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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
the ("EXCHANGE ACT")
Date of Report (date of earliest event reported): August 16, 2000
i2corp.com
(the "COMPANY")
(Exact Name of Registrant as Specified in its Charter)
Nevada 84-1423373
(State or Other Jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
5392 S. Eastern Avenue, Bldg. A-North
Las Vegas, Nevada 89119
(Address of Principal Executive Offices) (Zip Code)
(702) 564-2240
(Registrant's Telephone Number, Including Area Code)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
This Amendment to Current Report on Form 8-K of i2corp.com (the
"COMPANY") is being filed to restate pro forma financial information from
what the Company filed on Form 8-K/A filed on June 6, 2000 with respect to
the merger with PCG Media, Inc. and to give effect to $3.1 million in capital
contributions previously agreed to informally by a minority shareholder but
not formalized until August 2000.
1
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(b) PRO FORMA FINANCIAL INFORMATION.
The following revised unaudited pro forma balance sheet as of December
31, 1999, which is attached as Exhibit 99.2, gives effect to the Merger
described in Item 2. The revised unaudited pro forma information is presented
for illustrative purposes only and may not be indicative of the results that
would have been obtained had the transaction actually occurred on the dates
assumed, nor is it necessarily indicative of the future consolidated results of
operations.
(c) EXHIBITS.
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EXHIBIT NO. DESCRIPTION
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2.1 Agreement and Plan of Merger dated as of January 18, 2000
between PCG Media, Inc. and Home Gambling Network, Inc. (filed
as Exhibit 1.1 to the original Report on Form 8-K dated
February 8, 2000 and filed with the Commission on February 14,
2000 and hereby incorporated by reference).
2.2 Certificate of Merger between PCG Media, Inc. and Home Gambling
Network, Inc. (filed as Exhibit 1.2 to the original Report on
Form 8-K dated February 8, 2000 and filed with the Commission
on February 14, 2000 and hereby incorporated by reference)
3.1 Amended and Restated Articles of Incorporation (filed as
Exhibit 1.3 to the original Report on Form 8-K dated February
8, 2000 and filed with the Commission on February 14, 2000 and
hereby incorporated by reference).
3.2 Revised Bylaws of i2corp.com (filed as Exhibit 3.2 to the
original Report on Form 8-K dated June 6, 2000 and filed with
the Commission on June 6, 2000 and hereby incorporated by
referenced).
99.1* The following audited financial statements of Home Gambling
Network, Inc.:
Independent Auditors' Report
Balance Sheet as of December 31, 1999
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2
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Statements of Development Stage Operations and Deficit for the
years ended December 31, 1999, 1998 and for the cumulative period
from August 2, 1995 through December 31, 1999
Statement of Cash Flows for the years ended December 31, 1999,
1998 and for the cumulative period from August 2, 1995 through
December 31, 1999,
99.2* The following pro forma financial information (unaudited) of
i2corp.com (formerly, PCG Media, Inc. and Home Gambling Network,
Inc.):
Balance Sheet as of December 31, 1999
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* filed herewith
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.
Dated: August 17, 2000
i2corp.com
By: /s/ dee dee molnick
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(Print name and title of signing officer)
dee dee Molnick, President
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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99.1* The following audited financial statements of Home Gambling
Network, Inc.:
Independent Auditors' Report
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3
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Balance Sheet as of December 31, 1999
Statements of Development Stage Operations and Deficit for the
years ended December 31, 1999, 1998 and for the cumulative period
from August 2, 1995 through December 31, 1999
Statement of Cash Flows for the years ended December 31, 1999,
1998 and for the cumulative period from August 2, 1995 through
December 31, 1999,
99.2* The following pro forma financial information (unaudited) of
i2corp.com (formerly, PCG Media, Inc. and Home Gambling Network,
Inc.):
Balance Sheet as of December 31, 1999
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* filed herewith
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Home Gambling Network, Inc.
Las Vegas, Nevada
We have audited the accompanying balance sheet of Home Gambling Network, Inc.,
(the Company) (a development stage enterprise) as of December 31, 1999, and the
related statements of development stage operations and deficit, and cash flows
for each of the two years ended December 31, 1999 and 1998 and for the period
from inception, August 2, 1995 through December 31, 1999. 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 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 audits provide a reasonable basis for our opinion.
In our opinion, the accompanying financial statements of Home Gambling Network,
Inc., present fairly, in all material respects, its financial position as of
December 31, 1999, and the results of its operations and cash flows for the
periods presented, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company's
ability to pay its obligations when due and to commence operations is dependent
upon its issuing licenses for its product and its ability to raise additional
capital. These conditions raise substantial doubt as to the Company's ability to
continue as a going concern. Management's plans in regard to those matters are
also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
April 4, 2000, except for Note 1, as to which the date is August 9, 2000
F-1
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HOME GAMBLING NETWORK, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
DECEMBER 31, 1999
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ASSETS
CURRENT ASSETS, cash $ 623
FURNITURE, FIXTURES AND EQUIPMENT, net of
accumulated depreciation 13,718
PATENT 80,445
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$ 94,786
===============
LIABILITIES AND STOCKHOLDERS' EQUITY DEFICIENCY
CURRENT LIABILITIES, accounts payable $ 135,197
ADVANCES FROM STOCKHOLDERS 110,125
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245,322
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STOCKHOLDERS' EQUITY DEFICIENCY:
Common stock, 10,000,000 shares authorized, 1,000,000
issued and outstanding, $.001 par value 1,000
Deficit accumulated in the development stage (151,536)
---------------
(150,536)
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$ 94,786
===============
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SEE NOTES TO FINANCIAL STATEMENTS. F-2
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HOME GAMBLING NETWORK, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF DEVELOPMENT STAGE OPERATIONS AND DEFICIT
YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE CUMULATIVE
PERIOD FROM AUGUST 2, 1995, THROUGH DECEMBER 31, 1999
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YEAR ENDED DECEMBER 31, AUGUST 2, 1995,
--------------------------------- THROUGH
1999 1998 DECEMBER 31, 1999
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Selling, general and administrative expenses $ 126,631 $ 25,198 $ 152,699
Forfeited license deposit revenue (13,460) (13,460)
Interest expense 7,866 3,740 12,297
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NET LOSS 121,037 28,938 151,536
DEFICIT ACCUMULATED IN THE DEVELOPMENT STAGE:
Beginning of period 30,499 1,561
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End of period $ 151,536 $ 30,499 $ 151,536
============== ============= =============
NET LOSS PER COMMON SHARE $ 0.121 $ 0.029 $ 0.152
============== ============= =============
NUMBER OF COMMON SHARES OUTSTANDING 1,000,000 1,000,000 1,000,000
============== ============= =============
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SEE NOTES TO FINANCIAL STATEMENTS. F-3
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HOME GAMBLING NETWORK, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE CUMULATIVE
PERIOD FROM AUGUST 2, 1995, THROUGH DECEMBER 31, 1999
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OPERATING ACTIVITIES:
Net cash provided by operating activities $ 22,903
INVESTING ACTIVITIES:
Payments of patent costs (22,280)
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NET INCREASE IN CASH AND BALANCE, END OF YEAR $ 623
=============
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SEE NOTES TO FINANCIAL STATEMENTS. F-4
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HOME GAMBLING NETWORK, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDING DECEMBER 31, 1999 AND 1998, AND FOR THE CUMULATIVE PERIOD FROM
INCEPTION, AUGUST 2, 1995, THROUGH DECEMBER 31, 1999
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1. BACKGROUND INFORMATION:
BUSINESS ACTIVITIES AND HISTORY. Home Gambling Network, Inc. (the Company) holds
a patent for a method that allows entities that it licenses, via the internet
and other electronic media, to bring live gaming to players in remote locations,
and that enables making and receiving electronic payments to and from such
players. The Company has been in the development stage since its inception,
August 2, 1995.
In February 2000, in what is commonly referred to as a "reverse acquisition,"
100% of the Company's stock was effectively exchanged for a controlling interest
in a publicly held "shell" company, PCG Media, Inc. (referred to herein as PCG,
which concurrently changed its name to i2corp.com) (Note 4). Prior to this
transaction, PCG had recently registered its outstanding common stock with the
United States Securities and Exchange Commission (SEC) under the Securities
Exchange Act of 1934.
For financial accounting purposes, the acquisition will be treated as an
acquisition of PCG by the Company and as a recapitalization of the Company. The
historical financial statements presented are those of the Company.
In connection with, and as an incentive for the Company to enter into, the
reverse acquisition, a minority stockholder (then of PCG) agreed informally to
make a capital contribution of $3.1 million, which understanding was formalized
in August 2000. The receivable may be paid off in whole or in part at any time
without premium or discount. In the period subsequent to December 31, 1999,
$650,000 was received in cash, and a $500,000 loan made by the minority
stockholder was applied against this obligation.
EQUIPMENT, FURNITURE AND FIXTURES. Equipment, furniture and fixtures are stated
at cost. Depreciation is provided using the declining balance method over the
estimated useful lives of the assets.
PATENT COSTS. Patent costs are amortized over the life of the patents.
ADVERTISING COSTS. Costs for advertising are expensed as incurred. Advertising
costs expensed totaled $24,342 and $4,701 in 1999 and 1998.
USE OF ESTIMATES. Timely preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures, some of which
may require revision in futures periods.
2. COMMITMENTS AND CONTINGENCIES:
OPERATING LEASES. Subsequent to year-end, the Company entered into noncancelable
operating lease agreements for automobiles and office space.
The Company's minimum future lease under noncancelable operating leases are as
follows as of December 31, 1999:
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2000 $ 54,244
2001 64,964
2002 9,440
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GOING CONCERN. The accompanying financial statements have been prepared assuming
that the company will continue as a going concern. The Company has accumulated a
development stage deficit of $151,536. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
It is management's plan to finance its operations for the foreseeable primarily
with proceeds from the capital contribution receivable from the minority
shareholder and to explore other financing options in the investment community.
Management is also in the process of negotiating licensing agreements that, if
consummated, would generate operating revenues. However, there can be no
assurance that these sources will provide sufficient cash inflows to enable the
Company to achieve its operational objectives.
F-5
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HOME GAMBLING NETWORK, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDING DECEMBER 31, 1999 AND 1998, AND FOR THE CUMULATIVE PERIOD FROM
INCEPTION, AUGUST 2, 1995, THROUGH DECEMBER 31, 1999
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OTHER CONTINGENCY. The Company has been presented with claims asserting that
certain individuals and/or entities are entitled to an aggregate of
approximately 400,000 shares of the Company's common stock. Based on the
available evidence, management believes these claims are inconsistent with the
Company's records and invalid. It is believed that there may be other similar
claims asserted in the future. However, based, in part, upon the advice of
counsel, management believes that such matters will not have a significant
effect on the Company if the Company would be required to issue some or all of
the shares that are claimed by these individuals or entities.
3. INCOME TAXES:
Because, as of December 31, 1999, the Company has engaged in extensive
development stage activities and generated limited revenues over a period of
five years, it has incurred substantial losses, the income tax benefits of which
have been effectively offset by a 100% valuation allowance and, therefore are
not reflected in the accompanying financial statements.
4. CAPITALIZATION AND RELATED PARTY TRANSACTIONS:
The Company was capitalized at its inception with 1,000,000 shares of common
stock at par value issued in exchange for $1,000 in funds advanced on its behalf
by the stockholders.
In addition, the Company's sole source of financing has been advances made on
its behalf by its stockholders (Note 6), which have accrued interest at federal
statutory rates and are due on demand. Interest charged to operations on these
related party obligations totaled $6,621, $3,740 and $11,052 for 1999, 1998 and
the cumulative period from inception, respectively.
The Company's officer/stockholders have provided their services to the Company,
during substantially all of the development stage periods presented, without
compensation.
5. FINANCIAL INSTRUMENTS:
The carrying amounts of financial instruments approximates their fair value
because of their short maturities or because the debt bears fixed rates that
approximate current rates available on similar borrowings, except for
stockholder advances, for which the fair value cannot be estimated because of
the nature of related party transactions.
6. SUPPLEMENTAL CASH FLOW INFORMATION:
Since no bank account was opened for the Company until June 1999; no statement
of cash flows is presented for periods prior to 1999.
RECONCILIATION OF 1999 NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:
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Net loss $(121,037)
Depreciation and amortization 5,943
Interest expense accrued 6,621
Increase in accounts payable 131,376
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Net cash provided by operations $ 22,903
=========
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NON-CASH INVESTING AND FINANCING ACTIVITIES. Advances made by the shareholders
on behalf of the Company for patent costs, other asset purchases, and selling,
general and administrative expenses totaled $53,319, $38,117 and $99,073 in
1999, 1998 and the cumulative period presented, respectively.
F-6
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I2 CORP.COM (FORMERLY, PCG MEDIA, INC.), AND HOME GAMBLING NETWORK, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
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The following pro forma financial information has been derived from the
unaudited financial statements of PCG Media, Inc. (PCG) and the accompanying
audited financial statements of Home Gambling Network, Inc. (HGN) as of and for
the year ended December 31, 1999. It is presented for informational purposes
only and should be read in conjunction with the accompanying notes thereto and
historical financial statements of HGN and the related notes thereto. The pro
forma balance sheet is adjusted to give effect to the acquisition and related
recapitalization as if they had occurred on December 31, 1999. The pro forma
loss per share data presented are computed as if the number of shares
outstanding immediately after the acquisition (30,000,000) were outstanding for
all periods for which HGN's financial statements are presented. Such pro forma
loss per share data are not indicative of actual results that might have been
achieved had the acquisition taken place as assumed for pro forma purposes or
that might be achieved in the future.
PRO FORMA BALANCE SHEET, DECEMBER 31, 1999:
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I2CORP.COM AND
SUBSIDIARY
HISTORICAL PRO FORMA COMBINED
HGN ADJUSTMENTS PRO FORMA
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ASSETS
CURRENT ASSET, cash $ 623 $ 623
EQUIPMENT , FURNITURE AND FIXTURES, net of
accumulated depreciation of $10,313 13,718 13,718
UNAMORTIZED PATENT COSTS 80,445 80,445
----------------- -----------------------
$ 94,786 $ 94,786
================= =======================
LIABILITIES AND STOCKHOLDERS' EQUITY DEFICIENCY
CURRENT LIABILITIES, accounts payable $ 135,197 135,197
Advances from stockholders 110,125 110,125
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245,322 245,322
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STOCKHOLDERS' EQUITY DEFICIENCY:
Common stock (1) 1,000 30,000 (2)
(1,000) (3) 30,000
Additional paid-in capital (deficiency) (30,000) (2)
1,000 (3)
3,100,000 (4) 3,071,000
Capital contribution receivable (3,100,000) (4) (3,100,000)
Deficit accumulated during the development stage (151,536) (151,536)
----------------- -----------------------
(150,536) (150,536)
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$ 94,786 $ 94,786
================= =======================
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PRO FORMA LOSS PER SHARE DATA:
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YEAR ENDED DECEMBER 31, AUGUST 2, 1995,
----------------------------------- THROUGH
1999 1998 DECEMBER 31, 1999
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PRO FORMA NET LOSS PER COMMON SHARE $ 0.005 $ 0.001 $ 0.006
================= ================ =======================
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NOTES TO PRO FORMA FINANCIAL INFORMATION:
(1) After giving retroactive effect to the cancellation for lack of
consideration of 2,300,000 shares as of the date of their original
issuance.
(2) To give effect to shares issued in connection with acquisition.
(3) To eliminate historical common stock of HGN.
(4) Capital contribution made concurrent with the merger.
F-7
