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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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) May 18, 2000
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THE FINANCIAL COMMERCE NETWORK, INC.
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(Exact Name of Registrant as Specified in Charter)
NEVADA 0-27971 22-2582276
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
63 Wall Street, New York, New York 10005
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(Address if Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 742-9870
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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This form 8-K/A of The Financial Commerce Network, Inc. (the "Company")
constitutes Amendment No. 1 to the Company's Current Report on Form 8-K (the
"Original Form 8-K") which was filed with the Securities and Exchange Commission
(the "SEC") on August 18, 2000. This amendment sets forth the information
required by Items 7(a) and 7(b) omitted from the Original Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired
In accordance with Rule 210.3-05(b) of Regulation S-X the historical
statements covering the period from May 12, 1999 (date of inception) to
December 31, 1999 are attached to this report.
(b) Proforma Financial Information
The following unaudited pro forma condensed consolidated financial statements
(the "Pro Forma Financial Statements") are based on the historical financial
statements of The Financial Commerce Network, Inc. and Subsidiaries and
StockChicken.com, Inc. (collectively "The Financial Commerce Network, Inc.
and Subsidiaries"), adjusted to give effect to the acquisition by The
Financial Commerce Network, Inc. and Subsidiaries of StockChicken.com, Inc.
The Unaudited Pro Forma Condensed Consolidated Statements of Operations give
effect to the acquisition as if it had occurred as of May 12, 1999 (date of
inception). The acquisition and the related adjustments are described in the
accompanying notes. The pro forma adjustments are based upon available
information and certain assumptions that management believes are reasonable.
The Pro Forma Financial Statements do not purport to represent what The
Financial Commerce Network, Inc. and Subsidiaries' results of operations
would actually have been had the acquisition in fact occurred on such date or
to project The Financial Commerce Network, Inc. and Subsidiaries' results of
operations for any future period or date. The Pro Forma Financial Statements
should be read in conjunction with the historical financial statements of The
Financial Commerce Network, Inc. and Subsidiaries and StockChicken.com, Inc.
and the "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
The acquisition will be accounted for using the purchase method of
accounting. Upon acquisition, the purchase price of the acquisition of
StockChicken.com, Inc. will be allocated to the tangible and intangible
assets and liabilities of StockChicken.com, Inc. based upon their respective
fair values.
2
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THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
========================================================================================================
PERIOD MAY 12, 1999 TO DECEMBER 31, 1999
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THE FINANCIAL
COMMERCE NETWORK PRO FORMA
AND SUBSIDIARIES STOCKCHICKEN.COM ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
REVENUES
Trading and commissions $ 979,536 $ - $ - $ 979,536
Investment banking 650,320 650,320
Interest 38,266 38,266
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1,668,122 - 1,668,122
EXPENSES, selling, general and
administrative 33,040,489 21,652 20,000 (1) 33,082,141
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LOSS BEFORE INCOME TAXES (31,372,367) (21,652) (20,000) (31,414,019)
INCOME TAXES 57,000 - 57,000
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NET LOSS (31,429,367) (21,652) (20,000) (31,471,019)
PREFERRED STOCK DIVIDENDS (119,583) - (119,583)
------------------------------------------------------------------------
NET LOSS APPLICABLE
TO COMMON SHARES $ (31,548,950) $ (21,652) $ (20,000) $(31,590,602)
=========================================================================
BASIC AND DILUTED LOSS
PER COMMON SHARE $ (1.68) $ (1.67)
=========================================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES USED IN
COMPUTING BASIC AND DILUTED
LOSS PER COMMON SHARE 18,751,986 127,671 (2) 18,879,657
=========================================================================
</TABLE>
3
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THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
========================================================================================================
SIX MONTHS ENDED JUNE 30, 2000
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THE FINANCIAL
COMMERCE NETWORK PRO FORMA
AND SUBSIDIARIES STOCKCHICKEN.COM ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
REVENUES
Trading and commissions $ 814,181 $ - $ - $ 814,181
Investment banking 37,969 37,969
Interest 9,693 9,693
Other 13,125 61 13,186
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874,968 61 875,029
EXPENSES, selling, general and
administrative 2,893,916 45,735 2,574 (1),(3) 2,942,225
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NET LOSS APPLICABLE
TO COMMON SHARES $ (2,018,948) $ (45,674) $ (2,574) $ (2,067,196)
=======================================================================
BASIC AND DILUTED LOSS
PER COMMON SHARE $ (0.09) $ (0.09)
=======================================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES USED IN
COMPUTING BASIC AND DILUTED
LOSS PER COMMON SHARE 21,697,371 167,032 (2) 21,864,403
=======================================================================
</TABLE>
4
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NOTES TO PRO FORMA FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated statements of operations give
effect to the acquisition of StockChicken.com, Inc. by The Financial Commerce
Network by combining the respective Statements of Operations of the two
companies for the period May 12, 1999 (date of inception) to December 31, 1999
and the six months ended June 30, 2000. The acquisition was accounted for using
the "purchase" method of accounting. Therefore, the aggregate consideration paid
in connection with the acquisition was allocated to StockChicken.com's assets
and liabilities based on their fair market values with the excess consideration
treated as goodwill. The purchase price will be paid with the issuance of
200,000 restricted shares of common stock valued at $400,000. The common stock
was valued at the minimum value of $2.00 per share in accordance with the reset
provision in the agreement.
(1) To reflect goodwill amortization of $20,000 for the period May 12, 1999
(date of inception) to December 31, 1999 and $15,000 for the six months
ended June 30, 2000.
(2) To reflect the increase in shares as if the 200,000 shares issued to
purchase StockChicken.com had been outstanding since May 12, 1999 (date of
inception).
(3) To reflect the loss of StockChicken.com from May 18, 2000 to June 30, 2000
of $12,426 which is already included in the loss of The Financial Commerce
Network and Subsidiaries for the period ended June 30, 2000.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE FINANCIAL COMMERCE NETWORK, INC.
Date: September 13, 2000 By: /s/ Ara Proudian
-------------------------------
Ara Proudian
President
6
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STOCKCHICKEN.COM, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1999
<PAGE>
STOCKCHICKEN.COM, INC,
(A Development Stage Company)
CONTENTS
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<TABLE>
<S> <C>
INDEPENDENT AUDITORS' REPORT F-1
FINANCIAL STATEMENTS
Balance Sheet F-2
Statement of Operations F-3
Statement of Stockholders' Deficit F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6-F-7
</TABLE>
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INDEPENDENT AUDITORS' REPORT
Board of Directors
StockChicken.com, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of StockChicken.com, Inc. (A
Development Stage Company) as of December 31, 1999, and the related statements
of operations, stockholders' deficit, and cash flows for the period May 12, 1999
(date of inception) to December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of StockChicken.com, Inc. (A
Development Stage Company) as of December 31, 1999, and the results of their
operations and their cash flows for the period May 12, 1999 (date of inception)
to December 31, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3, the Company is
in the development stage and the Company's ability to continue in the normal
course of business is dependent upon the success of future operations. The
Company has a working capital deficit and a stockholders' deficit, which raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 3. These financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ ROTHSTEIN, KASS & COMPANY, P.C.
Roseland, New Jersey
September 12, 2000
F-1
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STOCKCHICKEN.COM, INC,
(A Development Stage Company)
BALANCE SHEET
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DECEMBER 31, 1999
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<TABLE>
<S> <C>
ASSET
CURRENT ASSET, cash $ 795
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LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 20,562
Other current liabilities 885
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Total current liabilities 21,447
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Preferred stock, no par value, authorized 5,000,000 shares,
none issued
Common stock, no par value, authorized 50,000,000 shares,
issued and outstanding 5,000,000 shares 1,000
Accumulated deficit (21,652)
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Total stockholders' deficit (20,652)
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$ 795
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</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F-2
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STOCKCHICKEN.COM, INC,
(A Development Stage Company)
STATEMENT OF OPERATIONS
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PERIOD MAY 12, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 1999
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<TABLE>
<S> <C>
EXPENSES
Hosting fees $ 18,176
Travel and entertainment 989
Incorporation fees 724
Communications 423
Interest expense 93
Other 1,247
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NET LOSS $ (21,652)
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</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F-3
<PAGE>
STOCKCHICKEN.COM, INC,
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIT
================================================================================
PERIOD MAY 12, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 1999
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<TABLE>
<CAPTION>
COMMON STOCK ACCUMULATED
SHARES AMOUNT DEFICIT
<S> <C> <C> <C>
Sales of common stock 5,000,000 $ 1,000 $ -
NET LOSS (21,652)
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BALANCES, December 31, 1999 5,000,000 $ 1,000 $ (21,652)
==========================================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F-4
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STOCKCHICKEN.COM, INC,
(A Development Stage Company)
STATEMENT OF CASH FLOWS
================================================================================
PERIOD MAY 12, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 1999
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<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (21,652)
Adjustments to reconcile net loss to net
cash used in operating activities:
Increase in accounts payable and accrued expenses 20,562
Increase in other current liabilities 885
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NET CASH USED IN OPERATING ACTIVITIES (205)
NET CASH PROVIDED BY FINANCING ACTIVITIES,
Sales of common stock 1,000
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NET INCREASE IN CASH AND CASH, END OF PERIOD $ 795
=============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F-5
<PAGE>
STOCKCHICKEN.COM, INC,
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. NATURE OF BUSINESS StockChicken.com, Inc. was incorporated in the
State of Florida in May 1999 for the purpose of
providing investment education, financial
newsletters, real-time quotes, research reports
and other services via its Stockchicken.com web
site.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES INCOME TAXES
The Company complies with Statement of Financial
Accounting Standards No. 109 (SFAS 109),
"Accounting for Income Taxes". SFAS 109 requires
the recognition of deferred tax assets and
liabilities for both the expected future tax
impact of differences between the financial
statement and tax bases of assets and
liabilities, and for the expected future tax
benefit to be derived from tax loss
carryforwards. Valuation allowances are
established, when necessary, to reduce deferred
tax assets to the amount expected to be
realized.
The Company's stockholders have elected to treat
the Company as an "S" Corporation for federal
and state income tax purposes. Accordingly, the
individual stockholders are liable for federal
and state income taxes on corporate income and
receive the benefit of allowable corporate loss.
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.
3. GOING CONCERN The accompanying financial statements have been
prepared assuming that the Company will continue
as a going concern. The Company is in the
development stage and the Company's ability to
continue in the normal course of business is
dependent upon the success of future operations.
The Company has a working capital deficit and a
stockholders' deficit, which raise substantial
doubt about its ability to continue as a going
concern. Management plans to eliminate future
debt through a consolidation of services,
currently offered on the web-site, with the
services offered with The Financial Commerce
Network, Inc. Specifically consolidating and
transferring the portal to the joint venture
web-hosting facility, Harborzone. These
financial statements do not include any
adjustments that might result from the outcome
of this uncertainty.
F-6
<PAGE>
STOCKCHICKEN.COM, INC,
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
================================================================================
4. SUBSEQUENT EVENTS Effective March 29, 2000, StockChicken.com, Inc.
entered into a 5,000 for 1 stock split, thereby
increasing the number of outstanding shares of
the Company's common stock to 5,000,000 and the
number of authorized shares to 50,000,000. The
financial statements give retroactive effect to
the stock split. In connection with this
agreement, the Company is also authorized to
issue 5,000,000 shares of preferred stock and
changed its common stock to no par value.
During March and April 2000, the Company sold
6,250,000 shares of its common stock for $5,250.
During May 2000, the Company issued 100,000
shares of its common stock in contemplation of a
financing transaction. The proceeds from the
issuance were returned to the purchaser.
During May 2000, TFCN issued 200,000 shares of
its restricted common stock in exchange for all
the issued and outstanding shares of the
Company's common stock. The shares will be
issued to the stockholders of StockChicken.com
with a valuation of $2.00 per share. The
acquisition has a "reset" provision that
provides on the sixth month anniversary of the
closing, if the price of TFCN common stock is
below a $2.00 bid price for five consecutive
trading days, then the selling shareholders will
be given an additional number of TFCN common
shares to offset the price.
