<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[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: 0-9129
EPICEDGE, INC.
Exact name of Registrant as specified in its charter
TEXAS 75-1657943
State or other jurisdiction of IRS Employer Identification Number
Incorporation or organization
3200 WILCREST, SUITE 370
HOUSTON, TEXAS 77042-3366
713-784-2374
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 [X] No [ ]
The number of shares of common stock of the Registrant outstanding at May 8,
2000 was 25,665,986.
<PAGE>
EPICEDGE, INC.
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
Page No.
--------
PART I FINANCIAL INFORMATION
Item 1 Financial Statements (Unaudited)
Condensed Balance Sheets........................ 3
Condensed Statements of Operations.............. 4
Condensed Statements of Cash Flows.............. 5
Notes to Condensed Financial Statements......... 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 7
PART II OTHER INFORMATION
Item 2 Changes of Securities and Use of Proceeds........... 11
Item 6 Exhibits and Reports on Form 8-K.................... 12
2
<PAGE>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
EPICEDGE, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,325,107 $ 1,517,065
Trade receivable, less allowance of $64,375 in 2000 and $37,000 in 1999 3,553,042 4,551,736
Other current assets 453,773 247,617
----------- -----------
Total current assets 12,331,922 6,316,418
PROPERTY AND EQUIPMENT, net 780,862 485,261
GOODWILL-net 14,616,300 8,508,128
DISCONTINUED OPERATIONS-net assets 366,977 365,878
----------- -----------
TOTAL $28,096,061 $15,675,685
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Line of credit, term note and other notes payable $ 3,001,673 $ 3,241,471
Accounts payable 3,039,355 5,096,439
Accrued expenses and other current liabilities 1,860,770 1,316,866
----------- -----------
Total current liabilities 7,901,798 9,654,776
STOCKHOLDERS' EQUITY
Common stock, 25,618,486 and 23,081,486 shares issued and outstanding
at March 31, 2000 and December 31, 1999, respectively 256,185 230,815
Common stock warrants 137,440 115,000
Additional paid-in capital 29,567,583 12,238,567
Accumulated deficit (9,766,945) (6,563,473)
----------- -----------
Total stockholders' equity 20,194,263 6,020,909
----------- -----------
TOTAL $28,096,061 $15,675,685
=========== ===========
</TABLE>
See notes to condensed financial statements
3
<PAGE>
EPICEDGE, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
-------------------------
2000 1999
----------- -----------
REVENUES 6,789,297 7,675,309
COST OF REVENUES 5,539,779 6,894,075
----------- -----------
GROSS PROFIT 1,249,518 781,234
OPERATING EXPENSES:
Selling, general and administrative 3,956,573 739,088
Depreciation and amortization 441,461 5,160
----------- -----------
Total operating expenses 4,398,034 744,248
----------- -----------
(LOSS) INCOME FROM OPERATIONS (3,148,516) 36,986
OTHER (EXPENSE) INCOME (56,055) 41,242
INCOME TAX BENEFIT - (26,300)
----------- -----------
(LOSS) INCOME FROM CONTINUING OPERATIONS (3,204,571) 51,928
INCOME (LOSS) FROM DISCONTINUED OPERATIONS 1,099 (26,976)
----------- -----------
NET (LOSS) INCOME $(3,203,472) $ 24,952
=========== ===========
NET (LOSS) INCOME PER SHARE--
Basic and diluted-
Continuing operations $(0.13) $ -
Discontinued operations
----------- -----------
Total $(0.13) $ -
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING--
Basic and diluted 24,243,761 20,006,654
=========== ===========
See notes to condensed financial statements
4
<PAGE>
EPICEDGE, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
(Loss) income from continuing operations $(3,204,571) $ 51,928
Adjustments to reconcile net (loss) to net cash
provided by (used by) in operating activities:
Depreciation 55,020 5,160
Amortization 351,249 -
Changes in assets and liabilities, net of acquisitions:
Accounts receivable 1,159,662 (856,938)
Accounts payable (2,166,873) (412,170)
Accrued expenses and other current liabilities 515,601 227,619
Other (204,155) 119,654
----------- ----------
Net cash used in operating activities (3,494,067) (864,747)
INVESTING ACTIVITIES
Purchase of property and equipment (340,942) (14,054)
Advance to related party - (125,633)
Acquisition of Growth Strategy (417,151) -
----------- ----------
Net cash used in investing activities (758,093) (139,687)
FINANCING ACTIVITIES
(Payment on) proceeds from notes payable, net (239,798) 1,399,338
Proceeds from private placement 11,300,000 -
----------- ----------
Net cash provided by financing activities 11,060,202 1,399,338
----------- ----------
INCREASE IN CASH AND CASH EQUIVALENTS 6,808,042 394,904
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,517,065 850,925
----------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD 8,325,107 1,245,829
=========== ==========
</TABLE>
See notes to condensed financial statements
5
<PAGE>
EPICEDGE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) PRESENTATION OF INTERIM INFORMATION
The unaudited financial statements have been prepared on the same basis as the
audited annual financial statements and do not contain certain information
included in the Company's audited financial statements for the fiscal year
ended December 31, 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
December 31, 2000. The accompanying unaudited condensed financial statements
and related notes should be read in conjunction with the audited consolidated
financial statements on the Form 10-KSB/A of EpicEdge, Inc. (the "Company")
and notes thereto, for its fiscal year ended December 31, 1999.
(2) ACQUISITIONS
On March 1, 2000, the Company acquired all of the issued and outstanding stock
of The Growth Strategy Group, Inc., (Growth Strategy) a marketing and
strategic planning firm, in an arm's length transaction between the Company
and all of the stockholders of Growth Strategy. The consideration for the
acquisition was: (1) 277,000 shares of the Company's common stock valued at
$6,076,800, and (2) $375,000 in cash. The three stockholders of Growth
Strategy entered into employment agreements with the Company. These employment
agreements terminate in February 2003 and include a non-compete provision for
the term of the agreement and one year thereafter. This transaction has been
accounted for as a purchase and resulted in goodwill of approximately
$6,459,421, which will be amortized over a period of eight years.
The operations of this acquired entity are included in the Company's
operations from its acquisition date.
The unaudited consolidated results of operations on a pro forma basis as
though the above acquisition and the acquisitions in 1999 were made and the
related common shares were issued as of the beginning of the Company's fiscal
year 1999 are as follows:
Three Months Ended
March 31,
----------------------------
2000 1999
----------- -----------
Revenues $ 7,004,358 $ 9,540,593
=========== ===========
Loss from continuing operations $(3,350,070) $ (303,239)
=========== ===========
Per share $ (0.14) $ (0.01)
=========== ===========
Weighted average common shares outstanding 24,426,398 22,051,000
=========== ===========
6
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(3) CAPITAL STOCK
On February 18, 2000, the Company entered into a Stock Purchase Agreement for
$11,300,000 in cash with Edgewater Private Equity Fund III, L.P., Aspen
Finance Investors I, LLC, a Colorado limited liability company, Fleck T.I.M.E.
Fund, L.P., a Connecticut limited partnership, Fleck Family Partnership II,
L.P., a Florida limited partnership, LJH Partners, L.P., a Delaware limited
partnership, Wain Investment, LLC, an Ohio limited liability company, Gerald
C. Allen and John Paul DeJoria (the "Investors"). In exchange for the
$11,300,000 in cash, the Company issued to the Investors 2,260,000 shares of
common stock of the Company, $.01 par value per share at a price of $5.00 per
share.
On February 18, 2000, the Company issued 22,000 warrants at an exercise price
of $15.00 per share to Aspen Finance Group in accordance with the Stock
Purchase Agreement dated February 18, 2000. The fair market value of these
warrants as of February 18, 2000, is $1.02 per warrant for a total value of
$22,440 which was recorded as additional paid-in-capital.
On April 3, 2000, the Company issued to Reliant Energy Ventures, Inc., 500,000
warrants to purchase common stock at an exercise price of $22.00 per share.
The Company is in the process of obtaining an independent valuation of the
fair market value of these warrants. Assuming the fair market value assigned
is at least equal to the value assigned to the warrants issued on February 18,
2000 of $1.02, the value, as of April 3, 2000, would be at least $510,000.
After the independent valuation is completed, the total fair market value
assigned to these warrants will be charged as a non-cash expense in the second
quarter of fiscal year 2000.
On April 24, 2000, the Company granted 47,500 shares of the Company's common
stock to two of the Company's directors for their service as a board members
during the months of February, March and April of 2000. The closing price of
the Company's common stock on April 24, 2000, was $19.00 per share for a total
value of $902,500, of which, the Company recorded $601,666 as accrued
director's fees in the first quarter of fiscal year 2000. The remaining
$300,834 will be recorded as director's fees in the second quarter of fiscal
year 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL AND RESULTS OF
OPERATIONS
Forward-Looking Statement
This Quarterly Report on Form 10-QSB contains forward-looking statements. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, the words "believes," "anticipates," "plans," "expects,"
and similar expressions are intended to identify forward-looking statements.
There are a number of important factors that could cause the Company's actual
results to differ materially from those indicated by such forward-looking
statements. These factors include, without limitation, failure of the Company
to implement its business plan, competitive pressures in the ASP industry and
the Company's response thereto, the Company's ability to obtain capital in
favorable terms and conditions, and general conditions in this economy. Factors
that might cause or contribute to such a discrepancy include, but are not
limited to, the risks discussed in the Company's other SEC filings, including
those in its annual report on Form 10-KSB for the year ended December 31, 1999.
These forward looking statements speak only as of the date hereof. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any
7
<PAGE>
forward-looking statements contained herein to reflect any change in its
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
OVERVIEW
The following analysis of the results of operations and financial condition of
the Company should be read in conjunction with the condensed financial
statements, including the notes thereto, of the Company contained elsewhere in
this Form 10-QSB.
EpicEdge, Inc., (the "Company") engages in the business of enabling Global 1000
and dot com companies to meet their business goals through implementation of
e-business strategies utilizing Enterprise Portal Solutions that allow anytime,
anywhere, device-independent sharing of applications, information, and
communication tools between trading communities. The Company's services assist
customers in dealing with issues during the entire life cycle of their projects;
including system architecture and design, product acquisition, configuration and
implementation, ongoing operational support, and evolutions in technology. The
Company provides solutions to complex information technology problems focusing
on enabling its clients to take advantage of the evolving internet economy.
In March 2000, the Company acquired all of the issued and outstanding stock of
The Growth Strategy Group, Inc. This acquisition provides the Company with a
highly experienced team of consultants specializing in marketing and strategic
planning in the area of technology and information services.
Impairment of Goodwill
In connection with the Company's acquisitions, including The Growth Strategy
Group, Inc., the Company has recorded goodwill that is being amortized on a
straight line basis over an eight year period. Goodwill represents the amount
that the Company paid for these acquired businesses in excess of the fair value
of the acquired tangible and separately measurable intangible net assets. At
March 31, 2000, the unamortized portion of these intangibles was $14.6 million,
which represented 52% of total assets and 72% of stockholders' equity. The
Company will amortize approximately $1.8 million annually.
The Company periodically reviews the carrying value and recoverability of its
unamortized goodwill and other intangible assets for impairment. If the facts
and circumstances suggest that the goodwill or other intangible assets may be
impaired, the carrying value of this goodwill will be adjusted by an immediate
charge against income during the period of the adjustment. The length of the
remaining amortization period may also be shortened, which will result in an
increase in the amount of goodwill amortization during the period of adjustment
and each period thereafter until fully amortized. Once adjusted, there can be no
assurance that there will not be further adjustments for impairment and
recoverability in future periods. In evaluating impairment a principal factor
considered is the failure to achieve expected cash flows from operations.
Non-Cash Compensation Charges Resulting from Securities Issued
In April 2000, the Company issued 47,500 shares of common stock to two of the
Company's board members for board services rendered in February, March, and
April 2000. For the three month period ended March 31, 2000, the Company
incurred non-cash compensation charges of $601,666, related to these issuances
for the portion of the services rendered during the period. The Company will
record additional non-cash compensation charges of $300,834 for the three month
period ended June 30, 2000 in connection with the above issuances for the
portion of the services rendered during this period.
8
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
The following table sets forth certain statement of operations data expressed as
a percentage of total revenues for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
2000 1999
-------- --------
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of revenues 81.6% 89.8%
-------- --------
Gross profit 18.4% 10.2%
Operating expenses:
Selling, general and administrative 58.3% 9.6%
Depreciation and amortization 6.5% 0.1%
-------- --------
Total operating expense 64.8% 9.7%
Income (loss) from operations (46.4)% 0.5%
Other income and expense (0.8)% 0.5%
-------- --------
Income (loss) before income taxes and discontinued operations (47.2)% 1.0%
(Provision) benefit for Income Taxes - (0.3)%
-------- --------
Income from continuing operations (47.2)% 0.7%
Discontinued Operations - (0.4)%
-------- --------
Net Income (loss) (47.2)% (0.3)%
======== ========
</TABLE>
9
<PAGE>
For the three months ended March 31, 2000, as compared to the three months ended
March 31, 1999, revenues decreased $886,012, or 12%, to $6,789,297 from
$7,675,309. The decrease in revenue is due primarily to system integration
revenue which decreased from $7,675,309 in 1999 to $4,944,923 in 2000. These
decreases were partially offset by the new consulting service revenue of
$1,844,374 in 2000. One customer represented 11% of total revenues in the three
months ended March 31, 2000; and one customer represented 32% in the three
months ended March 31, 1999.
For the three months ended March 31, 2000, gross profit increased to $1,249,518,
or 60%, as compared to the three months ended March 31, 1999, of $781,234, due
to new consulting services being added that have not previously existed. The
gross profit percentage for the three months ended March 31, 2000, was 18%
compared to 10% for the three months ended March 31, 1999, which was a result of
higher margins in consulting services and higher margins in hardware. Operating
expenses increased to $4,398,034 for the three months ended March 31, 2000, from
$744,248 for the three months ended March 31, 1999, an increase of $3,653,786 or
491%. The operating expenses for the three month period ended March 31, 2000,
consisted primarily of:
. approximately $1,763,008 in costs associated with the Company's increased
number of employees and consultants from 15 to 113 during the period;
. approximately $141,346 in professional fees related to the Company's
increased public reporting requirements;
. approximately $601,666 in non-cash compensation charges from issuances of
common stock to board members; and
. approximately $441,461 in amortization of goodwill related to
acquisitions in 1999 and 2000 and from depreciation.
The increased operating expenses resulted in a loss from operations of
$3,148,516 for the three months ended March 31, 2000, as compared to income from
operations of $36,986 for the three months ended March 31, 1999.
As to the discontinued operations, total revenue for the first quarter of 2000
amounted to $5,082, and lease operating expenses amounted to $3,353. The first
quarter net income of $1,099 is mainly due to a decrease in operating expenses.
For the three months ended March 31, 2000, net loss was $3,203,472 as compared
to a net income of $24,952 for the three months ended March 31, 1999, primarily
as a result of increases in operating expenses and non-cash expenses related to
the acquisitions in 1999 and 2000.
10
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LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000, the Company's primary sources of liquidity were cash and
cash equivalents of $8,325,107, accounts receivable of $3,553,042, and available
and unused funds in the Company's line of credit of $2,631,299. The Company had
working capital of $4,430,124 as of March 31, 2000. Historically, the Company
has relied on sales of its common stock for working capital. In February 2000,
the Company raised approximately $11.3 million in equity financing. Management
is currently in discussions with current shareholders, as well as other third
parties, with respect to raising additional equity capital to fund future
working capital needs. The Company intends to use proceeds from additional
financing to continue to grow its business operations through acquisitions that
provide consulting services resulting in a higher profit margin than historical
system integration revenues, and to increase organic growth. In order to
implement this business strategy, the Company will need to raise additional
financing. In the event that the Company is unable to raise additional financing
in the near future, the Company will utilize current working capital, in
addition to reducing future cash outflows, to meet its liquidity needs for the
balance of the current fiscal year. Failure to obtain additional capital, both
on a short term and long term basis, could restrict the ability of the Company
to expand its business as planned, and if severe enough, may cause the Company
to curtail operations or otherwise bring cash flows into balance.
Net cash used in operating activities was $3,494,067 for the three months ended
March 31, 2000, as compared to $864,747 at March 31, 1999. The difference was
primarily due to losses from operations, a decrease in accounts payable, timing
of payments to vendors and consultants, and operating payments to brokers and
attorneys related to the equity funding in February 2000.
Net cash used in investing activities was $758,093 for the three months ended
March 31, 2000, as compared to $139,687 for the three months ended March 31,
1999. This was primarily due to the increase in property and equipment and in
cash used in the aforementioned acquisition of The Growth Strategy Group, Inc.
of $375,000.
Net cash provided by financing activities was $11,060,202 for the three months
ended March 31, 2000, as compared to net cash used in financing activities of
$1,399,338 for the three months ended March 31, 1999. This is a result of the
$11,300,000 equity funding in February, which was offset in part by scheduled
payments made against notes payable.
PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 18, 2000, the Company entered into a Stock Purchase Agreement
with Edgewater Private Equity Fund III, L.P., Aspen Finance Investors I, LLC, a
Colorado limited liability company, Fleck T.I.M.E. Fund, L.P., a Connecticut
limited partnership, Fleck Family Partnership II, L.P., a Florida limited
partnership, LJH Partners, LP, a Delaware limited partnership, Wain Investment,
LLC, an Ohio limited liability company, Gerald C. Allen and John Paul DiJoria
(the "Investors"). Pursuant to the Stock Purchase Agreement, the Investors
purchased from the Company 2,260,000 shares of common stock in exchange for cash
of $11,300,000. The Company executed a Registration Agreement with the
Investors, dated February 18, 2000 pursuant to which the Company has agreed to
register the common stock owned by the Investors on or before August 18, 2000.
The Company believes this transaction was exempt from registration pursuant to
Section 4(2) of the Securities Act as an isolated transaction made solely to
accredited investors by an issuer not involving a public offering.
On March 1, 2000, the Company issued 277,000 shares of common stock to The
Growth Strategies Group, Inc. This common stock issue was part of the
consideration given for the acquisition of The Growth Strategies Group, Inc.
The Company believes 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. Through the due diligence process the investor had
access to the inner workings of the company, which would provide it with the
same kind of information as would be included in a registration statement, and
the investor had general expertise in financial and business matters that it was
able to evaluate the merits and risks of an investment in the Company.
11
<PAGE>
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are to be filed as part of the quarterly report:
EXHIBIT NUMBER DESCRIPTION
2.1 (1) Exchange Agreement by and between Loch Exploration, Inc. and
Design Automation Systems Incorporated
2.2 (2) Exchange Agreement by and between Loch Exploration, Inc. and
COAD Solutions, Inc.
2.3 (2) Acquisition Agreement of Cherokee Methane Corporation
2.4 (2) Plan of Merger between the Company and Design Automation
Systems Incorporated
2.5(6) Exchange Agreement between the Company and Dynamic
Professional Services, LLC
2.6(7) Exchange Agreement between the Company and Connected Software
Solutions, Inc.
2.7(10) Acquisition Agreement by and among the Company, EACQ, LLC and
The Growth Strategy Group, Inc.
2.8(11) Agreement and Plan of Merger by and between the Company,
EACQ, LLC and The Growth Strategy Group, Inc.
3.1 (3) Articles of Incorporation
3.2 (4) Amended Articles of Incorporation
3.3 (3) By-laws
4.1 (3) Common Stock Specimen
10.1 (4) 1999 Employee Stock Option Plan
10.2 (2) Employment Agreement with Carl Rose
10.3 (2) Employment Agreement with Charles Leaver
10.4 (2) Employment Agreement with Kelly Knake
10.5 (2) Lease Agreement
10.6 (2) Indirect Reseller Agreement between the Company, Hewlett-
Packard Company and Hall-Mark Computer Products
10.7(2) Indirect Reseller Agreement between the Company, Hewlett-
Packard Company and Client Systems, Inc.
10.8(2) Indirect Value-Added Reseller Agreement between the Company
and Sun Microsystems Computer Corporation
10.9(2) IBM Business Partner Agreement for Solution Providers
10.10(8) E1999 Line of Credit with FINOVA Capital Corporation
10.11(2) Line of Credit with FINOVA Corporation
10.12(9) Agreement for Services with Optimization Group, LLC
10.12(12) FINOVA Line of Credit
10.13(12) Microsystem Products Purchase Agreement
10.14(12) Sun Channel Agreement Master Terms
10.15(12) Ferrari/Connected Software Solutions Lease
10.16(12) Sun Trademark and Logo Policies
10.17(12) HP Authorized Reseller Agreement
10.18(12) IBM Business Partner/Solutions Provider Agreement
10.19(12) HP Agreement for Authorized Solutions Direct Resellers
10.20(12) Office Space Lease Austin
10.21(12) Texas Association of Realtors Commercial Lease
12
<PAGE>
10.22(12) Seattle Lease Agreement
10.23(12) St. Louis Lease Agreement
21.1 (2) List of Subsidiaries of the Registrant
27. (13) Financial Data Schedule
_______________
(1) Filed as an exhibit to the Company's Current Report on Form 8-K dated
January 15, 1999 and incorporated herein by reference.
(2) Filed as an exhibit to the Company's 10-KSB for the year ended
December 31, 1998 and incorporated herein by reference.
(3) Filed as an exhibit to the Company's Registration Statement on
Form S-1 dated September 7, 1979 and incorporated herein by
reference.
(4) Filed as an exhibit to the Company's Definitive Information Statement
filed March 9, 1999 and incorporated herein by reference.
(5) Filed as an exhibit to the Company's 10-QSB for the quarter ended
March 31, 1999 and incorporated herein by reference.
(6) Filed as an exhibit to the Company's Form 8-K filed June 14, 1999 and
incorporated herein by reference.
(7) Filed as an exhibit to the Company's Form 8-K filed August 11, 1999
and incorporated herein by reference.
(8) Filed as an exhibit to the Company's 10-QSB for the quarter ended
June 30, 1999 and incorporated herein by reference.
(9) Filed as an exhibit to the Company's 10-QSB for the quarter ended
September 30, 1999 and incorporated herein by reference.
(10) Filed as an exhibit to the Company's Current Report on Form 8-K filed
December 14, 1999 and incorporated herein by reference.
(11) Filed as an exhibit to the Company's Current Report on Form 8-K filed
March 15, 2000 and incorporated herein by reference.
(12) Filed as an exhibit to the Company's Annual Report on Form 10-KSB
filed March 30, 2000 and incorporated herein by reference.
(13) Filed herewith.
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed on January 26, 2000, reporting a
change in accountants from Hein + Associates, LLP to Deloitte & Touche, LLP.
A Current Report on Form 8-K was filed on February 28, 2000, reporting a
Stock Purchase Agreement by and among the Company, Edgewater Private Equity Fund
III, LP, Aspen Finance Investors I, LLC, Fleck T.I.M.E. Fund, LP, Fleck Family
Partnership II, LP, LJH Partners, LP, Wain Investment, LLC, Gerald C. Allen and
John Paul DeJoria.
A Current Report on Form 8-K was filed on March 15, 2000 reporting the
acquisition of The Growth Strategies Group, Inc.
13
<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.
EpicEdge, Inc.
Date: May 15, 2000 By /s/ Robert E. Nelson
--------------------------
Robert E. Nelson
Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 8,325,107
<SECURITIES> 0
<RECEIVABLES> 3,617,417
<ALLOWANCES> 64,375
<INVENTORY> 0
<CURRENT-ASSETS> 12,331,922
<PP&E> 1,034,760
<DEPRECIATION> 253,898
<TOTAL-ASSETS> 28,096,061
<CURRENT-LIABILITIES> 7,901,798
<BONDS> 0
0
0
<COMMON> 256,185
<OTHER-SE> 19,938,078
<TOTAL-LIABILITY-AND-EQUITY> 28,096,061
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<CGS> 5,539,779
<TOTAL-COSTS> 4,398,034
<OTHER-EXPENSES> 56,055
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,203,472)
<DISCONTINUED> 1,099
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,203,472)
<EPS-BASIC> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
