20/20 WEB DESIGN, INC.
FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
(UNAUDITED)
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TABLE OF CONTENTS
Page No.
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INDEPENDENT ACCOUNTANTS' REVIEW REPORT ................................ 1
FINANCIAL STATEMENTS
Balance Sheets.................................................. 2
Statements of Operations........................................ 3
Statements of Changes in Stockholders' Equity (Deficit)......... 4
Statements of Cash Flows........................................ 5
Notes to Financial Statements................................... 6 - 10
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INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Stockholders
20/20 Web Design, Inc.
Woodland Hills, California
We have reviewed the accompanying balance sheets of 20/20 Web Design, Inc. as of
March 31, 2000 and 1999, and the related statements of operations, changes in
stockholders' equity (deficit) and cash flows for the three months then ended,
in accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of 20/20 Web Design, Inc.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
Moffitt & Company, P.C.
Scottsdale, Arizona
May 8, 2000
June 19, 2000 in regards to statements of operations and footnotes 9 and 11 only
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20/20 WEB DESIGN, INC.
BALANCE SHEETS
MARCH 31, 2000 AND 1999
(UNAUDITED)
ASSETS
2000 1999
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 200 $ 0
------------ ------------
TOTAL ASSETS $ 200 $ 0
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable
Trade $ 15,307 $ 0
Related entity 250 0
------------ ------------
TOTAL CURRENT LIABILITIES 15,557 0
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock
Authorized 25,000,000 shares, par
value .001(cent)per share
Issued and outstanding -
March 31, 2000 - 10,774,787 shares 10,775 0
March 31, 1999 - 9,624,787 shares 0 9,625
Paid-in capital in excess of par value of stock 738,719 512,729
Retained earnings (deficit) (764,851) (522,354)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (15,357) 0
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 200 $ 0
============ ============
See Accompanying Notes and Independent Accountants' Review Report.
2
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20/20 WEB DESIGN, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
2000 1999
------------ ------------
REVENUE $ 0 $ 0
GENERAL AND ADMINISTRATIVE EXPENSES 14,444 2,513
------------ ------------
(LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (14,444) (2,513)
INCOME TAXES 0 0
------------ ------------
(LOSS) FROM CONTINUING OPERATIONS (14,444) (2,513)
DISCONTINUED OPERATION
(LOSS) ON INVESTMENT IN STEIN'S
CAKE BOX, INC (195,656) 0
------------ ------------
NET (LOSS) $ (210,100) $ (2,513)
============ ============
NET (LOSS) PER COMMON SHARE
Basic and diluted
Continuing operations $ (.00) $ (.00)
Discontinued operations (.02) (.00)
------------ ------------
Total $ (.02) $ (.00)
============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic and diluted 10,774,787 9,624,787
============ ============
See Accompanying Notes and Independent Accountants' Review Report.
3
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20/20 WEB DESIGN, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Paid in
Number Capital in
Of Excess of
Common Common Par Value Retained
Shares Stock of Stock Earnings
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1999 1,004,787 $ 1,005 $ 521,349 $ (519,841)
ISSUANCE OF COMMON STOCK FOR 20/20 WEB DESIGN, INC 8,620,000 8,620 (8,620) 0
NET (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 1999 0 0 0 (2,513)
---------- ---------- ---------- ----------
BALANCE, MARCH 31, 1999 9,624,787 9,625 512,729 (522,354)
NET (LOSS) FOR THE NINE MONTHS ENDED DECEMBER 31, 1999 0 0 0 (32,397)
ISSUANCE OF COMMON STOCK FOR CASH PER PRIVATE PLACEMENT, NET OF FEES 1,150,000 1,150 225,990 0
---------- ---------- ---------- ----------
BALANCE, DECEMBER 31, 1999 10,774,787 10,775 738,719 (554,751)
NET (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2000 0 0 0 (210,100)
---------- ---------- ---------- ----------
BALANCE, MARCH 31, 2000 10,774,787 $ 10,775 $ 738,719 $ (764,851)
========== ========== ========== ==========
</TABLE>
See Accompanying Notes and Independent Accountants' Review Report.
4
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20/20 WEB DESIGN, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
2000 1999
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $(210,100) $ (2,513)
Adjustments to reconcile net (loss) to net cash
(used) by operating activities:
Loss on investment in subsidiary 195,656 0
Organization costs 0 2,513
Increases (decreases)
Accounts receivable 28,173 0
Accounts payable (13,766) 0
--------- ---------
NET CASH FLOWS (USED) BY OPERATING ACTIVITIES (37) 0
--------- ---------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (37) 0
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 237 0
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 200 $ 0
========= =========
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 0
=========
Taxes paid $ 0
=========
NON CASH INVESTING AND FINANCING ACTIVITIES
Issuance of company stock for 20/20 Web Design, Inc. $ 8,620
=========
See Accompanying Notes and Independent Accountants' Review Report.
5
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20/20 WEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
20/20 Web Design, Inc. was incorporated in August 1995 in the state
of Nevada. The corporation is in the business of developing website
designs and managing and acquiring subsidiary corporations.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the company considers
all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
Accounting Estimates
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent
assets and liabilities, and the reported revenues and expenses.
Actual results could vary from the estimates that were used.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable
for the current year and deferred taxes on temporary differences
between the amount of taxable income and pretax financial income and
between the tax bases of assets and liabilities and their reported
amounts in the financial statements. Deferred tax assets and
liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the
deferred tax assets and liabilities are expected to be realized or
settled as prescribed in FASB Statement No. 109, Accounting for
Income Taxes. As changes in tax laws or rate are enacted, deferred
tax assets and liabilities are adjusted through the provision for
income taxes.
Net Loss Per Share
The company adopted Statement of Financial Accounting Standards No.
128 that requires the reporting of both basic and diluted earnings
per share. Basic earnings per share is computed by dividing net
income available to common shareowners by the weighted average
number of common shares outstanding for the period. Diluted earnings
per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised
or converted into common stock. In accordance with FASB 128,
potentially dilutive securities that would have an anti-dilutive
effect on net loss per share are excluded.
See Accompanying Notes and Independent Accountants' Review Report.
6
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20/20 WEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
(UNAUDITED)
NOTE 2 INCOME TAXES
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
(Loss) from continuing operations before income taxes $(14,444) $ (2,513)
-------- --------
The provision for income taxes is estimated as follows:
Currently payable $ 0 $ 0
-------- --------
Deferred $ 0 $ 0
-------- --------
A reconciliation of the provision for income taxes compared with the
amounts at the Federal Statutory rate was as follows:
Income taxes computed at statutory federal rates $ 0 $ 0
-------- --------
Income tax per books $ 0 $ 0
-------- --------
Deferred income tax asset and liabilities reflect the impact of
temporary differences between amounts of assets and liabilities for
financial reporting purposes and the basis of such assets and
liabilities as measured by tax laws
The net deferred tax is: $ 0 $ 0
-------- --------
The net deferred tax liability is: $ 0 $ 0
-------- --------
Temporary differences and carryforwards that give rise to deferred
tax assets and liabilities included the following:
Deferred Tax
-----------------------
2000 1999
-------- --------
Net operating loss $ 50,794 $ 19,459
Less valuation allowance 50,794 19,459
-------- --------
Net $ 0 $ 0
======== ========
A reconciliation of the valuation allowance is as follows:
2000 1999
-------- --------
Balance, beginning of period $ 19,300 $ 19,082
Addition to allowance for the three months ended
March 31, 2000 and 1999 31,674 377
-------- --------
Balance, end of period $ 50,974 $ 19,459
======== ========
</TABLE>
See Accompanying Notes and Independent Accountants' Review Report.
7
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20/20 WEB DESIGN, INC
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
(UNAUDITED)
NOTE 3 TAX CARRYFORWARDS
The corporation has the following net operating loss carryforwards:
Year Amount Expiration Date
---- ------ ---------------
1998 $ 94,200 2018
1999 35,524 2019
2000 210,100 2020
---------
$ 339,824
=========
NOTE 4 PRIVATE PLACEMENT OFFERING
In March 1999, the company had a private placement for 11,500,000
shares of common stock at $0.02 per share. All of the shares were
sold and the company realized $230,000 less $2,860 of costs.
NOTE 5 STOCK OPTIONS
The company does not have any stock options outstanding.
NOTE 6 BUSINESS COMBINATION
On March 30, 1999, the company completed a merger with 20/20 Web
Design, Inc. by exchanging 8,620,000 shares of section 144
restricted common stock for 100% of the outstanding shares of 20/20
Web Design, Inc.
The merger has been accounted for as a pooling of interest (reverse
acquisition as defined by the Securities and Exchange Commission)
and the company recorded the merger as follows:
Increase in common stock
8,620,000 shares @ .001(cent)par value $ 8,620
Decrease in paid-in capital 8,620
After the merger, the company changed its name to 20/20 Web Design,
Inc.
The following unaudited information presents certain income
statement data of the separate companies for the periods preceding
the merger:
See Accompanying Notes and Independent Accountants' Review Report.
8
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20/20 WEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
(UNAUDITED)
NOTE 6 BUSINESS COMBINATION (CONTINUED)
1999 1998
--------- ---------
Net sales
Trump Oil Corporation $ 2,500 $ 0
20/20 Web Design, Inc. 0 0
Net (loss)
Trump Oil Corporation (12,000) (359,441)
20/20 Web Design, Inc. 0 0
There were no material transactions between Trump Oil Corporation
and 20/20 Web Design, Inc. prior to the merger. The effects of
conforming 20/20 Web Design, Inc.'s accounting policies to those of
Trump Oil Corporation were not material.
NOTE 7 INSURANCE
The company does not carry liability or worker's compensation
insurance.
NOTE 8 WEB DESIGN CONTRACT
In December 1998, the company entered into a web-design contract
which began in September 1999. As compensation for its services, the
company will receive 50% of the net sales profits generated by the
Internet web site created by the company.
The initial term of the contract shall be for two years.
The company has not realize any income on the contract.
NOTE 9 DISCONTINUED OPERATIONS
The following information is presented for the loss from
discontinued operations:
a. Segment discontinued - subsidiary corporation, Stein's
Cake Box, Inc.
b. Discontinued date - February 29, 2000
c. Manner of disposal - investment written-off as worthless
d. Remaining assets and liabilities - none at February 29,
2000
e. Income or loss from February 29, 2000 to March 31, 2000
- none
f. Proceeds from disposal of assets - none
See Accompanying Notes and Independent Accountants' Review Report.
9
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20/20 WEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
(UNAUDITED)
NOTE 10 UNAUDITED FINANCIAL INFORMATION
The accompanying financial information as of March 31, 2000 and 1999
is unaudited. In management's opinion, such information includes all
normal recurring entries necessary to make the financial information
not misleading.
NOTE 11 COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
From continuing operations
Net (loss) from continuing operations $ (14,444) $ (2,513)
------------ ------------
Weighted average number of common
shares outstanding 10,774,787 9,624,787
(Loss) per share $ (.00) $ (.00)
From discontinued operations
Net (loss) from discontinued operations $ (195,656) $ 0
------------ ------------
Weighted average number of common
shares outstanding 10,774,787 9,624,787
(Loss) per share $ (.02) $ (.00)
</TABLE>
See Accompanying Notes and Independent Accountants' Review Report.
10
