_________________________________________________________________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 30,
1996
DYNAMICWEB ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
New Jersey 0-10039 22-2267658
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Ident. No.)
271 Route 46 West, Building F,
Suite 209, Fairfield, New Jersey 07004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 244-1000
N/A
(Former name or former address, if changed since last report.)
_________________________________________________________________
_________________________________________________________________
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) The financial statements of Software Associates, Inc.,
the business acquired, are included herein at Exhibit
99.1 and 99.2.
(b) The pro forma financial information is included herein
at Exhibit 99.3.
(c) The following exhibits are filed herewith:
99.1 Audited Financial Statements of Software
Associates, Inc. for the Fiscal Years Ended
June 30, 1996 and 1995.
99.2 Unaudited Financial Statements of Software
Associates, Inc. for the Three Months Ended
September 30, 1996 and 1995.
99.3 Pro Forma Financial Information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this Form 8-K/A to be
signed on its behalf by the undersigned hereunto duly authorized.
DYNAMICWEB ENTERPRISES, INC.
Dated: July 18, 1997
By /s/ Steve Vanechanos, Jr.
Steve Vanechanos, Jr.
President
<PAGE>
EXHIBIT INDEX
Exhibit Number
99.1 Audited Financial Statements of Software Associates,
Inc. for the Fiscal Years Ended June 30, 1996 and 1995.
99.2 Unaudited Financial Statements of Software Associates,
Inc. for the Three Months Ended September 30, 1996 and
1995.
99.3 Pro Forma Financial Information.
Exhibit 99.1
REPORT OF INDEPENDENT AUDITORS
Board of Directors Software Associates, Inc.
Fairfield, New Jersey
We have audited the accompanying balance sheet of Software
Associates, Inc. as at June 30, 1996 and the related statements
of operations, changes in stockholder's equity and cash flows for
the years ended June 30, 1996 and June 30, 1995. 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 audits.
We conducted our audits 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 audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements enumerated above
present fairly, in all material respects, the financial position
of Software Associates, Inc. as at June 30, 1996 and the results
of its operations and its cash flows for the years ended June 30,
1996 and June 30, 1995, in conformity with generally accepted
accounting principles.
The Company has sustained a net loss in the year ended
June 30, 1996 and has only minimal capital and working capital.
Also, as indicated in Note A, on November 30, 1996, the Company
was acquired by DynamicWeb Enterprises, Inc. a substantial
portion of whose resources may be depleted before it markets and
derives significant revenues from its products and services.
These factors raise substantial doubt about the Company's ability
to continue as a going concern. The acquiror's plan in regards
to these matters are also described in Note A. The financial
statements do not include any adjustments that might result from
the outcome of these uncertainties.
Richard A. Eisner & Company, LLP
/s/ Richard A. Eisner & Company, LLP
New York, New York
May 12, 1997<PAGE>
SOFTWARE ASSOCIATES, INC.
BALANCE SHEET
AS AT JUNE 30, 1996
A S S E T S
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . $12,455
Accounts receivable, less allowance for doubtful
accounts of $6,938 . . . . . . . . . . . . . . . . 61,209
Total current assets . . . . . . . . . . . . . . 73,664
Equipment, less accumulated depreciation of $4,000 . . 6,000
T O T A L. . . . . . . . . . . . . . . . . . . . $79,664
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . $13,548
Accrued expenses and other . . . . . . . . . . . . . 13,955
Current maturities of long-term debt (Note C). . . . 3,350
Deferred taxes (Note D). . . . . . . . . . . . . . . 1,000
Total current liabilities. . . . . . . . . . . . 31,853
Long-term debt, less current maturities (Note C) . . . 279
Total liabilities. . . . . . . . . . . . . . . . 32,132
Commitments and contingencies (Note F)
Stockholder's equity (Note A):
Common stock - no par value; 2,500 shares authorized,
issued and outstanding . . . . . . . . . . . . . . 16,000
Additional paid-in capital . . . . . . . . . . . . . 23,641
Retained earnings. . . . . . . . . . . . . . . . . . 7,891
Total stockholder's equity . . . . . . . . . . . 47,532
T O T A L. . . . . . . . . . . . . . . . . . . . $79,664
Attention is directed to the foregoing accountants' report and to
the accompanying notes to financial statements.
<PAGE>
SOFTWARE ASSOCIATES, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended June 30,
1996 1995
<S> <C> <C>
Revenues (Note E[2]):
System sales, net. . . . . . . . . . . . $380,397 $259,459
Services, net. . . . . . . . . . . . . . 286,983 529,975
T o t a l. . . . . . . . . . . . . . . 667,380 789,434
Cost of sales:
System sales . . . . . . . . . . . . . . 108,361 78,680
Services . . . . . . . . . . . . . . . . 79,944 84,016
T o t a l. . . . . . . . . . . . . . . 188,305 162,696
Gross profit . . . . . . . . . . . . . . . 479,075 626,738
Selling, general and administrative. . . . 555,660 610,407
Operating (loss) income before interest
and taxes. . . . . . . . . . . . . . . . (76,585) 16,331
Interest expense . . . . . . . . . . . . . 125 130
(Loss) income before (provision) benefit
for income taxes . . . . . . . . . . . . (76,710) 16,201
(Provision) benefit for income taxes . . . 29,000 (11,000)
NET (LOSS) INCOME. . . . . . . . . . . . . $(47,710) $ 5,201
</TABLE>
Attention is directed to the foregoing accountants' report and to
the accompanying notes to financial statements.
<PAGE>
SOFTWARE ASSOCIATES, INC.
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Note A)
<TABLE>
<CAPTION>
Common Stock - Additional
No Par Value Paid-in Retained
Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C>
Balance - July 1, 1994 . 2,500 $16,000 $ 23,641 $ 50,400 $ 90,041
Net income . . . . . . . 5,201 5,201
Balance - June 30, 1995. 2,500 16,000 23,641 55,601 95,242
Net (loss) . . . . . . . (47,710) (47,710)
BALANCE - JUNE 30, 1996. 2,500 $16,000 $23,641 $ 7,891 $ 47,532
</TABLE>
Attention is directed to the foregoing accountants' report and to
the accompanying notes to financial statements.
<PAGE>
SOFTWARE ASSOCIATES, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income . . . . . . . . . . . $(47,710) $ 5,201
Adjustment to reconcile net (loss)
income to net cash provided by
(used in) operating activities:
Depreciation. . . . . . . . . . . . 2,000 2,000
Deferred income taxes . . . . . . . (29,000) 11,000
Changes in operating assets and
liabilities:
Increase (decrease) in
accounts receivable . . . . . . 83,065 (76,753)
Increase (decrease) in
accounts payable . . . . . . . (13,305) 11,003
Increase in accrued expenses. . . 5,342 7,024
Net cash provided by (used in)
operating activities. . . . . . 392 (40,525)
Cash flows from financing activities:
Payments of long-term debt. . . . . . . (3,350) (3,021)
NET (DECREASE) IN CASH. . . . . . . . . . (2,958) (43,546)
Cash - beginning of year. . . . . . . . . 15,413 58,959
CASH - END OF YEAR. . . . . . . . . . . . $ 12,455 $ 15,413
Supplemental schedule of non-cash
investing and financing activities:
During the year ended June 30, 1995,
the Company financed $10,000 of
equipment.
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest. . . . . . . . . . . . . . . $ 125 $ 130
Taxes . . . . . . . . . . . . . . . . 125
</TABLE>
Attention is directed to the foregoing accountants' report and to
the accompanying notes to financial statements.
<PAGE>
SOFTWARE ASSOCIATES, INC.
NOTES TO FINANCIAL STATEMENTS
(NOTE A) - The Company:
Software Associates, Inc. (the "Company") is a New Jersey
corporation incorporated in March 1985. The Company is an
Electronic Data Interchange ("EDI") service bureau engaged in the
business of helping companies realize the benefits of expanding
their data processing and electronic communications
infrastructures through the use of EDI. The Company also resells
hardware and licensed software which is generally customized for
its customers.
On November 30, 1996, the Company was acquired by DynamicWeb
Enterprises, Inc. ("DynamicWeb"). DynamicWeb will utilize the
Company's expertise in EDI to expand their business and product
lines over the internet. A substantial portion of DynamicWeb's
resources may be depleted before it markets and derives
significant revenues from its products and services. DynamicWeb
is planning to raise additional equity through a proposed public
offering of stock, the net proceeds of which it intends to use,
in part, to support future operations.
(NOTE B) - Summary of Significant Accounting Policies:
[1] Revenue recognition:
Revenues are recognized when products are shipped
provided that no significant obligations remain, and collection
of the resulting receivable is deemed probable by management.
The Company provides customer support and revenues are recognized
when services are provided. The Company also enters into
contracts with customers whereby revenues are earned based on a
transaction fee.
[2] Depreciation:
Equipment is recorded at cost. Depreciation is
provided using the straight-line method over five years.
[3] Income taxes:
The Company files its corporate income tax returns on a
cash basis and accounts for income taxes on an accrual basis in
accordance with Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). SFAS
No. 109 measures deferred income taxes by applying enacted
statutory rates in effect at the balance sheet date to the
differences between the tax bases of assets and liabilities and
their reported amounts in the financial statements.
(NOTE B) - Summary of Significant Accounting Policies
(continued):
[4] 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.
[5] Fair value of financial instruments:
The Company considers its financial instruments and
obligations, which are carried at cost, to approximate fair value
due to the near term due dates.
(NOTE C) - Long-Term Debt:
Long-term debt consists of a capitalized lease obligation as
at June 30, 1996:
Equipment lease payable, due in July 1997;
payable in monthly installments of $291
including 4% interest . . . . . . . . $3,629
Less current maturities . . . . . . . . 3,350
Noncurrent portion. . . . . . . . . . $ 279
* Collateralized by computer equipment with a net book value
of approximately $6,000.
Maturities of long-term debt are as follows:
June 30,
1997 . . . . . . . . . . . . . . . $3,350
1998 . . . . . . . . . . . . . . . 279
T o t a l. . . . . . . . . . . . $3,629
(NOTE D) - Income Taxes:
[1] The Company has federal and state net operating loss
carryforwards of approximately $30,000 that expires from 2009 to
2010.
(NOTE D) - Income Taxes (continued):
The Tax Reform Act of 1986 contains provisions which
limit the net operating loss carryforwards available for use in
any given year should certain events occur, including significant
change in ownership interests. The utilization of the net
operating loss may be limited due to the acquisition of the
Company as described in Note A.
[2] The tax effects of principal temporary differences and
net operating loss carryforwards are as follows as at June 30,
1996:
Asset:
Federal and state operating loss carryforwards . . . $ 12,000
Liability:
Accrual basis to cash basis adjustment . . . . . . . (13,000)
Net deferred tax liability . . . . . . . . . . . . . $ (1,000)
[3] The difference between the statutory federal income tax
rate of 34% and the actual tax rate are as follows:
<TABLE>
<CAPTION>
June 30,
1996 1995
<S> <C> <C>
Statutory rate (benefit). . . . . . . . . $(26,018) $ 5,508
State taxes (benefit) net of federal
income tax effect . . . . . . . . . . . (4,603) 972
Nondeductible items . . . . . . . . . . . 3,305 3,305
Other . . . . . . . . . . . . . . . . . . (1,684) 1,215
T o t a l . . . . . . . . . . . . . . $(29,000) $11,000
</TABLE>
(NOTE E) - Concentration of Credit Risk:
[1] Accounts receivable:
The Company routinely evaluates the credit worthiness
of its customers to limit its concentration of credit risk
regarding its trade receivables.
(NOTE E) - Concentration of Credit Risk (continued):
[2] Significant customers:
The Company had one customer that accounted for 15% of
revenue for the year ended June 30, 1996 and two customers that
accounted for 22% and 19% of revenue for the year ended June 30,
1995.
(NOTE F) - Commitments and Contingencies:
[1] Lease and related party transaction:
On July 1, 1994, the Company signed an operating lease
for office space with a partnership whose partner is the sole
stockholder of the Company. The lease contains an annual
increase of five percent and condominium maintenance fees. The
Company has guaranteed the partnership's debt (United States
Small Business Administration guaranteed loan) underlying the
office space which was approximately $250,000 as at June 30,
1996; the debt matures in August 2019. The following are the
future annual rental payments:
Year Ending
June 30,
1997. . . . . . . . . . . . . $ 41,000
1998. . . . . . . . . . . . . 43,000
1999. . . . . . . . . . . . . 45,000
2000. . . . . . . . . . . . . 47,000
2001. . . . . . . . . . . . . 49,000
Thereafter. . . . . . . . . . 1,333,000
T o t a l . . . . . . . $1,558,000
Rent expense and related operating expense for the
years ended June 30, 1996 and June 30, 1995 was approximately
$46,400 and $44,400, respectively.
[2] Line of credit:
The Company has a line of credit of $50,000. No
balances are outstanding as at June 30, 1996. The stockholder of
the Company has personally guaranteed the debt under the line of
credit. In May 1997, the Company borrowed $14,750 under the line
of credit at a rate of 2% above the bank's lending rate.
(NOTE F) - Commitments and Contingencies (continued):
[3] Employment contract:
In connection with the acquisition of the Company as
described in Note A, the Company entered into a five year
employment contract with its then sole stockholder. The
agreement provides for an annual salary of approximately $136,000
and includes a discretionary bonus as determined by DynamicWeb's
Board of Directors.
EXHIBIT 99.2
SOFTWARE ASSOCIATES, INC.
FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
<PAGE>
SOFTWARE ASSOCIATES, INC.
UNAUDITED CONDENSED BALANCE SHEET
AS AT SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
A S S E T S
<S> <C>
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,376
Accounts receivable, net of allowance for doubtful accounts . . 67,769
Total current assets. . . . . . . . . . . . . . . . . 79,145
Property and equipment, net of depreciation and amortization. . 5,500
T O T A L . . . . . . . . . . . . . . . . . . . . . . $ 84,645
L I A B I L I T I E S
Accounts payable and accrued expenses . . . . . . . . . . . . . $ 20,628
Lease obligation. . . . . . . . . . . . . . . . . . . . . . . . 2,797
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . 7,000
Total current liabilities. . . . . . . . . . . . . . 30,425
STOCKHOLDER'S EQUITY
Common stock - no par value; 2,500 shares authorized,
issued and outstanding . . . . . . . . . . . . . . . . . . . 16,000
Additional paid-in capital. . . . . . . . . . . . . . . . . . . 23,641
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . 14,579
Total stockholder's equity . . . . . . . . . . . . . 54,220
T O T A L. . . . . . . . . . . . . . . . . . . . . . $ 84,645
</TABLE>
The accompanying notes are an integral part of
these condensed statements.
<PAGE>
SOFTWARE ASSOCIATES, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATION AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1996 1995
<S> <C> <C>
Net sales:
System sales . . . . . . . . . . . . . . . . . . $ 55,517 $ 44,766
Services . . . . . . . . . . . . . . . . . . . . 78,174 91,681
T o t a l . . . . . . . . . . . . . . . . 133,691 136,447
Cost of sales:
System sales . . . . . . . . . . . . . . . . . . 16,645 5,763
Services . . . . . . . . . . . . . . . . . . . . 23,845 29,889
T o t a l . . . . . . . . . . . . . . . . 40,490 35,652
Gross profit. . . . . . . . . . . . . . . . . . . . 93,201 100,795
Selling, general and administrative expenses. . . . 80,513 179,707
Operating income (loss) . . . . . . . . . . . . . . 12,688 (78,912)
(Provision) benefit for income taxes. . . . . . . . (6,000) 29,000
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . 6,688 (49,912)
Retained earnings, beginning of period. . . . . . . 7,891 55,601
RETAINED EARNINGS, END OF PERIOD. . . . . . . . . . $ 14,579 $ 5,689
</TABLE>
The accompanying notes are an integral part of
these condensed statements.
<PAGE>
SOFTWARE ASSOCIATES, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) . . . . . . . . . . . . . . . . $ 6,688 $(49,912)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating
activities:
Depreciation. . . . . . . . . . . . . . . . . 500
Deferred income taxes . . . . . . . . . . . . 6,000 (29,000)
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . (6,560) 101,688
Accounts payable and accrued expenses . . . (6,875) (20,224)
Net cash provided by (used in) operating
activities. . . . . . . . . . . . . . . (247) 2,552
Cash flows (used in) financing activities:
Payments of capital lease obligation . . . . . . (832)
NET (DECREASE) INCREASE IN CASH. . . . . . . . . . . (1,079) 2,552
Cash - beginning of period . . . . . . . . . . . . . 12,455 15,413
CASH - END OF PERIOD . . . . . . . . . . . . . . . . $11,376 $ 17,965
</TABLE>
The accompanying notes are an integral part of
these condensed statements.
<PAGE>
(NOTE A) - The Company:
Software Associates, Inc. (the "Company") is a New Jersey
corporation incorporated in March 1985. The Company is an
Electronic Data Interchange ("EDI") service bureau engaged in the
business of helping companies realize the benefits of expanding
their data processing and electronic communications
infrastructures through the use of EDI. The Company also resells
hardware and licensed software which is generally customized for
its customers.
(NOTE B) - Basis of Presentation:
The unaudited condensed consolidated balance sheet and
statement of operations should be read in conjunction with the
audited financial statements of Software Associates, Inc. and
notes thereto contained elsewhere herein. The information does
not purport to represent the future financial position or results
of operations of Software Associates, Inc. The interim financial
statements include all necessary adjustments, consisting of
normal recurring items, which in the opinion of management are
necessary for a fair presentation of such financial information.
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following pro forma unaudited financial information
gives effect to the acquisition of Software Associates, Inc. on
November 30, 1996. The unaudited pro forma condensed consolidated
balance sheet as at September 30, 1996 combines the historical
balance sheet of DynamicWeb Enterprises, Inc. as at September 30,
1996 with the historical balance sheet of Software Associates,
Inc. as at June 30, 1996 as if the acquisition occurred on
September 30, 1996. The unaudited pro forma condensed
consolidated statement of operations for the year ended
September 30, 1996 combines the operations of DynamicWeb
Enterprises, Inc. for the year ended September 30, 1996 with the
operations of Software Associates, Inc. for the year ended
June 30, 1996 as if the acquisition occurred on October 1, 1995.
The transaction is accounted for as a purchase in accordance with
Accounting Principles Board Opinion No. 16.
The unaudited condensed pro forma consolidated balance sheet
and statement of operations should be read in conjunction with
the notes thereto and the audited financial statements of
DynamicWeb Enterprises, Inc. and Software Associates, Inc. and
notes thereto. The pro forma information is not necessarily
indicative of what the financial position and results of
operations would have been had the transaction occurred earlier,
nor do they purport to represent the future financial position or
results of operations of DynamicWeb Enterprises, Inc.
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENT ADJUSTMENTS
1) To record the preliminary allocation of the purchase
price of Software Associates Inc. valued at $885,000 including
professional fees of $25,000 and to expense purchased research
and development as at October 1, 1995. The pro forma information
does not reflect any contingently issuable shares, up to
1,140,000, that may be issued in the event that the average
closing bid price of DynamicWeb Enterprises, Inc. common stock
does not equal $3.375 per share for the five trading days
immediately prior to January 30, 1999.
2) To amortize intangible asset over five years.
3) To record the difference in salary based on an
employment contract for the then shareholder of Software
Associates, Inc.
4) Pro forma weighted average number of shares outstanding
reflects shares issued for the acquisition as if they were
outstanding for the entire period presented.
<PAGE>
DYNAMICWEB ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATION
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA CONSOLIDATED
HISTORICAL ADJUSTMENTS RESULTS
DYNAMICWEB SOFTWARE
ENTERPRISES, INC. ASSOCIATES, INC.
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1996 JUNE 30, 1996
<S> <C> <C> <C> <C>
Net sales:
System sales $147,337 $380,397 $ 527,734
Services 312,730 286,983 599,713
Total 460,067 667,380 1,127,447
Cost of sales:
System sales 71,205 108,361 179,566
Services 81,194 79,944 161,138
Total 152,399 188,305 340,704
Gross profit 307,668 479,075 786,743
Expenses:
Selling, general and
administrative 719,443 555,660 (2) $ 20,000 1,323,103
(3) 28,000
Research and development 28,990 28,990
Total 748,433 555,660 48,000 1,352,093
Operating loss (440,765) (76,585) (48,000) (565,350)
Interest expense (23,271) (125) (23,396)
Interest income 8,806 8,806
Loss before benefit for
income taxes (455,230) (76,710) (48,000) (579,940)
Benefit for income taxes 29,000 29,000
Net loss $(455,230) $(47,710) $(48,000) $(550,940)
Pro forma net loss per pro
forma weighted average
number of shares
outstanding $ (0.08)
Pro forma weighted average
number of shares
outstanding 6,382,873 (4) 860,000 7,242,873
</TABLE>
<PAGE>
DYNAMICWEB ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PRO FORMA PRO
FORMA
HISTORICAL ADJUSTMENTS
CONSOLIDATED
DYNAMICWEB SOFTWARE
ENTERPRISES, INC. ASSOCIATES, INC.
AS AT AS AT
SEPTEMBER 30, 1996 JUNE 30, 1996
ASSETS
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 174,403 $12,455 $ 186,858
Accounts receivable, net
of allowance for
doubtful accounts 70,518 61,209 131,727
Prepaid and other current
assets 32,068 32,068
Total current assets 276,989 73,664 350,653
Property and equipment,
net of depreciation and
amortization 239,889 6,000 245,889
Patents and trademarks,
net of amortization 19,299 19,299
Intangibles (1) $ 100,000 100,000
TOTAL $ 536,177 $79,664 $ 100,000 $ 715,841
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 34,581 $13,548 $ 48,129
Accrued expenses and other 18,487 13,955 (1) $ 25,000 57,442
Current maturities of
long-term debt 12,434 3,350 15,784
Deferred revenue 11,330 11,330
Deferred income taxes 1,000 1,000
Total current maturities 76,832 31,853 25,000 133,685
Long-term debt, less current
maturities 197,661 279 197,940
Total liabilities 274,493 32,132 25,000 331,625
STOCKHOLDERS' EQUITY
(1) 86
Common stock 655 16,000 (1) (16,000) 741
Additional paid-in capital 676,215 23,641 (1) 836,273 1,536,129
Retained earnings (1) (7,891)
(Accumulated deficit) (415,186) 7,891 (1) (737,468)
(1,152,654)
Total stockholders' equity 261,684 47,532 75,000 384,216
TOTAL $ 536,177 $79,664 $ 100,000 $ 715,841
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