<PAGE>
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 19, 2000
-------------
Asia Web Holdings, Inc.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Commission File Number 000-27757
Delaware 33-0529299
------------------------------- -------------------
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
1947 Camino Vida Roble, Suite 102, Carlsbad, California 92008
----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (760) 804-0023
--------------
Acubid.com, Inc.
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) With respect to the transaction described in ITEM 2 of this
report, there has been a change in control of the Registrant
represented by 44,000,000 new common shares issued by the
Registrant.
In conjunction with the transaction, there were certain
changes to the Registrant's Board of Directors. Michael
Schaffer, Chairman of the Board and Chief Executive Officer
will remain as Chief Executive Officer and as a member of the
Board of Directors Waddy Stephenson, Director and Vice
President of Technical Development and Secretary will remain
in those positions. Lawrence Schaffer, Director and President
did not stand for re-election and ceased to be a member of the
Board of Directors upon the closing of the transaction
described in ITEM 2. Mr. Lawrence Schaffer did retain his
position as President.
Upon the closing of the transaction described in ITEM 2, six
new directors, elected at the Annual Meeting of Stockholders
on May 22, 2000, joined the Board of Directors. After his
election and the closing, Tjahjono Soerjodibroto, an
Indonesian citizen, was appointed to serve a five year term as
Chairman of the Board of Directors and will receive annual
compensation of $200,000 and certain stock options. Outside
directors include: William Millard; Terry Giles; Raj Singam, a
citizen of Singapore; Gordon Holterman; and, Bosko Djordjevic.
On July 21, 2000, subsequent to the Registrant's report on
Form 8-K filed July 5, 2000, Gordon Holterman resigned as a
director of the Company. There were no disagreements between
the Registrant and Mr. Holterman concerning the Registrant's
operations, policies or practices.
(b) There are currently no arrangements that will result in a
change of control of the Registrant. Beneficial owners of more
than 5% of the outstanding Common Stock of the Registrant,
after giving effect to the transaction described in ITEM 2 of
this report are as follows:
-1-
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Percentage
of Nature of of
Beneficial Owner Beneficial Ownership Ownership (1)
-------------------- -------------------- -------------
<S> <C> <C>
Alanberg Pte. Ltd. (2)(3) 41,400,000 shares of 78.40%
20 Raffles Place #17-00 Common Stock of
Ocean Tower, Singapore Record and Beneficially
048620
Francois Gontha 20,700,000 shares of 39.20%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 50%
048620 shareholder of Alanberg
Pte Ltd.
Asia Interactive Holdings(4) 20,700,000 shares of 39.20%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 50%
048620 shareholder of Alanberg
Pte Ltd.
Ernst and Young
Trust Sdn.Bhd.(5) 20,700,000 shares of 39.20%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 100%
048620 shareholder of Asia
Interactive Holdings
Pang Pah Loh a/k/a
Pang Pak Lok (6) 3,449,770.009 shares of 6.5332%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6655%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
Mohamed Sukarno
bin Tun Saroon(6) 3,449,770.009 shares of 6.5332%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6655%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
Foo San Kan(6) 3,449,770.009 shares of 6.5332%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6655%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
-2-
<PAGE>
Kevin How Kow(6) 3,449,770.009 shares of 6.5332%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6655%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
Nordin bin Baharuddin(6) 3,450,459.96 shares of 6.53457%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6688%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
Petrus Gimbaud(6) 3,450,459.96 shares of 6.53457%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6688%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
</TABLE>
(1) Percentage of ownership based on voting rights associated with total
outstanding common shares of 52,803,160 issued and outstanding after
giving effect to the transaction described in ITEM 2 of this report.
(2) The Directors of Alanberg Pte Ltd. are as follow: Raj Singam; Dewi
Gontha Sulisto; Francois Gontha; and Noorjahan Meurling.
(3) After the Closing of the transaction described in ITEM 2, Alanberg Pte
Ltd sold or otherwise conveyed 2,600,000 share of the Registrant's
Common Stock to Kingslake Holding Pte. Ltd.
(4) Asia Interactive Holdings, a corporation organized and existing under
the laws of Malaysia, was incorporated on March 7, 2000.
(5) Ernst & Young Trust Sdn. Bhd., a corporation organized and existing
under the laws of Malaysia, was incorporated on October 5, 1990.
(6) The total shares issued and outstanding of Ernst & Young Trust Sdn.Bhd.
is 32,002. Pang Pah Loh (also known as Pang Pak Lok), Mohamed Sukamo
bin Tun Saroon, Foo san Kan and Kevin How Kow each hold 5000 shares.
Nordin bin Baharuddin and Petrus Gimbad each hold 5001 shares.
After giving effect to the transaction with the Selim K. Zilkha Trust
("Zilkha Trust") described in ITEM 2, beneficial and record owners of more than
5% of the outstanding Common Stock of the Registrant, is as follows:
-3-
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Percentage
of Nature of of
Beneficial Owner Beneficial Ownership Ownership (1)
---------------- -------------------- -------------
<S> <C> <C>
Alanberg Pte. Ltd. (2)(3)(4) 41,400,000 shares of 63.89%
20 Raffles Place #17-00 Common Stock of
Ocean Tower, Singapore Record and Beneficially
048620
Selim K. Zilkha Trust 12,000,000 shares of 18.52%
c/o Selim K. Zilkha Common Stock
1001 McKinney, Beneficially
Suite 1900
Houston, Texas 77002
Francois Gontha 20,700,000 shares of 31.942%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 50%
048620 shareholder of Alanberg
Pte Ltd.
Asia Interactive Holdings(4) 20,700,000 shares of 31.942%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 50%
048620 shareholder of Alanberg
Pte Ltd.
Ernst and Young
Trust Sdn.Bhd.(5) 20,700,000 shares of 31.942%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 100%
048620 shareholder of Asia
Interactive Holdings
Pang Pah Loh a/k/a
Pang Pak Lok (6) 3,449,770.009 shares of 5.3234%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6655%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
Mohamed Sukarno
bin Tun Saroon(6) 3,449,770.009 shares of 5.3234%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6655%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
-4-
<PAGE>
Foo San Kan(6) 3,449,770.009 shares of 5.3234%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6655%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
Kevin How Kow(6) 3,449,770.009 shares of 5.3234%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6655%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
Nordin bin Baharuddin(6) 3,450,459.96 shares of 5.3245%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6688%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
Petrus Gimbaud(6) 3,450,459.96 shares of 5.3245%
20 Raffles Place #17-00 Common Stock held
Ocean Tower, Singapore Beneficially as a 16.6688%
048620 shareholder of Ernst & Young
Trust Sdn.Bhd.
</TABLE>
(1) Percentage of ownership based on voting rights associated with total
outstanding common shares of 64,803,160 issued and outstanding after
giving effect to the transaction described in ITEM 2 of this report.
This assumes the conversion of the One Million shares of the Series B
Preferred Stock held by the Zilkha Trust into Five Million shares of
Common Stock and the exercise of both Warrants granted to the Zilkha
Trust for an additional Seven Million common shares.
(2) The Directors of Alanberg Pte Ltd. are as follow: Raj Singam; Dewi
Gontha Sulisto; Francois Gontha; and Noorjahan Meurling.
(3) After the Closing of the transaction described in ITEM 2, Alanberg Pte
Ltd sold or otherwise conveyed 2,600,000 share of the Registrant's
Common Stock to Kingslake Holding Pte. Ltd.
(4) Asia Interactive Holdings, a corporation organized and existing under
the laws of Malaysia, was incorporated on March 7, 2000.
(5) Ernst & Young Trust Sdn. Bhd., a corporation organized and existing
under the laws of Malaysia, was incorporated on October 5, 1990.
(6) The total shares issued and outstanding of Ernst & Young Trust Sdn.Bhd.
is 32,002.
-5-
<PAGE>
Pang Pah Loh (also known as Pang Pak Lok), Mohamed Sukamo bin Tun
Saroon, Foo san Kan and Kevin How Kow each hold 5000 shares. Nordin bin
Baharuddin and Petrus Gimbad each hold 5001 shares.
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
(1) Stock Purchase Agreement for the Acquisition of 90% of the Outstanding
Shares of PT. Jaring Data Interaktif
On March 13, 2000, the Registrant entered into a Stock Purchase
Agreement with Adisatrya Surya Sulisto ("Seller" or "Sulisto"), owner of at
least 90% of the issued and outstanding shares of Jaring Data Interaktif,
("JDI") wherein and whereby, the Registrant, through its wholly owned
subsidiary, Acubid Acquisition Corp., was to purchase 90% of the issued and
outstanding shares of JDI in exchange for 44,000,000 shares of the Registrant's
Common Stock. The Stock Purchase Agreement also contemplated that an additional
5,000,000 shares of the Registrant's common stock would be issued to the Seller
in the event that the Seller raised an additional $10,000,000 in capital for the
Registrant.
On March 24, 2000, Registrant entered into an Amended and Restated
Stock Purchase Agreement (the "Agreement") which replaced the Stock Purchase
Agreement executed March 13, 2000. This Agreement did not differ significantly
from the March 13, 2000 Stock Purchase Agreement and essentially clarified
certain terms of the original agreement and expanded the representations and
warranties made by the Registrant and Seller. Again, in this Agreement, the
Registrant, through its wholly owned subsidiary, Acubid Acquisition Corp., was
to purchase 90% of the issued and outstanding shares of JDI from Seller in
exchange for 44,000,000 shares of the Registrant's common stock.
The Agreement also provided that Seller contemplated entering into an
arrangement with the Selim K. Zilkha Trust ("Zilkha" or the "Trust") wherein the
Trust would purchase 5,000,000 shares of Registrant's Common Stock in exchange
for a $10,000,000 capital infusion in the Registrant. It was contemplated that
this Private Placement would close simultaneously with the closing under the
Agreement and after Registrant receives appropriate investment representations
from Zilkha. The Agreement further provided that Zilkha, would be entitled to
all the rights, remedies, and other benefits under the Agreement as Seller, on a
pro rata basis. One of these other benefits included certain registration
rights.
The Agreement granted Seller and Zilkha and any Transferee of either
with registration rights that included one demand registration and an unlimited
number of incidental or "piggyback" registrations. In all "piggyback"
registrations contemplated by the Agreement, the Registrant was to pay all costs
and expenses with the exception of underwriting commissions and discounts,
transfer taxes and legal fees for the selling shareholders. As for the demand
registration, the Agreement provided, that the Registrant was to pay all costs
and expenses with the exception of underwriting commissions and discounts,
transfer taxes and legal fees and Commission and NASD filing fee, and state
securities registration and filing fees attributable solely to inclusion of the
selling shareholders' stock in the registration statement.
-6-
<PAGE>
Shareholder approval was required by the Agreement to complete the
transaction. Additionally, shareholder approval was also required since the
transaction contemplated a change in the name of the Registrant to Asia Web
Holdings, Inc. and since the completion of the transaction required increasing
the authorized shares of Common Stock from 50,000,000 to 100,000,000.
The Agreement provided that prior to closing, the Bylaws of the
Registrant and its wholly owned subsidiary would be amended to increase the
Board of Directors to eight (8) directors. Upon closing, the Agreement
contemplated that when the Registrant solicited proxies for approval of the
Agreement by the Shareholders, it would also solicit proxies for the election of
a Board of Directors consisting of eight persons, six (6) of which were to be
designated by the Seller and two of which were to be designated by the current
management.
The Agreement further contemplated that, upon closing, Michael
Schaffer, the Registrant's current Chief Executive Officer would enter into an
employment agreement in which Mr. Schaffer i) would serve as Chief Executive
Officer for a period of five (5) years; ii) receive an annual salary of $150,000
per year plus a qualified option package; iii) may be terminated by the
Registrant, at any time, by providing him with a severance of 1 1/2 years of
compensation at any time during the first year, 1 year compensation during the
next three years, and 1/2 year compensation during the fifth or last year. The
Agreement further contemplated providing Lawrence Schaffer, President, and Waddy
Stephenson, Chief Technical Officer similar employment contracts at their
present compensation levels.
The Agreement contemplated that closing would occur no later than
August 31, 2000 and that the Agreement could be terminated by either party if
the closing did not occur by that date.
Closing was also subject to the approval of the Indonesian Badan
Penanaman Modal or Investment Board and was obtained on March 24, 2000. Closing
was also subject to the approval of the Ministry of Laws and Legislation of the
amended Articles of Association of JDI reflecting the position of the Registrant
as a shareholder. Final approval of the Ministry of Laws and Legislation was
obtained on June 6, 2000. Amended and final approval of Badan Penanaman Modal or
Investment Board was obtained on June 16, 2000.
The Agreement also contemplated that the Seller would transfer the JDI
stock to an offshore entity which would be substituted in the in the place of
the Seller.
The Annual Meeting of Stockholders was held on May 22, 2000 and at that
meeting, the shareholders of the Registrant approved and adopted the following:
-7-
<PAGE>
(1) Amended and Restated Stock Purchase Agreement, dated as of
March 24, 1999 (the "Agreement"), by and among AcuBid, AcuBid
Acquisition Corporation ("Acquisition Corp."), PT Jaring Data
Interaktif ("JDI") and Adisatrya Surya Sulisto ("Sulisto") or
his assignee pursuant to which AcuBid, through Acquisition
Corp., would purchase 90% of the issued and outstanding shares
of JDI from Sulisto in exchange for 44,000,000 shares of
AcuBid common stock, par value $.001 per share (the "Common
Stock")This agreement also contemplated that at the time of
the Acquisition, Selim K. Zilkha Trust ("Zilkha") who had
indicated an interest in acquiring shares of the Registrant if
the Acquisition is completed, would purchase 5,000,000 shares
of Common Stock at $2.00 per share for an aggregate purchase
price of $10,000,000.
(2) Amendments to the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock from
50,000,000 to 100,000,000 shares and change the name of the
Company to Asia Web Holdings, Inc.;
(3) The election of the Michael Schaffer; Waddy Stephenson;
Tjahjono Soerjodibroto; William Millard; Terry Giles; Raj
Singam; Gordon Holterman; and, Bosko Djordjevic to the Board
of Director for a term of one year and effective upon Closing;
(4) The 1999 Incentive Equity Plan;
(5) The 1999 Stock Option Plan for Non-Employee Directors; and,
(6) The ratification of the appointment of Israeloff, Trattner &
Co., P.C. as the Registrants independent auditors for the
fiscal year ending August 31, 2000.
Implementation of No.2 above was condition on approval of No.1 and the
completion of the Acquisition. The election of the six directors recommended by
Sulisto (all of the above, excluding Michael Schaffer and Waddy Stephenson) was
only to be effective upon closing of the Acquisition.
On June 2, 2000, Registrant filed the Restated Certificate of
Incorporation of Acubid.com, Inc. changing the authorized shares and changing
the name of the Company from Acubid.com, Inc. to Asia Web Holdings, Inc.
Between May 22, 2000 and June 28, Registrant entered into the following
agreements with the officers and directors, including some of the directors
whose election was to be effective upon closing:
-8-
<PAGE>
Michael Schaffer
An employment agreement between Michael Schaffer and Asia Web Holdings,
Inc was entered into on June 1, 2000. In return for his serving as Chief
Executive Officer for the next five years, Mr. Schaffer will receive an annual
salary of $150,000 plus a monthly car allowance of $500. Additionally, in the
employment agreement, Mr. Schaffer was granted options to purchase 500,000
shares of common stock. Of those 500,000 options, 300,000 are non-qualified
options and subject to the terms of a Stock Option Agreement also executed on
June 1, 2000. The remaining 200,000 options are incentive equity options and
subject to the terms of the Company's Incentive Equity Plan. The non-qualified
options vest at a rate of 150,000 per year, the first vesting commencing
immediately with the signing of the employment agreement. The exercise price for
the non-qualified options shall be $2.50 per share. The incentive equity options
vest at a rate of 40,000 per year, the first vesting commencing immediately with
the signing of the employment agreement. The exercise price for the incentive
equity options is $2.50 per share. No additional director compensation is
presently provided to Mr. Schaffer. In the event Mr. Schaffer is terminated by
the Registrant without cause, Registrant is obligated to pay Mr. Schaffer: (a)
an amount equal to one and one half times one year of the his base salary if his
employment is terminated within the first year; (b) an amount equal to one year
of his base if Mr. Schaffer is terminated during the three years following the
first anniversary of the employment agreement; and, (c) an amount equal to one
half of one year of the base salary if Mr. Schaffer is terminated any time
thereafter during the term of the employment agreement.
Waddy Stephenson
An employment agreement between Waddy Stephenson and Asia Web Holdings,
Inc was entered into on June 1, 2000. In return for his serving as Chief
Technology Officer for the next five years, Mr. Stephenson will receive an
annual salary of $100,000 plus a monthly car allowance of $450. Additionally, in
the employment agreement, Mr. Stephenson was granted options to purchase 100,000
shares of common stock. These options are incentive equity options, subject to
the terms of the Company's Incentive Equity Plan, and vest at a rate of 40,000
per year, the first vesting commencing immediately with the signing of the
employment agreement. The exercise price for the options is $2.50 per share. No
additional director compensation is presently provided to Mr. Stephenson. In the
event Mr. Stephenson is terminated by the Registrant without cause, Registrant
is obligated to pay Mr. Stephenson: (a) an amount equal to one and one half
times one year of the his base salary if his employment is terminated within the
first year; (b) an amount equal to one year of his base if Mr. Stephenson is
terminated during the three years following the first anniversary of the
employment agreement; and, (c) an amount equal to one half of one year of the
base salary if Mr. Stephenson is terminated any time thereafter during the term
of the employment agreement.
Lawrence Schaffer
An employment agreement between Lawrence Schaffer and Asia Web
Holdings, Inc was entered into on June 1, 2000. In return for his serving as
President for the next five years, Mr. Schaffer will receive an annual salary of
$84,000 plus a monthly car allowance of $450. In the event Mr. Schaffer is
terminated by the Registrant without cause, Registrant is obligated to pay Mr.
Schaffer: (a) an amount equal to one and one half times one year of the his base
salary if his employment is terminated within the first year; (b) an amount
-9-
<PAGE>
equal to one year of his base if Mr. Schaffer is terminated during the three
years following the first anniversary of the employment agreement; and, (c) an
amount equal to one half of one year of the base salary if Mr. Schaffer is
terminated any time thereafter during the term of the employment agreement.
Terry Giles
An agreement between Terry Giles and Asia Web Holdings, Inc was entered
into on June 14, 2000. In return for his serving as a Director of Asia Web
Holdings, Inc for the next five years, Mr. Giles was granted options to purchase
500,000 shares of common stock. These options are non-qualified options and vest
at a rate of 100,000 per year, the first vesting commencing immediately with the
signing of the agreement. The exercise price for the options is $2.00 per share.
William Millard
An agreement between William Millard and Asia Web Holdings, Inc was
entered into on June 14, 2000. In return for his serving as a Director of Asia
Web Holdings, Inc for the next five years, Mr. Millard was granted options to
purchase 500,000 shares of common stock. These options are non-qualified options
and vest at a rate of 100,000 per year, the first vesting commencing immediately
with the signing of the agreement. The exercise price for the options is $2.00
per share.
Tjahjono Soerjodibroto
A services agreement between Tjahjono Soerjodibroto and Asia Web
Holdings, Inc was entered into on June 28, 2000. In return for his serving as
Director and Chairman of the Board for the next five years, Mr. Soerjodibroto
will receive an annual salary of $200,000. Additionally, in the services
agreement, Mr. Soerjodibroto was granted options to purchase 150,000 shares of
common stock. These options are non-qualified options and vest at a rate of
30,000 per year, the first vesting commencing at the end of the first year of
service. The exercise price for the options is $2.00 per share.
Bosko Djordjevic
Mr. Djordjevic presently has no compensation package from Asia Web
Holdings, Inc.
Gordon Holterman
Mr. Holterman never had a compensation package from Asia Web Holdings,
Inc.
Raj Singam
Mr. Singam presently has no compensation package from Asia Web
Holdings, Inc.
-10-
<PAGE>
Pursuant to a Sale and Purchase Agreement dated June 15, 2000, between
Adisatrya Surya Sulisto and Alanberg Pte. Ltd., a Singapore corporation,
("Alanberg" or "Seller"), Alanberg assumed all of the duties, rights and
obligations of Sulisto under the Amended and Restated Stock Purchase Agreement.
By June 19, 2000, all required Indonesian regulatory approval and all
conditions precedent had been fulfilled and the Transaction closed on that date.
At the closing, Registrant delivered to Alanberg certificates representing
44,000,000 shares of the Registrant's Common Stock in exchange for 180,000,000
shares or 90% of the issued and outstanding shares of JDI's stock. No other
consideration was paid for 90% of the issued and outstanding shares of JDI
stock.
On June 20, 2000, Registrant and Alanberg entered into Amendment No. 1
to the Amended and Restated Stock Purchase Agreement ("Amendment No. 1") amended
the provisions of Article III of the Agreement. Amendment No. 1 provided that
Seller was to arrange for Zilhka to purchase 1,000,000 shares of Registrants
Series B Preferred Stock (convertible into 5,000,000 common shares) at $10.00
per share (the "Preferred Shares"). Amendment No. 1 also provided that Zilkha
was to receive a Warrant to purchase an additional 5,000,000 shares of common
Stock exercisable at $2.00 per share for the first three years after the closing
of the Transaction and $4.00 per share for an additional two years thereafter.
Additionally, Zilkha was to receive a second warrant to purchase an additional
2,000,000 shares of Common Stock exercisable at $5.00 per share for five years
after the closing of the Transaction. Amendment III also provided that Zilkha
was entitled to all the same rights, remedies and other benefits under the
Agreement as the Seller, including registration rights.
On June 20, 2000, Registrant entered into a Registration Rights
Agreement with Zilkha which provided that Zilkha was entitled to one demand
registration and an unlimited number of incidental or "piggyback" registrations.
In all "piggyback" registrations, the Registrant was to pay all costs and
expenses with the exception of underwriting commissions and discounts, transfer
taxes and legal fees for the selling shareholders. As for the demand
registration, the Registrant was to pay all costs and expenses with the
exception of underwriting commissions and discounts, transfer taxes and legal
fees and Commission and NASD filing fee, and state securities registration and
filing fees attributable solely to inclusion of the selling shareholders' stock
in the registration statement.
On June 20, 2000, Registrant filed the Certificate of Designations of
the Series B Preferred with the Delaware Secretary of State. The Preferred
Shares have a Stated Value of $10.00 per share, rank senior to all other
securities of the Registrant, including later authorized classes, have a
liquidation preference, and are convertible, at any time into five common shares
for each preferred share. The Preferred Shares also contain an Economic
Anti-Dilution provision in the event that the Registrant sells Common Stock at a
more advantageous price than Two Dollars per share within ten years of the
issuance of the Preferred Shares.
-11-
<PAGE>
On June 23, 2000, the Company closed the Private Placement transaction
with Zilkha, issuing 1,000,000 shares of Series B Preferred Stock and the two
warrants described above, in exchange for $10,000,000.
ITEM 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired :
1. Pt Jaring Data Interaktif and Subsidiary Consolidated
Balance Sheets as of June 30, 2000 and December 31,
1999.
2. Pt Jaring Data Interaktif and Subsidiary Consolidated
Statement of Operations for the six months ended June
30, 2000 and from inception (February 25, 1999)
through June 30, 1999 and the period from inception
("February 25, 1999) through December 31, 1999
3. Pt Jaring Data Interaktif and Subsidiary Consolidated
Statement of Cash Flows for the six months ended June
30, 2000 and from inception (February 25, 1999)
through June 30, 1999 and June 30, 2000.
4. Notes to Consolidated Financial Statements
(b) Unaudited Pro Forma Combined Condensed Financial Statements
1. Asia Web Holdings, Inc. and Pt. Jaring Data
Interaktif Unaudited Pro Forma Combined Balance Sheet
as of May 31, 2000
2. Asia Web Holdings, Inc. and Pt. Jaring Data
Interaktif Unaudited Pro Forma Combined Statement of
Operations for nine months ended May 31, 2000
3. Asia Web Holdings, Inc. and Pt. Jaring Data
Interaktif Unaudited Pro Forma Combined Statement of
Operations for the year ended August 31, 1999
4. Notes to Unaudited Pro Forma Combined Financial
Statements
Exhibit Description Page
------- ----------- ----
2.1 Stock Purchase Agreement Executed March 13, 2000
(Filed with Form 8-K on March 29, 2000)
2.2 Amended and Restated Stock Purchase Agreement
Executed March 24, 2000 (Filed with Form 8-K on
March 29, 2000 and Registrant's Definitive Proxy
filed on May 3, 2000)
2.3 Amendment No. 1 to the Amended and Restated Stock
Purchase Agreement Executed June 20, 2000
(Filed with Form 8-K on July 5, 2000)
3(i) Restated Certificate of Incorporation of Acubid.com,
Inc. (filed with Registrant's Definitive Proxy on May
3, 2000.)
4.1 Certificate of Designations of the Series B Preferred Stock
Filed June 20, 2000 (Filed with Form 8-K on July 5, 2000)
-12-
<PAGE>
4.2 Warrant 1 Dated June 20, 2000 granted Selim Zilkha Trust
(Filed with Form 8-K on July 5, 2000)
4.3 Warrant 2 Dated June 20, 2000 granted Selim Zilkha Trust
(Filed with Form 8-K on July 5, 2000)
10.1 Employment Agreement with Michael Schaffer dated
June1, 2000 (Filed with Form 8-K on July 5, 2000)
10.2 Stock Option Agreement with Michael Schaffer dated June1, 2000
(Filed with Form 8-K on July 5, 2000)
10.3 Employment Agreement with Waddy Stephenson dated
June1, 2000 (Filed with Form 8-K on July 5, 2000)
10.4 Employment Agreement with Lawrence Schaffer dated June 1, 2000
(Filed with Form 8-K on July 5, 2000)
10.5 Director's Compensation Agreement dated June 14, 2000
with Terry Giles (Filed with Form 8-K on July 5, 2000)
10.6 Director's Compensation Agreement dated June 14, 2000 with
William Millard (Filed with Form 8-K on July 5, 2000)
10.7 Director's Compensation Agreement dated June 28, 2000
with Tjahjono Soerjodibroto (Filed with Form 8-K
on July 5, 2000)
10.8 Purchase and Sale Agreement dated June 12, 2000 between
Adisatrya Surya Sulisto and Alanberg Pte Ltd, a Singapore
Corporation (Filed with Form 8-K on July 5, 2000)
10.9 Registration Rights Agreement dated June 20, 2000 between
Registrant and the Selim Zilkha Trust (Filed with Form 8-K
on July 5, 2000)
-13-
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: September 5, 2000
ACUBID.COM, INC. (Registrant)
By: /S/ Lawrence Schaffer
----------------------------
Lawrence Schaffer, President
-14-
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit Description Page
------- ----------- ----
2.1 Stock Purchase Agreement Executed March 13, 2000
(Filed with Form 8-K on March 29, 2000)
2.2 Amended and Restated Stock Purchase Agreement
Executed March 24, 2000 (Filed with Form 8-K on
March 29, 2000 and Registrant's Definitive Proxy
filed on May 3, 2000)
2.3 Amendment No. 1 to the Amended and Restated Stock
Purchase Agreement Executed June 20, 2000
(Filed with Form 8-K on July 5, 2000)
3(i) Restated Certificate of Incorporation of Acubid.com,
Inc. (filed with Registrant's Definitive Proxy on May
3, 2000.)
4.1 Certificate of Designations of the Series B Preferred Stock
Filed June 20, 2000 (Filed with Form 8-K on July 5, 2000)
4.2 Warrant 1 Dated June 20, 2000 granted Selim Zilkha Trust
(Filed with Form 8-K on July 5, 2000)
4.3 Warrant 2 Dated June 20, 2000 granted Selim Zilkha Trust
(Filed with Form 8-K on July 5, 2000)
10.1 Employment Agreement with Michael Schaffer dated
June1, 2000 (Filed with Form 8-K on July 5, 2000)
10.2 Stock Option Agreement with Michael Schaffer dated June1, 2000
(Filed with Form 8-K on July 5, 2000)
10.3 Employment Agreement with Waddy Stephenson dated
June1, 2000 (Filed with Form 8-K on July 5, 2000)
10.4 Employment Agreement with Lawrence Schaffer dated June 1, 2000
(Filed with Form 8-K on July 5, 2000)
10.5 Director's Compensation Agreement dated June 14, 2000
with Terry Giles (Filed with Form 8-K on July 5, 2000)
10.6 Director's Compensation Agreement dated June 14, 2000 with
William Millard (Filed with Form 8-K on July 5, 2000)
10.7 Director's Compensation Agreement dated June 28, 2000
with Tjahjono Soerjodibroto (Filed with Form 8-K
on July 5, 2000)
10.8 Purchase and Sale Agreement dated June 12, 2000 between
Adisatrya Surya Sulisto and Alanberg Pte Ltd, a Singapore
Corporation (Filed with Form 8-K on July 5, 2000)
10.9 Registration Rights Agreement dated June 20, 2000 between
Registrant and the Selim Zilkha Trust (Filed with Form 8-K
on July 5, 2000)
-15-
<PAGE>
<TABLE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
CONSOLIDATED BALANCE SHEET
<CAPTION>
ASSETS
June 30, 2000
(Unaudited) December 31, 1999
----------------------------- -----------------------------
Rp (000's) U.S. $ Rp (000's) U.S. $
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash on hand and in banks 3,632,503 413,960 1,012,828 141,456
Accounts receivable 632,381 72,066 55,650 7,772
Advances for expenses 2,139,297 243,795 123,955 17,312
Prepaid tax 199,304 22,713 4,110 574
------------ ------------ ------------ ------------
Total Current Assets 6,603,485 752,534 1,196,543 167,114
DEFERRED TAX ASSET 473,726 53,985 473,726 66,163
PROPERTY AND EQUIPMENT
Net of accumulated
depreciation 5,654,872 644,430 3,383,841 472,604
OTHER ASSETS
Refundable deposits 414,200 47,202 401,139 56,025
Goodwill 483,000 55,043 - -
------------ ------------ ------------ ------------
TOTAL ASSETS 13,629,283 1,553,194 5,455,249 761,906
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Accounts payable 2,190,098 249,583 1,020,767 142,565
Due to stockholder - - 230,473 32,189
Taxes payable 16,923 1,929 112,342 15,690
Accrued expenses 241,209 27,488 238,260 33,277
------------ ------------ ------------ ------------
Total Current liabilities 2,448,230 279,000 1,601,842 223,721
------------ ------------ ------------ ------------
DUE TO RELATED PARTIES 12,209,298 1,391,373 - -
------------ ------------ ------------ ------------
MINORITY INTEREST 171,284 19,519 171,284 23,922
------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY
(DEFICIENCY)
Capital stock - Rp 25 par value
Authorized, subscribed and fully paid
-200,000,000 shares 5,000,000 569,801 5,000,000 698,324
Net loss accumulated during the
Development stage (6,199,529) (706,499) (1,317,877) (184,061)
------------ ------------ ------------ ------------
Stockholders' Equity (Deficiency) (1,199,529) (136,698) 3,682,123 514,263
------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIENCY) 13,629,283 1,553,194 5,455,249 761,906
============ ============ ============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements which
are an integral part of the consolidated financial statements.
<PAGE>
<TABLE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
For the Six Months Ended Inception (February 25, 1999) to
June 30, 2000 ----------------------------------------------------
(Unaudited) June 30, 1999 June 30, 2000
------------------------- ------------------------ --------------------------
Rp (000) U.S. $ Rp (000) U.S. $ Rp (000) U.S. $
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenue 95,172 11,908 - - 119,622 15,324
Cost of Revenue 1,733,238 216,872 - - 1,733,238 216,872
----------- ----------- ----------- ----------- ----------- -----------
Gross profit (1,638,066) (204,964) - - (1,613,616) (201,548)
----------- ----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES
Salaries and employee benefits 849,840 106,336 122,098 17,721 1,537,696 202,405
General and administrative 1,621,598 202,903 71,416 10,365 2,862,538 376,219
Sales and marketing 165,909 20,759 3,600 522 165,909 20,759
Depreciation and amortization 554,744 69,412 8,319 1,207 720,854 92,612
----------- ----------- ----------- ----------- ----------- -----------
Total operating expenses 3,192,091 399,410 205,433 29,815 5,286,997 691,995
----------- ----------- ----------- ----------- ----------- -----------
Loss from operations (4,830,157) (604,734) (205,433) (29,815) (6,900,613) (893,543)
----------- ----------- ----------- ----------- ----------- -----------
Other Income (Expense)
Gain (loss) on foreign exchange 8,405 1,051 (78,983) (11,463) 139,759 19,396
Interest income - net 21,441 2,683 9,641 1,399 30,225 3,910
Other (81,342) (10,178) (108) (16) (81,342) (10,178)
----------- ----------- ----------- ----------- ----------- -----------
Total other income (expense) (51,496) (6,444) (69,450) (10,080) 88,642 13,128
----------- ----------- ----------- ----------- ----------- -----------
Loss before provision for income
tax (benefit) (4,881,653) (610,817) (274,883) (39,895) (6,811,971) (880,415)
Provision for income tax (benefit) - - - - (473,726) (66,163)
----------- ----------- ----------- ----------- ----------- -----------
Loss before minority interest (4,881,653) (610,817) (274,883) (39,895) (6,338,245) (814,252)
Minority interest in net loss of subsidiary - - - - 138,715) (19,374)
----------- ----------- ----------- ----------- ----------- -----------
Net loss (4,881,653) (610,817) (274,833) (39,895) (6,199,530) (794,878)
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements which
are an integral part of the consolidated financial statements.
2
<PAGE>
<TABLE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Inception (February 25, 1999) to
For the Six Months Ended ---------------------------------------------------
June 30, 2000 June 30, 1999 June 30, 2000
------------------------- ------------------------- -------------------------
Rp (000) U.S. $ Rp (000) U.S. $ Rp (000) U.S. $
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (4,881,653) (610,817) (274,883) (38,716) (6,199,530) (794,878)
------------ ------------ ------------ ------------ ------------ ------------
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 544,744 68,161 8,319 1,172 710,854 91,361
Provision for income tax - deferred - - - - (473,726) (66,163)
Minority interest in net loss of subsidiary - - - - (138,716) (19,374)
Operating assets and liabilities:
Accounts receivable (576,731) (72,164) - - (632,381) (79,936)
Advances for expenses and other (2,015,342) (252,170) (148,304) (20,888) (2,139,296) (269,482)
Prepaid tax (195,194) (24,424) - - (199,304 (24,998)
Refundable deposits (13,061) (1,634) - - (414,200) (57,659)
Accounts payable 866,889 108,470 14,210 2,001 1,887,656 251,035
Taxes payable (95,419) (11,939) - - 16,923 3,751
Accrued expenses 2,949 369 - - 241,209 33,646
------------ ------------ ------------ ------------ ------------ ------------
Total adjustments (1,481,165) (185,331) (125,775) (17,715) (1,140,981) (137,819)
------------ ------------ ------------ ------------ ------------ ------------
Net cash used in operating activities (6,362,818) (796,148) (400,658) (56,431) (7,340,511) (932,697)
------------ ------------ ------------ ------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (2,819,738) (352,820) (433,103) (61,000) (6,369,689) (848,624)
Investment in shares of common stock (483,000) (60,435) - - (483,000) (60,435)
------------ ------------ ------------ ------------ ------------ ------------
Net cash used in investing activities (3,302,738) (413,255) (433,103) (61,000) (6,852,689) (909,059)
------------ ------------ ------------ ------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock - - 250,000 35,211 5,000,000 698,324
Capital contributions from minority interest in
subsidiary - - - - 310,000 43,296
Advances from related parties 12,285,231 1,537,191 1,295,500 182,465 12,515,703 1,569,380
------------ ------------ ------------ ------------ ------------ ------------
Net cash provided by financing activities 12,285,231 1,537,191 1,545,500 217,676 17,825,703 2,311,000
------------ ------------ ------------ ------------ ------------ ------------
INCREASE (DECREASE) IN CASH 2,619,675 327,788 711,739 100,245 3,632,503 469,244
CASH - beginning of period 1,012,828 141,456 - - - -
------------ ------------ ------------ ------------ ------------ ------------
CASH - end of period 3,632,503 469,244 711,739 100,245 3,632,503 469,244
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements which
are an integral part of the consolidated financial statements.
3
<PAGE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF BUSINESS
PT Jaring Data Interaktif ("the Company") was established on February
25, 1999 based on the notarial deed No. 2 of Uus Sumirat S.H. The deed
of establishment was approved by the Ministry of Justice in its
decision letter No. C-17528.HT.01.01Th 99 dated October 12, 1999. Based
on the Stockholders' Extraordinary Meeting held on November 12, 1999,
the Company's articles of association has been amended to increase the
Company's authorized, subscribed and fully paid capital stock (see Note
10).
According to article 3 of its articles of association, the Company
shall engage in trading, construction, manufacturing, agriculture,
transportation, printing, multimedia satellite and service. Its
activities since its establishment have been related mainly to the
development and marketing of a television program starting in 1999.
PT Medialintas Antarbuana ("MLB"), the Company's 69%-owned subsidiary,
was established in 1995 but had been dormant until 1998. In 1999, it
established the groundwork to provide internet-related services to the
Company. It obtained a principal license to engage as an internet
service provider from the Directorate General of Post and
Telecommunication of the Ministry of Transportation in its letter No.
19/DIRJEN/2000 dated February 4, 2000.
As of June 30, 2000, the Companies are in the development stage as
defined under Statement of Financial Accounting Standards No. 6,
"Accounting and Reporting by Development Stage Enterprises".
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and PT Medialintas Antarbuana. All significant inter-company
accounts and transactions have been eliminated.
Transactions with Related Parties
The Company has transactions with certain parties which are regarded as
having special relationship as defined under Statement of Financial
Accounting Standards No. 57, "Related Party Disclosures".
The nature and extent of these transactions with related parties are
disclosed in
4
<PAGE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and Equipment
Property and equipment are stated at cost less accumulated
depreciation. Depreciation is computed on the straight-line method over
the estimated useful lives of the assets as follows:
Years
-----
Infrastructure 4
Operating equipment 4
Office furniture and equipment 4
The cost of maintenance and repairs is expensed as incurred;
significant renewals and betterments are capitalized to the related
property and equipment account. When assets are retired or otherwise
disposed of, their costs and the related accumulated depreciation are
removed from the accounts and any resulting gain or loss is reflected
in results of operations for the period.
Use of Estimates
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 amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates. Significant estimates include those related to
recoverability of goodwill and deferred taxes.
Revenue Recognition
Revenue from subscription is recognized when the service is delivered
to the subscriber based on the respective subscription terms.
Foreign Currency Transactions and Balances
Transactions involving foreign currencies are recorded at the rates of
exchange prevailing at the time the transactions are made. At the
balance sheet date, assets and liabilities denominated in foreign
currencies are adjusted to reflect the rates of exchange prevailing at
such date as published by Bank Indonesia (Central Bank), and the
resulting gains or losses are credited or charged to current
operations.
At June 30, 2000, the average buying rate of exchange used was Rp 8,775
to U.S. $1.
5
<PAGE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred Income Tax
The Company provides for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS 109), "Accounting for
Income Taxes". SFAS 109 requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of
temporary differences between the financial statement carrying amounts
and the tax basis of assets and liabilities.
3. TRANSLATION OF RUPIAH INTO UNITED STATES DOLLARS
The financial statements are stated in rupiah. The translations of the
rupiah amounts into United States dollar are included solely for the
convenience of the readers, using the average of Rp 7,992 to U.S.$1.
The convenience translations should not be construed as representations
that the rupiah amounts have been, could have been, or could in the
future be, converted into United States dollar at this or any other
rate of exchange.
4. ACQUISITION BY ASIA WEB HOLDINGS, INC. (formerly AcuBid.Com) ("Asia
Web").
On March 13, 2000 (as amended on March 27, 2000), the Company entered
into a Stock Purchase Agreement with Adisatrya Surya Sulisto ("Seller"
or"Sulisto"), owner of at least 90% of the issued and outstanding
shares of the Company's common stock whereby, Asia Web, through its
wholly owned subsidiary Acubid Acquisition Corp. purchased 90% of the
issued and outstanding shares of the Company's stock. In exchange for
44,000,000 shares of Asia Web's Common Stock. The Stock Purchase
Agreement provides that an additional 5,000,000 shares of Asia Web's
common stock will be issued to the Seller in the event that the Seller
raises an additional $10,00,000 in capital for Asia Web.
5. REFUNDABLE DEPOSITS
This account consists of the deposits amounting to U.S. $49,500 (Rp
351,450,000) and Rp 49,689,050 paid to Loral Orion Service Inc. -
U.S.A. and other parties, respectively.
6. TRANSACTIONS WITH A RELATED PARTY
The Company obtained advances totaling U.S. $32,461 (Rp 230,473,100)
from Mrs. Dewi Allice Lydia Gontha (stockholder). These advances, which
are outstanding as of December 31, 1999, are non-interest bearing.
There are no fixed repayment terms.
6
<PAGE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. AGREEMENTS
a. Loral Orion Services Inc. USA ("Loral")
On December 6, 1999, MLB entered into an agreement with Loral,
whereby Loral agreed to provide telecommunication network
services ("the services") for transporting Internet Protocol
("IP") packets between Loral Internet Gateways and MLB's site.
The service consists, among others, of providing: (I) simplex
Permanent Virtual Circuits ("PVC") between Loral Internet
Gateway and MLB's site, (ii) Borday Gateway Protocol service
between the router at MLB's site and Loral-designated U.S.
Internet Service Provider ("ISP"), (iii) required space
segment, satellite uplink and downlink services, and (iv)
technical consultancy service. MLB is obligated to pay Loral
the following: (I) one-time installation fee of U.S. $5,000,
(ii) monthly service fee of U.S. $16,500, and (iii) refundable
deposit of U.S. $49,500.
As of December 31, 1999, MLB has paid to Loral refundable
deposit amounting to U.S. $49,500 (Rp 351,450,000),
installation fee amounting to U.S. $5,000 or Rp 35,690,000
(charged to Installation and Related Expenses) and sevice fee
amounting to U.S. $16,500 or Rp 117,150,000 (charged to
Advances).
On December 8, 1999, the Company entered into an agreement
with MLB, whereby MLB agreed to provide the services to the
Company. In return, the Company agreed to reimburse MLB (I)
monthly service fee of U.S. $16,500 and refundable deposit of
U.S. $49,500 which have been paid by MLB to Loral as discussed
above, and (ii) VSAT rental fees payable to Infokom (see"d"
below) and IIX ("Indonesian Internet Exchange") fees amounting
to U.S. $2,500 and U.S.$1,500 per month, respectively.
b. PT Mesana Investama Utama ("Mesana")
The Company has an agreement with Mesana, a related company
which is an Indonesian securities company. Under the agreement
which is dated December 3, 1999, the Company agreed to provide
Mesana online electronic stock trading, website development
and maintenance, news and data supply, software license, web
hosting and mail hosting. In return, Mesana shall pay the
Company 25% of the total net commission on stock trading
generated by Mesana of Rp 12,500,000 per month, whichever
amount is greater.
c. PT Indonesian Satellite Corporation Tbk ("Indosat")
On October 1, 1999, the Company entered into a contract with
Indosat, for the use of Indosat's Indosatnet facility by the
Company for a compensation of Rp 7,500,000 per month. As of
December 31, 1999, Indosat has billed the Company installation
fee and rental fee amounting to Rp 2,500,000 and Rp
22,500,000, respectively.
7
<PAGE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
7. AGREEMENTS (Continued)
d. PT Infokom Electrindo ("Infokom")
On October 6, 1999, MLB entered into a lease agreement with
Infokom, for the use of Infokom's Very Small Aperture Terminal
("VSAT") equipment to be installed in MLB's site. In return,
the Company agreed to pay Infokom, service fee amounting to
U.S. $30,000 per year. The lease agreement will expire on
November 17, 2000. As of December 31, 1999, the amounts of
U.S. $2,375 and Rp 17,000,000 (charged to Service Fee) have
been billed by Infokom to MLB.
e. PT Tanjung Bangun Semesta ("TBS")
On September 1, 1999, the Company signed a memorandum of
understanding with TBS whereby the Company agreed to provide
TBS with Quick Financial Channel Program either through direct
cable connection or via Broadcast Satellite under certain
terms and conditions as provided in the memorandum. The
subscription revenue earned from TBS amounted to Rp 1,800,000
udring the period.
f. PT Matahari Lintas Cakrawala ("MLC")
On September 1, 1999, the Company entered into an agreement
with MLC whereby the Company agreed to provide MLC with Quick
financial Channel Program through a direct cable connection
which will become part of the subscription television service
currently being provided by MLC. The revenue earned will be
shared between the Company and MLC at the rates of 70% and
30%, respectively. The subscription revenue earned from MLC
amounted to Rp 22,650,000 during the period.
g. PT Bursa Efek Jakarta ("BEJ")
(i) On March 3, 1999, the Company and BEJ entered into an
agreement whereby both parties agreed, among other
matters, to cooperate in the development and
provision of programming services such as: stock
Channel and TV interactive'Web TV ("Program
Channel"), which will be distributed via cable
television operators in Indonesia, MLC's Indovision
Digital channel and/or other media.
Under the agreement, BEJ will: (I) provide certain
supporting equipment and space in the Jakarta Stock
Exchange which will be available to the Company in
order to provide the programming service to other
third parties and (ii) make available to the Company
certain data and other information related with
securities transactions in the Jakarta Stock
Exchange. The calculated gross profit earned will be
shared between the Company and BEJ at certain rate,
which will vary from time to time, according to a
table stipulated in the agreement.
8
<PAGE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
7. AGREEMENTS (Continued)
(ii) On September 24, 1999, the Company and BEJ entered
into an agreement with the Directorate General of
Tourism of the Republic of Indonesia, whereby the
Company and BEJ agreed to broadcast the "let's Go
Indonesia" logo and to provide space/page in the
Quick Financial Channel program without any charges.
In return, the Directorate General of Tourism will
require the Indonesian Hotel and Restaurant
Association ("PHRI" to promote among their members
the Quick Financial Channel program provided through
MLC's Indovision broadcasting program.
h. Bridge Information System (S) Pte. Ltd. Singapore (`Bridge")
(i) On July 1, 1999, the Company entered into an
agreement with Bridge whereby Bridge agreed to:
o Install required equipment units on the Company's
premises and ensure accurate and timely transmission
of data, such as real-time information from commodity
exchange, money market and stock exchange, etc.;
o transmit the data and other information as stipulated
in the agreement to the Company through a leased
telecommunication line or satellite downlink, in
respect of which the Company shall bear all cost and
charges incurred; and
o grant the Company the license to use the data in
accordance with the terms and conditions as
stipulated in the agreement.
In return, the Company is obligated to pay one-time
installation fee of U.S. $300, monthly subscription
fee of U.S. $1,000 and communication fees to be
billed to the Company based on actual
telecommunication lines used to deliver the data to
the Company's site. The monthly subscription fees are
waived for the first six months commencing on the
date the equipment units are installed.
(ii) On July 1, 1999, the Company entered into another
agreement with Bridge whereby Bridge agreed to, among
others:
o Grant a license to the Company to access and utilize
Bridge's product and service ("Bridge Services") in
the production of the Company's television
programming service in Indonesia (known as
"Stockwatch");
o Provide training and support to the Company in
relation to the use of Bridge Services and assistance
in converting the news and data contained in the
Bridge Services into a variety of formats for
presentation in Stockwatch; and
o Provide access to the Bridge journalists in Asia for
market moving stores.
9
<PAGE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
7. AGREEMENTS (Continued)
(ii) In recognition of Bridge's assistance, the Company
will provide, among other:
o Commercial airtime on the Stockwatch program and will
produce Bridge commercials free of charge. The
minimum airtime shall be three 30-second spots per
day for one month every three months;
o On-air marketing and attribution rights to Bridge;
and
o Communication link between Bridge's office and the
Company's premises.
i. On January 26, 2000, the Company entered into an agreement with
PT Mediacitra Indostar (MCI) whereby the latter agreed to
provide transponders with capacity of 16 Mbps to be used for
transmitting Company data. The Company is obligated to pay MCI,
fees amounting to U.S. $320,00 per year payable in twelve equal
monthly installments starting on July 10, 2000. The agreement
shall be valid for five years commencing June 1, 2000, and the
amount of the fees is fixed during the 5-year period.
j. On January 27, 2000, MLB entered into a contract with PT
Telekomunikasi Indonesia Tbk - Regional Division II ("PT
Telkom"), whereby the latter agreed to provide
telecommunications infrastructure and facilities to be used by
MLB. The charges on the use of the infrastructure and
facilities have been determined according to PT Telkom's list
of tariff as stipulated in the agreement. The agreement is
valid for two years commencing from the date of the agreement.
k. In the Company's Stockholders' Meeting held on February 24,
2000 the minutes of which are notarized under deed No. 23
dated February 25, 2000 of Neneng Salmiah, S.H., J. Hum, the
stockholders resolved to:
o Approve the plan of Mrs. Dewi Allice Lydia Gontha and
Mr. Adisatrya Suryo Sulisto to sell their stock
ownership in the Company totaling 150,000,000 and
30,000,000 shares, respectively, to Alanberg Pte.
Ltd. ("Alanberg"), a Singapore limited liability
company, or to another party which will be appointed
by Alanberg; and
o Change the Company's status from a domestic
investment company to a foreign investment company.
l. On different dates from January 1, 2000 to March 1, 2000, the
Company entered into agreements with several companies,
whereby the Company agreed to provide the following: (I) web
development and design, web maintenance, web hosting, mail
hosting and internet connection services for which the Company
shall receive one-time design fees of Rp 10,000,000 and Rp
15,135,000 per month for web maintenance and internet
connection services, respectively; and (ii) dedicated
leased-line service for which the Company shall receive an
amount ranging from Rp 3,500,000 to Rp 24,000,000 per month,
depending on the capacity provided.
10
<PAGE>
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
8. CURRENT ECONOMIC CONDITIONS IN INDONESIA
Since the second half of 1997, Indonesia has been experiencing economic
difficulties characterized by the depreciation of the rupiah, high
interest rates, sharply reduced economic activities, high unemployment
rate, lack of liquidity, tightening of available credit and increasing
number of business insolvencies.
Despite the above factors, the stockholders still established the
Company. However, they have carefully considered the factors and are
undertaking the following actions/plans:
o Intensifying their marketing efforts on the Quick Financial
Channel Program;
o Adoption of stringent criteria in the evaluation of investment
activities; and
o Negotiation with investors to invest in the Company's equity
or cooperate in the Company's project development.
Although the volatility of the foreign exchange rates has been reduced
and interest rates declined significantly in 1999 as compared to the
condition in 1997 and 1998, the resolution of the economic condition is
dependent on the fiscal, monetary and other measures that are being
taken by the government, actions which are beyond the Company's
control, to achieve economic recovery. It is not possible to determine
the future development on the economic condition and its impact to the
Company's liquidity and earnings.
9. PRESIDENTIAL DECREE
On July 20, 2000, Indonesia's President Wahid issued a decree banning
new investments by foreigners in multimedia industries (including
internet related operations) and limiting foreign ownership in
telecommunications companies to forty-nine percent (49%).
Management is currently evaluating the impact that the decree may have
on the Company's business plan. Although it is difficult to assess
presently, it is at least reasonably possible that the decree might
have a significant impact on the Company's plans, as well as future
liquidity and profitability.
11
<PAGE>
PT JARING DATA INTERAKTIF
AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION (FEBRUARY 25, 1999)
TO DECEMBER 31, 1999
AND
INDEPENDENT AUDITORS' REPORT
INDONESIAN CURRENCY
(WITH TRANSLATION INTO UNITED STATES DOLLAR)
<PAGE>
THIS REPORT IS ORIGINALLY ISSUED IN INDONESIAN LANGUAGE.
INDEPENDENT AUDITORS' REPORT
REPORT NO. 33435S
The Board of Directors and Stockholders
PT JARING DATA INTERAKTIF
We have audited the consolidated balance sheet of PT Jaring Data Interaktif and
Subsidiary (companies in the development stage) as of December 31, 1999, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the period from inception (February 25, 1999) to December 31,
1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements based on our audit.
We conducted our audit in accordance with auditing standards established by the
Indonesian Institute of Accountants. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of PT Jaring Data
Interaktif and Subsidiary as of December 31, 1999, and the results of their
operations and their cash flows for the period then ended in conformity with
generally accepted accounting principles.
G-1
<PAGE>
THIS REPORT IS ORIGINALLY ISSUED IN INDONESIAN LANGUAGE.
Note 14 to the consolidated financial statements summarizes the effects the
economic condition in Indonesia has had on the Company, as well as the measures
the Company plans to implement in response to the economic condition.
PRASETIO, UTOMO & CO.
License No. 98.2.0024
Drs. Rusdy Daryono
License No. 98.1.0061
March 1, 2000
NOTICE TO READERS
The accompanying consolidated financial statements are intended to present the
financial position, results of operations and cash flows in accordance with
accounting principles and practices generally accepted in Indonesia and not
those of any other jurisdictions. The standards, procedures and practices to
audit such financial statements are those generally accepted and applied in
Indonesia.
G-2
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
ASSETS
--------------------------------------------------------------------------------
Notes Rp U.S.$ (Note 3)
------ -------------- --------------
CURRENT ASSETS
Cash on hand and in banks 2,4 1,012,828,166 141,456
Accounts receivable 55,650,000 7,772
Advances for expenses 11 123,954,500 17,312
Prepaid tax 4,110,317 574
------------- --------------
Total Current Assets 1,196,542,983 167,114
DEFERRED TAX ASSET 2,8 473,725,647 66,163
PROPERTY AND EQUIPMENT
Net of Accumulated Depreciation 2,5 3,383,841,532 472,604
OTHER ASSETS
Refundable deposits 6,11 401,139,050 56,025
-------------
TOTAL ASSETS 5,455,249,212 761,906
============= ==============
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------------------------------------------------------------------------------
Notes Rp U.S.$ (Note 3)
--------- -------------------- -------------------
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable 7 1,020,766,800 142,565
Due to stockholder 2,9 230,473,100 32,189
Taxes payable 8 112,341,502 15,690
Accrued expenses 238,260,495 33,277
-------------------- -------------------
Total Current Liabilities 1,601,841,897 223,721
-------------------- -------------------
MINORITY INTEREST 2 171,284,098 23,922
-------------------- -------------------
STOCKHOLDERS' EQUITY
Capital stock - Rp 25 par value
Authorized, subscribed and fully paid -
200,000,000 shares 10 5,000,000,000 698,324
Net loss during the development stage (1,317,876,783) (184,061)
-------------------- -------------------
Net Stockholders' Equity 3,682,123,217 514,263
-------------------- -------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 5,455,249,212 761,906
==================== ===================
</TABLE>
See accompanying Notes to Consolidated Financial Statements which
are an integral part of the consolidated financial statements.
G-3
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION
(February 25, 1999) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Notes Rp U.S.$ (note 3)
---------- -------------------- --------------------
<S> <C> <C> <C>
REVENUE 2
Subscription Agreement 11 24,450,000 3,415
-------------------- --------------------
EXPENSES 2
Salaries and employee benefits 687,855,828 96,069
Representation and entertainment 316,714,301 44,234
Professional fees 182,505,909 25,490
Depreciation 2,5 166,109,536 23,200
Advertising and promotion 153,251,462 21,404
Rental 135,973,966 18,991
Transportation 108,010,769 15,085
Service fee 94,832,470 13,245
Telephone and electricity 86,456,043 12,075
Installation and related expenses 73,183,690 10,221
Stationery and office supplies 61,463,151 8,584
Permit and taxes 21,307,500 2,976
Miscellaneous 7,241,690 1,011
-------------------- --------------------
Total Expense 2,094,906,315 292,585
-------------------- --------------------
LOSS FROM OPERATIONS 2,070,456,315 289,170
-------------------- --------------------
OTHER INCOME
Gain on foreign exchange - net 2 131,353,926 18,345
Interest income - net 8,784,057 1,227
-------------------- --------------------
Total Other Income 140,137,983 19,572
-------------------- --------------------
LOSS BEFORE PROVISION FOR INCOME TAX 1,930,318,332 269,598
PROVISION FOR INCOME TAX
Deferred 2,8 (473,725,647) (66,163)
-------------------- --------------------
LOSS BEFORE MINORITY INTEREST 1,456,592,685 203,435
MINORITY INTEREST IN
NET LOSS OF SUBSIDIARY 2 (138,715,902) (19,374)
-------------------- --------------------
NET LOSS 1,317,876,783 184,061
==================== ====================
</TABLE>
See accompanying Notes to Consolidated Financial Statements which
are an integral part of the consolidated financial statements.
G-4
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION
(February 25, 1999) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Net Loss
during the
Description Note No. of Shares Per Share Amount Development Stage
---------------------------------- ------- ------------- ---------------- ------------------- --------------------
<S> <C> <C> <C> <C> <C>
Initial issuance for cash 250,000 Rp 1,000 Rp 250,000,000 Rp --
Change in par value 10
Old (250,000) (1,000) (250,000,000) --
New 10,000,000 25 250,000,000 --
Additional issuance for cash 10 190,000,000 25 4,750,000,000 --
Net Loss -- -- -- 1,317,876,783
--------------- -------------------- ------------------
Balance at December 31, 1999 200,000,000 Rp 5,000,000,000 Rp 1,317,876,783
=============== ==================== ==================
</TABLE>
Description Net Stockholders' Equity
---------------------------------- ------------------------
Initial issuance for cash Rp 250,000,000
Change in par value
Old (250,000,000)
New 250,000,000
Additional issuance for cash 4,750,000,000
Net Loss (1,317,876,783)
------------------
Balance at December 31, 1999 Rp 3,682,123,217
==================
See accompanying Notes to Consolidated Financial Statements which
are an integral part of the consolidated financial statements.
G-5
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION
(February 25, 1999) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Rp U.S.$ (Note 3)
--------------- -------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss (1,317,876,783) (184,061)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 166,109,536 23,200
Provision for Income Tax - deferred (473,725,647) (66,163)
Minority interest in net loss of subsidiary (138,715,902) (19,374)
Operating assets and liabilities
Accounts receivable (55,650,000) (7,772)
Advances for expenses (123,954,500) (17,312)
Prepaid tax (4,110,317) (574)
Refundable deposits (401,139,050) (56,025)
Accounts payable 1,020,766,800 142,565
Taxes payable 112,341,502 15,690
Accrued expenses 238,260,495 33,277
--------------- --------------
Net Cash Used in Operating Activities (977,693,866) (136,549)
CASH FLOWS FROM INVESTING
ACTIVITY
Acquisitions of property and equipment (3,549,951,068) (495,804)
--------------- --------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of capital stock 5,000,000,000 698,324
Capital contributions from minority interest
in subsidiary 310,000,000 43,296
Advances from stockholder 230,473,100 32,189
--------------- --------------
Net Cash Provided by Financing Activities 5,540,473,100 773,809
--------------- --------------
CASH ON HAND AND IN BANKS AT END
OF PERIOD 1,012,828,166 141,456
=============== ==============
</TABLE>
See accompanying Notes to Consolidated Financial Statements which
are an integral part of the consolidated financial statements.
G-6
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. General
PT Jaring Data Interaktif ("the Company") was established on February 25,
1999 based on the notarial deed No. 2 of Uus Sumirat S.H. The deed of
establishment was approved by the Ministry of Justice in its decision
letter No. C-17528.HT.01.01.Th 99 dated October 12, 1999. Based on the
Stockholders' Extraordinary Meeting held on November 12, 1999, the
Company's articles of association has been amended to increase the
Company's authorized, subscribed and fully paid capital stock (see Note
10).
According to article 3 of its articles of association, the Company shall
engage in trading, construction, manufacturing, agriculture,
transportation, printing, multimedia satellite and service. Its activities
since its establishment have been related mainly to the development and
marketing of a television program starting in 1999.
PT Medialintas Antarbuana ("MLB"), the Company's 69%-owned subsidiary, was
established in 1995 but had been dormant until 1998. In 1999, it
established the groundwork to provide internet-related services to the
Company. It obtained a principal license to engage as an internet service
provider from the Directorate General of Post and Telecommunication of the
Ministry of Transportation in its letter No. 19/DIRJEN/2000 dated February
4, 2000.
As of December 31, 1999, the Companies are in the development stage as
defined under Statement of Financial Accounting Standards No. 6,
"Accounting and Reporting by Development Stage Enterprises".
Based on the amendment of the Company's articles of association which is
notarized under notarial deed No. 1 dated April 12, 1999 of Uus Sumirat
S.H., the composition of the Company's Board of Commissioners and Directors
is as follows:
President Commissioner : Mr. Ahmad Sidik Mauladi Iskandar Dinata
Vice President Commissioner : Mr. Priyatno Sulisto
Commissioner : Mr. Ichyar Musa
Commissioner : Mr. Adisatrya Suryo Sulisto
Commissioner : Mr. Doopy Irwan
Commissioner : Mrs. Dewi Allice Lydia Gontha
President Director : Mr. Suhardi Gunawan Halim
Director : Mr. Agusjulianto Sunjoto
Director : Mr. Cecil Constantino Alexander
G-7
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The total number of the Company's employees as of December 31, 1999 is 18
persons. The Company's office is located at Mezzanine Floor, Wisma Indovision,
JI. Raya Panjang Z/III, Jakarta.
G-8
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared on the historical
cost basis of accounting.
The consolidated statement of cash flows presents cash receipts and
payments into operating, investing and financing activities. The cash flows
from operating activities are reported under the indirect method.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and PT Medialintas Antarbuana. All significant inter-company accounts and
transactions have been eliminated.
TRANSACTIONS WITH RELATED PARTIES
The Company has transactions with certain parties which are regarded as
having special relationship as defined under Statement of Financial
Accounting Standards No. 7, "Related Party Disclosures".
The nature and extent of these transactions with related parties are
disclosed in Note 9.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed on the straight-line method over the estimated
useful lives of the assets as follows:
Years
------------
Infrastructure 4
Operating equipment 4
Office furniture and equipment 4
The cost of maintenance and repairs is charged to income as incurred;
significant renewals and betterments are capitalized to the related
property and equipment account. When assets are retired or otherwise
disposed of, their costs and the related accumulated depreciation are
removed from the accounts and any resulting gain or loss is reflected in
income for the period.
G-9
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
REVENUE AND EXPENSE RECOGNITION
Revenue from subscription is recognized when the service is delivered to
the subscriber based on the respective subscription terms.
Expenses are recognized when incurred.
FOREIGN CURRENCY TRANSACTIONS AND BALANCES
Transactions involving foreign currencies are recorded at the rates of
exchange prevailing at the time the transactions are made. At balance sheet
date, assets and liabilities denominated in foreign currencies are adjusted
to reflect the rates of exchange prevailing at such date as published by
Bank Indonesia (Central Bank), and the resulting gains or losses are
credited or charged to current operations.
For December 31, 1999, the average buying rate of exchange used was Rp
7,100 to U.S.$1.
DEFERRED INCOME TAX
The Company follows the deferred tax liability method in accounting for
Income Tax. Under this method, the tax effects are recognized for timing
differences between financial reporting and Income Tax purposes and fiscal
loss carry-over, that will result in taxable or deductible amounts in
determining taxable profit of future periods when the carrying amount of
the asset or liability is recovered or settled.
3. TRANSLATIONS OF RUPIAH INTO UNITED STATES DOLLAR
The financial statements are stated in rupiah. The translations of the
rupiah amounts into United States dollar are included solely for the
convenience of the readers, using the average of Rp 7,160 to U.S.$1 of the
market buying and selling rates published by Bank of Indonesia on March 1,
2000. The convenience translations should not be construed as
representations that h rupiah amounts have been, could have been, or could
in the future be, converted into United States dollar at this or any other
rate of exchange.
G-10
<PAGE>
These Consolidated Financial Statements are Originally Issued in
Indonesian Language.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(Companies in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. CASH ON HAND AND IN BANKS
This account consists of the following:
Cash on hand Rp 17,886,200
Cash in banks
PT Bank Central Asia 954,256,616
PT Bank Universal 35,791,220
Others 4,894,130
-------------
Total Rp 1,012,828,166
=============
5. PROPERTY AND EQUIPMENT
The details of property and equipment are as follows:
<TABLE>
<CAPTION>
Transactions during the Period
--------------------------------------------------------------------------
Beginning
Balance Additions Deductions Ending Balance
----------------- -------------------- -------------- -------------------
<S> <C> <C> <C> <C>
Cost:
Infrastructure Rp -- Rp 1,695,543,600 Rp -- Rp 1,695,543,600
Operating equipment -- 1,539,835,200 -- 1,539,835,200
Office furniture and equipment -- 314,572,268 -- 314,572,268
----------------- -------------------- -------------- -------------------
Total Cost -- 3,549,951,068 -- 3,549,951,068
----------------- -------------------- -------------- -------------------
Accumulated Depreciation:
Infrastructure -- 3,592,500 -- 3,592,500
Operating equipment -- 134,083,561 -- 134,083,561
Office furniture and equipment -- 28,433,475 -- 28,433,475
----------------- -------------------- -------------- -------------------
Total Accumulated Depreciation -- 166,109,536 -- 166,109,536
----------------- -------------------- -------------- -------------------
Net Book Value Rp -- Rp 3,383,841,532
================= ===================
</TABLE>
Depreciation charged to operations amounted to Rp 166,109,536 during the
period.
6. REFUNDABLE DEPOSITS
This account consists of the deposits amounting to U.S.$49,500
(Rp 351,450,000) and Rp 49,689,050 paid to Loral Orion Service Inc.
- U.S.A. and other parties, respectively.
G-11
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
--------------------------------------------------------------------------------
7. ACCOUNTS PAYABLE
This account consists of the following:
<TABLE>
<S> <C>
PT Sentradata Mitra Cakrawala Rp 861,258,400
PT Grasindo 72,000,000
PT Duta Tiara Kusuma 38,800,000
PT Indo Bhakti Karya 31,943,000
Others 16,765,400
-----------------------------------
Total Rp 1,020,766,800
===================================
</TABLE>
--------------------------------------------------------------------------------
8. TAXES PAYABLE
This account consists of the following Income Taxes:
<TABLE>
<S> <C>
Article 21 Rp 97,664,918
Article 23 14,676,584
Article 26 -
-----------------------------------
Total Rp 112,341,502
===================================
</TABLE>
A reconciliation between loss before provision for Income Tax, as shown in
the consolidated statement of operations, and estimated fiscal loss for the
period follows:
<TABLE>
<S> <C>
Loss before provision for Income Tax per
consolidated statement of operations (Rp 1,930,318,332)
Timing difference -
Depreciation ( 1,608,865,998)
Permanent differences:
Non-deductible expenses
Representation and entertainment 316,714,301
Salaries and employee benefits 51,975,300
Interest income already subjected to final tax ( 17,456,760)
-----------------------------------
Estimated fiscal loss Rp 3,187,951,489
===================================
</TABLE>
G-12
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The computation of the provisions for Income Tax - deferred is as follows:
<TABLE>
<S> <C>
Effection fiscal loss at enacted maximum tax rate of 30% Rp 956,385,446
Effection timing differences at enacted maximum tax rate of 30% -
Depreciation ( 482,659,799)
-------------------------
Provision for Income Tax - deferred Rp 473,725,647
=========================
</TABLE>
The reconciliation between the provision for Income Tax calculated by
applying the applicable tax rate of 30% to the loss before provision for
Income Tax, and the provision for Income Tax shown in the consolidated
statement of operations for the period is as follows:
<TABLE>
<S> <C>
Loss before provision for Income Tax
per consolidated statement of operations Rp 1,930,318,332
=========================
Provision for Income Tax at the applicable tax rate of 30% Rp 579,095,499
Tax effect on permanent differences:
Representation and entertainment ( 95,014,290)
Salaries and employee benefits ( 15,592,590)
Interest income already subject to final tax 5,237,028
-------------------------
Provision for Income Tax per consolidated statement of operations Rp 473,725,647
=========================
</TABLE>
The breakdown of the deferred tax assets as of December 31, 1999 is as
follows:
<TABLE>
<S> <C>
Fiscal loss carryover Rp 956,385,446
Depreciation ( 482,659,799)
-------------------------
Deferred tax asset - net Rp 473,725,647
=========================
</TABLE>
The timing difference on which deferred tax asset has been computed relates
to the differences in the book and tax bases of property and equipment due
to the use of different depreciation periods and methods for Income Tax and
financial reporting purposes.
--------------------------------------------------------------------------------
9. TRANSACTIONS WITH A RELATED PARTY
G-13
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company obtained advances totaling U.S.$32,461 (Rp 230,473,100) from
Mrs. Dewi Allice Lydia Gontha (stockholder). These advances, which are
outstanding as of December 31, 1999, are non-interest bearing. There are no
fixed repayment terms.
G-14
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
--------------------------------------------------------------------------------
10. CAPITAL STOCK
The Company's stockholders as of December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Number of Shares Subscribed Percentage of
Stockholders and Fully Paid Ownership (%) Amount
------------------------------- ----------------------------- ------------------- -----------------------
<S> <C> <C> <C>
Dewi Allice Lydia Gontha 154,500,000 77.25% Rp 3,862,500,000
Adisatrya Suryo Sulisto 40,000,000 20.00 1,000,000,000
Priyatno Sulisto 2,000,000 1.00 50,000,000
Cecil Constantino Alexander 2,000,000 1.00 50,000,000
Doopy Irwan 500,000 0.25 12,500,000
Agusjulianto Sunjoto 500,000 0.25 12,500,000
Suhardi Gunawan Halim 500,000 0.25 12,500,000
----------------------------- ------------------- -----------------------
Total 200,000,000 100.00% Rp 5,000,000,000
============================= =================== =======================
</TABLE>
In the Company's Stockholders' Extraordinary General Meeting held on
November 12, 1999 the minutes of which are notarized under deed No. 1 dated
December 1, 1999 of Uus Sumirat S.H., the stockholders resolved to amend
the original articles of association for the following:
- increase in the authorized capital stock from Rp 1,000,000,000
consisting of 1,000,000 shares at Rp 1,000 par value per share to Rp
5,000,000,000 consisting of 200,000,000 shares at Rp 25 par value per
share; and
- increase of Rp 4,750,000,000 in the paid-up capital from Rp 250,000,000
(250,000 shares at Rp 1,000 par value per share) to Rp 5,000,000,000
(200,000,000 shares at Rp 25 par value per share), which increase shall
be subscribed and fully paid by Mrs. Dewi Allice Lydia Gontha and Mr.
Adisatrya Suryo Sulisto in the amounts of Rp 3,800,000,000 and Rp
950,000,000, respectively.
As of December 31, 1999, Mrs. Dewi Allice Lydia Gontha and Mr. Adisatrya
Suryo Sulisto have fully paid their additional capital stock subscriptions
totaling Rp 4,750,000,000.
The above amendment to the Company's articles of association has been
approved by the Ministry of Justice in its decision letter No.
C-3665HT.01.04.TH.2000 dated February 23, 2000.
--------------------------------------------------------------------------------
11. AGREEMENTS
a. LORAL ORION SERVICES INC., USA ("LORAL")
On December 6, 1999, MLB entered into an agreement with Loral, whereby
Loral agreed to provide telecommunication network services ("the
services") for transporting Internet Protocol ("IP") packets between
Loral Internet Gateways and MLB's site. The service consists, among
others, of providing: (i) simplex Permanent Virtual Circuits ("PVC")
between Loral Internet Gateway and MLB's site, (ii) Borday Gateway
Protocol service between the router at MLB's site and Loral-designated
U.S. Internet Service Provider
G-15
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
("ISP"), (iii) required space segment, satellite uplink and downlink
services, and (iv) technical consultancy service. MLB is obligated to
pay Loral the following: (i) one-time installation fee of U.S.$5,000,
(ii) monthly service fee of U.S.$16,500, and (iii) refundable deposit
of U.S.$49,500.
G-16
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 1999, MLB has paid to Loral refundable deposit
amounting to U.S.$49,500 (Rp 351,450,000), installation fee amounting
to U.S.$5,000 or Rp 35,690,000 (charged to Installation and Related
Expenses) and service fee amounting to U.S.$16,500 or Rp 117,150,000
(charged to Advances).
On December 8, 1999, the Company entered into an agreement with MLB,
whereby MLB agreed to provide the services to the Company. In return,
the Company agreed to reimburse MLB (i) monthly service fee of
U.S.$16,500 and refundable deposit of U.S.$49,500 which have been paid
by MLB to Loral as discussed above, and (ii) VSAT rental fees payable
to Infokom (see "d" below) and IIX ("Indonesian Internet Exchange")
fees amounting to U.S.$2,500 and U.S.$1,500 per month, respectively.
b. PT MESANA INVESTAMA UTAMA ("MESANA")
The Company has an agreement with Mesana, a related company which is an
Indonesian securities company. Under the agreement which is dated
December 3, 1999, the Company agreed to provide Mesana online
electronic stock trading, website development and maintenance, news and
data supply, software license, web hosting and mail hosting. In return,
Mesana shall pay the Company 25% of the total net commission on stock
trading generated by Mesana of Rp 12,500,000 per month, whichever
amount is greater.
c. PT INDONESIAN SATELLITE CORPORATION TBK ("INDOSAT")
On October 1, 1999, the Company entered into a contract with Indosat,
for the use of Indosat's Indosatnet facility by the Company for a
compensation of Rp 7,500,000 per month. As of December 31, 1999,
Indosat has billed the Company installation fee and rental fee
amounting to Rp 2,500,000 and Rp 22,500,000, respectively.
d. PT INFOKOM ELECTRINDO ("INFOKOM")
On October 6, 1999, MLB entered into a lease agreement with Infokom,
for the use of Infokom's Very Small Aperture Terminal ("VSAT")
equipment to be installed in MLB's site. In return, the Company agreed
to pay Infokom, service fee amounting to U.S.$30,000 per year. The
lease agreement will expire on November 17, 2000. As of December 31,
1999, the amounts of U.S.$2,375 and Rp 17,000,000 (charged to Service
Fee) have been billed by Infokom to MLB.
e. PT TANJUNG BANGUN SEMESTA ("TBS")
On September 1, 1999, the Company signed a memorandum of understanding
with TBS whereby the Company agreed to provide TBS with Quick Financial
Channel Program either
G-17
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
through direct cable connection or via Broadcast Satellite under
certain terms and conditions as provided in the memorandum. The
subscription revenue earned from TBS amounted to Rp 1,800,000 during
the period.
G-18
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
f. PT MATAHARI LINTAS CAKRAWALA ("MLC")
On September 1, 1999, the Company entered into an agreement with MLC
whereby the Company agreed to provide MLC with Quick Financial Channel
Program through a direct cable connection which will become part of the
subscription television service currently being provided by MLC. The
revenue earned will be shared between the Company and MLC at the rates
of 70% and 30%, respectively. The subscription revenue earned from MLC
amounted to Rp 22,650,000 during the period.
g. PT BURSA EFEK JAKARTA ("BEJ")
(i) On March 3, 1999, the Company and BEJ entered into an agreement
whereby both parties agreed, among other matters, to cooperate in
the development and provision of programming services such as:
Stock Channel and TV Interactive/Web TV ("Program Channel"), which
will be distributed via cable television operators in Indonesia,
MLC's Indovision Digital channel and/or other media.
Under the agreement, BEJ will: (i) provide certain supporting
equipment and space in the Jakarta Stock Exchange which will be
available to the Company in order to provide the programming
service to other third parties and (ii) make available to the
Company certain data and other information related with securities
transactions in the Jakarta Stock Exchange. The calculated gross
profit earned will be shared between the Company and BEJ at
certain rate, which will vary from time to time, according to a
table stipulated in the agreement.
(ii) On September 24, 1999, the Company and BEJ entered into an
agreement with the Directorate General of Tourism of the Republic
of Indonesia, whereby the Company and BEJ agreed to broadcast the
"Let's Go Indonesia" logo and to provide space/page in the Quick
Financial Channel program without any charges. In return, the
Directorate General of Tourism will require the Indonesian Hotel
and Restaurant Association ("PHRI") to promote among their members
the Quick Financial Channel program provided through MLC's
Indovision broadcasting program.
h. BRIDGE INFORMATION SYSTEM (S) PTE. LTD., SINGAPORE ("BRIDGE")
(i) On July 1, 1999, the Company entered into an agreement with Bridge
whereby Bridge agreed to:
- install required equipment units in the Company's premises and ensure
accurate and timely transmission of data, such as real-time information
from commodity exchange, money market and stock exchange, etc.;
G-19
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- transmit the data and other information as stipulated in the agreement
to the Company through a leased telecommunication line or satellite
downlink, in respect of which the Company shall bear all cost and
charges incurred; and
- grant the Company the license to use the data in accordance with the
terms and conditions as stipulated in the agreement.
In return, the Company is obligated to pay one-time installation
fee of U.S.$300, monthly subscription fee of U.S.$1,000 and
communication fees to be billed to the Company based on actual
telecommunication lines used to deliver the data to the Company's
site. The monthly subscription fees are waived for the first six
months commencing on the date the equipment units are installed.
(ii) On July 1, 1999, the Company entered into another agreement with
Bridge whereby Bridge agreed to, among others:
- grant a license to the Company to access and utilize Bridge's product
and service ("Bridge Services") in the production of the Company's
television programming service in Indonesia (known as "Stockwatch");
- provide training and support to the Company in relation to the use of
Bridge Services and assistance in converting the news and data
contained in the Bridge Services into a variety of formats for
presentation in Stockwatch; and
- provide access to the Bridge journalists in Asia for market moving
stories.
In recognition of Bridge's assistance, the Company will provide, among others:
- commercial airtime on the Stockwatch program and will produce Bridge
commercials free of charge. The minimum airtime shall be three
30-second spots per day for one month every three months;
- on-air marketing and attribution rights to Bridge; and
- communication link between Bridge's office and the Company's premises.
--------------------------------------------------------------------------------
12. ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
The Company has monetary assets and liabilities in U.S. dollar only as of
December 31, 1999, as follows:
<TABLE>
<CAPTION>
U.S. Dollar Rupiah Equivalent (i)
------------------------- ---------------------------
<S> <C> <C>
Assets:
Cash on hand and in banks 10,279 72,980,900
Advances 16,500 117,150,000
Refundable deposits 49,500 351,450,000
</TABLE>
G-20
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<S> <C> <C>
------------------------- ---------------------------
Total assets 76,279 541,580,900
========================= ===========================
</TABLE>
G-21
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
U.S. Dollar Rupiah Equivalent (i)
------------------------- ---------------------------
<S> <C> <C>
Liabilities:
Accounts payable 121,304 861,258,400
Due to stockholder 32,461 230,473,100
Accrued expense 2,500 17,750,000
------------------------- ---------------------------
Total liabilities 156,265 1,109,481,500
------------------------- ---------------------------
Net liabilities 79,986 567,900,600
========================= ===========================
</TABLE>
(i) THE RUPIAH EQUIVALENT BALANCES PRESENTED HAVE BEEN TRANSLATED USING THE
PREVAILING RATE AT BALANCE SHEET DATE.
--------------------------------------------------------------------------------
13. SUBSEQUENT EVENTS
a. On January 26, 2000, the Company and AcuBid.com ("AcuBid", a U.S.A.
company,) entered into a memorandum of understanding whereby:
- AcuBid expressed its desire to form an Internet Service/Content
Provider (ISP) which will provide e-commerce solutions to the markets
of Asia, including Indonesia; and
- AcuBid granted the Company an option to acquire 33 million of AcuBid's
common stock. In return, the Company will provide 90% of its ISP
contracts, licenses and assets to AcuBid, which will be formalized in
an agreement to be entered into by and between both parties.
b. On January 26, 2000, the Company entered into an agreement with PT
Mediacitra Indostar (MCI) whereby the latter agreed to provide
transponders with capacity of 16 Mbps to be used for transmitting
Company data. The Company is obligated to pay MCI, fees amounting to
U.S.$320,000 per year payable in twelve equal monthly installments
starting on July 10, 2000. The agreement shall be valid for five years
commencing June 1, 2000, and the amount of the fees is fixed during the
5-year period.
c. On January 27, 2000, MLB entered into a contract with PT Telekomunikasi
Indonesia Tbk Regional Division II ("PT Telkom"), whereby the latter
agreed to provide telecommunications infrastructure and facilities to
be used by MLB. The charges on the use of the infrastructure and
facilities have been determined according to PT Telkom's list of tariff
as stipulated in the agreement. The agreement is valid for two years
commencing from the date of the agreement.
d. In the Company's Stockholders' Meeting held on February 24, 2000 the
minutes of which are notarized under deed No. 23 dated February 25,
2000 of Neneng Salmiah, S.H., M. Hum, the stockholders resolved to:
G-22
<PAGE>
THESE CONSOLIDATED FINANCIAL STATEMENTS ARE ORIGINALLY ISSUED IN INDONESIAN
LANGUAGE.
PT JARING DATA INTERAKTIF AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- approve the plan of Mrs. Dewi Allice Lydia Gontha and Mr. Adisatrya
Suryo Sulisto to sell their stock ownership in the Company totaling
150,000,000 and 30,000,000 shares, respectively, to Alanberg Pte. Ltd.
("Alanberg"), a Singapore limited liability company, or to another
party which will be appointed by Alanberg; and
- change the Company's status from a domestic investment company to a
foreign investment company.
e. On different dates from January 1, 2000 to March 1, 2000, the Company
entered into agreements with several companies, whereby the Company
agreed to provide the following: (i) web development and design, web
maintenance, web hosting, mail hosting and internet connection services
for which the Company shall receive one-time design fees of Rp
10,000,000 and Rp 15,135,000 per month for web maintenance and internet
connection services, respectively; and (ii) dedicated leased-line
service for which the Company shall receive an amount ranging from Rp
3,500,000 to Rp 24,000,000 per month, depending on the capacity
provided.
--------------------------------------------------------------------------------
14. CURRENT ECONOMIC CONDITION
Since the second half of 1997, Indonesia has been experiencing economic
difficulties characterized by the depreciation of the rupiah, high interest
rates, sharply reduced economic activities, high unemployment rate, lack of
liquidity, tightening of available credit and increasing number of business
insolvencies.
Despite the above factors, the stockholders still established the Company.
However, they have carefully considered the factors and are undertaking the
following actions/plans:
- Intensifying their marketing efforts on the Quick Financial Channel
Program;
- Adoption of stringent criteria in the evaluation of investment
activities; and
- Negotiation with investors to invest in the Company's equity or
cooperate in the Company's project development.
Although the volatility of the foreign exchange rates has been reduced and
interest rates declined significantly in 1999 as compared to the condition
in 1997 and 1998, the resolution of the economic condition is dependent on
the fiscal, monetary and other measures that are being taken by the
government, actions which are beyond the Company's control, to achieve
economic recovery. It is not possible to determine the future development
on the economic condition and its impact to the Company's liquidity and
earnings.
G-23
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following statements contain unaudited condensed combined financial
information for Asia Web Holdings, Inc. (formerly Acubid.com, Inc.) and PT
Jaring Data Interaktif (JDI) on a pro forma combined basis giving effect to the
acquisition applying the purchase method of accounting.
The Unaudited Pro Forma Combined Statement of Operations of JDI and Asia Web
Holdings, Inc. for the fiscal year ended August 31, 1999 ("Pro Forma Statement
of Operations") and the Unaudited Pro Forma Balance Sheet as of May 31, 2000
("Pro Forma Balance Sheet", and, together with the Pro Forma Statement of
Operations, the "pro Forma Financial Statements"), have been prepared to
illustrate the estimated effect of the Merger between JDI and Asia Web Holdings,
Inc. The Pro Forma Statement of Operations give pro forma effect to the Merger
as if it had occurred on February 25, 1999, the date of JDI's inception for
financial reporting purposes. The Pro Forma Balance Sheet gives pro forma effect
to the Merger as if it had occurred on May 31, 2000. The Pro Forma Financial
Statements do not purport to be indicative of the results of operations or the
financial position of the combined entity that would have actually been achieved
had the Merger occurred as of the assumed dates and for the period presented, or
which may be obtained in the future. The pro forma adjustments are described in
the accompanying notes and are based upon available information and certain
assumptions that the Company believes are reasonable. The Pro Forma Financial
Statements should be read in conjunction with the separate financial statements
of Acubid.com and JDI and the notes thereto and management's Discussion and
Analysis of Financial Condition and Results of Operations included elsewhere or
incorporated by reference in this Proxy.
A preliminary allocation of the purchaser price has been made to major
categories of assets and liabilities in the accompanying Pro Forma Financial
Statements based on available information. The actual allocation of purchase
price and the resulting effect on results of operations may differ significantly
from the pro forma amounts included herein. These pro forma adjustments
represent the Company's preliminary determination of purchase accounting
adjustments and are based upon available information and certain assumptions
that the Company believes to be reasonable. Consequently, the amounts reflected
in the Pro Forma Financial Statements are subject to change, and the final
amounts may differ substantially.
<PAGE>
<TABLE>
ASIA WEB HOLDINGS, INC AND PT. JARING DATA INTERAKTIF
UNAUDITED PROFORMA COMBINED BALANCE SHEET
<CAPTION>
PT. Jaring Data Asia Web Pro Forma
Interaktif Holdings, Inc. Pro Forma Combined
June 30, 2000 May 31, 2000 Combined Adjustments Total
------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 413,960 $ 161,770 $ 575,730 $ 575,730
Accounts receivable 72,066 72,066 72,066
Short-term investments 2,390,402 2,390,402 2,390,402
Inventory 182,389 182,389 182,389
Prepaid expenses and advances 266,507 59,269 325,776 325,776
Due from affiliates 270,144 270,144 (b) (182,000) 88,144
------------ ------------- ------------- ------------- -------------
Total current assets 752,534 3,063,974 3,816,508 (182,000) 3,634,508
Deferred tax asset 69,985 - 53,985 53,985
Property and equipment, net of accumulated 644,430 179,181 823,611 823,611
depreciation
Goodwill 55,043 55,043 55,043
Deposits and other assets 47,202 6,053 53,255 (a) 5,054,000 5,107,255
------------ ------------- ------------- ------------- -------------
TOTAL ASSETS $ 1,553,194 $ 3,249,208 $ 4,802,402 $ 4,872,000 $ 9,674,402
============ ============= ============= ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 249,583 $ 45,415 $ 294,998 $ 294,998
Accrued liabilities 29,417 57,142 86,559 86,559
Due to related parties 1,391,373 13,290 1,404,663 (b) (182,000) 1,222,663
------------ ------------- ------------- ------------- -------------
Total current liabilities 1,670,373 115,847 1,786,220 (182,000) 1,604,220
------------ ------------- ------------- ------------- -------------
MINORITY INTEREST 19,519 - 19,519 19,519
------------ ------------- ------------- ------------- -------------
SHAREHOLDERS' EQUITY
Common stock 569,801 8,805 578,606 (a) 44,000 52,805
(a) (569,801)
Additional paid in capital 13,558,943 13,558,943 (a) (4,854,586) 8,704,357
Accumulated deficit (706,499) (10,434,387) (11,140,886) (a) 10,434,387 (706,499)
------------ ------------- ------------- ------------- -------------
Total shareholders' equity (136,698) 3,133,361 2,996,663 5,054,000 8,050,663
------------ ------------- ------------- ------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,553,194 $ 3,249,208 $ 4,802,402 $ 4,872,000 $ 9,674,402
============ ============= ============= ============= =============
</TABLE>
<PAGE>
<TABLE>
ASIA WEB HOLDINGS, INC AND PT. JARING DATA INTERAKTIF
UNAUDITED PROFORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MAY 31, 2000
<CAPTION>
PT. Jaring Data Asia Web Pro Forma
Interaktif Holdings, Inc. Pro Forma Combined
June 30, 2000 May 31, 2000 Combined Adjustments Total
------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenue $ 15,352 $ 19,306 $ 34,658 $ - $ 34,658
Cost of revenue 216,872 137,153 354,025 354,025
------------ ------------- ------------- ------------- -------------
GROSS PROFIT (LOSS) (201,520) (117,847) (319,367) (319,367)
------------ ------------- ------------- ------------- -------------
Operating costs and expenses
General and administrative expenses 521,239 1,530,750 2,051,989 (a) 60,000 2,111,989
Depreciation and amortization 84,784 67,807 152,591 (b) 758,000 910,591
------------ ------------- ------------- ------------- -------------
TOTAL OPERATING COSTS AND EXPENSES 606,023 1,598,557 2,204,580 818,000 3,022,580
------------ ------------- ------------- ------------- -------------
LOSS FROM OPERATIONS (807,543) (1,716,404) (2,523,947) (818,000) (3,341,947)
------------ ------------- ------------- ------------- -------------
Other income (expenses)
Interest (net) 2,592 69,896 72,488 72,488
Gain on foreign exchange 23,270 23,270 23,270
Others (10,167) 41,836 31,669 31,669
------------ ------------- ------------- ------------- -------------
TOTAL OTHER INCOME (EXPENSE) 15,696 111,732 127,428 - 127,428
------------ ------------- ------------- ------------- -------------
Income (loss) before tax provision (791,847) (1,604,672) (2,396,519) (818,000) (3,214,519)
------------ ------------- ------------- ------------- -------------
Provision for income taxes (44,427) (44,427) (44,427)
Distribution in converting preferred stock in (788,960) (788,960) (788,960)
form of common stock
Minority interest in net loss of subsidiary (12,979) (12,979) (12,979)
------------ ------------- ------------- ------------- -------------
NET LOSS $ (734,441) $ (2,393,632) $ (3,242,885) $ (818,000) $ (4,060,885)
============ ============= ============= ============= =============
Net loss per common share
Net loss $ (0.08)
=============
Pro Forma weighted number of common shares outstanding 52,803,160
=============
</TABLE>
<PAGE>
<TABLE>
ASIA WEB HOLDINGS, INC AND PT. JARING DATA INTERAKTIF
UNAUDITED PROFORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1999
<CAPTION>
PT. Jaring Data Asia Web Pro Forma
Interaktif Holdings, Inc. Pro Forma Combined
June 30, 1999(1) August 31, 1999(2) Combined Adjustments Total
------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenue $ - $ 840 $ 840 $ - $ 840
Cost of revenue
------------ ------------- ------------- ------------- -------------
GROSS PROFIT (LOSS) 840 840 840
------------ ------------- ------------- ------------- -------------
Operating costs and expenses
General and administrative expenses 28,609 1,799,364 1,827,973 (b) 80,000 1,907,973
Depreciation and amortization 1,207 39,458 40,665 (a) 1,011,000 1,051,665
------------ ------------- ------------- ------------- -------------
TOTAL OPERATING COSTS AND EXPENSES 29,816 1,838,822 1,868,638 1,091,000 2,959,638
------------ ------------- ------------- ------------- -------------
LOSS FROM OPERATIONS (29,816) (1,837,982) (1,867,798) (1,091,000) (2,958,798)
------------ ------------- ------------- ------------- -------------
Other income (expenses)
Interest (net) 1,399 7,401 8,800 8,800
Gain on foreign exchange (11,463) (11,463) (11,463)
Others (16) 4,575 4,559 4,559
------------ ------------- ------------- ------------- -------------
TOTAL OTHER INCOME (EXPENSE) (10,080) 11,976 1,896 1,896
------------ ------------- ------------- ------------- -------------
Loss before tax provision (39,896) (1,826,006) (1,865,902) (1,091,000) (2,956,902)
------------ ------------- ------------- ------------- -------------
Provision for income taxes (800) (800) (800)
------------ ------------- ------------- ------------- -------------
Loss before extraordinary items (39,896) (1,826,806) (1,866,702) (1,091,000) (2,957,702)
Extraordinary items
Gain on debt forgiveness 72,745 72,745 72,745
Loss on extinguishment of debt (120,421) (120,421) (120,421)
------------ ------------- ------------- ------------- -------------
NET LOSS $ (39,896) $ (1,874,482) $ (1,914,378) $ (1,091,000) $ (3,005,378)
============ ============= ============= ============= =============
Net loss per common share
Loss before extraordinary items
Extraordinary items $ (0.06)
=============
Net loss $ (0.00)
=============
Pro Forma weighted number of common shares outstanding 52,803,160
=============
</TABLE>
(1) For the six months ended June 30, 1999
(2) For the year ended August 31, 1999
<PAGE>
Notes to Unaudited Pro Forma Combined Financial Statements
PRO FORMA STATEMENT OF OPERATIONS
---------------------------------
(a) The Pro Forma Statement of Operations assumes that the Merger occurred
on February 25, 1999, date of JDI's commencement of operations. For
purposes of the Pro Forma Statements of Operations for the year ended
August 31, 1999, JDI's results of operations for the period from
inception (February 25, 1999) to June 30, 1999 have been combined with
Asia Web Holdings, Inc.'s results for the year ended August 31, 1999
and for purposes of the Pro Forma Statement of Operations for the nine
months ended May 31, 2000, JDI's results of operations for the nine
months ended June 30, 2000 have been combined with Asia Web's results
of operations for its nine months ended May 31, 2000
(b) The Merger has been accounted for as a purchase by JDI of Asia Web
Holdings, Inc. ("the reverse acquisition"). The total purchase price
was determined by reference to the fair value of the issued and
outstanding shares of Acubid.com prior to the Merger. The fair value
was determined by reference to the average closing price of Asia Web's
common stock for the thirty days prior to the announcement of the
proposed Merger. Under purchase accounting, the total purchase price
was allocated to the tangible and intangible assets and liabilities of
Acubid.com based upon their respective fair values and other available
information. Pursuant to the Company's purchase accounting, on a
preliminary basis the Company believes that the entire excess of the
cost of the Merger in excess of Asia Web's net assets has been
allocated to goodwill for purposes of the Pro Forma Financial
Statements.
The adjustment for estimated pro forma amortization of goodwill is
based upon its estimated fair value and a useful life of five years.
The amount of the pro forma adjustment to reflect the amortization is
$1,011,000 for the year ended August 31, 1999 and $758,000 for the nine
months ended May 31, 2000.
(c) Certain officers of Asia Web Holdings, Inc. will receive employment
agreements in connection with the proposed Merger. The effect of the
agreements will be to increase officers' compensation by $80,000 in the
year ended August 31, 1999 and $60,000 for the nine months ended May
31, 2000 above amounts paid to these individuals based on employment
agreements expected to be in place concurrent with the acquisition.
<PAGE>
PRO FORMA BALANCE SHEET
-----------------------
(a) The estimated purchase price and preliminary adjustments to historical
book value to Asia Web Holdings, Inc. as a result of the Acquisition is
as follows:
Purchase price:
Estimated value of Asia Web common shares
immediately prior to the Acquisition's announcement $ 8,778,000
Book value of Asia Web's net assets acquired 3,724,000
------------
Purchase price in excess of net assets acquired $ 5,054,000
============
Preliminary allocation of purchase price in excess
of net assets acquired
Estimated goodwill $ 5,054,000
============
The Adjustments to common stock, paid-in capital, retained earnings
(deficit) as a result of the Merger are as follows:
Common stock
Consolidation of JDI and Asia Web and elimination
against paid-in capital $ (569,801)
Issuance of 44,000,000 Asia Web common shares to
majority shareholder of JDI 44,000
Paid-in capital
Elimination of Asia Web deficit 10,434,387
Issuance of 44,000,000 Asia Web common shares (5,579,801)
Retained earnings (deficit)
Elimination of Asia Web deficit 10,434,387
------------
$ 5,054,000
============
(b) Adjustment to eliminate intercompany accounts
