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UNITED STATES
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 OF 1934
Date of Report (Date of earliest event reported) June 22, 2000
--------------
e-financial depot.com, Inc.
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 000-26899 33-0809711
-------- --------- ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
150 - 1875 Century Park East, Century City, California 90067
-------------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (877) 739-3812
---------------
(Former name or former address, if changed since last report.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 22, 2000 the Registrant entered into an agreement (the "Share Purchase
Agreement") with Westcor Mortgage Inc. ("Westcor") and Patricia Kirkham and
Dennis Petersen, both business persons of Calgary, Alberta (the "Vendors")
pursuant to which the Registrant acquired all of the issued common shares of
Westcor (the "Vendors Shares"). Westcor is a private Alberta company which
carries on the mortgage brokerage business. The assets of Westcor are primarily
goodwill in the form of an operating brokerage which received commissions for
placing approximately US$97 million in mortgages in 1999. The direct
consideration for the purchase of the Vendors Shares (the "Transaction") was the
payment of US$600,000 by the issue of two promissory notes totalling US$592,636
and a holdback retained by the Registrant of US$7,364. The promissory notes are
secured by a pledge of the Vendors Shares in an agreement between the Vendors
and the Registrant dated for reference February 29, 2000 (the "Hypothecation
Agreement").
<PAGE>
Prior to the acquisition of the Vendors Shares, Westcor issued to the Vendors
295520 Exchangeable shares of Westcor which are exchangeable into an equal
number of common shares of the Registrant at a deemed price of US$4.25 per
share. In addition, the Registrant issued 73880 common shares of the Registrant
at the same deemed price to a financial intermediary, Oxford Capital Corp.
("Oxford"). Accordingly, the value of shares of the Registrant into which the
Exchangeable shares may be exchanged was approximately US$1,255,960 and the
total effective consideration for the Vendors Shares was US$2,169,950 of which
US$313,990 in the form of common shares of the registrant was received by
Oxford.
All of the Exchangeable shares are held in escrow pending the completion of an
audit of Westcor pursuant to an escrow agreement among the Registrant, the
Vendors and Oxford dated for reference February 29 2000 (the "Escrow
Agreement"). If the value of Westcor's assets as disclosed by the audit is less
than that shown on Westcor's management prepared financial statements for the
nine month period ending January 31, 2000, a proportionate number of
Exchangeable shares will be cancelled prior to the release of Exchangeable
shares from escrow.
The consideration paid by the Registrant for the Vendors Shares was determined
by negotiation with the Vendors. Prior to the closing of the Transaction the
Vendors were completely at arms length from the Registrant and its affiliates.
The Registrant intends to discharge its obligations under the promissory notes
by carrying out one or more private placements of its common shares.
In addition to the Share Purchase Agreement, the Hypothecation Agreement and the
Escrow Agreement, the Registrant entered into two other agreements relating to
the Transaction both dated for reference February 29, 2000. In an agreement
with Westcor (the "Support Agreement") the Registrant agreed to refrain from
making corporate distributions or alterations without protecting the holders of
the Exchangeable shares by ensuring that they receive the equivalent value on
any such distribution or alternation as they would have received if they had
held common shares of the Registrant directly. The Registrant also agreed to
ensure that Westcor is able to meet its obligation to deliver common shares of
the Registrant on the exchange of the Exchangeable Shares.
Pursuant to an agreement (the "Voting Trust and Exchange Agreement") with
Westcor, the Vendors and Miller Thomson as trustee , the trustee will be issued
one special voting share of the Registrant on behalf of the Vendors which will
effectively allow the Vendors, as holders of Exchangeable Shares, to have one
vote per each such share at general meetings of the Registrant. In addition,
certain rights to exchange Exchangeable Shares for common stock of the
Registrant are granted. The Voting Trust and Exchange Agreement also contains a
grant by the Registrant to the Vendors of certain "piggy-back" rights to have
the common shares of the Registrant which they receive on the exchange of their
Exchangeable Shares registered concurrently with the registration of new issues
of the Registrant's common stock.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
Westcor Mortgage Inc.
April 30, 2000 and 1999
(U.S. dollars)
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors of
Westcor Mortgage Inc.
We have audited the accompanying balance sheets of Westcor Mortgage Inc. as at
April 30, 2000 and 1999 and the related statements of income (loss) and
comprehensive income (loss) and retained earnings (deficit) and cash flows for
the years then ended. 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 audits provide 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 Westcor Mortgage Inc. as at
April 30, 2000 and 1999 and the results of its operations and its cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States.
Ernst & Young LLP
--------------------
/s/ Ernst & Young LLP
Chartered Accountants
Calgary, Canada
July 13, 2000
<PAGE>
Westcor Mortgage Inc.
<TABLE>
<CAPTION>
BALANCE SHEETS
(all amounts expressed in U.S. dollars)
As at April 30
2000 1999
$ $
---------------------------------------------------------------- --------- --------
<S> <C> <C>
ASSETS
Current
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 34
Term deposits [note 3] . . . . . . . . . . . . . . . . . . . . . 7,306 7,045
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . 51,827 111,286
Prepaid expenses and deposits. . . . . . . . . . . . . . . . . . 2,447 2,479
Due from stockholders [note 4] . . . . . . . . . . . . . . . . . 3,323 84,518
--------- --------
64,937 205,362
Capital assets [note 5]. . . . . . . . . . . . . . . . . . . . . 12,485 17,428
77,422 222,790
--------- --------
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)
EQUITY
Current
Bank indebtedness [note 6] . . . . . . . . . . . . . . . . . . . 39,553 36,744
Accounts payable and accrued liabilities . . . . . . . . . . . . 48,934 84,919
Unearned revenue . . . . . . . . . . . . . . . . . . . . . . . . 6,030 8,880
Income taxes payable [note 9]. . . . . . . . . . . . . . . . . . 10,810 7,922
Notes payable [note 7] . . . . . . . . . . . . . . . . . . . . . 43,219 43,776
--------- --------
148,546 182,241
--------- --------
Commitments [note 10]
Stockholders' (deficiency) equity
Share capital [notes 8 and 15] . . . . . . . . . . . . . . . . . 70 70
Authorized
Unlimited number of Class A common voting shares,
Class B common voting shares, and Class C redeemable preferred
shares
Outstanding
100 no par value Class A common voting shares
Cumulative translation adjustment. . . . . . . . . . . . . . . . 233 (251)
Retained earnings (deficit). . . . . . . . . . . . . . . . . . . (71,427) 40,730
--------- --------
(71,124) 40,549
--------- --------
77,422 222,790
--------- --------
See accompanying notes
</TABLE>
On behalf of the Board:
--------------- ---------------
Director Director
<PAGE>
Westcor Mortgage Inc.
<TABLE>
<CAPTION>
STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) AND RETAINED
EARNINGS (DEFICIT)
(all amounts expressed in U.S. dollars)
For the years ended April 30
2000 1999
$ $
---------- --------
<S> <C> <C>
REVENUE 511,959 713,653
----------------------------------------- ---------- --------
EXPENSES
Advertising and promotion 29,653 12,492
Amortization 4,848 3,937
Appraisals, credit reports and searches 10,030 13,369
Automobile 8,156 7,942
Bad debts 8,683 8,156
Commission 177,373 268,164
Dues, fees and memberships 3,042 830
Forgiven stockholder debt [note 4] 78,408 -
Interest and bank charges 3,902 4,626
Office 20,786 19,973
Professional fees 17,894 8,671
Rent, insurance and taxes 28,621 28,076
Salaries 214,542 290,734
Telephone 18,178 19,070
---------- --------
624,116 686,040
---------- --------
Income (loss) before income taxes (112,157) 27,613
Income tax expense [note 9] - 5,835
----------------------------------------- ---------- --------
Net income (loss) (112,157) 21,778
Other comprehensive gain (loss)
Foreign currency translation adjustment 484 307
---------- --------
Comprehensive income (loss) (111,673) 22,085
----------------------------------------- ---------- --------
Retained earnings, beginning of year 40,730 18,952
Net income (loss) (112,157) 21,778
---------- --------
Retained earnings (deficit), end of year (71,427) 40,730
----------------------------------------- ---------- --------
Earnings per common share (1,122) 218
----------------------------------------- ---------- --------
See accompanying notes
</TABLE>
<PAGE>
Westcor Mortgage Inc.
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
(all amounts expressed in U.S. dollars)
For the year ended April 30
2000 1999
$ $
---------- ---------
<S> <C> <C>
Cash flows from (used in) operating activities
Net income (loss). . . . . . . . . . . . . . . . . . . . . (112,157) 21,778
Items not affecting cash
Forgiven stockholder debt. . . . . . . . . . . . . . . . . 78,408 -
Amortization . . . . . . . . . . . . . . . . . . . . . . . 4,848 3,937
Foreign currency translation adjustment. . . . . . . . . . 484 307
---------- ---------
(28,417) 26,022
Net change in non-cash working capital balances [note 11]. 23,544 11,198
---------- ---------
(4,873) 37,220
---------- ---------
Cash flows used in investing activities
Purchase of capital assets . . . . . . . . . . . . . . . . - (12,504)
Proceeds from disposal of capital assets . . . . . . . . . 95 -
Increase in term deposits. . . . . . . . . . . . . . . . . (261) (63)
---------- ---------
(166) (12,567)
---------- ---------
Cash flows from (used in) financing activities
Repayment (loans issued to) by stockholders. . . . . . . . 2,787 (55,800)
Increase in bank indebtedness. . . . . . . . . . . . . . . 2,809 32,055
Decrease in notes payable. . . . . . . . . . . . . . . . . (557) (909)
---------- ---------
5,039 (24,654)
---------- ---------
Increase (decrease) in cash. . . . . . . . . . . . . . . . - (1)
Cash, beginning of year. . . . . . . . . . . . . . . . . . 34 35
---------- ---------
Cash, end of year. . . . . . . . . . . . . . . . . . . . . 34 34
---------- ---------
Interest paid. . . . . . . . . . . . . . . . . . . . . . . 3,902 4,626
Income taxes paid. . . . . . . . . . . . . . . . . . . . . 5,123
---------- ---------
See accompanying notes
</TABLE>
<PAGE>
BASIS OF PRESENTATION
Westcor Mortgage Inc. (the "Company") was incorporated on February 18, 1994
under the Alberta Business Corporation's Act as 600455 Alberta Ltd. On May 25,
1994, 600455 Alberta Ltd. changed its name to Westcor Mortgage Inc. The
company's business purpose is to provide mortgage brokering services. The
Company was acquired on June 16, 2000 by EFinancial Depot.com.
The Company is dependent upon Efinancial Depot.com to provide funding to support
its continuing operations as it works towards sustained profitability.
Significant Accounting Policies
The financial statements have, in management's opinion, been properly prepared
in accordance with accounting principles generally accepted in the United
States.
Use of estimates
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates which would affect the amount of recorded assets,
liabilities, revenues and expenses. Actual amounts could differ from these
estimates.
Capital assets
Capital assets are recorded at cost and are depreciated at the following annual
rates which are designed to amortize the cost of the assets over their estimated
useful lives:
Furniture and fixtures - 20% diminishing balance
Computer hardware - 30% diminishing balance
Computer software - 100% diminishing balance
Leasehold improvements - straight line over the lease term
Revenue and unearned revenue
Commissions from mortgage brokering are recognized when the lending institution
and client have finalized an agreement to provide mortgage funds. Brokerage
fees, application fees and direct expense reimbursements received in advance of
a final agreement are recorded as unearned revenue.
Advertising
Advertising costs are expensed as incurred.
Income taxes
The Company follows the liability method of accounting for the tax effect of
temporary differences between the carrying amount and the tax basis of the
company's assets and liabilities. Temporary differences arise when the
realization of an asset or the settlement of a liability would give rise to
either an increase or decrease in the Company's income taxes payable for the
year or later period. Deferred income taxes are recorded at the income tax
rates that are expected to apply when the deferred tax liability is settled or
the deferred tax asset is realized. When necessary, valuation allowances are
established to reduce deferred income tax assets to the amount expected to be
realized. Income tax expense is the tax payable for the period and the change
during the period in deferred income tax assets and liabilities.
Foreign currency translation
The financial statements are prepared in US dollars whereas the functional
currency of the Company is the Canadian dollar. Accordingly, assets and
liabilities are translated at the year-end exchange rate and revenues and
expenses are translated at average exchange rates. Gains and losses arising
from the translation of the financial statements are recorded in Cumulative
Translation Adjustment in stockholder's equity and are included in comprehensive
income.
<PAGE>
3. TERM DEPOSITS
The term deposits mature in February, 2001 and bear interest at 4.0 percent
(1999 - 3.0 percent) per annum. The term deposits are required to be held as a
condition of the Company's line of credit [see Note 6].
4. DUE FROM STOCKHOLDERS
The stockholder loan is non-interest bearing and has no fixed repayment terms.
As at February 1, 2000, $78,408, the balance of the loan as at that date, was
forgiven by the Company.
<TABLE>
<CAPTION>
5. CAPITAL ASSETS
2000
----
Accumulated Net Book
Cost Depreciation Value
$ $ $
------- ------- -------
<S> <C> <C> <C>
------- ------- -------
Furniture and fixtures 9,129 5,593 3,536
Computer hardware. . . 17,173 9,231 7,942
Computer software. . . 699 699 -
Leasehold improvements 3,096 2,089 1,007
------- ------- -------
30,097 17,612 12,485
------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
1999
----
Accumulated Net Book
Cost Depreciation Value
$ $ $
------- ------- -------
<S> <C> <C> <C>
------- ------- -------
Furniture and fixtures 9,203 4,709 4,494
Computer hardware. . . 17,173 5,828 11,345
Computer software. . . 699 633 66
Leasehold improvements 3,096 1,573 1,523
------- ------- -------
30,171 12,743 17,428
------- ------- -------
</TABLE>
6. BANK INDEBTEDNESS
The Company has a $33,765 ($50,000 Cdn.) line of credit with its bank which was
fully drawn at April 30, 2000 (1999 - $34,200 was drawn). This line of credit is
repayable on demand and bears interest at the bank's prime rate plus one and
one-half percent (prime rate - 7.00%). The Company is required to hold $7,306
(1999 - $7,045) in term deposits [see note 3]. A registered general security
agreement over assets has been pledged as collateral.
In addition to amounts drawn on its line of credit, the Company has a bank
overdraft at April 30, 2000 of $5,788 (1999 - $2,544).
<PAGE>
7. NOTES PAYABLE
The notes bear interest at 20% per annum payable monthly. On June 1, 2000, the
note payable was renegotiated to require a principal repayment of $23,478 on
September 1, 2000 with the remaining $21,610 due on March 15, 2001. The
principal repayments include penalties for the renegotiation. The estimated
fair value of the notes payable is $25,047. This is based on the estimated
present value of the principal and interest under the notes payable.
A personal asset of the shareholder has been pledged as collateral.
8. Share Capital
Authorized
Unlimited number of no par value Class A common voting shares
Unlimited number of no par value Class B common voting shares
Unlimited number of no par value Class C redeemable preferred shares
2000 1999
$ $
Issued and outstanding
100 common shares 70 70
-----------------
9. Income Taxes
The income tax expense differs from the amount computed by applying the Canadian
federal statutory tax rates to the loss before income taxes for the following
reasons:
<TABLE>
<CAPTION>
2000 1999
$ $
--------- ------
<S> <C> <C>
Income tax expense at the Canadian statutory rate. (21,444) 5,256
Increase (decrease) in taxes resulting from:
Change in deferred tax asset valuation allowance . 5,903 -
Non-deductible expenses. . . . . . . . . . . . . . 538 579
Forgiven stockholder debt. . . . . . . . . . . . 15,003 -
-------------------------------------------------- --------- ------
Income tax expense (recovery). . . . . . . . . . . - 5,835
-------------------------------------------------- --------- ------
</TABLE>
Future income taxes reflect the net tax effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. The components of the Company's
future tax assets are as follows:
<TABLE>
<CAPTION>
April 30, April 30,
2000 1999
$ $
-------- -----
<S> <C> <C>
Future tax assets:
Net operating loss carryforwards (5,894) -
Organization costs . . . . . . . (47) (51)
Depreciation . . . . . . . . . . 38 51
---------------------------------- -------- -----
Net future tax assets. . . . . . . 5,903 -
Valuation allowance. . . . . . . . (5,903) -
Net future tax assets. . . . . . . - -
---------------------------------- -------- -----
</TABLE>
The Company has provided a valuation allowance for the full amount of future tax
assets in light of its operating loss in the current year.
The Company has Canadian operating losses carried forward of $30,665 which
expire in 2007.
<PAGE>
10. Commitments
The Company is committed to the following annual minimum lease payments under
operating leases for premises and equipment:
$
------
2001 45,045
2002 40,056
2003 8,621
11. net change in non-cash working capital
<TABLE>
<CAPTION>
2000 1999
$ $
--------- ---------
<S> <C> <C>
Accounts receivable. . . . . . . . . . . 59,459 (12,929)
Prepaid expenses and deposits. . . . . . 32 51
Accounts payable and accrued liabilities (35,985) 24,757
Unearned revenue . . . . . . . . . . . . (2,850) (1,691)
Income taxes payable . . . . . . . . . . 2,888 1,010
---------------------------------------- --------- ---------
Change relating to operating activities. 23,544 11,198
---------------------------------------- --------- ---------
</TABLE>
12. segmented information
The Company's activities are conducted in one operating segment with all
activities relating to mortgage brokering. All activities are carried out in
Canada.
13. FINANCIAL INSTRUMENTS
Financial instruments comprising term deposits, accounts receivable, amounts due
from stockholders, deposits, bank indebtedness and accounts payable and accrued
liabilities approximate their fair value. It is management's opinion that the
Company is not exposed to significant currency or credit risks arising from
these financial instruments.
14. RECENT PRONOUNCEMENTS
In June, 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities", which became effective June 30, 2000. The Company does not
acquire derivatives or engage in hedging activities.
In December, 1999, the SEC issued SAB 101, Revenue Recognition in Financial
Statements, which will become effective December 31, 2000. The Company does not
expect the standard to have a material effect on its results.
15. SUBSEQUENT EVENT
On May 1, 2000, the Company amended its share capital such that 100,000 Class A
common voting shares and 259,520 new non-voting exchangeable common shares were
issued in exchange for the existing 100 common shares.
Effective June 16, 2000, EFinancial Depot.com purchased all the outstanding
Class A common voting shares of the Company in exchange for $592,636 to be paid
over the next six months. The former shareholders still hold the 295,520 issued
and outstanding non-voting exchangeable shares in the Company.
(b) Pro Forma Financial Information.
Consolidated Pro Forma Unaudited Balance Sheet
as of December 31, 1999
Consolidated Pro Forma Unaudited Statement of Operations
as of December 31, 1999
Notes to Condensed Pro Forma Unaudited Financial Statements
as of December 31, 1999
<TABLE>
<CAPTION>
EFINANCIAL DEPOT. COM, INC.
CONSOLIDATED PROFORMA UNAUDITED BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Pro forma Pro forma
eFinancial Westcor Adjustments Consolidated
------------ --------- ------------ --------------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,859 7,340 $ 19,199
Accounts Receivable, net of allowance . . . . . . . . . 119,610 51,827 171,437
Securities available for sale . . . . . . . . . . . . . 51,836 - 51,836
Accrued tax benefits. . . . . . . . . . . . . . . . . . 17,980 - 17,980
Prepaid expenses. . . . . . . . . . . . . . . . . . . . 35,005 2,447 37,452
Due from related parties. . . . . . . . . . . . . . . . - 3,323 3,323
------------ --------- --------------
236,290 64,937 301,227
PROPERTY AND EQUIPMENT, AT COST:. . . . . . . . . . . . . -
Furniture and equipment , net . . . . . . . . . . . . . 31,156 12,485 43,641
OTHER ASSETS:
Goodwill. . . . . . . . . . . . . . . . . . . . . . . . - - 1,580,151 (1) 1,580,151
------------ --------- ----------
$ 267,446 $ 77,422 $ 1,925,019
============ ========= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses . . . . . . . . . 152,328 65,774 7,364 (1) 225,466
Notes payable to seller . . . . . . . . . . . . . . . . 592,636 (1) 592,636
Notes payable . . . . . . . . . . . . . . . . . . . . . 28,220 82,772 110,992
------------ --------- --------------
180,548 148,548 929,094
STOCKHOLDERS' EQUITY: . . . . . . . . . . . . . . . . . .
Common stock. . . . . . . . . . . . . . . . . . . . . . 12,500 70 (70) (1) 12,574
74 (2)
Additional paid in capital . . . . . . . . . . . . . . . . 908,720 (1) 1,135,827
227,107 (1)
Accumulated earnings/(deficit) . . . . . . . . . . . . . . 96,907 (71,427) 71,427 (1) (130,200)
(227,107) (2)
Unrealized loss on securities available for sale . . . . (22,509) - (22,509)
Cumulative translation adjustment. . . . . . . . . . . . - 233 233
------------ --------- --------------
86,898 (71,124) 995,925
------------ --------- --------------
$ 267,446 $ 77,424 $ 1,925,019
============ ========= ==============
See accompanying notes to pro forma financial information
</TABLE>
<TABLE>
<CAPTION>
EFINANCIAL DEPOT. COM, INC.
CONSOLIDATED PROFORMA UNAUDITED STATEMENT OF OPERATIONS
DECEMBER 31, 1999
Pro forma Pro forma
eFinancial Westcor Adjustments Consolidated
------------ ------------ ----------- --------------
<S> <C> <C> <C> <C>
Operating revenue . . . . . . . . . . . . . . . . . . . . $ 1,197,813 $ 511,959 $ 1,709,772
Operating expenses:
General and administrative. . . . . . . . . . . . . . . 1,023,355 615,366 227,181 (2) 1,865,902
Depreciation and amortization . . . . . . . . . . . . . 3,520 4,848 79,008 (3) 87,376
------------ ------------ ------------
1,026,875 620,214 1,953,278
------------ ------------ ----------- ------------
Operating income (loss) . . . . . . . . . . . . . . . . . 170,938 (108,255) (243,506)
Interest expense. . . . . . . . . . . . . . . . . . . . . - (3,902) (3,902)
Realized loss on securities available for sale. . . . . . (32,203) - (32,203)
------------ ------------ ----------- ------------
Net income (loss) before taxes . . . . . . . . . . . . . 138,735 (112,157) (279,611)
Income tax (expense) benefit. . . . . . . . . . . . . . . (75,350) - (75,350)
------------ ------------ ----------- ------------
Net income (loss) . . . . . . . . . . . . . . . . . . . . $ 63,385 $ (112,157) $ (354,961)
============ ============ =========== ============
Other comprehensive income (loss):
Foreign currency translation adjustment . . . . . . . . . 484 484
------------ ------------ -------------
Comprehensive income (loss) . . . . . . . . . . . . . . . $ ( 111,673) $ (354,477)
============ ============ ==============
Earnings (loss) per common share:
Basic and diluted . . . . . . . . . . . . . . . . . . . $ 0.01 $ (0.03)
============ ============
Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . 12,500,000 12,573,880
Diluted . . . . . . . . . . . . . . . . . . . . . . . . 12,500,000 12,869,400
See accompanying notes to proforma financial information
</TABLE>
<PAGE>
eFINANCIAL DEPOT.COM, INC.
NOTES TO CONDENSED PROFORMA UNAUDITED FINANCIAL STATEMENTS
December 31, 1999
The Proforma Unaudited Financial Statements have been prepared in order to
present consolidated financial position and results of operations of eFinancial
Depot.Com, Inc. (eFinancial) and Westcor Mortgage, Inc. (Westcor) as if the
acquisition had occurred at the beginning of 1999.
In consideration for the acquisition of all of the issued and outstanding shares
of common stock of Westcor, eFinancial issued promissory notes totaling
$ 592,636, a retainage holdback of $ 7,364 and 295,520 newly issued exchangeable
shares of Westcor . The exchangeable shares are exchangeable into the
Company's common stock on a one for one basis. The exchangeable stock
issued in this transaction was valued at the average of the eFinancial
stock closing price five days prior to June 22, 2000.
Following is a description of the proforma adjustments that have been made to
the financial statements.
(1) To record the acquisition of Westcor for stock and notes payable. The
significant components of this transaction are:
Stock issued $ 908,724
Notes payable issued 592,636
Retainage payable 7,364
Excess of liabilities assumed over assets acquired 71,427
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Total consideration paid $ 1,580,151
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(2) To record issuance of 73,880 shares of unregistered common stock in
connection with financial advisory services rendered to the Company. The shares
were valued at the average of the eFinancial stock closing price five days prior
to June 22, 2000.
(3) To record one year's amortization of intangibles arising from the
acquisition of Westcor. The intangible assets acquired in the acquisition of
Westcor are being amortized over a twenty-year period.
(c) Exhibits
(2) Plan of Acquisition, reorganization, arrangement, liquidation or
succession
2.1 Share Purchase Agreement dated February 29, 2000 between Patricia
Kirkham and Dennis Petersen and the Company
2.2 Support Agreement dated February 29, 2000 between the Registrant
and Westcor Mortgage Inc.
2.3 Voting Trust and Exchange Agreement dated February 29, 2000 among the
Registrant, Westcor Mortgage Inc., Miller Thomson, Patricia Kirkham and Dennis
Petersen
2.4 Hypothecation Agreement dated February 29, 2000 among Patricia
Kirkham, Dennis Petersen, Westcor Mortgage Inc., Miller Thomson and the
Registrant
2.5 Escrow Agreement dated February 29, 2000 among the Registrant, Clark,
Wilson, Patricia Kirkham, Dennis Petersen, Oxford Capital Corp. and Westcor
Mortgage Inc.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
<PAGE>
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.
E-FINANCIAL DEPOT.COM, INC.
Date: August 31, 2000 /s/ John Huguet
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John Huguet, President and CEO
