UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
September 30, 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
902 Clint Moore Road, Suite 136-C; Boca Raton, Florida 33487
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
As previously disclosed in the Registrant's Form 10-QSB for the period
ended September 30, 1999, on November 11, 1999, but effective as of September
30, 1999 for all operating, financial, tax and accounting purposes, Wriwebs.com,
Inc. ("WRI"), a Florida-based provider of Internet related services was merged
into American Internet Technical Centers, Inc. a wholly owned subsidiary of the
Registrant in a privately negotiated, arms-length transaction in consideration
for 531,000 shares of the Registrant's common stock and the right to receive an
additional 150,000 shares, based on future performance, distributed to the four
stockholders of WRI.
The financial statements of WRI and the pro forma financial information
required to be filed in accordance with Item 7 of Form 8-K are filed herewith.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
Audited Financial Statements of WRI for the years ended December 31, 1999
and Unaudited Financial Statements for the nine months ended September 30, 1999.
(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 twelve months ended
December 31, 1998 and three and six 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: _______________
---------------------------------
Michael Harris Jordan
President
Page 2
<PAGE>
Index to Financial Statements
The following financial statements, pro forma financial information and
exhibits are filed as part of this Form 8-K/A:
Independent Auditor's Report
Balance Sheet
Statement of Operations
Statement of Changes in Stockholders' Deficit
Statement of Cash Flows
Notes to Financial Statements
Pro forma Financial Statements
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. Under the terms of the agreement the
registrant will invest up to $300,000 in WRI within 120 days after the
completion of the merger and the filing of the required reports with the
Securities and Exchange Commission. In addition, the majority shareholder of WRI
will retain the right, for a period of two years starting 182 days following the
completion of the merger, to exchange all of his AmeriNet Group.com, Inc.,
securities for between seventy and eighty percent of American Internet Technical
Center, Inc., common stock.
The following Pro Forma Combined Balance Sheet of the Registrant has been
prepared by management of the Registrant based upon the balance sheets of the
Registrant as of December 31, 1998. The Pro Forma Combined Statement of
Operations was prepared based upon the statement of operations for the
Registrant for the twelve months ended December 31, 1998, the six months ended
June 30,1999, and the three months ended September 30, 1999. The pro forma
statement of operations also includes WRI's statement of operations for the
twelve months ended December 31, 1998, the six months ended June 30, 1999, and
the three months ended September 30, 1999. The pro forma statements give effect
to the transaction 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 balance sheet gives effect to the acquisition
as if it had occurred as of December 31, 1998. The pro forma combined statement
of operations for the year ended December 31, 1998, gives effect to the
acquisition as if it had occurred as of January 1, 1997. The pro forma combined
statement of operations for the six months ended June 30, 1999, gives effect to
the acquisition as if it had occurred as of January 1, 1998. The pro forma
combined statement of operations for the three months ended September 30, 1999,
gives effect to the acquisition as if 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.
Page 3
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Balance Sheets
December 31, 1998
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
AmeriNet WRI Pro Forma Pro Forma
December 31, 1998 December 31, 1998 Total Adjustments Combined
Current assets:
Cash $ 13,182 $ 4,002 $ 17,184 $ - $ 17,184
Accounts receivable - 23,633 23,633 - 23,633
Prepaid and other assets - 8,406 8,406 - 8,406
---------------- ------------------ --------------- ----------- ----------
Total current assets 13,182 36,041 49,223 - 49,223
Property and equipment, net - 30,162 30,162 - 30,162
Other assets:
Goodwill, net - - - (a) 763,646 763,646
Total other assets - - - 763,646 763,646
---------------- ----------------- ---------------- ----------- ----------
Total assets $ 13,182 $ 66,203 $ 79,385 $ 763,646 $ 843,031
================ ================= ================ ============ ===========
Current liabilities:
Accounts payable $ 4,661 $ 42,602 $ 47,263 - $ 47,263
Accrued expenses 147,000 19,187 166,187 - 166,187
Deferred revenue - 74,823 74,823 - 74,823
Cash overdraft - 13,026 13,026 - 13,026
----------------- ---------------- ---------------- ------------ ----------
Total current liabilities 151,661 149,638 301,299 - 301,299
Stockholders' equity (deficit):
Common stock 59,911 7,500 67,411 (a) (2,190) 65,221
Additional paid in capital 2,930,395 - 2,930,395 (a) 674,901 3,605,296
Retained earnings(deficit) (3,128,785) (90,935) (3,219,720)(a) 90,935 (3,128,785)
------------------ ---------------- ------------------ ------------ ----------
Total stockholders' equity (deficit) (138,479) (83,435) (221,914) 763,646 541,732
------------------ ---------------- ------------------ ------------ ----------
Total liabilities and
stockholders' equity $ 13,182 $ 66,203 $ 79,385 $ 763,646 $ 843,031
- -------- ================== ================= ============== ============ ============
</TABLE>
1. The Pro Forma Balance Sheet at December 31, 1998, is based on the balance
sheets of the Registrant and Wriwebs.com, Inc. as of December 31, 1998.
(a) The purchase price for the acquisition of all the common stock of
Wriwebs.com, Inc. was 531,000 shares at $1.281 per share. Goodwill of
$763,646 would have been recorded if the acquisition had taken place on
December 31, 1998.
Page 4
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Statement of Operations
For the twelve months ended December 31, 1998
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
AmeriNet WRI
Twelve months ended Twelve months ended Pro Forma Pro Forma
December 31, 1998 December 31, 1998 Total Adjustments Combined
Revenues earned $ - $ 1,037,212 $ 1,037,212 $ - $ 1,037,212
Cost of revenues earned - 339,713 339,713 - 339,713
------------------ ---------------------- ---------------- ------------ ----------
Gross profit - 697,499 6797,499 697,499
Operating Expense:
Selling expense - 376,691 376,691 - 376,691
General and Administrative - 411,743 411,743 (b) 50,910 462,653
------------------- --------------------- ----------------- -------------- ------------
Total operating expense - 788,434 788,434 50,910 839,344
Loss from operations - (90,935) (90,935) (50,910) (141,845)
Other expense:
Loss from discontinued operations (562,415) - (562,415) - (562,415)
------------------- ----------------------- --------------- ------------ ------------
Total other expense (562,415) - (562,415) - (562,415)
------------------- ---------------------- --------------- ------------ ------------
Net loss $ (562,415) $ (90,935) $ (653,350) $ (50,910) $ (704,260)
================== ====================== =============== ============= ===========
Basic net loss per share $ (0.13) $ (0.15)
Weighed average ================== ===========
shares outstanding 4,174,778 4,705,778
================= ===========
Fully diluted net loss per share $ (0.13) $ (0.15)
================= ===========
Fully diluted average
shares outstanding 4,174,778 4,705,778
================= ===========
</TABLE>
- ---------
1. The Pro Forma Statement of Operations for the year ended December 31, 1998
is based on the twelve months ended December 31, 1998 for the Registrant
and Wriwebs.com, Inc. and gives effect to the acquisition as if it had
occurred on January 1, 1998.
(b) Amount represents the amortization of goodwill of $ 763,646 over 15 years
using the straight line method.
Page 5
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Statement of Operations
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
AmeriNet WRI
Six months ended Six months ended Pro Forma Pro Forma
June 30, 1999 June 30, 1999 Total Adjustments Combined
Revenues earned $ - $ 692,390 $ 692,390 $ - $ 692,390
Cost of revenues earned - 235,339 235,339 - 235,339
--------------- -------------- ----------------- ------------- ----------------
Gross profit - 457,051 457,051 - 457,051
Operating expenses:
Selling expenses - 271,306 271,306 - 271,306
General and administrative expense 256,218 148,087 404,305(c) 25,455 429,760
---------------- ------------------ ------------- ------------- -----------
Total operating expenses 256,218 419,393 675,611 25,455 701,066
---------------- ------------------ ------------- ------------ ------------
Net income (loss) $ (256,218) $ 37,658 $ (218,560) $ (25,455) $ (244,015)
============= ================== ================ =========== ============
Basic net loss per share $ (0.04) $ (0.04)
============== ===========
Weighed average
shares outstanding 6,091,566 6,622,566
============== ===========
Fully diluted net loss per share $ (0.04) $ (0.04)
============== ===========
Fully diluted average
shares outstanding 6,091,566 6,622,566
============== ===========
</TABLE>
- --------
1. The Pro Forma Statement of Operations for the six months ended June 30,
1999 is based on the six months ended June 30, 1999 for the Registrant
and Wriwebs.com, Inc. and gives effect to the acquisition as if it had
occurred on January 1, 1999.
(c) Amount represents the amortization of the goodwill of $ 763,646 over15
years using the straight line method.
Page 6
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Statement of Operations
For the three months ended September 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
AmeriNet WRI
Three months ended Three months ended Pro Forma Pro Forma
September 30, 1999 September 30, 1999 Total Adjustments Combined
Revenues earned $ 168,169 $ 252,083 $ 420,252 $ - $ 420,252
Cost of revenues earned 69,109 161,348 230,457 - 230,457
---------------- ------------------ --------------- ------------- -------------
Gross profit 99,060 90,735 189,795 - 189,795
Operating expenses:
Selling expenses - 130,953 130,953 - 130,953
General and administrative expense 476,341 50,547 526,888 (d) 12,100 538,988
--------------- ----------------- ---------------- -------------- -------------
Total operating expenses 476,341 181,500 657,841 12,100 669,941
--------------- ----------------- ---------------- -------------- -------------
Net loss $ (377,281) $ (90,765) $ (468,046) $ (12,100) $ (480,146)
============== =============== ========== =========== ============
Basic net loss per share $ (0.05) $ - $ - $ - $ (0.06)
============== ============
Weighed average
shares outstanding 8,148,308 8,679,308
============== ============
Fully diluted net loss per share $ (0.05) $ (0.06)
============== ============
Fully diluted average
shares outstanding 8,148,308 8,679,308
============== ============
</TABLE>
- -------
1. The Pro Forma Statement of Operations for the three months ended September
30, 1999 is based on the three months ended September 30, 1999 for the
Registrant and Wriwebs.com, Inc. and gives effect to the acquisition as if
it had occurred on July 1, 1999.
(d) Amount represents the amortization of the goodwill of $ 725,989 over 15
years using the straight line method.
Page 7
<PAGE>
WRIWEBS.COM, INC.
FINANCIAL STATEMENTS
FROM JANUARY 20, 1998 (INCEPTION)
THROUGH DECEMBER 31, 1998
TABLE OF CONTENTS
Independent Auditor's Report ............................................9
Financial Statements:
Balance Sheet ........................................................10
Statement of Operations ..............................................11
Statement of Changes in Stockholders' Deficit.........................12
Statement of Cash Flows ..............................................13
Notes to Financial Statements ...........................................14-16
Page 8
<PAGE>
DASZKAL, BOLTON, MANELA, DEVLIN & CO.
CERTIFIED PUBLIC ACCOUNTANTS
A PARTNERSHIP OF PROFESSIONAL ASSOCIATIONS
2401 N.W. BOCA RATON BOULEVARD, SUITE 100 BOCA RATON, FLORIDA 33431
TELEPHONE (561) 367-1040 FAX (561) 750-3236
JEFFREY A. BOLTON, CPA, P.A. MEMBER OF THE AMERICAN INSTITUTE
MICHAEL I. DASZKAL, CPA, P.A. OF CERTIFIED PUBLIC ACCOUNTANTS
ROBERT A. MANELA, CPA, P.A.
TIMOTHY R. DEVLIN. CPA, P.A.
MICHAEL S. KRIDEL, CPA, P.A.
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
WRIwebs.com, Inc.
We have audited the accompanying balance sheet of WRIwebs.com, Inc. as of
December 31, 1998, and the related statement of operations, changes in
stockholders' deficit and cash flows from January 20, 1998 (inception) to
December 31, 1998. These financial statements are the responsibility of the
management of WRIwebs.com, Inc. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WRIwebs.com, Inc. as of
December 31, 1998, and the results of the operations and its cash flows from
January 20, 1998 (inception) to December 31, 1998, in conformity with generally
accepted accounting principles.
/s/ Daszkal Bolton Manela Devlin & Co.
Boca Raton, Florida
January 18, 2000
Page 9
<PAGE>
WRIwebs.com,Inc.
Balance sheet
December 31, 1998
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash $ 4,002
Accounts receivable- 23,633
net of allowance for doubtful accounts $6,398
Loan receivable - stockholder 8,406
-------------
Total current assets 36,041
-------------
Property and equipment, net $ 30,162
-------------
Total assets $ 66,203
==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 42,602
Accrued expenses 19,187
Deferred rvenue 74,823
Cash overdraft 13,026
-------------
Total current liabilities 149,638
=============
Stockholders' deficit:
Common stock, $1.00 par value, 7,500 shares authorized
issued and outstanding 7,500
Accumulated deficit (90,935)
-------------
Total stcokholders' deficit (83,435)
-------------
Total liabilities and stockholders' deficit $ 66,203
=============
</TABLE>
See accompanying notes to financial statements.
Page 10
<PAGE>
WRIwebs.com, Inc.
Statement of Operations
From January 20, 1998 (INCEPTION)
Through December 31, 1998
<TABLE>
<S> <C>
Revenues earned $ 1,037,212
Cost of revenues earned 339,713
---------------
Gross profit 697,499
Operating Expenses:
Selling expenses 376,691
General and administrative expenses 411,743
--------------
Total operating expenses 788,434
--------------
Net Loss $ (90,935)
==============
</TABLE>
See accompanying notes to financial statements.
Page 11
<PAGE>
WRIwebs.com, Inc.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FROM JANUARY 20, 1998 (INCEPTION) THROUGH DECEMBER 31, 1998
<TABLE>
<S> <C> <C> <C> <C>
Number
of Common Accumulated
Shares Stock Deficit Total
Balance, January 1, 1998 - $ - $ - $ -
Issuance of common stock 7,500 7,500 7,500
Net loss - December 31, 1998 - - (90,935) (90,935)
----------- --------- ---------- ------------
Balance, December 31, 1998 7,500 $ 7,500 $ (90,935) $ (83,435)
=========== ========= ========== ============
</TABLE>
See accompanying notes to financial statements.
Page 12
<PAGE>
WRIwebs.com, Inc.
Statement of Cash Flows
From January 20, 1998 (INCEPTION)
Through December 31, 1998
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $ (90,935)
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 3,836
Bad debts expense 6,398
(Increase) decrease in:
Accounts receivables (30,031)
Loan receivable - stockholder (8,406)
Increase (decrease) in:
Accounts payable 42,602
Accrued expenses 19,187
Deferred revenue 74,823
-----------
Net cash provided by operating activities 17,474
-----------
Cash flows used by investing activities:
Purchase of property and equipment (33,998)
----------
Cash flows from financing activities:
Issuance of common stock 7,500
Cash overdraft 13,026
----------
Net cash provided by financing activities 20,526
----------
Net increase in cash 4,002
Cash at beginning of year -
-----------
Cash at end of year $ 4,002
=============
</TABLE>
See accompanying notes to financial statements.
Page 13
<PAGE>
WRIWEBS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Web Results Institute, Inc. (the "Company") was incorporated under the laws of
the State of Florida on August 31, 1998. Prior to its formation as a Subchapter
S Corporation, the Company existed as a limited liability company. The Company
changed its name to WRIwebs.com, Inc. on April 19, 1999.
The Company was established to design, produce and host websites. Hosting
services, including search engine registrations, are typically six-month to
one-year contracts.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all cash and
other demand deposits to be cash and cash equivalents. As of December 31, 1998,
the Company had no cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost and are being depreciated using the
straight-line method over the estimated useful lives of five to seven years.
REVENUE RECOGNITION
Revenue from contract sales is recognized when all material services relating to
the sale have been substantially performed.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
ADVERTISING
Advertising costs are expensed when incurred. The advertising cost incurred for
the period ended December 31, 1998 was $7,959.
NOTE 3 - CORPORATION FORMATION
On August 8, 1998, the Company was incorporated, and elected to be treated as an
S Corporation. Prior to its formation as a corporation, the Company existed as a
limited liability company that began on January 20, 1998. This is a change in
legal organization, but not in the entity. This type of transfer is not covered
by APB Opinion No. 16 "Business Combinations." The assets and liabilities so
transferred were accounted for at historical cost in a manner similar to that in
pooling of interests accounting.
Page 14
<PAGE>
WRIWEBS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 4 - ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are recorded net of an allowance for doubtful accounts of
$6,398 at December 31, 1998.
NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash, accounts receivable, accounts payable and loans to
stockholders approximates fair value because of their short maturities.
NOTE 6 - RELATED PARTY TRANSACTIONS
At December 31, 1998, the Company had an outstanding receivable from the
stockholder in the amount of $8,406. The transactions involving the
stockholder/officer are summarized below:
Balance at January 1, 1998 $ -
Advances to stockholders 8,406
-----------
Balance at December 31, 1998 $ 8,406
===========
NOTE 7 - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at December 31, 1998:
Computer and other equipment $ 31,762
Software $ 406
Furniture and fixtures 1,830
--------------
Total property and equipment 33,998
Less: accumulated depreciation (3,836)
-------------
Property and equipment, net $ 30,162
=============
Depreciation expense for the period ended December 31, 1998, was $3,836.
NOTE 8 - OPERATING LEASES
The Company leases its facilities in Florida under a long-term operating lease
agreement.
Future minimum lease payments are as follows:
Year ending Operating
December 31, Lease
1999 $ 26,802
2000 35,736
2001 8,934
--------------
Total minimum lease payments $ 71,472
==============
Page 15
<PAGE>
WRIWEBS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 8 - OPERATING LEASES, CONTINUED
Rental expense for the period ended December 31, 1998 was $29,571.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
LITIGATION
The Company believes a claim may arise from a claim for unpaid telephone charges
in the amount of $19,115. In the opinion of management, this claim will be
settled for an estimated $12,000. A payable has been recorded at December 31,
1998 to reflect this claim.
Additionally, the Company believes a claim may arise from an agreement with a
website sales selling agent. The selling agent paid $10,000 towards the building
of a working relationship between the two companies, but the agent was unable to
sell the websites. Management has recorded a payable for half of the potential
claim, and a payable of $5,000 has been recorded at December 31, 1998.
NOTE 10 - CONCENTRATION OF CREDIT RISK
Financial instruments, which potentially expose the Company to concentrations of
credit risk, as defined by Statement of Financial Accounting Standards No. 105,
consist primarily of trade receivables. The Company officers have attempted to
minimize this risk by monitoring the companies to whom they provided credit.
NOTE 11 - INCOME TAXES
The Company has elected to be treated as an S Corporation for Federal and State
income tax purposes. Under this election, all taxable income, losses and credits
pass through to the individual stockholders and are reflected on their
individual income tax returns. Consequently, no provision for income taxes has
been provided by the corporation. The financial statements reflect earnings on
the percentage of completion method of accounting whereas the completed contract
method is used for income tax purposes.
NOTE 12 - SUBSEQUENT EVENTS
On November 12, 1999, the Company merged with American Internet Technical
Center, Inc. (AITC), a wholly-owned subsidiary of AmeriNet Group.com, Inc.
(AmeriNet). As consideration, AmeriNet issued 531,000 shares of common stock to
the stockholders of the Company. Under the terms of the acquisition agreement,
AmeriNet will invest $300,000 in the Company within 120 days after the
completion of the merger and filing of the required reports with the United
States Securities and Exchange Commission. Under the terms of the Merger, the
current majority stockholder of WRI will retain the right, for a period of two
years, starting on the 182nd day following the completion of the merger, to
exchange all of his AmeriNet securities issued pursuant to the agreement for
between seventy and eighty percent of the surviving Company's common stock.
The acquisition will be recorded using the purchase method of accounting. The
results of operations since the date of acquisition, November 12, 1999, will be
included in the consolidated statements of operations of AmeriNet Group.com,
Inc. Goodwill will be recorded and amortized over its useful life using the
straight-line method.
On the date of acquisition, the Company's status changed to a regular
corporation from an S corporation.
Page 16
