<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number:
EBASEONE CORPORATION
Exact name of Registrant as specified in is charter
DELAWARE 13-3911740
State of Incorporation IRS Employer Identification Number
6060 RICHMOND AVENUE, SUITE 190
HOUSTON, TEXAS 77057
713-975-8700
Address and telephone number of principal executive offices
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to filing
requirements for the past 90 days.
Yes No X
------ -----
The number of shares of common stock of the Registrant outstanding at March 31,
2000 was 38,039,133.
<PAGE>
EBASEONE CORPORATION
AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
PART I FINANCAL INFORMATION
Item 1 Financial Statements 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statement of Cash flows 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis or Plan of Operation 7
Item 3 Quantitative and Qualitative Disclosures About Market Risk 14
PART II OTHER INFORMATION
Item 2 Changes in Securities and Use of Proceeds 14
Item 6 Exhibits and Reports on Form 8-K 14
</TABLE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
EBASEONE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
------
March 31, September 30,
2000 1999
------------------ -----------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,135,000 $ 308,000
Account receivable - trade, no allowance for doubtful accounts 85,000 40,000
Note receivable 60,000 -
Other assets 26,000 2,000
------------ -----------
Total current assets 5,306,000 350,000
OTHER ASSETS 46,000 18,000
Property and Equipment, net 1,148,000 333,000
------------ -----------
Total assets $ 6,500,000 $ 701,000
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES:
Short-term borrowings $ - $ 110,000
Current portion of long-term debt 44,000 55,000
Current portion of capital lease obligation 295,000 19,000
Notes payable to stockholders - 5,000
Trade accounts payable 539,000 373,000
Accrued expenses and other current liabilities 32,000 247,000
------------ -----------
Total current liabilities 910,000 819,000
Long-Term Debt, net of current portion 225,000 360,000
Capital Lease Obligation, net of current portion 282,000 56,000
------------ -----------
Total liabilities 1,417,000 1,225,000
SHAREHOLDERS' EQUITY (DEFICIT) :
Note receivable from stockholder - (8,000)
Preferred stock, $.001 par value, 10,000,000 shares authorized; none - -
issued
Common stock subscribed (279,959 shares) - 280
Common stock, $.001 par value; 75,000,000 shares authorized;
38,039,133 and 34,697,704 shares issued and outstanding at March 31,
2000 and September 30, 1999 38,000 35,000
Additional paid in capital 17,258,000 3,603,000
Accumulated deficit (12,218,000) (4,157,000)
Accumulated other comprehensive income 5,000 3,000
------------ -----------
Total shareholders' equity (deficit) 5,083,000 (524,000)
------------ -----------
Total liabilities and shareholders' equity (deficit) $ 6,500,000 $ 701,000
============ ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
EBASEONE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended March 31, Six Months Ended March 31,
-------------------------------------- --------------------------------------
2000 1999 2000 1999
-------------- ------------ -------------- ------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Product sales $ 88,000 $ 117,000 $ 294,000 $ 253,000
Service revenue 56,000 53,000 87,000 106,000
----------- ----------- ----------- -----------
144,000 170,000 381,000 359,000
OPERATING EXPENSES:
Cost of goods sold - products 60,000 49,000 176,000 153,000
Compensation - technical staff:
Non-cash compensation - - 43,000 -
Other 361,000 63,000 428,000 124,000
----------- ----------- ----------- -----------
361,000 63,000 471,000 124,000
General and administrative expenses:
Non-cash compensation 2,947,000 - 4,860,000 -
Other 1,985,000 274,000 2,974,000 454,000
----------- ----------- ----------- -----------
4,932,000 274,000 7,834,000 454,000
INTEREST, NET 55,000 (10,000) 39,000 (15,000)
----------- ----------- ----------- -----------
NET LOSS $(5,154,000) $ (226,000) $(8,061,000) $ (387,000)
----------- ----------- ----------- -----------
NET LOSS PER SHARE - BASIC AND DILUTED $(.14) $(.01) $(.22) $(.02)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 37,955,152 23,721,287 37,168,088 22,670,234
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
EBASEONE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
March 31,
----------------------------------------
2000 1999
-------------- ------------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(8,061,000) $(387,000)
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation 74,000 27,000
Non-cash compensation 4,904,000 -
Non-cash services 153,000 -
Changes in assets and liabilities:
Accounts receivable (105,000) 20,000
Other assets (41,000) -
Trade accounts payable 166,000 30,000
Accrued liabilities (216,000) (20,000)
----------- ---------
Net cash used in operating activities (3,126,000) (330,000)
CASH FLOWS FROM INVESTING ACTIVITIES - purchase of (367,000) 50,000
furniture and equipment
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances on notes payable - 40,000
Repayments of notes payable (261,000) -
Repayments of capital lease obligations (20,000) -
Proceeds from sale of common stock 8,398,000 40,000
Exercise of warrants 138,000 50,000
Exercise of options 65,000 -
----------- ---------
Net cash provided by financing activities 8,320,000 130,000
----------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,827,000 (150,000)
CASH AND CASH EQUIVALENTS, at beginning of period 308,000 152,000
----------- ---------
Cash and Cash Equivalents, at end of period $ 5,135,000 $ 2,000
=========== =========
Supplemental Cash Flow Information:
Cash paid for interest $ 38,000 $ 15,000
=========== =========
Equipment acquired under capital leases $ 522,000 $ 178,000
=========== =========
Account payable converted to common stock $ - $ 44,000
=========== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
EBASEONE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX-MONTH PERIOD ENDED MARCH 31, 2000 AND 1999
(1) PRESENTATION OF INTERIM INFORMATION
The unaudited financial statements and related notes are presented as
permitted by Form 10-Q, and do not contain certain information included in
ebaseOne's audited consolidated financial statements and notes for the fiscal
year ended September 30, 1999. The information furnished reflects, in the
opinion of management, all adjustments, consisting of normal recurring
accruals, necessary for a fair presentation of the results of the interim
periods presented. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the entire fiscal
year ending September 30, 2000. The accompanying unaudited financial
statements and related notes should be read in conjunction with the audited
consolidated financial statements included in the Form S-1 file number
333-33994 of ebaseOne Corporation (the "Company") and notes thereto, for its
fiscal year ended September 30, 1999.
(2) STOCKHOLDERS' EQUITY
Common Stock
During the six-month period ended March 31, 2000, ebaseOne issued 2,558,499
shares of common stock for net proceeds of $8,398,000. In addition, the
Company issued 19,175 shares of common stock for services. The Company
recorded expense of $153,000 related to these services.
During the six-month period ended March 31, 2000, ebaseOne issued 483,797
shares of common stock upon the exercise of warrants and options. Total
proceeds were approximately $203,000.
Non-cash Compensation
Compensation expense of $2,947,000 and $4,904,000 has been recognized for the
three-month period ended March 31, 2000 and the six-month period ended
March 31, 2000, respectively, for various options and warrants issued to
employees with exercise prices below the fair value of ebaseOne's common stock
on date of grant. As of March 31, 2000, the Company has approximately
$5,600,000 of additional compensation expense related to these options and
warrants to be recognized over the next 20 months.
(3) CONTINGENCIES
ebaseOne was involved in two legal actions which arose in the ordinary course
of business. During the six-month period ended March 31, 2000, the Company
settled the disputes for approximately $342,000, which amount is recognized as
expense in the accompanying condensed financial statements.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
We are an ASP, offering an integrated solution that provides clients the
ability to use leading business software applications through an international
high-speed network connected to the Internet. Since June 1999, we have devoted
substantially all of our efforts to:
. developing our network infrastructure;
. recruiting and training personnel;
. establishing strategic business partnerships with application software
providers; and
. raising capital.
We began providing ASP services in November 1999 and as of April 30, 2000 had
entered into approximately 25 contracts to provide ASP services. These contracts
generate monthly revenues of approximately $47,000. We have incurred a
cumulative net loss since inception, and at March 31, 2000, we had an
accumulated deficit of approximately $12,218,000. We expect to incur additional
losses during the current fiscal year, due primarily to additional early-stage
costs related to:
. the continued expansion of our service lines;
. the continued expansion of our facilities and our sales, technical, and
administrative staff; and
. non-cash compensation charges related to our issuance of securities to our
management at below market prices.
The operating losses incurred since our inception raise substantial doubt
about our ability to meet future expected expenditures necessary to fully
develop our business strategy and to continue as a going concern. Our
independent auditors have issued an explanatory paragraph in their opinion in
our financial statements for the year ended September 30, 1999 about the
uncertainty concerning our ability to continue as a going concern.
We currently have two non-operating subsidiaries: Synoptech Solutions Group,
Inc., a Nevada corporation and Prime Net Corporation, a Texas corporation. In
May 1999, we acquired substantially all of the outstanding capital stock of
Synoptech Solutions. In September 1998, Synoptech Solutions acquired
substantially all of the outstanding capital stock of Prime Net.
Prime Net specialized in providing computer-based solutions for small and
medium-sized businesses as a software application reseller. As Synoptech
Solutions has no business operations, we acquired it to obtain many of Prime
Net's sales and technical personnel, which we believed would aid us in
establishing our ASP services. In November 1999, we completed the consolidation
of Prime Net's business operations into ebaseOne. Although we have continued
Prime Net's former business operations, we do not intend the operations to be a
material portion of our ongoing operations. As we only began conducting our ASP
operations in November 1999, Prime Net's former business operations have
accounted for substantially all of our revenues. We intend to merge Synoptech
Solutions and Prime Net into ebaseOne in the future since they conduct no
substantial operations.
7
<PAGE>
We currently have no exposure to foreign currency exchange rate fluctuations,
since we have no foreign operations. If we initiate future foreign operations,
we will seek to minimize our exposure to foreign currency exchange rate
fluctuations by requesting that our customers purchase our products in United
States dollars or by entering into transactions to attempt to hedge some of the
risks of foreign currency exchange rate fluctuations.
Non-Cash Compensation Charges Resulting from Below Market Securities Issued
For the quarter ended March 31, 2000, we incurred non-cash compensation
charges of $2,947,000, which related to below market issuance of securities to
non-technical employees and management. As a result of vesting schedules for
some warrants issued to management, up to $9,500,000 of non-cash compensation
charges will be recorded as a general and administrative expense during the
fiscal periods ending September 30, 2000 and 2001.
Some of the warrants vest upon our achieving performance goals, either as a
result of achieving specific revenues or common stock prices. As a result, we
cannot predict the periods in which the deferred compensation expense relating
to these management warrants will be expensed. The magnitude of these charges
will likely result in us reporting very large operating losses for fiscal 2000
and 2001.
Capitalization of Costs and Expenses of ASP Services
We will incur up-front costs related to the delivery of our ASP services. The
costs to operate our network and data centers will be recognized as period
costs. Costs related to the acquisition of hardware will be capitalized and
depreciated over the estimated useful life of the hardware. Costs related to the
acquisition of software licenses, as well as the costs related to the
customization and implementation of the software will be capitalized and
amortized over either:
. the shorter of the useful life of the license or the term of the license
agreement, or
. the term of the individual client contract, depending on the nature of the
software license agreement.
Amortization will be based on current and future revenue from each product,
but will not be less than that computed on a straight-line basis over the
remaining useful life. Direct costs related to the integration of software
applications for a client on our network will be capitalized and amortized over
the contract period.
Concentration of Credit Risk
Financial instruments which potentially expose us to concentrations of credit
risk consist primarily of accounts receivable. We do not believe a significant
credit risk exists at March 31, 2000. We maintain deposits in banks which
exceed, at times, the federal deposit insurance available. We periodically
assess the financial condition of the institutions and believe that any possible
deposit loss is minimal.
RESULTS OF OPERATIONS
The results of operations for the quarter and six month periods ended March
31, 1999 are based on the former business operations of Prime Net, and do not
reflect our new ASP business operations. In view of the rapidly changing nature
of our business, our recent entrance into the ASP market, and our limited
operating history, we believe that period to period comparisons of our revenue
and operating results are not necessarily meaningful and should not be relied
upon as indications of our future performance.
8
<PAGE>
QUARTER ENDED MARCH 31, 2000 COMPARED TO THE QUARTER ENDED MARCH 31, 1999
Revenues
Total revenues for the quarter ended March 31, 2000 was $144,000, compared to
$170,000 for the quarter ended March 31, 1999. Product sales decreased from
$117,000 to $88,000, or 33%. For the quarter ended March 31, 2000, service
revenues increased to $56,000 from $53,000 during the quarter ended March 31,
1999, or 5%. Product sales decreased because the company began concentrating
more heavily on deploying the ASP model. Through the initial stages of
deployment, the sales force placed greater emphasis on establishing name
recognition for ebaseOne. This, therefore, caused a decrease on efforts related
to the sale of off-the-shelf products. The increase in service revenue was due
primarily to training efforts on product sales from the previous quarter.
Operating Expenses
Cost of goods sold-products. For the quarter ended March 31, 1999, cost of
goods sold-products increased to $60,000 from $49,000 during the quarter ended
March 31, 1999. The main reason for the increase can be contributed to
consulting fees for an ASP client and higher product costs. Our gross profit
margin for products sold decreased to 58% for the quarter ended March 31, 2000
from 71% for the quarter ended March 31, 1999. This decrease was due to higher
commissions and lower margins on the decreased activity.
Compensation-technical staff. For the quarter ended March 31, 2000, the
compensation to technical staff increased to $361,000 from $63,000 during the
quarter ended March 31, 1999. The increase of 469% was primarily attributable to
additional employees added to our technical staff and to non-cash compensation
charges of $43,000 during the quarter. The non-cash compensation charges arose
from securities issued to technical employees with exercise prices below quoted
market prices. Our technical staff increased primarily as a result of building
the foundation for our ASP services. During the three month period ended March
31, 1999 and 2000, for accounting purposes, all of the compensation incurred by
our technical staff was recorded as compensation-technical staff, regardless of
whether they were performing billable services to clients or working on
developing our ASP business.
While we do not believe it is meaningful to track costs of sales for service
revenues, we do track billable hours based upon the time involved to complete
the project. Work orders are prepared and signed by both our engineers and
clients at the end of each day. These work orders reflect the hours incurred by
our professionals and the services performed. By signing the work order the
client is agreeing that the services were provided in conformity with the scope
of work defined in the related proposal. Our management team reviews the work
orders regularly to determine whether the hours incurred and services provided
differ from the hours and scope specified in the related proposal.
General and Administrative Expenses
For the quarter ended March 31, 2000, general and administrative expenses
increased to $4,932,000 from $274,000 during the quarter ended March 31, 1999,
an increase of $4,658,000. The primary portions of the increase are discussed
below:
. A non-cash compensation charge of $2,947,000 resulting from securities issued
to consultants and management employees with exercise prices below quoted
market prices. There is no corresponding charge in the prior period.
. A $394,000 increase in salaries, or 487%. The increase is attributable to
an increase in employees from 11 to 45 during the period.
9
<PAGE>
. A $157,000 increase in legal and accounting fees, or 1,980%. The increase
is attributable to the completion of our initial public filing, auditing and
accounting fees, reviewing quarterly activity, and an increase in our general
business activity.
. A $153,000 increase in recruiting fees, or 100%. The increase is attributable
to the hiring of executives and other professionals with knowledge and
experience in the high-tech industry.
. A $248,000 increase in advertising, or 5412%. This increase is due to our
deployment of the ASP model.
Net Loss
For the quarter ended March 31, 2000, our net loss increased to $5,136,000
from $226,000 during the quarter ended March 31, 1999. The increase was
primarily attributable to the increase in general and administrative expenses as
discussed above.
SIX MONTHS ENDED MARCH 31, 2000 COMPARED TO THE SIX MONTHS ENDED MARCH 31, 1999
Revenues
Total revenues for the six months ended March 31, 2000 was $381,000, compared
to $359,000 for the six months ended March 31, 1999. Product sales increased
from $253,000 to $294,000, or 16%. For the six months ended March 31, 2000,
service revenues decreased to $87,000 from $106,000, during the six months ended
March 31, 1999, or 18%. The reason that product sales increased and service
revenue decreased was that a larger component of the total revenues during this
period was related to products sales versus service revenues.
Operating Expenses
Cost of goods sold-products. For the six months ended March 31, 2000, cost of
goods sold-products increased to $176,000 from $153,000 during the six months
ended March 31, 1999, which corresponds to increased product sales. Our gross
profit margin for products sold remained consistent at 40% for the six months
ended March 31, 2000 and March 31, 1999.
Compensation-technical staff. For the six months ended March 31, 2000, the
compensation to technical staff increased to $471,000 from $124,000 during the
six months ended March 31, 1999. The increase of 279% was primarily attributable
to additional employees added to our technical staff and to non-cash
compensation charges of $43,000 during the six months. The non-cash compensation
charges arose from securities issued to technical employees with exercise prices
below quoted market prices. Our technical staff increased primarily as a result
of building the foundation for our ASP services. During the six-month period
ended March 31, 1999 and 2000, for accounting purposes, all of the compensation
incurred by our technical staff was recorded as compensation-technical staff,
regardless of whether they were performing billable services to clients or
working on developing our ASP business.
General and Administrative Expenses
For the six months ended March 31, 2000, general and administrative expenses
increased to $7,834,000 from $454,000 during the six months ended March 31,
1999, an increase of $7,380,000. The primary portions of the increase are
discussed below:
10
<PAGE>
. A non-cash compensation charge of $4,860,000 resulting from securities issued
to consultants and management employees with exercise prices below quoted
market prices. There is no corresponding charge in the prior period.
. A $567,000 increase in salaries, or 545%. The increase is attributable to an
increase in employees from 11 to 45 during the period.
. A $311,000 increase in legal and accounting fees, or 3,451%. The increase is
attributable to the completion of our initial public filing, auditing and
accounting fees, reviewing quarterly activity, and an increase in our general
business activity.
. A $198,000 increase in recruiting fees, or 100%. The increase is attributable
to the hiring of executives and other professionals with knowledge and
experience in the high-tech industry.
. A $264,000 increase in advertising, or 2844%. This increase is due to our
deployment of the ASP model.
Net Loss
For the six months ended March 31, 2000, our net loss increased to $8,061,000
from $386,000 during the six months ended March 31, 1999. The increase was
primarily attributable to the increase in general and administrative expenses
discussed above.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000, we had working capital of $4,396,000 and had negative
cash flows from operations of approximately $3,126,000. We anticipate incurring
losses from operations during the current fiscal year. As a result, we do not
expect to receive cash flow from operations during the current fiscal year. At
the present time we cannot estimate when, or if, our operations will generate
positive cash flows from operations. We do not have any significant credit
facilities available with financial institutions or other third parties and
until we can generate cash flow from operations, we will be dependent upon
external sources of best-efforts financing.
We intend to use our available working capital to further our business plan.
Specifically, our business plan requires:
. hiring additional executive, marketing, and technical personnel;
. launching an extensive marketing campaign;
. building our global command center to provide customer support, application
management, and network monitoring; and
. other general corporate expenditures incurred in implementing our business
plan.
At this time, it is difficult to estimate how we will allocate our available
funds. The allocation will be based on a variety of business factors that we
can not predict with certainty at this time, including the rate we obtain new
customers and the rate we hire new employees. At this time, we also cannot
predict with certainty what our monthly operating expenditure will be. Keeping
these factors in mind, we estimate that our available proceeds will provide
sufficient liquidity until August 2000. This period may be shortened if we
experience increased competition and higher costs associated with hiring
necessary personnel. After August 2000, we will be required to seek additional
capital to continue to fund our business operations.
11
<PAGE>
After August 2000, we will likely be dependent upon best efforts equity and
debt financing, of which we have no firm commitments or arrangements, and on the
exercise of outstanding warrants. We can provide no assurance that we will be
successful in any future financing effort to obtain the necessary working
capital to support our operations. If we are unable to obtain necessary
financing from external sources before August 2000, we may need to curtail
operations or sell assets. Therefore, on a short-term basis, or during calendar
year 2000, we will require additional funding in August 2000. Since we do not
expect to generate positive cash flows from operations, this funding will need
to be external funding. On a long-term basis, or after calendar year 2000, we
will also require additional external financing.
In connection with the sale of $9,000,000 of common stock during the six-month
period ended March 31, 2000, we issued warrants to purchase 833,000 shares of
common stock at an exercise price of $5.18 per share. The fair value of these
warrants using the Black-Scholes model is approximately $18,408,000. In
addition, as part of the $9,000,000 financing discussed above, we issued an
adjustable warrant that requires us to issue additional shares of common stock
if the price of our common stock is less than $5.31 per share. Although we do
not the exact number of shares that we expect to issue pursuant to this warrant,
we expect the number of shares to be significant.
As of March 31, 2000, we had long-term notes payable consisting of $269,000 to
financial institutions due through October 2004 in monthly installments ranging
from $239 to $1,147 at interest rates ranging from 7.95% to 21.03%. Of this note
payable, $44,000 is due during the year ended September 30, 2000. In addition,
during fiscal 2000 we have capital lease commitments on equipment totaling
$577,000 and lease commitments on office space of $169,000. We believe our
current cash position will be sufficient to fund our obligations until August
2000.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk principally as a result of changes in
interest rates. Through March 31, 2000, we invested our excess cash in cash
equivalents. Our long-term debt outstanding at March 31, 2000 requires the
payment of interest at fixed rates of interest. As of March 31, 2000, our
exposure to reasonably possible near-term changes in interest rates was not
significant to our financial position, results of operations, and cash flows.
PART II
OTHER INFORMATION
Pursuant to the Instructions to Part II of the Form 10-Q, Items 1 and 3-5 are
omitted.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In January and March 2000, we issued 26,500 shares of common stock to three
sophisticated investors on the exercise of outstanding options. We believe this
transaction was exempt from registration pursuant to Section 4(2) of the
Securities Act as an isolated transaction by an issuer not involving a public
offering. The investors had general expertise in financial and business matters
that they were able to evaluate the merits and risks of an investment in the
company.
In March 2000, we issued 87,888 shares of common stock to an accredited
investor on the exercise of an outstanding warrant. We believe this
transaction was exempt from registration pursuant to Section 4(2) of the
Securities Act as an isolated transaction by an issuer not involving a public
offering to an accredited investor.
12
<PAGE>
In March 2000, we issued 19,175 shares of common stock to an accredited
investor in settlement of litigation. We believe this transaction was exempt
from registration pursuant to Section 4(2) of the Securities Act as an isolated
transaction by an issuer not involving a public offering to an accredited
investor.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
- ----------- -------------------------
2.1 Exchange Agreement between Norske Energy Corporation and
Synoptech Solutions Group, Inc. (Filed previously on Form S-1,
file number 333-91439)
3.1 Amended and Restated Articles of Incorporation (Filed previously
on Form S-1, file number 333-91439)
3.2 By-Laws (Filed previously on Form S-1, file number 333-91439)
4.1 Form of Specimen of common stock (Filed previously on Form S-1,
file number 333-91439)
10.1 Employment Agreement of John Frazier Overstolz (Filed
previously on Form S-1, file number 333-91439)
10.2 Employment Agreement of Charles W. Skamser (Filed previously on
Form S-1, file number 333-91439)
10.3 Employment Agreement of Michael A. Sooley (Filed previously on
Form S-1, file number 333-91439)
10.4 Employment Agreement of Scott Feuless (Filed previously on
Form S-1, file number 333-91439)
10.5 1999 Stock Option Plan (Filed previously on Form S-1, file
number 333-91439)
10.6 Cooperative Marketing Agreement with Phonoscope Communications,
Ltd. (Filed previously on Form S-1, file number 333-91439)
10.7 Securities Purchase Agreement Between ebaseOne Corp. and the
Investors Signatory Hereto Dated as of November 15, 1999 (Filed
previously on Form S-1, file number 333-91439)
10.8 Level 3 Communications, LLC Terms and Conditions for Delivery of
Service (Filed previously on Form S-1, file number 333-91439) **
10.8(b) Level 3 Communications, LLC commitment order (Filed previously on
Form S-1, file number 333-91439) **
10.9 Master License Agreement with Marimba, Inc. (Filed previously on
Form S-1, file number 333-91439) **
10.10 ASP License Agreement with SalesLogix Corporation (Filed
previously on Form S-1, file number 333-91439) **
10.11 Sun Microsystems, Inc. Service Provider Agreement Master Terms
(Filed previously on Form S-1, file number 333-91439) **
10.12 Paperchaser.com, Inc. CorServ Service Order (Filed previously on
Form S-1, file number 333-91439) **
10.13 Microsoft Direct Commercial Service License Agreement (Filed
previously on Form S-1, file number 333-91439)
10.14 Memorandum of Understanding with Cisco Systems, Inc. (Filed
previously on Form S-1, file number 333-91439)
10.15 The Greenspoint Technology Center, Houston, Texas Net Lease
(Filed previously on Form S-1, file number 333-91439)
13
<PAGE>
10.16 Employment Agreement of Dennis White (Filed previously on
Form S-1, file number 333-33994)
21.1 List of Subsidiaries (Filed previously on Form S-1, file
number 333-91439)
27.1 Financial Data Schedule
___________________
** We have omitted some portions of these exhibits and have received
confidential treatment from SEC relating to the omitted portions.
(B) REPORTS ON FORM 8-K
None.
14
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ebaseOne Corporation
Date: May 15, 2000 By: /s/ RORY COLE
---------------------------------------
Rory Cole, Chief Financial Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 5,135,000
<SECURITIES> 0
<RECEIVABLES> 85,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,306,000
<PP&E> 1,148,000
<DEPRECIATION> 74,000
<TOTAL-ASSETS> 6,500,000
<CURRENT-LIABILITIES> 910,000
<BONDS> 0
0
0
<COMMON> 38,000
<OTHER-SE> 5,045,000
<TOTAL-LIABILITY-AND-EQUITY> 6,500,000
<SALES> 381,000
<TOTAL-REVENUES> 381,000
<CGS> 176,000
<TOTAL-COSTS> 8,266,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,000
<INCOME-PRETAX> (8,061,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,061,000)
<EPS-BASIC> (.22)
<EPS-DILUTED> (.22)
</TABLE>
