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
November 12, 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.
These financial statements and pro-forma statements are being filed to
replace those originally filed in a current report on Form 8-K filed with the
Commission on January 26, 2000.
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, 1998
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 months ended September 30, 1999 and six months ended
June 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 3, 2000
/s/ Michael H. Jordan
---------------------------------
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:
(a) Financial Statements
Independent Auditor's Report
Balance Sheet
Statement of Operations
Statement of Changes in Stockholders' Deficit
Statement of Cash Flows
Notes to Financial Statements
(b) Pro financial information.
Pro forma Financial Statements
AmeriNet Group.com, Inc.
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 Companies. Under the terms of the agreement the registrant will
invest $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 connection with the acquisition, 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 Surviving Corporation
would repay all funds advanced to it or it's affiliates or designees directly or
indirectly by or through Amerinet together with:
(a) Interest at the rate of six percent per annum from the day of funding,
concurrently with the exercise of the Caputa option or
(b) Over a period of twenty four months, in equal installments, starting on the
date of the exercise of the option, together with interest at the rate of
eight percent per annum, payable first, and after all the interest has been
paid of principle. Such repayment obligation is secured through a pledge of
assets of the Surviving Corporation either having a value equal to 150% of
the aggregate indebtedness or comprised of all of the Surviving
Corporation's Capital Stock, in either case using forms of notes and
security agreements mutually agreed to by Amerinet and the Surviving
Corporation; and, the payment is guaranteed by Mr. Caputa.
The Company accounts for the investment in WRIwebs.com, Inc. under the equity
method. The company recognizes 20 percent of WRI's net losses.
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 twenty percent (20%) in WRI's income or
losses 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 equity 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, 1998. 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, 1999. 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>
Historical
AmeriNet WRI Pro Forma
December 31, 1998 December 31, 1998 Total Adjustments Combined
Current assets:
Cash $ 13,182 $ - $ 13,182 $ 13,182
--------------------------------------------------------------------------------------------
Other assets:
Investment in WRIwebs.com, Inc. - - - (a) 748,104 748,104
--------------------------------------------------------------------------------------------
Total assets $ 13,182 $ - $ 13,182 $ 748,104 $ 761,286
============================================================================================
Current liabilities:
Accounts payable $ 4,661 $ - $ 4,661 $ 4,661
Accrued expenses 147,000 - 147,000 147,000
Deferred revenue - - - -
Cash overdraft - - - -
--------------------------------------------------------------------------------------------
Total current liabilities 151,661 - 151,661 151,661
Equity subject to potential redemptions - - - (a) 748,104 748,104
--------------------------------------------------------------------------------------------
Stockholders' deficit:
Preferred stock - - - -
Common stock 59,911 - 59,911 59,911
Additional paid in capital 2,930,395 - 2,930,395 2,930,395
Accumulated deficit (3,128,785) - (3,128,785) (3,128,785)
--------------------------------------------------------------------------------------------
Total stockholders' deficit (138,479) - (138,479) - (138,479)
--------------------------------------------------------------------------------------------
Total liabilities and stockholders' deficit $ 13,182 $ - $ 13,182 $ 748,104 $ 761,286
============================================================================================
</TABLE>
1. The Pro Forma Balance Sheet at December 31, 1998, is based upon 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 584,000 shares at $1.281 per share. The Registrant
accounts for the investment under the equity method.
Page 4
<PAGE>
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>
Historical
AmeriNet WRI
Twelve months ended Twelve months ended Pro Forma Pro Forma
December 31, 1998 December 31, 1998 Total Adjustments Combined
Revenues earned $ - $ - $ - $ -
Cost of revenues earned - - - -
--------------------------------------------------------------------------------------------
Gross profit - - - -
Selling, general and admn expense - - - -
--------------------------------------------------------------------------------------------
Total operating expense - - - - -
Loss from operations - - - - -
Other income (expense)
Equity in losses of subsidiary - - - (b) (18,187) (18,187)
--------------------------------------------------------------------------------------------
Provision for income taxes - - - - -
--------------------------------------------------------------------------------------------
Loss from discontinued operations (562,415) - (562,415) - (562,415)
--------------------------------------------------------------------------------------------
Net loss $ (562,415) $ - $(562,415) $ (18,187) $ (580,602)
============================================================================================
Basic net loss per share $ (0.13) $ (0.12)
================== ============
Wieghted average shares
outstanding 4,174,778 4,758,878
================== ============
Fully diluted net loss per share $ (0.13) $ (0.12)
================== ============
Fully diluted average shares
outstanding 4,174,778 4,758,878
================== ============
</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 WRIwebs.com, Inc. and gives effect to the acquisition as if it had
occured on January 1, 1998.
(b) The Registrant accounts for the investment under the equity method and
recognizes 20% of WRI's losses of $90,935.
Page 5
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Balance Sheets
June 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI Pro Forma
June 30, 1999 June 30, 1999 Total Adjustments Combined
Current assets:
Cash $ 79,021 $ - $ 79,021 $ 79,021
Accounts receivable, net 76,662 - 76,662 76,662
--------------------------------------------------------------------------------------------
Total current assets 155,683 - 155,683 155,683
Property and equipment, net 33,656 - 33,656 33,656
--------------------------------------------------------------------------------------------
Other assets:
Goodwill, net 1,470,559 - 1,470,559 1,470,559
Investment in WRIwebs.com, Inc. - - - (c) 748,104 748,104
Deposits 14,492 - 14,492 14,492
--------------------------------------------------------------------------------------------
Total other assets 1,485,051 - 1,485,051 748,104 2,233,155
--------------------------------------------------------------------------------------------
Total assets $ 1,674,390 $ - $ 1,674,390 $ 748,104 $ 2,422,494
============================================================================================
Current liabilities:
Accounts payable $ 10,648 $ - $ 10,648 $ 10,648
Accrued expenses 16,901 - 16,901 16,901
Deferred revenue 80,558 - 80,558 80,558
Loans to stockholders 29,333 - 29,333 29,333
--------------------------------------------------------------------------------------------
Total current liabilities 137,440 - 137,440 137,440
Equity subject to potential redemptions - - - (c) 748,104 748,104
--------------------------------------------------------------------------------------------
Stockholders' equity:
Preferred stock - - -
Common stock 80,948 - 80,948 80,948
Additional paid in capital 4,841,005 - 4,841,005 4,841,005
Accumulated deficit (3,385,003) - (3,385,003) (3,385,003)
--------------------------------------------------------------------------------------------
Total stockholders' equity 1,536,950 - 1,536,950 - 1,536,950
--------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $1,674,390 $ - $ 1,674,390 $ 748,104 $ 2,422,494
============================================================================================
</TABLE>
1. The Pro Forma Balance Sheet at June 30, 1999, is based upon the balance
sheets of the Registrant and WRIwebs.com, Inc. as of June 30, 1999.
(c) The purchase price for the acquisition of all the common stock of
WRIwebs.com, Inc. was 584,000 shares at $1.281 per share. The Registrant
accounts for the investment under the equity method.
Page 6
<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>
Historical
AmeriNet WRI
Six months ended Six months ended Pro Forma
June 30, 1999 June 30, 1999 Total Adjustments Combined
Revenues earned $ - $ - $ - $ -
Cost of revenues earned - - - -
--------------------------------------------------------------------------------------------
Gross profit - - - - -
Operating expenses:
Selling, general and admn expense 256,218 - 256,218 256,218
--------------------------------------------------------------------------------------------
Total operating expenses 256,218 - 256,218 - 256,218
Loss from operations (256,218) - (256,218) (256,218)
Other income (expense)
Equity in income of subsidiary - - - (d) 7,532 7,532
--------------------------------------------------------------------------------------------
Net loss $ (256,218) $ - $ (256,218) $ 7,532 $ (248,686)
============================================================================================
Basic net loss per share $ (0.04) $ (0.04)
================== ============
Wieghted average shares
outstanding 6,091,566 6,675,666
================== ============
Fully diluted net loss per share $ (0.04) $ (0.04)
================== ============
Fully diluted average shares
outstanding 6,091,566 6,675,666
================== ============
</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 WRIwebs.com, Inc. and gives effect to the acquisition as if it had
occured on January 1, 1999.
(d) The Registrant accounts for the investment under the equity method and
recognizes 20% of WRI's income of $37,658
Page 7
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Balance Sheets
September 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI ProForma
September 30, 1999September 30, 1999 Total Adjustments Combined
Current assets:
Cash $ 32,718 $ - $ 32,718 $ 32,718
Accounts receivable, net 49,093 - 49,093 49,093
--------------------------------------------------------------------------------------------
Total current assets 81,811 - 81,811 81,811
Property and equipment, net 53,326 - 53,326 53,326
--------------------------------------------------------------------------------------------
Other assets:
Goodwill, net 639,589 - 639,589 639,589
Investment in WRIwebs.com, Inc. - - - (e) 748,104 748,104
Deposits 14,492 - 14,492 14,492
--------------------------------------------------------------------------------------------
Total other assets 654,081 - 654,081 748,104 1,402,185
Total assets $ 789,218 $ - $ 789,218 $ 748,104 $ 1,537,322
============================================================================================
Current liabilities:
Accounts payable $ 65,370 $ - $ 65,370 $ 65,370
Accrued expenses 15,010 - 15,010 15,010
Deferred revenue 39,970 - 39,970 39,970
Loans to stockholders 29,333 - 29,333 29,333
Loans payable - other 75,000 - 75,000 75,000
--------------------------------------------------------------------------------------------
Total current liabilities 224,683 - 224,683 - 224,683
Equity subject to potential redemptions - - - (e) 748,104 748,104
--------------------------------------------------------------------------------------------
Stockholders' equity:
Preferred stock - - - -
Common stock 81,924 - 81,924 81,924
Common stock to be retired (9,328) (9,328) (9,328)
Additional paid in capital 4,254,223 - 4,254,223 4,254,223
Accumulated deficit (3,762,284) - (3,762,284) (3,762,284)
--------------------------------------------------------------------------------------------
Total stockholders' equity 564,535 - 564,535 - 564,535
Total liabilities and stockholders' equity $ 789,218 $ - $ 789,218 $ 748,104 $ 1,537,322
============================================================================================
</TABLE>
1. The Pro Forma Balance Sheet at September 30, 1999, is based upon the
balance sheets of the Registrant and WRIwebs.com, Inc. as of September 30,
1999.
(e) The purchase price for the acquisition of all the common stock of
WRIwebs.com, Inc. was 584,000 shares at $1.281 per share. The Registrant
accounts for the investment under the equity method.
Page 8
<PAGE>
AmeriNet Group.com, Inc.
Pro Forma Combined Statement of Income
For the three months ended September 30, 1999
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
Historical
AmeriNet WRI
Three months ended Three months ended ProForma
September 30, 1999 September 30, 1999 Total Adjustments Combined
Revenues earned $ 168,169 $ - $ 168,169 $ 168,169
Cost of revenues earned 69,109 - 69,109 69,109
--------------------------------------------------------------------------------------------
Gross profit 99,060 - 99,060 - 99,060
Operating expenses:
Selling, general and admn expense 476,341 - 476,341 476,341
--------------------------------------------------------------------------------------------
Total operating expenses 476,341 - 476,341 - 476,341
Loss from operations (377,281) - (377,281) (377,281)
Other income (expense)
Equity in income of subsidiary - - - (f) (18,153) (18,153)
--------------------------------------------------------------------------------------------
Net loss $ (377,281) $ - $ (377,281) $ (18,153) $ (395,434)
============================================================================================
Basic net loss per share $ (0.05) $ (0.05)
================== ============
Wieghted average shares
outstanding 8,148,308 8,732,408
================== ============
Fully diluted net loss per share $ (0.05) $ (0.05)
================== ============
Fully diluted average shares
outstanding 8,148,308 8,732,408
================== ============
</TABLE>
1. The Pro Forma Statement of Operations for the three months ended September
30, 1999 is based upon the three months ended September 30, 1999 for the
Registrant and WRIwebs.com, Inc. and gives effect to the acquisition as if
it had occured on July 1, 1999.
(f) The Registrant accounts for the investment under the equity method and
recognizes 20% of WRI's losses of $90,765.
Page 9
<PAGE>
WRIwebs.com, INC.
FINANCIAL STATEMENTS
FROM JANUARY 20, 1998 (INCEPTION)
THROUGH DECEMBER 31, 1998
Page 10
<PAGE>
TABLE OF CONTENTS
Independent Auditor's Report .............................................11
Financial Statements:
Balance Sheets as of December 31, 1998 and unaudited as of
June 30, 1999 and September 30, 1999 ...............................12
Statements of Operation for the period from January 20, 1998 (Inception)
through December 31, 1998 and unaudited for the six months ended June 30,
1999 and for the three months ended September 30, 1999..............13
Statements of Changes in Stockholders' Deficit for the period from January
20, 1998 (Inception) through December 31, 1998 and unaudited for the six
months ended June 30, 1999 and for the three months ended
September 30, 1999..................................................14
Statements of Cash Flows for the period from January 20, 1998 (Inception)
through December 31, 1998 and unaudited for the six months ended June 30,
1999 and for the three months ended September 30, 1999 .............15
Notes to Financial Statements ............................................16-19
Page 11
<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. CPAs
Boca Raton, Florida
January 18, 2000
Page 12
<PAGE>
WRIwebs.com, Inc.
BALANCE SHEETS
ASSETS
<TABLE>
<S> <C> <C> <C>
June 30, September 30,
December 31, 1999 1999
1998 (Unaudited) (Unaudited)
Current assets:
Cash $ 4,002 $ 13,832 $ 7,598
Accounts receivable - net 23,633 49,250 71,896
Loan receivable - stockholder 8,406 - -
Loan receivable - other - - 510
---------------------------------------------------------
Total current assets 36,041 63,082 80,004
---------------------------------------------------------
Property and equipment, net 30,162 35,054 67,094
---------------------------------------------------------
Total assets $ 66,203 $ 98,136 $ 147,098
=========================================================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 42,602 $ 51,475 $ 78,798
Accrued expenses 19,187 9,646 9,646
Deferred revenue 74,823 68,192 69,838
Cash overdraft 13,026 - -
Loan payable - stockholder - 14,601 77,755
Note payable - current portion - - 19,002
-----------------------------------------------------------
Total current liabilities 149,638 143,914 255,039
-----------------------------------------------------------
Note payable - equipment - - 14,998
-----------------------------------------------------------
Total liabilities 149,638 143,914 270,037
-----------------------------------------------------------
Stockholders' deficit:
Common stock, $1.00 par value, 7,500
shares authorized, issued and 7,500 7,500 7,500
outstanding
Additional paid in capital - - 13,604
Accumulated deficit (90,935) (53,278) (144,043)
-------------------------------------------------------------
Total stockholders' deficit (83,435) (45,778) (122,939)
-------------------------------------------------------------
Total liabilities and stockholders' deficit $ 66,203 $ 98,136 $ 147,098
=============================================================
</TABLE>
See accompanying notes to financial statements
Page 13
<PAGE>
WRIwebs.com, Inc.
STATEMENTS OF OPERATION
<TABLE>
<S> <C> <C> <C>
January 20, 1998 Six Months Three Months
(Inception) Ended Ended
Through June 30, 1999 September 30, 1999
December 31, 1998 (Unaudited) (Unaudited)
Revenues earned $ 1,037,212 $ 692,390 $ 252,083
Cost of revenues earned 339,713 235,339 161,348
--------------------------------------------------------------
Gross profit 697,499 457,051 90,735
Operating expenses:
Selling expenses 376,691 271,307 130,953
General and administrative expenses 411,743 148,087 50,547
--------------------------------------------------------------
Total operating expenses 788,434 419,394 181,500
--------------------------------------------------------------
Net income (loss) $ (90,935) $ 37,657 $(90,765)
==============================================================
</TABLE>
See accompanying notes to financial statements.
Page 14
<PAGE>
WRIwebs.com, Inc.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
<TABLE>
<S> <C> <C> <C> <C> <C>
Number Additional
of Common Paid-In Accumulated
Shares Stock Capital 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)
Net income - June 30, 1999 (Unaudited) - - - 37,657 37,657
---------------------------------------------------------------------------
Balance, June 30, 1999 (Unaudited) 7,500 7,500 - (53,278) (45,778)
Issuance of common stock for services - - 13,604 - 13,604
Net loss - September 30, 1999 (Unaudited) - - - (90,765) (90,765)
---------------------------------------------------------------------------
Balance, September 30, 1999 (Unaudited) 7,500 $ 7,500 $ 13,604 $ (144,043) $(122,939)
===========================================================================
</TABLE>
See accompanying notes to financial statements.
Page 15
<PAGE>
WRIwebs.com, Inc.
STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C> <C>
January 20, 1998 Six Months Three Months
(Inception) Ended Ended
Through June 30, 1999 September 30, 1999
December 31, 1998 (Unaudited) (Unaudited)
Cash flows from operating activities:
Net income (loss) $ (90,935) $ 37,657 $ (90,765)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,836 5,000 3,700
Bad debts expense 6,398 3,602 3,000
Common stock issued for services - - 13,604
(Increase) decrease in:
Accounts receivables (30,031) (29,219) (25,648)
Loan receivable - other - - (510)
Increase (decrease) in:
Accounts payable 42,602 8,873 27,324
Accrued expenses 19,187 (9,541) -
Deferred revenue 74,823 (6,631) 1,647
------------------------------------------------------------
Net cash provided (used) by operating activities 25,880 9,741 (67,648)
------------------------------------------------------------
Cash flows used by investing activities:
Purchase of property and equipment (33,998) (9,892) (1,740)
------------------------------------------------------------
Cash flows from financing activities:
Issuance of common stock 7,500 - -
Cash overdraft 13,026 13,026 -
Increase (decrease) in stockholder loan (8,406) 23,007 63,154
------------------------------------------------------------
Net cash provided by financing activities 12,120 36,033 63,154
------------------------------------------------------------
Net increase (decrease) in cash 4,002 35,882 (6,234)
Cash at beginning of year - 4,002 13,832
------------------------------------------------------------
Cash at end of year $ 4,002 $ 39,884 $ 7,598
============================================================
</TABLE>
See accompanying notes to financial statements.
Page 16
<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.
Unaudited Interim Information
The information presented as of June 30, 1999 and September 30, 1999, and for
the six-month period ended June 30, 1999 and the three-month period ended
September 30, 1999, has not been audited. In the opinion of management, the
unaudited interim financial statements include all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly the Company's
financial position as of June 30, 1999 and September 30, 1999, and the results
of its operations and its cash flows for the six months ended June 30, 1999 and
the three months ended September 30, 1999, and the stockholders' deficit for the
six months ended June 30, 1999 and for the three months ended September 30,
1999.
Page 17
<PAGE>
WRIwebs.com, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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.
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.
Page 18
<PAGE>
WRIwebs.com, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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
=================
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 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,
Page 19
<PAGE>
WRIwebs.com, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 12 - SUBSEQUENT EVENTS, continued
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 20
