EXHIBIT 99.3
FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT
September 20, 2000.
BOARD OF DIRECTORS
24 X 7 DEVELOPMENT.COM, INC.
Phoenix, Arizona
We have audited the accompanying balance sheet of 24 X 7 DEVELOPMENT.COM, INC.
as of September 20, 2000 and the related statements of operations, stockholders'
deficit and cash flows for the period from April 1 (inception) to September 20,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 24 x 7 Development.com, Inc. as
of September 20, 2000, and the results of its operations and its cash flows for
the period then ended, in conformity with generally accepted accounting
principles.
The Company has a limited operating history and its prospects are subject to the
risks, expenses and uncertainties frequently encountered by companies in new and
rapidly evolving markets for internet products and services. As discussed in
Note 7 to the financial statements, the Company was only recently formed, and
has not generated sufficient revenues to achieve profitability. Failure to
secure financing or its ability to generate sufficient cash flows through
operations may have a material adverse impact on the Company's operations and
financial position. Management's plans in regards to these matters are also
described in Note 7. The financial statements do not include any adjustments
that might result from the outcome of these uncertainties.
November 6, 2000
By: /s/ Hood & Strong, LLP
-------------------------------
Hood and Strong, LLP
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24 X 7 DEVELOPMENT.COM, INC.
BALANCE SHEET
September 20, 2000
===============================================================
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,325
Prepaid expenses 10,570
---------------------------------------------------------------
Total current assets 17,895
FURNITURE AND EQUIPMENT, net 127,359
OTHER ASSETS 12,621
---------------------------------------------------------------
$157,875
===============================================================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Trade payables $ 8,270
Accrued expenses 25,179
Capitalized lease obligations 56,062
---------------------------------------------------------------
Total current liabilities 89,511
LONG-TERM LIABILITIES:
Notes payable 105,604
---------------------------------------------------------------
Total liabilities 195,115
---------------------------------------------------------------
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value, 25,000,000 shares
authorized, issued and outstanding 25,000
Receivable from stockholders (20,000)
Accumulated deficit (42,240)
---------------------------------------------------------------
Total stockholders' deficit (37,240)
---------------------------------------------------------------
$157,875
===============================================================
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24 X 7 DEVELOPMENT.COM, INC.
STATEMENT OF OPERATIONS
From date of inception of April 1, 2000 through September 20, 2000
==================================================================
REVENUE $598,916
COST OF SALES 250,202
------------------------------------------------------------------
GROSS PROFIT 348,714
------------------------------------------------------------------
OPERATING EXPENSES:
Salaries and benefits 218,933
Professional fees 31,249
Office expenses 122,554
Depreciation 18,218
------------------------------------------------------------------
390,954
------------------------------------------------------------------
NET LOSS $(42,240)
==================================================================
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<TABLE>
<CAPTION>
24 X 7 DEVELOPMENT.COM, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
From date of inception of April 1, 2000 through September 20, 2000
===================================================================================================
Number Receivable Total
of Shares Common from Accumulated Stockholders'
Outstanding Stock Stockholders Deficit Deficit
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCEPTION:
Common stock 25,000,000 $ 25,000 $ (20,000) $ 0 $ 5,000
Net loss for the
period ended
September 20, 2000 (42,240) (42,240)
---------------------------------------------------------------------------------------------------
BALANCES -
September 20, 2000 25,000,000 $ 25,000 $ (20,000) $ (42,240) $ (37,240)
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
24 X 7 DEVELOPMENT.COM, INC.
STATEMENT OF CASH FLOWS
From date of inception of April 1, 2000 through September 20, 2000
==============================================================================
OPERATING ACTIVITIES:
<S> <C>
Net loss $(42,240)
Adjustments to reconcile net loss to net cash used by operations:
Depreciation 18,218
Changes in:
Prepaid expenses (10,570)
Other assets (7,621)
Accounts payable 8,270
Accrued expenses 25,179
------------------------------------------------------------------------------
Net cash used by operating activities (8,764)
------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of furniture and equipment (12,655)
------------------------------------------------------------------------------
Net cash used by investing activities (12,655)
------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds from issuance of debt 37,800
Payments on capitalized lease obligations (9,056)
------------------------------------------------------------------------------
Net cash provided by financing activities 28,744
CASH AND CASH EQUIVALENTS $ 7,325
==============================================================================
NON-CASH ACTIVITIES:
Capital lease payable $ 65,118
Note payable for property acquisition $ 67,804
</TABLE>
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Notes to Financial Statements for 24x7 Development.com, Inc.
NOTE 1 - ORGANIZATION:
24 x 7 Development.com, Inc. (the Company) is a corporation
organized under the laws of the State of Delaware for the purpose
of doing business as a provider of website development and
management services.
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 (of
which there are none as of September 20, 2000).
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.
d. Revenue Recognition:
-------------------
The Company records revenue based upon specific contract
rates for website development and management services
rendered.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
e. 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 affect on the financial statements would not have been
significant.
NOTE 3 - FURNITURE AND EQUIPMENT
Furniture and equipment, at cost, is summarized as follows as of
September 20, 2000:
Equipment $ 116,728
Furniture and fixtures 28,849
145,577
Less accumulated depreciation 18,218
$ 127,359
Depreciation expense amounted to $18,218 for the period ended
September 20, 2000.
NOTE 4 - CAPITAL LEASE OBLIGATIONS:
As of September 20, 2000 the Company has capitalized lease
obligations of $56,062. These leases bear interest at rates of 20
to 28% per annum and are classified as current as of September
20, 2000. The related equipment has been capitalized and
reflected in furniture and equipment as of September 20, 2000.
NOTE 5 - 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
20, 2000 approximate $6,500. These carry-forwards will be
available to offset future taxable income and expire beginning in
2020. Deferred income tax assets arising from such loss
carryforwards have been fully reserved as of September 20, 2000.
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NOTE 6 - NOTES PAYABLE:
At September 20, 2000 there is a note payable in the amount of
$67,804. This note bears interest rate of 8% per annum. This
note is currently payable upon demand. The holder of this note
has the option to convert the debt to common stock of the
Company.
At September 20, 2000 there is a note payable to a stockholder in
the amount of $14,800. The note bears interest at a rate of 18%
per annum. This note is due December 31, 2000
At September 20, 2000 there is a note to Digital Bridge, Inc. in
the amount of $23,000. No interest has been accrued on this note.
NOTE 7 - 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. As noted in Note 8, the company is involved
in a merger transaction with Digital Bridge, Inc., a
publicly-held company which is expected to be recorded as a
pooling of interests.
NOTE 8 - MERGER:
Effective September 20, 2000 the Company's stockholders entered
into an agreement to exchange 100% of their common stock to
Digital Bridge, Inc., a Nevada corporation, in a merger
transaction pursuant to which Digital Bridge, Inc. will be the
surviving entity. As consideration, the stockholders received
10,000,000 shares of Digital Bridge, Inc. common stock, with an
estimated value of $18,125,000.
The Company's financial statements reflect the balances and
activities immediately prior to the above transactions.
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