UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
December 1, 1999
Date of Report (Date of earliest reported)
AmeriNet Group.com, Inc.
(Exact name of registrant as specified in its chapter)
Delaware
(State or other jurisdiction of incorporation
000-03718
(Commission File Number)
11-2050317
(IRS Employer Identification No.)
2500 North Military Trail, Suite 225; Boca Raton, Florida 33431
(Address of principal executive offices) (Zip Code)
(561) 998-3435
Registrant's telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
TABLE OF CONTENTS
ITEM PAGE
Item 303 Management's Plan of Operation; Discussion and Analysis of Financial
Condition and Results of Operations 2
Item 5 Other Events 8
Item 7 Financial Statements and Exhibits 8
Financial Statements of Businesses Acquired
Pro Forma Financial Information
Signatures 8
ITEM 303 MANAGEMENT'S PLAN OF OPERATION; DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information required by this item will be provided, together with the
financial statements and pro forma financial information pertaining to the
transaction which is the subject of this report, by amendment hereto to be filed
by the Registrant with Commission on or before the sixtieth day following the
date of this report. The financial data included in the following information is
based on unaudited data that may not comply with generally accepted accounting
principals, consistently applied and will be superseded in the subsequent
amendment. Accordingly, the information may not prove accurate and should not be
relied on other than as a good faith effort by Trilogy's management to provide
useful information on an interim basis.
PLAN OF OPERATION:
During the twelve months ending on November 30, 2000, Trilogy intends to
materially expand its business operations using the funding that the Registrant
provided upon the closing of the acquisition of Trilogy ($250,000) and the
funding that the Registrant has agreed to provide (up to an additional $650,000)
within the next 180 days.
Trilogy is a network marketing and e-commerce company selling its products
through a network of independent field representatives. Although Trilogy was
founded in May of 1998 and was formally organized as a Florida corporation in
August of 1998, product sales were not initiated until the end of July 1999.
Since July 1999, 152 individuals have signed agreements to become independent
field representatives.
Trilogy's business development was limited until recently because a major
component of its marketing plan involved use by its independent marketing
representatives of individual replicator sites based on Trilogy's Internet and
e-commerce site. Because the replicator sites were not fully functional and
therefore not available to independent field representatives until early
December of 1999, independent field representatives were not actively recruited
during the last four months. Consistent with management's belief in their
importance, Trilogy's web site (www.trilogyonline.com) and the corresponding
independent field representative's replicator sites will constantly be updated
and improved by the Trilogy information systems and marketing departments.
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During the next twelve months, assuming that the replicator sites remain
functional and available and that the Registrant provides funding for ongoing
operations during the next six months, Trilogy's chief executive officer and its
president will be devoting a major portion of their time to recruiting,
enlisting and training additional independent field representatives for Trilogy.
Trilogy's management believes that the number of active independent field
representatives necessary to produce revenues sufficient to generate net
operating income (approximately 5,000) can be recruited and trained within nine
months after the date of this report and that it will have trained and recruited
7,000 independent field representatives within twelve months after the date of
this report.
As Trilogy's marketing capabilities expand, management anticipates that it
will expand its product offerings to meet the perceived requirements of its
existing consumer base and to expand into other areas deemed potentially
profitable and synergistic. Its product development and marketing departments
will be responsible for assuring that required products are developed, tested
and test marketed in time to meet demand therefor.
Trilogy currently maintains its own product development and marketing
departments; however, all product development activities following the
formulation stage are conducted through third party anticipated suppliers. In
addition, a major source of new products in the future is expected to involve
marketing rights to products developed by other persons. Products under
consideration at this time include an expansion of Trilogy's current line of pet
care and human nutritional supplement products. In most instances, information
concerning products under development or products for which Trilogy is
negotiating marketing rights will be kept confidential and if disclosure
pursuant to Commission rules is required, the information will be provided under
requests for confidential treatment. Such policy is based on competitive and
negotiating factors.
MANAGEMENT DISCUSSION AND ANALYSIS
From the date of its organization in August of 1998 through late July of
1999, Trilogy had no revenues. From May of 1998 through December 31, 1998
Trilogy incurred start-up expenses of $170,382. For the six months ending June
30, 1999 Trilogy incurred expenses of $490,773. For the three months ending
September 30, 1999 Trilogy had revenues of $38,571 and expenses of $399,990 for
a net loss from operations of $361,419. Management estimates that an additional
loss from operations of approximately $150,000 was incurred for the two months
ending November 30, 1999.
Trilogy does not expect to be able to meet all anticipated operating
expenses during the next twelve months from internally generated operational
income. Management expects that loses from operations will continue to be
substantial for at least the next six months while a viable network of
independent field representatives is being established. Net operating loss from
operations for the next six months is projected to be approximately $475,000. If
projections are met, of which there can be no assurance at this time, operations
are expected to become marginally profitable in the third calendar quarter of
2000.
Through November of 1999, the employees of Trilogy have funded a
substantial portion of the operating expenses of Trilogy through the deferral of
a portion of their salaries. Trilogy's liability for this deferred compensation
amounted to $390,224 through November 30, 1999 and an additional liability for
deferred compensation in December 1999 is expected in the amount of $22,460. The
total, expected to be $412,684 at December 31, 1999, is not payable until
Trilogy becomes profitable and is able to make payments to reduce this
obligation from positive cash flow from operations. However, Trilogy is
committed to start paying its employees at their full salaries as of January 1,
2000, which will increase the cash, requirements of Trilogy's operations by
approximately $14,543 per month.
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If revenues are realized as projected, additional personnel will be
required in Trilogy's call center, administrative and finance departments.
Management anticipates that it will add a receptionist in March of 2000 and an
administrative assistant in July of 2000. An additional field support agent is
planned for the call center department in each of the months of April, June,
August, October and November, 2000. The finance department expects to add a
bookkeeper in April of 2000 and a staff accountant in November of 2000. An
assistant to the director of information systems is planned for November of 2000
but this position my have to be filled sooner depending on the demands created
by Trilogy's web site and the field representatives' replicator sites. The cost
of adding the personnel listed above is estimated to be $110,000 during the next
twelve months.
As additional personnel are employed, there will be a corresponding
requirement for capital expenditures for office furniture, computer hardware and
computer software. During the next twelve months, Trilogy's management
anticipates spending approximately $40,000 for such purpose.
Trilogy's current level of product inventory is sufficient to fill
anticipated orders for its current product line over the next several months and
current levels will be maintained by replacement as sold, funded by revenues.
However, a higher level of available inventory must be established and
maintained as new products are added to Trilogy's existing product line.
Management anticipates that as much as $100,000 could be required during the
next twelve months to establish and maintain inventories at the required levels.
To increase the network of independent field representatives, to expand
operations and make necessary capital expenditures as projected, Trilogy will be
dependent on up to $650,000 in funding from the Registrant over the next six
months in order to meet its ongoing financial obligations.
RESULTS OF OPERATIONS
For the eight-month period from the founding of Trilogy in May 1998 through
December 31, 1998, Trilogy had no revenues and incurred $170,382 of start-up
expenses.
For the six-month period ending June 30, 1999, Trilogy had no revenues and
incurred expenses of $490,773. Of this amount payroll expense was $311,804 and
consulting expense was $107,377. Of this $419,181 total, $191,571 has been paid
and employees and consultants have deferred $227,610 until Trilogy attains
profitable operations. Legal costs were $32,403 of which $24,738 was incurred in
conjunction with Trilogy's February 22, 1999 participating preferred offering.
Travel expense was $15,240, telephone expense $12,177 and other general and
administrative expenses including rent, utilities, insurance, facilities
maintenance and supplies and depreciation totaled $40,617. Trilogy fiscal
resources during this period were employed principally to establish its
infrastructure and to develop, test and test market its existing product lines
and marketing materials.
Trilogy began to book sales in August of 1999 and for the three month
period ending September 30, 1999 had net revenues from sales of its products and
sales materials of $38,571. Cost of sales was $18,375 yielding a gross profit of
$20,196. Departmental and other expenses for the period were $458,570 and net
operating loss was $440,887. Payroll expense was $247,793 and consulting expense
$45,837, of which $214, 273 was paid to employees and consultants and the
balance was accrued, increasing Trilogy's liability for deferred compensation by
$78,836. Travel expense was $44,452; telephone expense was $29,853; legal
expense was $18,311 and other departmental and general and administrative
expenses for the period were $71,936.
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ACCOUNTING POLICIES AND PROCEDURES
Generally, Trilogy recognizes revenues from sales of products when its
products or sales materials are shipped. Generally, credit card, check, cash or
electronic transfer prepays all orders. Because its policy of prepayment is
generally applied, Trilogy's accounts receivable are minimal and are expected to
remain so.
INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY
From its founding in May 1998 through late July 1999, Trilogy generated no
revenues. Trilogy financed its operations from its start-up through launch
phases using a combination of capital contributions, debt, lease financing,
extended credit terms from vendors and deferral of compensation by its officers,
employees and consultants.
CONTRIBUTIONS BY FOUNDERS
From the founding of Trilogy in May of 1998 and its organization as a
Florida corporation in August 1998 through March 1999, Dennis Berardi, the chief
executive officer and co-founder of Trilogy and his wife Carol Berardi, the
president and co-founder of Trilogy, contributed $96,818 of their own funds to
paid in capital. In addition, Mr. and Mrs. Berardi received no salary from
Trilogy from inception through November 1998 and deferred their full salaries
for the period from December 1, 1998 through March 1999 until such time as
Trilogy becomes sufficiently profitable to repay the deferred compensation from
positive cash flow generated by operations.
PRIVATE PLACEMENT TO ACCREDITED INVESTORS
In May of 1999, Trilogy completed a participating preferred offering in
reliance on Section 4(6) of the Securities Act in the amount of $635,262, the
net proceeds of which were $625,261 (after deduction for legal expenses in
connection with the offering). A total of 18 accredited investors participated
in the placement subscribing for $10,000 to $120,000 each. In accordance with
the terms of the participating preferred offering approximately $40,000 of the
proceeds were used to reimburse officers and employees of Trilogy for expenses
incurred on behalf of Trilogy during the period from January 1, 1999 through
April 30, 1999. No reimbursement for salaries deferred during the period
December 1, 1998 through March 31, 1999 were made, as required in accordance
with the terms of the Offering. As a condition of the participating preferred
offering and in order to conserve operating capital, the officers and management
employees of Trilogy agreed to defer 25% of their salaries for the four months
following the closing of the offering. The deferred portion of their salaries
was also to be paid only upon Trilogy's becoming profitable and having the
ability to repay the deferred compensation from positive cash flow generated by
operations.
RECENT SALARY DEFERRALS
The opening of Trilogy for business was delayed beyond the date that
management originally anticipated. As a result, in August 1999, in a further
effort to conserve Trilogy's operating capital, its officers, management
employees and consultants who had been deferring 25% of their salaries for the
prior four months agreed to continue to defer at least 25% of their salaries
through December 1999. Trilogy's Chief financial officer, upon being hired in
late July 1999, also agreed to defer 25% of his salary through December 1999. In
September two additional management employees agreed to defer 25% of their
salaries through the end of December 1999.
Page 5
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LOANS
In May of 1999, Trilogy borrowed $7,118 from a member of its board of
directors for the purchase of computer equipment. $1,000 of the subject loan was
subsequently repaid. The balance of the loan in the principal amount of $6,118
plus interest at 20.65% per annum (the lenders' interest cost based on
applicable credit card rates) from June 15, 1999, remains unpaid.
EXPENDITURE ARRANGEMENTS
In addition to the operating losses generated by Trilogy during the six
months ending June 30, 1999, Trilogy made capital expenditures in the amount of
$115,492 for computer hardware and software, office equipment and furniture;
purchased $33,415 of products and sales materials for inventory; and, made
security deposits for rent and utilities totaling $18,648.
During the three-month period ending September 30, 1999, Trilogy increased
its inventory on hand by $109,924 bringing the total value of inventory on hand
to $143,339 and purchased $27,118 of additional computer hardware, $22,366 of
which was leased, reducing the capital expenditure required to $4,752; and, made
additional capital expenditures for computer software; office furniture and
equipment; telephone equipment and lease hold improvements to its new office
space in the total amount of $26,822. After funding accrued expenses of
approximately $40,000 and funding the operating expenses and capital
expenditures through June 30, 1999, Trilogy retained approximately $229,339 of
the net proceeds of its participating preferred offering as working capital.
The operating loses and capital expenditures for the three month period
ending September 30, 1999, as detailed above, were $361,419, resulting in a
requirement for additional working capital of $223,561. Trilogy was able to deal
with the shortfall for the period:
* Through deferring internal compensation in the amount of $78,836;
restructuring payment of accounts payable to vendors and reimbursement
of expenses to employees, resulting in a deferral of $138,815;
* By obtaining short term loans from officers, management employees and
families of officers in the total amount of $25,500 (based on Trilogy's
agreement to repay them from the proceeds of the investment anticipated
from the Registrant); and,
* Through an additional equity investment by two of the original
investors in Trilogy's participating preferred offering totaling
$33,000.
Subsequent to September 30, 1999, Trilogy continued to sustain substantial
loses from operations which required additional funding. In October of 1999 two
of the original investors in Trilogy's participating preferred offering made
additional equity investments which totaled $41,818 and in November of 1999 one
of the original investors made an additional $10,000 equity investment. In
October of 1999 a short-term loan in the amount of $7,000 was obtained from
members of officers families and in November of 1999 a short-term loan in the
amount of $12,000 was obtained from a member of Trilogy's board of directors.
During the period from October 1 through November 30, 1999, accounts payable
increased by approximately $27,931 to $166,746 and accrued compensation for
employees and consultants increased by approximately $33,942 to a total of
$383,525.
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CURRENT CAPITAL REQUIREMENTS
On December 3, 1999 Trilogy received $220,000 of the $250,000 funded by the
Registrant upon closing of the acquisition of Trilogy which is the subject of
this report. $30,000 was retained by Trilogy's legal counsel for legal expenses.
Of the $30,000 retained by counsel, approximately $8,000 was to satisfy
outstanding accounts payable for services unrelated to the acquisition and
approximately $22,000 was retained for legal services rendered in connection
with the acquisition.
Upon receipt of the $220,000 in net proceeds from the initial funding
provided by the Registrant, Trilogy disbursed funds to reduce accounts payable
by approximately $119,153 leaving an accounts payable balance of approximately
$47,593 (the majority of which is past due). Short-term loans in the principal
amount of $44,500 were repaid together with accrued interest in the amount of
$908. In addition to deferring 25% of their salaries as agreed, Carol and Dennis
Berardi deferred payment of $16,442 of their salaries until the closing of the
acquisition and receipt of the initial funding from the Registrant. This amount
was paid from the proceeds of the Registrant's initial funding. The funds
remaining from the Registrant's initial funding of Trilogy combined with the
cash flow expected to be generated by Trilogy's operations will not be
sufficient to meet anticipated operating expenses through December 31, 1999 and
reduce the current accounts payable balance to an acceptable level.
Subject to a number of conditions involving Trilogy's compliance with its
obligations under the acquisition agreement (including providing required
audited financial statements for filing with the Commission in a timely manner
and the accuracy of representations and warranties), the Registrant indicated
that it intended to provide Trilogy with funding in addition to the initial
$250,000 provided, within 180 days after the acquisition of Trilogy, which took
place on December 1, 1999. The funding was anticipated in two equal
installments, the first of which was to be provided within 90 days after the
acquisition. However, subsequent to the closing Trilogy's management provided
the Registrant with projections of income, expense and cash flow indicating that
it would require accelerated funding of $50,000 during December of 1999, $75,000
during January of 2000 and $75,000 during February of 2000 from the first
$325,000 installment and Trilogy's management is endeavoring to persuade the
Registrant to provide such funding in a manner allowing Trilogy to meet its
revised, anticipated operating expense schedule. While no assurances can be
provided that the funding requested by Trilogy will be available, the Registrant
believes that funding can be arranged at level's deemed adequate for Trilogy by
the Registrant, provided that Trilogy's business operations and prospects
reflect the projections provided by Trilogy's management, as reflected by the
acquisition agreement and its schedules and exhibits, all of which are filed as
exhibits to this report. The failure of the Registrant to provide funding in a
manner sufficient to meet Trilogy's cash flow requirements could substantially
inhibit Trilogy's ability to expand its network of independent field
representatives, introduce new products or continue to operate its business as
planned.
Subsequent to the original filing of Form 8-K, the firm of Daskal, Bolton,
Manela, Devlin & co., Certified Public Accountants, conducted an audit of
Trilogy's financial statements for the period from inception through December
31, 1998. Adjustments were made to the previously submitted financial statements
to bring them in full compliance with Generally Accepted Accounting Principals.
At the same time they conducted a review of Trilogy's financial statements for
the six months ending June 30, 1999 and the three months ending September 30,
1999. Adjustments made as a result of their audit and reviews have been
incorpoated in the pro forma include as part of this amendment.
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Item 5. Other Events.
These pro-forma statements are being filed to replace those originally
filed in a current report on Form 8-K filed with the Commission on February 8,
2000.
As previously disclosed in the Registrant's Form 8-K filed on December 16,
1999, for all operating, financial, tax and accounting purposes, Trilogy
International, Inc. ("Trilogy"), a Florida-corporation, an Internet based
company currently selling wholesome, non-toxic and proven effective pet care
products and human nutritional products, was merged into Trilogy Acquisition
Corporation, a wholly owned subsidiary of the Registrant in a privately
negotiated, arms-length transaction in consideration for 1,817,273 shares of the
Registrant's common stock.
The pro-forma financial inforamtion required to be filed in accordance with
Item 7 of Form 8-K are filed herewith.
Item 7. Financial Statements and Exhibits.
(b)Pro forma financial information.
AmeriNet Group.com, Inc. Pro Forma Combined Balance Sheets at December 31, 1998;
Pro Forma Combined Statements of Operations for the six months ended June 30,
1999 and three months ended September 30, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AmeriNet Group.com, Inc
Dated: March 1, 2000
/s/ Michael H. Jordan
---------------------------------
Michael Harris Jordan
President
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AmeriNet Group.com, Inc.
(b) Pro financial information.
On November 12, 1999, AmeriNet Group.com, Inc., through its wholly owned
subsidiary, American Internet Technical Center, Inc., merged with WRIwebs.com,
Inc. ("WRI"). As consideration the registrant issued 531,000 shares of its
common stock to the shareholders of WRI and will issue 53,100 shares of common
stock to Yankee. In addition, the agreement provides that the current majority
stockholder of WRI retains the right, for a period of two years starting on the
182nd day following completion of the Merger, to exchange all of his Amerinet
securities issued pursuant to the agreement, including dividends or
distributions based on the ownership thereof, for between seventy and eighty
percent of the Surviving Corporation's Common Stock. The Pro Forma Combined
Balance Sheets and Statements of Operations give effect to this merger. The
Company accounts for the investment in WRIwebs.com, Inc. under the equity
method. The company recognizes 20 percent (20%) of WRI's net losses.
On December 1, 1999, AmeriNet Group.com, Inc., through its wholly owned
subsidiary, Trilogy Acquisition Corporation, acquired all of the outstanding
common stock of Trilogy International, Inc. ("Trilogy"). As consideration the
Registrant issued 1,817,273 shares of its common stock to the shareholders of
Trilogy and will issue 181,727 shares of common stock to Yankee. Under the terms
of the acquisition agreement, the Registrant will invest up to $900,000 in
Trilogy within 180 days after the completion of the merger and the filing of the
required reports with the United States Securities and Exchange Commission.
The following Pro Forma Combined Statement of Operations was prepared based upon
the statement of operations for the Registrant for the six months ended December
31, 1999, which includes the one month ended December 31, 1999 for WRI and
Trilogy. The Pro Forma Statement of Operations includes twenty percent (20%) of
WRI's losses for the five months ended November 30, 1999. The Pro Forma
Statement of Operations also includes Trilogy's statement of operations for the
five months ended November 30, 1999. The pro forma statements give effect to the
transactions under the purchase method of accounting and the assumptions and
adjustments in the accompanying notes to pro forma combined financial
statements. The Pro Forma Combined Statement of Operations for the six months
ended December 31, 1999, gives effect to the acquisition of WRI and Trilogy as
if they had occurred as of July 1, 1999.
The pro forma adjustments are based upon available information and certain
assumptions that management believes are reasonable. The pro forma combined
financial statements do not purport to represent what the combined companies'
financial position or results of operations would actually have been had the
acquisition occurred on such date or as of the beginning of the period
indicated, or to project the combined companies' financial position or results
of operations for any future period.
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AmeriNet Group.com, Inc.
Pro Forma Combined Balance Sheets
December 31, 1998
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI Combined Trilogy Int'l Pro forma
December 31, 1998 December 31, 1998 Total December 31, 1998 Adjustments Combined
Current assets:
Cash $ 13,182 $ - $ 13,182 $ - $ 13,182
Other assets:
Investment in WRIwebs.com, Inc. 748,104 (18,187) 729,917 - (a) 3,623,187 4,353,104
--------------------------------------------------------------------------------------------
Total assets $ 761,286 $ (18,187) $ 743,099 $ - $ 3,623,187 $ 4,366,286
============================================================================================
Current liabilities:
Accounts payable $ 4,661 $ - $ 4,661 $ - $ 4,661
Accrued expenses 147,000 - 147,000 63,406 210,406
--------------------------------------------------------------------------------------------
Total current liabilities 151,661 - 151,661 63,406 - 215,067
Equity subject to potential redemption 748,104 - 748,104 - - 748,104
--------------------------------------------------------------------------------------------
Stockholders' equity (deficit):
Common stock 59,911 - 59,911 3,240 14,933 78,084
Outstanding stock options - - - 17,270 - 17,270
Additional paid in capital 2,930,395 - 2,930,395 86,466 3,437,872 6,454,733
Accumulated deficit (3,128,785) (18,187) (3,146,972) (170,382) 170,382 (3,146,972)
--------------------------------------------------------------------------------------------
Total stockholders' equity (deficit) (138,479) (18,187) (156,666) (63,406) 3,623,187 3,403,115
--------------------------------------------------------------------------------------------
Total liabilities and stockholders' equit$ 761,286t) $ (18,187) $ 743,099 $ - $ 3,623,187 $ 4,366,286
============================================================================================
</TABLE>
1. The Pro Forma Balance Sheet at December 31, 1998, is based upon the balance
sheets of the Registrant and Trilogy International, Inc., as of December
31, 1998.
(a) The purchase price for the acquisition of all the common stock of Trilogy
International, Inc., was 1,999,000 shares at $1.8125 per share. Goodwill of
$3,623,187 would have been recorded if the acquisition had taken place on
December 31, 1998.
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AmeriNet Group.com, Inc.
Pro Forma Combined Statement of Income
For the twelve months ended December 31, 1998
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI Trilogy Int'l
Twelve months ended Twelve months ended Combined Five months ended Pro forma
December 31, 1998 December 31, 1998 Total December 31, 1998 Adjustments Combined
Revenues earned $ - $ - $ - $ - $ - $ -
Cost of revenues earned - - - - - -
--------------------------------------------------------------------------------------------
Gross profit - - - - - -
Operating expense:
Selling, general and admn expenses - - - 170,382 (b) 1,207,729 1,378,111
--------------------------------------------------------------------------------------------
Total operating expense - - - 170,382 1,207,729 1,378,111
Loss from operations - - - (170,382) (1,207,729) (1,378,111)
Other expense:
Equity in losses of subsidiary - (18,187) (18,187) - (18,187)
--------------------------------------------------------------------------------------------
Provision for income taxes - - - - -
--------------------------------------------------------------------------------------------
Loss from discontinued operations (562,415) - (562,415) - (562,415)
--------------------------------------------------------------------------------------------
Net loss $ (562,415) $ (18,187) $ (580,602) $ (170,382) $ (1,207,729) $ (1,958,713)
============================================================================================
Basic net loss per share $ (0.13) $ (0.12) $ (0.29)
================ ============= ============
Wieghted average shares
outstanding 4,174,778 4,758,778 6,757,778
================ ============= ============
Fully diluted net loss per share $ (0.13) $ (0.12) $ (0.29)
================ ============= ============
Fully diluted average shares
outstanding 4,174,778 4,758,778 6,757,778
================ ============= ============
</TABLE>
1. The Pro Forma Statement of Operations for the year ended December 31, 1998
is based upon the twelve months ended December 31, 1998 for the Registrant
and Trilogy International, Inc., and gives effect to the acquisition as if
it had occured on January 1, 1998.
(b) Amount represents the amortization of goodwill of $ 3,623,187 over 3 years
using the straight line method.
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AmeriNet Group.com, Inc.
Pro Forma Combined Balance Sheets
June 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI Combined Trilogy Int'l Pro forma
June 30, 1999 June 30, 1999 Total June 30, 1999 Adjustments Combined
Current assets:
Cash $ 79,021 $ - $ 79,021 $ 229,339 $ 308,360
Accounts receivable, net 76,662 - 76,662 - 76,662
Inventory - - - 33,415 33,415
--------------------------------------------------------------------------------------------
Total current assets 155,683 - 155,683 262,754 - 418,437
Property and equipment, net 33,656 - 33,656 109,993 - 143,649
--------------------------------------------------------------------------------------------
Other assets:
Goodwill, net 1,470,559 - 1,470,559 - (c) 3,539,753 5,010,312
Investment in WRIwebs.com, Inc. 748,104 7,532 755,636 755,636
Deposits 14,492 - 14,492 18,648 33,140
--------------------------------------------------------------------------------------------
Total other assets 2,233,155 7,532 2,240,687 18,648 3,539,753 5,799,088
--------------------------------------------------------------------------------------------
Total assets $ 2,422,494 $ 7,532 $ 2,430,026 $ 391,395 $ 3,539,753 $ 6,361,174
============================================================================================
Current liabilities:
Accounts payable $ 10,648 $ - $ 10,648 $ - $ 10,648
Accrued expenses 16,901 - 16,901 307,962 324,863
Deferred revenue 80,558 - 80,558 - 80,558
Loan to stockholders 29,333 - 29,333 - 29,333
--------------------------------------------------------------------------------------------
Total current liabilities 137,440 - 137,440 307,962 - 445,402
Equity subject to potential redemptions 748,104 - 748,104 - - 748,104
--------------------------------------------------------------------------------------------
Stockholders' equity:
Preferred stock - - - 330,000 (330,000) -
Common stock 80,948 - 80,948 4,560 13,613 99,121
Outstanding stock options - - 17,270 - 17,270
Additional paid in capital 4,841,005 - 4,841,005 392,758 3,194,985 8,428,748
Accumulated deficit (3,385,003) 7,532 (3,377,471) - - (3,377,471)
Accumulated deficit from inception of - - - -
development stage - - - (661,155) 661,155 -
--------------------------------------------------------------------------------------------
Total stockholders' equity 1,536,950 7,532 1,544,482 83,433 3,539,753 5,167,668
--------------------------------------------------------------------------------------------
Total liabilities and stockholders' equ$t2,422,494 $ 7,532 $ 2,430,026 $ 391,395 $ 3,539,753 $ 6,361,174
============================================================================================
</TABLE>
1. The Pro Forma Balance Sheet at June 30, 1999, is based upon the balance
sheets of the Registrant and Trilogy International, Inc., as of June 30,
1999.
(c) The purchase price for the acquisition of all the common stock of Trilogy
International, Inc., was 1,999,000 shares at $1.8125 per share. Goodwill of
$ 3,539,753 would have been recorded if the acquisition had taken place on
June 30, 1999.
Page 12
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Statement of Income
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI Trilogy Int'l
Six months ended Six months ended Combined Six months ended Pro Forma
June 30, 1999 June 30, 1999 Total June 30, 1999 Adjustments Combined
Revenues earned $ - $ - $ - $ - $ -
Cost of revenues earned - - - - -
Gross profit - - - - - -
Operating expenses:
Selling, general and admn expense 256,218 - 256,218 4(d)773 603,865 1,350,856
Total operating expenses 256,218 - 256,218 490,773 603,865 1,350,856
Loss from operations (256,218) - (256,218) (490,773) (603,865) (1,350,856)
Other income (expense):
Equity in income of subsidiary - 7,532 7,532 - 7,532
Net income (loss) $ (256,218) $ 7,532 $ (248,686) $ (490,773) $ (603,865) $ (1,343,324)
============================================================================================
Basic net loss per share $ (0.04) $ (0.04) $ (0.15)
=============== ============ ============
Wieghted average shares
outstanding 6,091,566 6,675,566 8,674,566
=============== ============ ============
Fully diluted net loss per share $ (0.04) $ (0.04) $ (0.15)
=============== ============ ============
Fully diluted average shares
outstanding 6,091,566 6,675,566 8,674,566
=============== ============ ============
</TABLE>
1. The Pro Forma Statement of Operations for the six months ended June 30,
1999 is based upon the six months ended June 30, 1999 for the Registrant
and Trilogy International, Inc. and gives effect to the acquisition as if
it had occured on January 1, 1999.
(d) Amount represents the amortization of the goodwill of $ 3,623,187 over 3
years using the straight line method.
Page 13
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Balance Sheets
September 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI Combined Trilogy Int'l Pro forma
Sept. 30, 1999 Sept. 30, 1999 Total Sept. 30, 1999 Adjustments Combined
Current assets:
Cash $ 32,718 $ - $ 32,718 $ 5,778 $ 38,496
Accounts receivable, net 49,093 - 49,093 2,132 51,225
Inventory - - - 143,339 143,339
--------------------------------------------------------------------------------------------
Total current assets 81,811 - 81,811 151,249 - 233,060
Property and equipment, net 53,326 - 53,326 138,420 - 191,746
--------------------------------------------------------------------------------------------
Other assets:
Goodwill, net 639,589 - 639,589 - (e) 3,852,272 4,491,861
Loan costs, net - - - 5,000 5,000
Investment in WRIwebs.com, Inc. 748,104 - 748,104 - 748,104
Deposits 14,492 (18,153) (3,661) 15,675 12,014
--------------------------------------------------------------------------------------------
Total other assets 1,402,185 (18,153) 1,384,032 20,675 3,852,272 5,256,979
--------------------------------------------------------------------------------------------
Total assets $ 1,537,322 $ (18,153) $ 1,519,169 $ 310,344 $ 3,852,272 $ 5,681,785
============================================================================================
Current liabilities:
Accounts payable $ 65,370 $ - $ 65,370 $ 138,815 $ 204,185
Accrued expenses 15,010 - 15,010 365,756 380,766
Deferred revenue 39,970 - 39,970 - 39,970
Loan to stockholders 29,333 - 29,333 34,858 64,191
Loan payable - others 75,000 - 75,000 - 75,000
--------------------------------------------------------------------------------------------
Total current liabilities 224,683 - 224,683 539,429 - 764,112
Equity subject to potential redemptions 748,104 - 748,104 - - 748,104
--------------------------------------------------------------------------------------------
Stockholders' equity (deficit):
Preferred stock - - - 346,500 (346,500) -
Common stock 81,924 - 81,924 4,655 13,518 100,097
Common stock to be retired (9,328) - (9,328) - (9,328)
Outstanding stock options - - - 17,270 17,270
Additional paid in capital 4,254,223 - 4,254,223 425,064 3,162,680 7,841,967
Accumulated deficit (3,762,284) (18,153) (3,780,437) - (3,780,437)
Accumulated deficit from inception of -
development stage - - - (1,022,574) 1,022,574 -
--------------------------------------------------------------------------------------------
Total stockholders' equity (deficit) 564,535 (18,153) 546,382 (229,085) 3,852,272 4,169,569
--------------------------------------------------------------------------------------------
Total liabilities and stockholders' equ$t1,537,322 $ (18,153) $ 1,519,169 $ 310,344 $ 3,852,272 $ 5,681,785
============================================================================================
</TABLE>
1. The Pro Forma Balance Sheet at Sept. 30, 1999, is based upon the balance
sheets of the Registrant and Trilogy International, Inc., as of Sept. 30,
1999.
(e) The purchase price for the acquisition of all the common stock of Trilogy
International, Inc., was 1,999,000 shares at $1.8125 per share. Goodwill of
$ 3,852,272 would have been recorded if the acquisition had taken place on
Sept. 30, 1999.
Page 14
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Statement of Income
For the three months ended Sept 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI Trilogy Int'l
Three months ended Three months ended Combined Three months ended Pro Forma
Sept. 30, 1999 Sept. 30, 1999 Total Sept. 30, 1999 Adjustments Combined
Revenues earned $ 168,169 $ - $ 168,169 $ 38,571 $ 168,169
Cost of revenues earned 69,109 - 69,109 18,375 69,109
-----------------------------------------------------------------------------------------------
Gross profit 99,060 - 99,060 20,196 - 99,060
Operating expenses:
Selling,general and administrative expense 476,341 - 476,341 381,615(f) 294,979 1,152,935
-----------------------------------------------------------------------------------------------
Total operating expenses 476,341 - 476,341 381,615 294,979 1,152,935
Loss from operations (377,281) - (377,281) (361,419) (294,979) (1,053,875)
Other income (expense):
Equity in losses of subsidiary - (18,153) (18,153) - (18,153)
----------------------------------------------------------------------------------------------
Net income (loss) $ (377,281) $ (18,153) $ (395,434) $ (361,419) $ (294,979) $(1,072,028)
============================================================================================
Basic net loss per share $ (0.05) $ (0.05) $ (0.10)
================ ================ ============
Wieghted average shares
outstanding 8,148,308 8,732,308 10,731,308
================ ================ ============
Fully diluted net loss per share $ (0.05) $ (0.05) $ (0.10)
================ ================ ============
Fully diluted average shares
outstanding 8,148,308 8,732,308 10,731,308
================ ================ ============
</TABLE>
1. The Pro Forma Statement of Operations for the three months ended Sept. 30,
1999 is based upon the three months ended Sept. 30, 1999 for the Registrant
and Trilogy International, Inc. and gives effect to the acquisition as if
it had occured on July 1, 1999.
(f) Amount represents the amortization of the goodwill of $ 3,539,753 over 3
years using the straight line method.
Page 15
