UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission File Number: 0-13347
ARINCO COMPUTER SYSTEMS INC.
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(Name of small business issuer in its charter)
New Mexico 85-0272154
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
20 Dayton Avenue, Greenwich, Connecticut 06830
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(Address of principal executive offices) (Zip Code)
(203)661-6942
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Issuer's telephone number, including area code
Not applicable
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(Former names, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ].
The number of shares of the issuer's common stock outstanding at August 4, 2000
was approximately 44,958,000.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE>
This amended and restated quarterly Form 10-QSB/A of the Company for the period
ended June 30, 2000 reflects only a change in the presentation of the sale of
Series B redeemable preferred stock. The accounting for this transaction has
been revised to reflect (a) the allocation of the total gross proceeds of $40.0
million to the beneficial conversion feature related to the preferred stock, and
(b) the amortization, in full, at the date of issuance of the beneficial
conversion feature. These revisions had no impact upon net loss for the period,
but increased net loss applicable to common shares from $10 million previously
reported to $40.0 million as revised. In addition, the Company has revised its
computation of the weighted average shares used in the basic and diluted
computation - see Note 2 to the unaudited condensed financial statements.
TABLE OF CONTENTS
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED INTERIM FINANCIAL STATEMENTS............................... 1
Unaudited Condensed Balance Sheet as of June 30, 2000................ 1
Unaudited Condensed Statement of Operations for the three and six
months ended June 30, 2000 and 1999 ................................. 2
Unaudited Condensed Statement of Cash Flows for the six months ended
June 30, 2000 ....................................................... 3
Notes to Unaudited Condensed Financial Statements.................... 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS:.......... 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.......... 9
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS....................................................10
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS............................10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES......................................11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................11
ITEM 5. OTHER INFORMATION....................................................11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.....................................11
ITEM 7. SIGNATURES...........................................................12
ii
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1.- CONDENSED INTERIM FINANCIAL STATEMENTS
ARINCO COMPUTER SYSTEMS INC.
UNAUDITED CONDENSED BALANCE SHEET
JUNE 30, 2000
ASSETS
CURRENT ASSETS
Cash and cash equivalents............................. $ 34,325,000
Prepaid expenses ..................................... 105,000
----------
Total current assets............................. 34,430,000
EQUITY INVESTMENT 6,500,000
----------
$ 40,930,000
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities............ $ 1,156,000
REDEEMABLE PREFERRED STOCK
Series B - convertible into common,
as defined; $.10 par value; authorized
4,000,000 shares; issued and outstanding,
3,000,000 shares.................................. 30,000,000
SHAREHOLDERS' EQUITY
Preferred stock
Series A - $.06 per share cumulative,
Convertible share-for-share into common
stock - $.10 par value; authorized,
500,000 shares; issued and outstanding
3,000 shares........................................ -
Common stock - $.01 par value; authorized
45,000,000 shares; issued and outstanding,
44,958,000 shares................................... 449,000
Additional paid-in capital............................ 51,709,000
Subscription receivable............................... -
Accumulated deficit................................... (42,384,000)
----------
9,774,000
$ 40,930,000
==========
See accompanying notes to
unaudited condensed financial statements
1
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ARINCO COMPUTER SYSTEMS INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
JUNE 30,
2000 1999
------------- -------------
Operating expenses -- general
and administrative ...................... $ 471,000 $ 4,000
Operating loss ....................... (471,000) (4,000)
Other income (expense)
Interest income ...................... 454,000 1,000
Realized gain on trading securities .. - 1,000
Unrealized loss on trading securities - (9,000)
------------ ------------
454,000 (7,000)
------------ ------------
NET INCOME (LOSS) .................... $ (17,000) $ (11,000)
============ ============
Preferred stock dividend requirement ...... - (6,000)
------------ ------------
Net income (loss) applicable to
common stockholders ................ $ (17,000) $ (11,000)
============ ============
Basic and diluted net income (loss)
per common share ................... $ - $ -
============ ============
Weighted average of common shares
outstanding, basic and diluted .......... 44,958,000 4,541,000
============ ============
See accompanying notes to
unaudited condensed financial statements
2
<PAGE>
ARINCO COMPUTER SYSTEMS INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED
JUNE 30,
2000 1999
------------- -------------
Operating expenses -- general
and administrative ................... $ 475,000 $ 7,000
Operating loss (475,000) (7,000)
Other income (expense)
Interest income ...................... 454,000 3,000
Realized gain on trading securities .. - 1,000
Unrealized loss on trading securities - 36,000
------------ ------------
454,000 40,000
------------ ------------
NET INCOME (LOSS) $ (21,000) $ (33,000)
============ ============
Preferred stock dividend requirement ...... - (12,000)
Deemed dividend attributable to
issuance of convertible
preferred stock and warrants ......... (40,000,000) -
------------ ------------
Net income (loss) applicable to
common stockholders .................. $(40,021,000) $ (21,000)
============ ============
Basic and diluted net income (loss)
per common share ..................... $ (1.56) $ -
============ ============
Weighted average of common shares
outstanding, basic and diluted ....... 25,617,000 4,541,000
============ ============
See accompanying notes to
unaudited condensed financial statements
3
<PAGE>
ARINCO COMPUTER SYSTEMS INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED
JUNE 30,
2000 1999
------------- -------------
Cash flows from operating activities
Net income (loss) $ (21,000) $ 33,000
Adjustments to reconcile net earnings
(loss) to net cash provided by
operating activities:
Changes in operating assets and
Liabilities:
Accounts receivable ................ 1,000 -
Prepaid expenses ................... (105,000) -
Accounts payable and accrued
liabilities ...................... 1,155,000 1,000
------------ ------------
Net cash provided by operating
activities ......................... 1,030,000 35,000
Cash flows from investing activities
Decrease in trading securities
(including unrealized appreciation of
and of realized gains in 1999) ..... 112,000 (1,000)
Purchase of equity investment ........ (6,500,000) -
Advances on related party note
receivable ....................... - (20,000)
Receipts on related party note
receivable ....................... - 36,000
------------ ------------
Net cash provided by (used in)
investing activities ............... (6,388,000) 16,000
Cash flows from financing activities
Bank overdraft ....................... - (2,000)
Issuance of Series B preferred stock
and warrants, net of offering
costs .............................. 39,550,000 -
------------ ------------
Net cash provided by (used in)
financing activities ............... 39,550,000 (2,000)
------------ ------------
NET INCREASE IN CASH AND CASH
EQUIVALENTS ........................ 34,192,000 49,000
Cash and cash equivalents at
beginning of period ..................... 133,000 173,000
------------ ------------
Cash and cash equivalents at
end of period ........................... $ 34,325,000 $ 222,000
============ ============
See accompanying notes to
unaudited condensed financial statements
4
<PAGE>
ARINCO COMPUTER SYSTEMS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
1. ORGANIZATION AND BASIS OF PRESENTATION
Interim Results
The accompanying unaudited condensed balance sheet as of June 30, 2000 and the
accompanying statements of operations and cash flows for the periods ended June
30, 2000 and 1999 have been prepared by the Company. In the opinion of
management, the accompanying condensed financial statements have been prepared
on the same basis as the annual financial statements and contain all
adjustments, which include only normal recurring adjustments, considered
necessary for a fair presentation of the Company's financial position, results
of operations and cash flows at the dates and for the periods presented in
conformity with generally accepted accounting principals applicable to interim
periods.
While the Company believes that the disclosures presented are adequate to make
the information not misleading, these condensed financial statements should be
read in conjunction with the audited financial statements and related notes for
the year ended December 31, 1999, which are contained in the Company's Annual
Report on Form 10-KSB. The results for the three- and six-month periods ended
June 30, 2000 are not necessarily indicative of the results to be expected for
the full fiscal year or for any future periods.
2. BASIC AND DILUTED NET EARNINGS (LOSS) PER COMMON SHARE
Basic net (loss)/income per common share excludes the effect of potentially
dilutive securities and is computed by dividing net income or loss available to
common shareholders by the weighted average number of common shares outstanding
for the period. Diluted net (loss)/income per share adjusts for the effect of
convertible securities, warrants and other potentially dilutive financial
instruments only in the periods in which such effect would have been dilutive.
At June 30, 2000, outstanding warrants to purchase 41,250,000 shares of common
stock were not included in the computation of diluted net loss per share because
to do so would have had an antidilutive effect for the periods presented.
Similarly, the computation of diluted net loss per share excludes the effect of
120,000,000 shares issuable upon the conversion of redeemable convertible
preferred stock, since their inclusion would have had an antidilutive effect. As
a result, the basic and diluted net loss per share amounts are equal for all
periods presented.
The following are the basic and diluted net loss per common share for the six
months ended June 30, 2000 and the weighted average shares used in the basic and
diluted net loss per share computation as previously reported and as revised.
5
<PAGE>
AS AS PREVIOUSLY
REVISED REPORTED
------------ -------------
Weighted average shares used in basic and
diluted net loss per share computation 25,617,000 25,837,000
Net earnings (loss) applicable to common
shares (see "capitalization," below) $(40,021,000) $(10,031,000)
------------ -------------
Basic and diluted net loss per share $ (1.56) $ (0.39)
------------ -------------
3. CAPITALIZATION
The presentation of the sale of Series B redeemable convertible preferred stock
has been revised to reflect (a) the allocation of the total gross proceeds of
$40.0 million to the beneficial conversion feature related to the preferred
stock, and (b) the amortization, of the beneficial conversion feature.
The presentation of the sale of Series B redeemable convertible preferred stock
has been revised to reflect (a) the allocation of the total gross proceeds of
$40.0 million to the beneficial conversion feature related to the preferred
stock, and (b) the amortization, of the beneficial conversion feature in full,
at the date of issuance.
On March 28, 2000, an investor group led by Pangea Internet Advisors, LLC
purchased 4,000,000 shares of Series B convertible preferred stock ("Series B
stock") for net proceeds to the Company of $39,450,000 in cash. Each share of
Series B stock is convertible into 40 common shares, and the Series B stock,
collectively, represents approximately 77% of the voting interest of the Company
on a fully diluted basis. If by December 31, 2000 the Company's authorized
common stock had not been increased to provide for the conversion of all Series
B shares, holders of 50% of the Series B stock could require the Company to
redeem all such series B stock at $10 per share on demand. Accordingly, Series B
stock was classified as temporary equity until shareholder approval had been
obtained to sufficiently increase the number of authorized common shares.
Also, on March 28, 2000 certain investors purchased warrants ("Warrants") to
purchase 41,250,000 shares of common stock for $100,000. Of these Warrants, 20%
have an exercise price of $.25 per share, 30% have an exercise price of $.50 per
share, 30% have an exercise price of $.75 per share and 20% have an exercise
price of $1.00 per share. The Warrants are exercisable at the election of the
holder for a period of five years.
The difference between the value of the Series B on an as if converted basis of
$0.25 and $4.88 (the fair value of common stock on the date of issuance), or
$4.63, multiplied by the number of shares of Series B on an as if converted
basis represents the intrinsic value of the beneficial conversion feature, which
totaled approximately $185 million. However, as the intrinsic value of the
beneficial conversion feature is greater than the $40.0 million in gross
proceeds received from the Series B preferred stock issuance, the amount of the
discount attributed to the beneficial conversion feature is limited to the $40.0
million of gross proceeds received. The beneficial conversion feature was
recorded in the quarter ended March 31, 2000 as a non-cash preferred stock
dividend as the Series B convertible preferred stock is effectively convertible
at the option of the preferred
6
<PAGE>
stockholders. The $40.0 million non-cash dividend increased the Company's net
loss attributable to common stockholders by the same amount.
The following are the deemed dividend attributable to issuance of convertible
preferred stock and the net loss applicable to common shares for the six months
ended June 30, 2000 as previously reported and as revised.
AS AS PREVIOUSLY
REVISED REPORTED
------------ -------------
Deemed dividend attributable to
issuance of convertible
preferred stock............................ (40,000,000) (10,000,000)
Net earnings (loss) applicable to
common shares.............................. (40,021,000) (10,031,000)
The change in presentation of the sale of Series B redeemable preferred stock
had no impact on the net loss applicable to common shares for the three months
ended June 30, 2000.
4. CHANGES IN EQUITY
The following table represents changes to the Company's equity accounts for the
six months ended June 30, 2000.
<TABLE>
<CAPTION>
SERIES B
REDEEMABLE
CONVERTIBLE SERIES A COMMON
PREFERRED PREFERRED STOCK
------------ ------------ -----------
<S> <C> <C> <C>
Balance at January 1, 2000.............. $ - $ - $ 49,000
Issuance of preferred stock
and warrants....................... 40,00,000 - -
Beneficial conversion feature
Related to redeemable
Preferred stock.................... - - -
Amortization of beneficial
conversion feature................. - - -
Conversion of 1,000,000
Series B preferred shares
To 40,000,000 common shares........ (10,000,000) - 400,000
------------ ----------- -----------
Balance at June 30, 2000................ $ 30,000,000 $ - $ 449,000
============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
ADDITIONAL
PAID-IN SUBSCRIPTION ACCUMULATED
CAPITAL RECEIVABLE DEFICIT
------------ ----------- -------------
<S> <C> <C> <C>
Balance at January 1, 2000............ $ 2,559,000 $ - $ (2,363,000)
Issuance of preferred stock
and warrants..................... 100,000 - -
Offering costs related to
preferred stock and warrants..... (550,000) - -
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Beneficial conversion feature
related to redeemable
preferred stock and warrants..... 40,000,000 - -
Amortization of beneficial
conversion feature............... - - (40,000,000)
Conversion of 1,000,000
series B preferred shares to
40,000,000 common shares......... 9,600,000 - -
Net loss.............................. - - (21,000)
------------ ----------- ------------
Balance at June 30, 2000............ $ 51,709,000 $ - $(42,384,000)
============ =========== ============
</TABLE>
5. EQUITY INVESTMENT
In June 2000, the Company purchased 7,626,165 shares of Series A Preferred stock
of Broadstream.com, Inc. ("Broadstream"), representing an approximate 30% equity
interest (calculated on a fully-diluted basis) and approximate 47% voting
interest, for $6,500,000 in cash. Broadstream is a streaming media management
services company that delivers fault tolerant distribution services for
streaming media content and data.
The investment in Broadstream is being accounted for under the equity method.
The Company's proportionate share of Broadstream's net income or loss and
amortization of goodwill is included in equity losses of affiliate in the
accompanying consolidated statements of operations.
6. RELATED PARTY TRANSACTIONS
During the period ended June 30, 2000 the Company incurred legal fees in
connection with certain transactions and other matters in the normal course of
business. These services were provided by a firm of which a member of the Board
of Directors of the Company is a partner. Fees paid to this firm totaled
approximately $550,000 for the six months ended June 30, 2000.
Additionally, in the period ended June 30, 2000 the Company incurred management
and investment advisory service fees in connection with identifying, evaluating,
negotiating and managing investment opportunities for the Company. These
services were provided by a firm of which certain employees and members of the
Board of Directors of the Company are affiliated. Fees paid to this firm totaled
approximately $340,000 in the six month period ended June 30, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS:
THE FOLLOWING DISCUSSION OF THE PLAN OF OPERATIONS OF THE COMPANY CONTAINS
FORWARD-LOOKING STATEMENTS RELATING TO FUTURE EVENTS AND THE FUTURE PERFORMANCE
OF THE COMPANY WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933,
AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
STOCKHOLDERS ARE CAUTIONED THAT SUCH STATEMENTS INVOLVE RISKS AND UNCERTAINTIES.
THE COMPANY'S
8
<PAGE>
ACTUAL RESULTS AND TIMING OF CERTAIN EVENTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS
AND ELSEWHERE IN THIS REPORT AND IN THE COMPANY'S OTHER PUBLIC FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.
As the Company has not had revenues from operations in the fiscal year ended
December 31, 1999 and the six months ended June 30, 2000, the following
represents management's plans of operations for the next twelve months.
The Company is presently without revenues or cash flows from operations. The
Company plans to commence engaging in its primary activity, which will the
acquisition and operation of enterprises that are, or propose to be, engaged in
businesses relating primarily to the Internet, e-commerce and related
technologies. The Company intends to begin acquiring controlling interests in
and actively managing companies that offer significant potential for growth,
profitability and value creation.
LIQUIDITY AND CAPITAL RESOURCES
FINANCIAL CONDITION
The Company invests predominantly in instruments that are highly liquid,
investment grade securities and have maturities of less than 45 days.
Management anticipates that it will experience a substantial increase in its
capital expenditures and lease commitments consistent with its anticipated
growth in operations, infrastructure and personnel and possible acquisitions.
The Company currently anticipates that it will continue to experience
significant growth in its operating expenses for the foreseeable future and that
its operating expenses will be a material use of its cash resources. The Company
believes that its existing cash and cash equivalents and investments will be
sufficient to meet its anticipated cash needs for working capital and capital
expenditures for at least the next twelve months.
Management believes that cash on hand and trading securities of approximately
$34,325,000 is sufficient to meet the Company's cash requirements for the next
twelve months, which are expected to consist of (1) payments to management and
consultants under employment and consulting agreements, (2) investments in
target companies and related expenses and (3) general administrative expenses.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
The primary objective of our investment activities is to preserve principal
while at the same time maximizing yields without significantly increasing risk.
To achieve this objective, we maintain our portfolio of cash equivalents and
investments in government securities and money market funds.
9
<PAGE>
As of June 30, 2000, we held cash and cash equivalents and investments in
marketable securities with average days to maturity of 30 days. We did not hold
derivative financial instruments as of June 30, 2000, and have never held these
instruments in the past.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is subject to certain legal claims from time to time and is involved
in litigation that has arisen in the ordinary course of its business. It is the
Company's opinion that it either has adequate legal defenses to such claims or
that any liability that might be incurred due to such claims will not, in the
aggregate, exceed the limits of the Company's insurance policies or otherwise
result in any material adverse effect on the Company's operations or financial
position.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On March 28, 2000, the Company sold (the "Offering") an aggregate of 4,000,000
shares of the Company's Series B Redeemable Convertible Preferred Stock, par
value $.10 per share (the "Series B Preferred Stock") to principals of Pangea
Internet Advisors LLC ("Pangea Advisors") and other investors (collectively with
Pangea Advisors, the "Investors") for an aggregate offering price of
$40,000,000. Also on March 28, 2000 certain investors purchased warrants to
purchase 41,250,000 shares of common stock for $100,000. The Company claimed an
exemption from registration under the Securities Act of 1933, as amended (the
"Securities Act"), for the Offering pursuant to Regulation D promulgated under
the Securities Act. Each share of Series B Preferred Stock is convertible into
Common Stock by the holder thereof at any time at a rate equal to $10.00 divided
by the conversion price in effect from time to time (the "Conversion Price").
The Conversion Price is initially $0.25 (resulting in an initial conversion rate
of 40 shares of Common Stock for each share of Series B Preferred Stock). The
Conversion Price is subject to adjustment in the event of stock dividends, stock
splits, or a reorganization, reclassification, consolidation or merger.
The Series B Preferred Stock will be automatically converted into Common Stock
at the then prevailing Conversion Price upon the occurrence of either (x) the
consummation of a public offering by the Company of its Common Stock resulting
in proceeds to the Company of at least $10,000,000 and where the per share
offering price is at least four times the then prevailing conversion price and
(y) the conversion into Common Stock of at least 60% of the number of shares of
Series B Preferred Stock originally issued. The Warrants expire in five years
and 20% of the Warrants have an exercise price of $.25 per share, 30% of the
Warrants have an exercise price of $.50 per share, 30% of the Warrants have an
exercise price of $.50 per share and 20% of the Warrants have an exercise price
of $1.00 per share.
In the event of a liquidation, dissolution or winding up of the Company, each
share of Series B Preferred Stock will be entitled to receive the greater of (i)
the sum of $10.00 plus any declared but unpaid dividends and (ii) the amount
such share would be entitled
10
<PAGE>
to receive on an "as converted" basis. After this preferential distribution has
been made, all remaining assets shall be distributed to the holders of shares of
Common Stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
On June 29, 2000 Gary C. Wendt was elected to the Company's Board of Directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of this report:
3.1 * Articles of Incorporation.
3.2 * Bylaws.
4.1 ** Certificate of Designations of Series B Convertible
Preferred Stock of Arinco Computer Systems Inc.
4.2 ** Amendment to Certificate of Designations of Series A
Convertible Preferred Stock of Arinco Computer
Systems Inc.
10.1 ** Securities Purchase Agreement, dated March 9, 2000,
by and between Arinco Computer Systems, Inc., Pangea
Internet Advisors LLC and the purchasers listed on
Schedule I attached thereto.
10.2 ** Registration Rights Agreement by and among Arinco
Computer Systems Inc., Pangea Internet Advisors LLC
and the persons party to the Securities Purchase
Agreement, dated as of March 28, 2000.
10.3 ** Business Opportunity Allocation and Miscellaneous
Services Agreement by and among Arinco Computer
Systems Inc. and Pangea Internet Advisors LLC, dated
as of March 28, 2000.
10.4 ** Employment Agreements entered into by and between
Arinco Computer Systems Inc. and each of Cary S.
Fitchey, William Avery, David M. Roberts, William P.
O'Donnell and Frederick G. Noell.
10.5 ** Warrants for William Avery, Cary S. Fitchey, The
Roberts Family Revocable Trust U/D/T dated as of
December 15, 1997, David M. Roberts and Gail M.
Simpson, Trustees, Roberts Children Irrevocable Trust
U/D/T dated October 21, 1996, Stephen H. Roberts,
Trustee and Turtle Holdings LLC.
10.6 *** Stock Purchase Agreement, dated June 29, 2000, by and
11
<PAGE>
between Arinco Computer Systems Inc.,
Broadstream.com, Inc. and the purchasers listed on
Schedule I attached thereto.
10.7 Employment Agreement entered into by and between
Arinco Computer Systems Inc. and Frank Gallagi dated
as of June 12, 2000.
27.1 Financial Data Schedule (for SEC use only).
--------------------
* Filed as an exhibit to the Registrant's Form 10 Registration
Statement dated March 25, 1985 and is incorporated herein by
reference.
** Filed as an exhibit to the Registrant's Form 8-K dated March
28, 2000, and is incorporated herein by reference.
*** Filed as an exhibit to the Registrant's Form 8-K dated June
29, 2000, and is incorporated herein by reference.
(b) Reports on Form 8-K:
The Registrant filed Form 8-K dated June 29, 2000 during the quarter ended June
30, 2000 reporting matters under Item 5, Other Events.
There are no other exhibits specified in Item 601 of Regulation S-B to be
included with this filing.
ITEM 7. SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: January 5, 2001
ARINCO COMPUTER SYSTEMS INC.
(now known as Change Technology
Partners, Inc.)
By: /s/ Matthew Ryan
---------------------------------------
Matthew Ryan, President and
Chief Executive Officer
By: /s/ Frank Gallagi
---------------------------------------
Frank Gallagi, Chief Financial Officer
12
