions through a
suite of applications and professional services, empowering business from
"concept to click". Specifically, the Company will concentrate on building two
complementary, asset-based, lines of business: The Venture Technology Program
and Internet Business Applications.
Venture Technology is the Company's practice of providing human capital for both
emerging and expanding companies in the form of a total and instant IT
infrastructure in exchange for equity participation. The Company's Venture
Technology portfolio partners are supplied human capital in the form of
technology resources, intellectual properties and infrastructure. Through this
program, the Company becomes its clients' Internet strategy consultant,
interactive agency and technology developer. Venture Technology portfolio
partners are carefully selected businesses that must go through a meticulous
screening process. The Company looks for innovative and strategic business
concepts in broad market segments with rapid growth potential and seasoned
management teams.
As the Company builds solutions for its Venture Technology portfolio clients,
the Company has created and continues to create a series of intellectual
properties, which are transformed into a product suite of Internet Business
Applications. These applications enable the rapid deployment of electronic
business initiatives spanning content delivery, e-commerce, customer management,
and community building. The Company's solutions are both wired and wireless. The
primary goal of the applications is to empower clients with better tools for
doing more efficient electronic business. Current available products include The
Digital Bridge Ad Server, The Digital Bridge Site Monitor, and Digital Bridge
eCommerce Tools.
The Company's net revenues are derived primarily from providing Technology
services to clients who are creating or expanding electronic businessess. We
expect that our net revenues will be driven primarily by the number and scope of
our client engagements. Additionally, we expect to generate revenue through
equity positions held in our Venture Technology portfolio clients. We also
expect to generate revenues through our growing product line of Internet
Business Applications.
We also anticipate Net revenues from any given client will vary from period to
period. Additionally, we expect that customer concentration will continue for
the foreseeable future. To the extent that any significant client uses less of
our services or terminates its relationship with us, our net revenues could
decline substantially. As a result, the loss of any significant client could
seriously harm our business and results of operations.
We generally provide our services on a fixed fee basis, which may include an
equity position in our clients. When we provide fixed-fee engagements, we use an
internally developed process to estimate and propose fixed prices for such
projects. The estimation process accounts for standard billing rates particular
to each project, the technology environment and application type to be applied,
and the project's timetable and overall technical complexity.
For the quarter ended September 30, 2000, 100% of net revenues were derived from
services contracts. Professional service expenses consist primarily of
compensation and benefits for our employees engaged in the delivery of
professional services. Professional service margins reflect net revenues less
professional service expenses which are incurred regardless of whether or not
the employees' time is billed to a client. We expect that our professional
service expenses will increase over time due to wage increases and inflation.
Our professional service margins are affected by trends in the percentage of
professional service employees' time that is billed to clients, and, will vary
in the future. Any significant decline in fees billed to clients or the loss of
a significant client would materially adversely affect our professional service
margins.
We expect selling, general and administrative expenses to increase in absolute
dollars as we expand our direct sales force, continue expenditures on knowledge
management and information technology infrastructure, open new offices, increase
our recruiting efforts and incur additional costs related to the growth of our
business and operations on a global basis.
Despite growth in our net revenues to date, we have not been profitable. Our net
losses may not decrease proportionately with any future increase in our net
revenues primarily because of likely increased expenses related to the expansion
of the number of our offices, increased investment in our knowledge management
and operations infrastructure, and increased recruiting, marketing and sales
efforts. To the extent that future net revenues do not increase significantly in
the same periods in which operating expenses increase, our operating results
would be adversely affected.
14
<PAGE>
We are currently planning to introduce a series of products to complement our
services in the Internet Business arena. There is, however, no guarantee that
these products will be successful or that their development will meet the time
constraints currently set for them. In such an event, our operating results
would be adversely affected.
The Company also anticipates that a large portion of its future growth will be
accomplished by acquiring existing businesses. The success of this plan depends
upon, among other things, the Company's ability to integrate acquired personnel,
operations, products and technologies into its organization effectively, to
retain and motivate key personnel of acquired businesses and to retain customers
of acquired firms. The Company cannot guarantee that it will be able to identify
suitable acquisition opportunities, obtain any necessary financing on acceptable
terms to finance such acquisitions, consummate such acquisitions or successfully
integrate acquired personnel and operations.
RESULTS OF OPERATIONS
REVENUES
Total revenues for the three months ended September 30, 2000 totaled $629,395.
Since its inception, the Company has generated almost all of its revenues from
services provided to affiliated companies. Sales to these companies for the
three months ended September 30, 2000 represent 71% of total revenues.
COST OF SALES
Cost of sales includes salary allocation of marketing and technical personnel
for time spent on web development, design, implementation and market research.
Employees' time is tracked internally and expensed against client projects.
Other cost of sales include web hosting services and maintenance. Costs of
sales for the three-month period ended September 30, 2000 was $444,271 and
$280,095 for the three month period ended June 30, 2000.
OPERATING EXPENSES
2 Salaries and Benefits consist of compensation and related expenses for
personnel. The Company expects these costs to increase in absolute
dollars in future periods as the Company expands its technical staff
to support the growth of its operations.
3 Professional Fees consist of legal and accounting fees incurred by the
Company. Professional fees totaled $58,799 for the three month period
ended September 30, 2000 and $93,363 for the three months ended June
30, 2000.
4 Office Expenses for the three-month period ended September 30, 2000
were $405,990 and $385,008 for the three month period ended June 30,
1999.
5 Depreciation is calculated on a straight-line basis with assets
recorded at cost and depreciated with a life of three years for
software, five years for computers and seven years for furniture and
equipment. Depreciation expense for the period ended September 30,
2000 was $35,266 and $5,203 for the period ended June 30, 2000.
15
<PAGE>
6 Other Expenses include trade show costs and advertising, sales and
marketing costs. These costs are expensed as incurred
7 Tax expense of $1,600 in the period ended September 30, 2000
represents the minimum state tax paid to the state of California for
the Company and its wholly-owned subsidiary Online Television Network
Services.
INCOME TAXES
No provision for federal and state income taxes has been recorded because the
Company has incurred net operating losses since inception. The net operating
loss carry-forwards as of September 30, 2000 approximate $746,791. These
carry-forwards will be available to offset future taxable income and expire
beginning in 2019. Deferred income tax assets arising from such loss carry
forwards have been fully reserved as of September 30, 2000.
STOCK INCENTIVE PLAN
The Company has drafted a stock incentive plan for directors, officers,
employees and consultants of the Company and affiliated companies, which
provides for nonqualified and incentive stock options. The maximum number of
shares of common stock reserved and available for issuance under this plan is
three million. As of September 30, 2000 no options had been granted. The Plan
is subject to adoption by the Company's board of directors and approval by its
shareholders.
The Company follows Accounting Principles Board Opinion 25, Accounting for Stock
Issued to Employees, to account for the stock incentive plan, recognizing
compensation expense to the extent of the difference between the fair value of
the underlying stock at the measurement date less the amount the employee is
required to pay. There were no charges to compensation expense during the
period ended September 30, 2000.
An alternative method of accounting for stock options is Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation.
Under SFAS 123, employee stock options are valued at grant date using the
Black-Scholes valuation model, and compensation cost is recognized ratably over
the vesting period. Had the Company followed SFAS 123, no significant adjustment
would have been made to the statement of operations during the period ended
September 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $716,713 for the three months ended
September 30, 2000 and $3,881 for the three months ended September 30, 1999.
Net cash used in investing activities for the three months ended September 30,
2000 was $12,655, which was primarily used to acquire computer equipment.
Net cash provided by financing activities was $685,080 in the three months ended
September 30, 2000.
The Company currently anticipates that its available cash resources combined
with proceeds from capital raising transactions will be sufficient to meet its
anticipated working capital and capital expenditure requirements through the end
of January 2001. The company is actively seeking to raise additional funds from
institutional investors. The Company intends to use the additional capital to
fund more rapid expansion, to develop new or enhance existing services or
products, to respond to competitive pressures or to acquire complementary
products, businesses or technologies. If adequate funds are not available on
acceptable terms, the Company's business, results of operation and financial
condition could be materially adversely affected.
16
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FACTORS AFFECTING OPERATING RESULTS
This report on Form 10-QSB contains forward-looking statements which involve
risks and uncertainties. Our actual results could differ materially from those
anticipated by such forward looking statements as a result of certain factors
including those set forth below. You should carefully consider the business
risks described below in connection with evaluation of our business and
prospects. If any of the following risks occur, our results of operation may
have a material adverse impact on the Company's future operation and financial
position. In that case, the trading price of our common stock could decline.
ABILITY TO RAISE CAPITAL
We currently plan to raise additional capital during the remainder of the
calendar year 2000. The primary purposes for raising this capital is to obtain
additional equity capital. We expect to use the proceeds from any such capital
raising transactions for general corporate purposes, including working capital.
A portion of the proceeds may also be used for the acquisition of businesses
that are complementary to ours. If we do not successfully address the need to
raise capital, our ability to continue to conduct business would be seriously
harmed.
RISKS RELATED TO OUR BUSINESS
WE HAVE A HISTORY OF LOSSES AND EXPECT TO INCUR LOSSES IN THE FUTURE
We incurred net losses of $746,791 during the three months ended September 30,
2000. As of September 30, 2000, we had an accumulated deficit of $3,414,014. We
have not had a profitable quarter and may never achieve profitability. We also
expect to continue to incur increasing sales and marketing, infrastructure
development and general and administrative expenses. As a result, we will need
to generate significant revenues to achieve profitability. If we do achieve
profitability, we may not be able to sustain or increase profitability on a
quarterly or annual basis in the future.
OUR QUARTERLY REVENUES AND OPERATING RESULTS ARE VOLATILE AND MAY CAUSE OUR
STOCK PRICE TO FLUCTUATE
Our quarterly revenues and operating results are volatile and difficult to
predict. It is possible that in some future quarter or quarters our operating
results will be below the expectations of public market analysts or investors.
In such event, the market price of our common stock may decline significantly.
Our quarterly operating results have varied in the past and are likely to vary
significantly from quarter to quarter. As a result, we believe that
period-to-period comparisons of our results of operations are not a good
indication of our future performance. A number of factors are likely to cause
these variations, including:
- Our ability to obtain new and follow-on client engagements;
- The amount and timing of expenditures by our clients for eBusiness
services;
- Our ability to attract, train and retain skilled management, strategic,
technical, design, sales, marketing and support professionals;
- Our employee utilization rate, including our ability to transition
employees quickly to new or other existing engagements;
- The introduction of new services by us or our competitors;
- Changes in our pricing policies or those of our competitors;
- Our ability to manage costs, including personnel costs and support services
costs; and
- Costs related to opening or expanding Company offices.
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We derive all of our revenues from professional services, which we generally
provide on a time and materials basis. Revenues pursuant to time and materials
contracts are generally recognized as services are provided. Since personnel and
related costs constitute the substantial majority of our operating expenses and
since we establish these expenses in advance of any particular quarter,
underutilization of our professional services employees may cause significant
reductions in our operating results for a particular quarter and could result in
losses for such quarter. In addition, we have hired a number of personnel in
core support services, including technology infrastructure and administration,
in order to support our anticipated growth. As a result, a significant portion
of our operating expenses are fixed in the short term. Therefore, any failure to
generate revenues according to our expectations in a particular quarter could
result in losses or greater than expected losses for the quarter.
OUR ABILITY TO ATTRACT, TRAIN AND RETAIN QUALIFIED EMPLOYEES IS CRUCIAL TO OUR
RESULTS OF OPERATIONS AND ANY FUTURE GROWTH
Our future success depends in large part on our ability to hire, train and
retain project and engagement managers, technical architects, engineers, design
professionals, other technical personnel and sales and marketing professionals
of various experience levels. Any inability to hire, train and retain a
sufficient number of qualified employees could hinder the growth of our
business. Skilled personnel are in short supply, and this shortage is likely to
continue for some time. As a result, competition for these people is intense,
and the industry turnover rate for them is high. Consequently, we may have more
difficulty hiring our desired numbers of qualified employees. Moreover, even if
we are able to expand our employee base, the resources required to attract and
retain such employees may adversely affect our operating margins.
WE DEPEND ON OUR KEY PERSONNEL, AND THE LOSS OF ANY KEY PERSONNEL MAY ADVERSELY
AFFECT OUR BUSINESS
We believe that our success will depend on the continued employment of our key
management and technical personnel. This dependence is particularly important to
our business because personal relationships are a critical element of obtaining
and maintaining client engagements. If one or more of our key management or
technical personnel were unable or unwilling to continue in their present
positions, such persons would be very difficult to replace and our business
could be seriously harmed. Accordingly, the loss of one or more members of our
senior management team could have a direct adverse impact on our future sales.
In addition, if any of these key employees joins a competitor or forms a
competing company, some of our clients might choose to use the services of that
competitor or new company instead of our own. Furthermore, clients or other
companies seeking to develop in-house eBusiness capabilities may hire away some
of our key employees. This would not only result in the loss of key employees
but could also result in the loss of a client relationship or a new business
opportunity. Any losses of client relationships could seriously harm our
business.
WE HAVE A LIMITED OPERATING HISTORY AND A LIMITED NUMBER OF COMPLETED
ENGAGEMENTS THAT MAKE AN EVALUATION OF OUR BUSINESS DIFFICULT
Our limited operating history makes an evaluation of our business and prospects
very difficult. Companies in an early stage of development frequently encounter
enhanced risks and unexpected expenses and difficulties. These risks, expenses
and difficulties apply particularly to us because our market, eBusiness
services, is new and rapidly evolving. Our long-term success will depend on our
ability to achieve satisfactory results for our clients and to form long-term
relationships with core clients. We have not been in operation long enough to
judge whether our clients will perceive our work as being beneficial to their
businesses or to form any long-term business relationships. Also, because of our
limited operating history, our business reputation is based on a limited number
of client engagements. All of our clients have only limited experience with the
electronic business systems we have developed for them. Accordingly, there can
be no assurance that the limited number of electronic business systems we have
implemented will be successful in the longer term. If the electronic business
systems we have implemented are not successful, our brand will be harmed and we
may incur liability to our clients. If one or more of our clients for whom we
have done substantial work suffers a significant failure or setback in its
eBusiness, our business reputation could be severely damaged, whether or not
such failure or setback was caused by our work or was within our control. Our
ability to obtain new engagements, retain clients and recruit and retain
highly-skilled employees could be seriously harmed if our work product or our
clients' eBusinesses fail to meet the expectations of our clients.
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COMPETITION FROM BIGGER, MORE ESTABLISHED COMPETITORS WHO HAVE GREATER FINANCIAL
RESOURCES OR FROM NEWLY EMERGING COMPETITORS COULD RESULT IN PRICE REDUCTIONS,
REDUCED PROFITABILITY AND LOSS OF MARKET SHARE
Competition in the eBusiness services market is intense. If we fail to compete
successfully against current or future competitors, our business, financial
condition and operating results would be seriously harmed. We compete against
companies selling eBusiness software and services, and the in-house development
efforts of companies seeking to engage in eBusiness. We expect competition to
persist and intensify in the future. We cannot be certain that we will be able
to compete successfully with existing or new competitors.
Because relatively low barriers to entry characterize our market, we also expect
other companies to enter our market. We expect that competition will continue to
intensify and increase in the future. Some large information technology
consulting firms have announced that they have begun to or will soon focus more
resources on eBusiness opportunities. Because we contract with our clients on an
engagement-by-engagement basis, we compete for engagements at each stage of our
methodology. There is no guarantee that we will be retained by our existing or
future clients on later stages of work.
The vast majority of our current competitors have longer operating histories,
larger client bases, larger professional staffs, greater brand recognition and
greater financial, technical, marketing and other resources than we do. This may
place us at a disadvantage in responding to our competitors' pricing strategies,
technological advances, advertising campaigns, strategic partnerships and other
initiatives. In addition, many of our competitors have well-established
relationships with our current and potential clients and have extensive
knowledge of our industry. As a result, our competitors may be able to respond
more quickly to new or emerging technologies and changes in customer
requirements and they may also be able to devote more resources to the
development, promotion and sale of their services than we can. Competitors that
offer more standardized, commoditized or less customized services or products
than we do may have a substantial cost advantage, which could force us to lower
our prices, adversely affecting our operating margins.
Current and potential competitors also have established or may establish
cooperative relationships among themselves or with third parties to increase
their ability to address customer needs. Accordingly, it is possible that new
competitors or alliances among competitors may emerge and rapidly acquire
significant market share. In addition, some of our competitors may develop
services that are superior to, or have greater market acceptance than, the
services that we offer.
FAILURE TO MANAGE OUR GROWTH MAY ADVERSELY AFFECT OUR BUSINESS
We expect to grow rapidly both by hiring new employees, making major
acquisitions and serving new business and geographic markets. Our growth has
placed, and will continue to place, a significant strain on our management and
our operating and financial systems.
Our personnel, systems, procedures and controls may be inadequate to support our
future operations. In order to accommodate the increased number of engagements,
number of clients and the increased size of our operations, we will need to
hire, train and retain the appropriate personnel to manage our operations. We
will also need to improve our financial controls by centralizing the accounting
process as well as improve managerial reporting and operating systems.
OUR ACQUISITIONS COULD BE DIFFICULT TO INTEGRATE, DISRUPT OUR BUSINESS, DILUTE
STOCKHOLDER VALUE AND ADVERSELY AFFECT OUR OPERATING RESULTS
On September 19 and 20, 2000 the Company acquired three separate entities which
offer complimentary services and technologies to the Company. These
acquisitions have complicated our management and financial tasks. We are
currently integrating widely dispersed operations with distinct corporate
cultures. Our integration efforts may not succeed or may distract our
management from servicing existing clients. Our failure to manage these
acquisitions successfully could seriously harm our operating results.
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WE HAVE RELIED AND EXPECT TO CONTINUE TO RELY ON A LIMITED NUMBER OF CLIENTS FOR
A SIGNIFICANT PORTION OF OUR REVENUES
We currently derive and expect to continue to derive a significant portion of
our revenues from a limited number of clients. To the extent that any
significant client uses less of our services or terminates its relationship with
us, our revenues could decline substantially. As a result, the loss of any
significant client could seriously harm our business, financial condition and
operating results. The volume of work that we perform for a specific client is
likely to vary from period to period, and a significant client in one period may
not use our services in a subsequent period.
OUR LACK OF LONG-TERM CONTRACTS WITH CLIENTS REDUCES THE PREDICTABILITY OF OUR
REVENUES
Our clients retain us on an engagement-by-engagement basis, rather than under
long-term contracts. As a result, our revenues are difficult to predict. Because
we incur costs based on our expectations of future revenues, our failure to
predict our revenues accurately may seriously harm our financial condition and
results of operations. Although it is our goal to design and build complete
eBusiness systems for our clients, we are frequently retained to design and
build discrete segments of an overall eBusiness system on an
engagement-by-engagement basis. Since large client projects involve multiple
engagements or stages, there is a risk that a client may choose not to retain us
for additional stages of a project or that the client will cancel or delay
additional planned projects. Such cancellations or delays could result from
factors unrelated to our work product or the progress of the project, but could
be related to general business or financial conditions of the client. For
example, many of our current or potential clients that are in the early stages
of development may be unable to retain our services because of financial
constraints. In addition, our existing clients can generally reduce the scope of
or cancel their use of our services without penalty and with little or no
notice. If a client defers, modifies or cancels an engagement or chooses not to
retain us for additional phases of a project, we must be able to rapidly
re-deploy our employees to other engagements in order to minimize
underutilization of employees and the resulting harm to our operating results.
Our operating expenses are relatively fixed and cannot be reduced on short
notice to compensate for unanticipated variations in the number or size of
engagements in progress.
WE MAY LOSE MONEY ON FIXED-FEE CONTRACTS
If we miscalculate the resources or time we need to complete engagements with
capped or fixed fees, our operating results could be seriously harmed. The risk
of such miscalculations for us is high because we work with complex technologies
in compressed timeframes, and therefore it is difficult to judge the time and
resources necessary to complete a project. To date, we have generally entered
into contracts with our clients on a time and materials basis, though we
sometimes work on a fixed-fee basis or cap the amount of fees we may invoice on
time and material contracts without client consent.
OUR EFFORTS TO DEVELOP BRAND AWARENESS OF OUR SERVICES MAY NOT BE SUCCESSFUL
An important element of our business strategy is to develop and maintain
widespread awareness of the Digital Bridge brand name. To promote our brand
name, we plan to increase our advertising and marketing expenditures, which may
cause our operating margins to decline. Moreover, our brand may be closely
associated with the business success or failure of some of our high-profile
clients, many of whom are pursuing unproven business models in competitive
markets. As a result, the failure or difficulties of one of our high-profile
clients may damage our brand. If we fail to successfully promote and maintain
our brand name or incur significant related expenses, our operating margins and
our growth may decline.
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OUR FAILURE TO MEET CLIENT EXPECTATIONS OR DELIVER ERROR-FREE SERVICES COULD
RESULT IN LOSSES AND NEGATIVE PUBLICITY
Our client engagements involve the creation, implementation and maintenance of
eBusiness systems and other applications that are often critical to our clients'
businesses. Any defects or errors in these applications or failure to meet
clients' expectations could result in:
- Delayed or lost revenues due to adverse client reaction;
- Requirements to provide additional services to a client at no charge;
- Negative publicity regarding us and our services, which could adversely
affect our ability to attract or retain clients; and
- Claims for substantial damages against us, regardless of our responsibility
for such failure.
Our contracts generally limit our liability for damages that may arise from
negligent acts, errors, mistakes or omissions in rendering services to our
clients. However, we cannot be sure that these contractual provisions will
protect us from liability for damages in the event we are sued. Furthermore, our
general liability insurance coverage may not continue to be available on
reasonable terms or in sufficient amounts to cover one or more large claims, or
the insurer may disclaim coverage as to any future claim. The successful
assertion of any such large claim against us could seriously harm our business,
financial condition and operating results.
OUR BUSINESS IS DEPENDENT ON OUR ABILITY TO KEEP PACE WITH TECHNOLOGICAL CHANGES
Our market and the enabling technologies used by our clients are characterized
by rapid technological change. Failure to respond successfully to these
technological developments, or to respond in a timely or cost-effective way,
will result in serious harm to our business and operating results. We have
derived, and we expect to continue to derive, a substantial portion of our
revenues from creating eBusiness systems that are based upon today's leading
technologies and that are capable of adapting to future technologies. As a
result, our success will depend, in part, on our ability to offer services that
keep pace with continuing changes in technology, evolving industry standards and
changing client preferences. In addition, we must hire, train and retain
technologically knowledgeable professionals so that they can fulfill the
increasingly sophisticated needs of our clients.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS
OR PREVENT INFRINGEMENT CLAIMS AGAINST US
We cannot guarantee that the steps we have taken or will take to protect our
proprietary rights will be adequate to deter misappropriation of our
intellectual property. In addition, we may not be able to detect unauthorized
use of our intellectual property and take appropriate steps to enforce our
rights. If third parties infringe or misappropriate our trade secrets,
copyrights, trademarks or other proprietary information or intellectual
property, our business could be seriously harmed. In addition, although we
believe that our proprietary rights do not infringe the intellectual property
rights of others, other parties may assert infringement claims against us or
claim that we have violated their intellectual property rights. Such claims,
even if not true, could result in significant legal and other costs and may be a
distraction to management. In addition, protection of intellectual property in
many foreign countries is weaker and less reliable than in the United States, so
as our business continues to expand into foreign countries, risks associated
with protecting our intellectual property will increase.
A FEW INDIVIDUALS OWN MUCH OF OUR STOCK
Our directors, executive officers and their affiliates beneficially own, in the
aggregate, approximately 62.5% of our outstanding common stock. As a result,
these stockholders may be able to exercise effective control over all matters
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions, such as acquisitions, and to block an
unsolicited tender offer. Accordingly, this concentration of ownership could
have the effect of delaying or preventing a third party from acquiring control
over us at a premium over the then-current market price of our common stock.
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OUR SUCCESS DEPENDS ON INCREASED ADOPTION OF THE INTERNET AS A MEANS FOR
COMMERCE
Our future success depends heavily on the continued use and acceptance of the
Internet as a means for commerce. The widespread acceptance and adoption of the
Internet for conducting business is likely only in the event that the Internet
provides businesses with greater efficiencies and improvements. If commerce on
the Internet does not continue to grow, or grows more slowly than expected, our
growth would decline and our business would be seriously harmed. Consumers and
businesses may reject the Internet as a viable commercial medium for a number of
reasons, including:
- Potentially inadequate network infrastructure;
- Delays in the development of Internet enabling technologies and performance
improvements;
- Delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity;
- Delays in the development of security and authentication technology
necessary to effect secure transmission of confidential information;
- Changes in, or insufficient availability of, telecommunications services to
support the Internet; and
- Failure of companies to meet their customers' expectations in delivering
goods and services over the Internet.
INCREASING GOVERNMENT REGULATION COULD AFFECT OUR BUSINESS
We are affected not only by regulations applicable to businesses generally, but
also by laws and regulations directly applicable to eBusiness. Although there
are currently few such laws and regulations, both state, federal and foreign
governments may adopt a number of these laws and regulations. Any such
legislation or regulation could dampen the growth of the Internet and decrease
its acceptance as a communications and commercial medium. If such a decline
occurs, companies may decide in the future not to use our services to create an
electronic business channel. This decrease in the demand for our services would
seriously harm our business and operating results.
Any new laws and regulations may govern or restrict any of the following issues:
- User privacy;
- The pricing and taxation of goods and services offered over the Internet;
- The content of websites;
- Consumer protection; and
- The characteristics and quality of products and services offered over the
Internet.
For example, the Telecommunications Act of 1996 prohibits the transmission of
certain types of information and content over the Internet. The scope of the
Act's prohibition is currently unsettled. In addition, although courts recently
held unconstitutional substantial portions of the Communications Decency Act,
federal or state governments may enact, and courts may uphold, similar
legislation in the future. Future legislation could expose companies involved in
Internet commerce to liability.
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RISKS RELATED TO THE SECURITIES MARKETS
WE NEED TO RAISE ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE
We need to raise additional funds, and we cannot be certain that we will be able
to obtain additional financing on favorable terms or at all. If we need
additional capital and cannot raise it on acceptable terms, we may not be able
to:
- Expand our offices in the United States;
- Create additional market-specific business units;
- Enhance our infrastructure and leveragable assets;
- Hire, train and retain employees;
- Respond to competitive pressures or unanticipated requirements; or
- Pursue acquisition opportunities.
Our failure to do any of these things could seriously harm our financial
condition.
OUR STOCK PRICE IS VOLATILE
The market price of our publicly traded stock may vary in response to any of the
following factors, some of which are beyond our control:
- Changes in financial estimates or investment recommendations relating to
our stock by securities analysts;
- Changes in market valuations of other eBusiness software and service
providers or electronic businesses;
- Announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;
- Loss of a major client;
- Additions or departures of key personnel; and
- Fluctuations in the stock market price and volume of traded shares
generally, especially fluctuations in the traditionally volatile technology
sector.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The exhibits listed on the accompanying Index to Exhibits immediately
following the signature page are filed as part of, or incorporated by
reference into, this Interim Report on Form 10-QSB.
2 Digital Bridge, Inc. filed a report on Form 8-K on September 25, 2000
regarding the September 20, 2000 acquisition of 100% of the
outstanding common stock of 24x7 Development.com, Inc. a Delaware
corporation, and 100% of the outstanding common stock of N2Plus, Inc.,
also a Delaware corporation. Both acquisitions were completed in
merger transactions pursuant to which the Company was the surviving
entity. Also reported on Form 8-K was the September 19, 2000
acquisition of 100% of the outstanding common stock of Online
Television Network Services, a California Corporation, in a stock for
stock acquisition, pursuant to which Online Television Network
Services became a wholly owned subsidiary of the Company.
As it was impracticable for the Company to file the financial
information of the businesses acquired at the time of the
acquisitions, such financial information will be filed by amendment to
the September 25, 2000 Report on Form 8-K not later than November 19,
2000.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DIGITAL BRIDGE, INC.
/s/ John C. Flanders, Jr.
------------------------------
By: John C. Flanders, Jr.
Its: Chief Executive Officer
Date: November 13, 2000
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INDEX TO EXHIBITS
Exhibit No. Description
2.1 Agreement and Plan of Merger dated as July 31, 2000, by and between
Digital Bridge, Inc. and 24x7 Development.com, Inc. (Exhibit 2) (1)
2.2 Agreement and Plan of Merger dated August 31, 2000, among Digital
Bridge, Inc., N2Plus, Inc. and Certain of the Equity Holders of
N2Plus, Inc. (Exhibit 2) (1)
2.3 Stock Purchase Agreement dated as of August 31, 2000, by and between
Digital Bridge, Inc. and Online Television Network Services. (Exhibit
2) (1)
27 Financial Data Schedule
--------------------------------
(1) Incorporated by reference to the exhibits shown in parenthesis in the
report on Form 8-K filed by Digital Bridge, Inc. on September 25, 2000
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