SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 7, 2000
North Lily Mining Company
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Utah
----------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-16740 87-159350
---------------------- -------------------------------
(Commission File Number) (IRS Employer Identification No.)
1800 Glenarm Place, Suite 210, Denver Colorado 80202
(Address of principal executive offices) (Zip Code)
-----------------------------------------------------------------
Registrant's telephone number, including area code (303) 294-0427
<PAGE>
This form 8-K/A amends the Form 8-K filed with the Securities and Exchange
Commission on April 7, 2000 (the "Original Form 8-K") by including the financial
statements and pro forma financial information referred to below.
Item 7. Financial Statements, Pro Forma Information and Exhibits
(a) Financial Statements of Business Acquired
(1) Report of Independent Auditors.
(2) Loanmining.com, Inc. (formerly Home Loan.Com, Inc.) balance
sheets as of December 31, 1999 and the related statements of
operations, stockholders' and cash flows for the year ended
December 31, l999 and Mortgage Partners Funding Corp. and
Mortgage Partners Lending Corp. balance sheets as of October
4, l999 and December 31, l998 and the related statement of
operations, stockholders' equity and cash flows for each of
the two years ended in the period October 4, l999 and
December 31, l999.
(3) Notes to Financial Statements of Loanmining.com, Inc.,
Mortgage Partners Funding Corp. and Mortgage Partners
Lending Corp.
(b) Pro Forma Financial Information (unaudited)
(1) Unautidted Pro Forma Condensed Combined Statement of
Operations for the Year Ended December 31, l999.
(2) Unaudited Pro Forma Condensed Combined Statement of
Operations for the Quarter Ended March 31, 2000.
(3) Unaudited Pro Forma Condensed Combined Balance Sheet as of
March 31, 2000.
2
<PAGE>
Janet Loss, C.P.A. P.C.
Certified Public Accountant
1780 South Bellaire Street, Suite 500
Denver, Colorado 80222
303-782-0878
Board of Directors
Home Loan.com, Inc. and Subsidiaries
4155 East Jewell Avenue, Suite #400
Denver, Colorado 80222
I have audited the accompanying consolidated Balance Sheet of Home Loan.com,
Inc. and Subsidiaries as of December 31, 1999 and the consolidated statements of
Operations, Stockholder's Equity and Cash Flows for the period October 4, 1999
(Inception) thru December 31, 1999. The financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on the financial statements based on my audit.
My examination was made in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurances as to whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management as evaluating the overall financial statement presentation. I believe
that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Home Loan.com, Inc. and
Subsidiaries as of December 31, 1999, and the results of its operations and
changes in cash flow for the period October 4, 1999 (Inception) thru December
31, 1999, in conformity with generally accepted accounting principles applied on
a consistent basis
/s/ Janet Loss
Janet Loss, C.P.A., P.C.
November 6, 2000
3
<PAGE>
HOME LOAN.COM, INC.
BALANCE SHEET
December 31, 1999
ASSETS
CURRENT ASSETS:
Cash in Checking .............................. $ 444
Receivable, other ............................. 600
Accounts Receivable, trade .................... 18,494
Total current assets ................. 19,538
Fixed assets net, of accumulated
depreciation of $6,164 ......................................... 29,631
Security Deposit ................................................ 13,875
--------
TOTAL ASSETS ......................... $ 63,044
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Overdraft ..................................... $ 3,001
Accounts payable .............................. 29,576
Payroll taxes payable ......................... 33,538
--------
Total current liabilities ............ 66,115
--------
LONG-TERM LIABILITIES:
Line of Credit ................................ 23,573
--------
Total Liabilities .................... 89,688
--------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, no par value,
50,000 shares authorized, 1,253
shares issued and outstanding ................. 100
Contributed Capital ........................... 3,837
Common Stock Subscribed ....................... 16,000
(Deficit) ..................................... (46,581)
--------
Total Stockholders' Equity (Deficit) .......... (26,644)
--------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY .......................... $ 63,044
========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
HOME LOAN.COM, INC.
STATEMENT OF OPERATIONS
For the Period October 4, 1999 (Inception)
Thru December 31, 1999
REVENUES
Mortgage Brokerage Revenues ......................... $ 305,949
Cost of Mortgage Brokerage .......................... $ 158,641
---------
Net Profit ............................. $ 147,308
OPERATING EXPENSES:
General and Administrative expenses ................. 192,251
NET (LOSS) INCOME BEFORE
OTHER INCOME (EXPENSES) ...................................... (44,943)
---------
OTHER INCOME AND (EXPENSES)
Interest (Expense) .................................. (1,638)
---------
NET (LOSS) ................................................... (46,581)
=========
NET (LOSS) PER SHARE ......................................... (37.18)
=========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING .................................................. 1,253
=========
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
HOME LOAN.COM, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
For the period October 4, 1999 (Inception)
Thru December 31, 1999
Common Common Common Total
Stock Number Stock Stock Contributed Stockholders'
of Shares Amount Subscribed Capital (Deficit) Equity
------------ ------ ---------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
October 4,
1999 1,000
shares issued
(Inception) ...... 1000 $ 100 -- -- -- $ 100
Shares issued
For merger
Effective
October 4,
1999 (Note 1) .... 253 -- -- $ 3,837 -- $ 3,837
Funds
Received
December 1999 ... -- -- 16,000 -- -- 16,000
Net (Loss) For
the Period
October 4, 1999
(Inception) thru
December 31,
1999 ............ -- -- -- -- ($46,581) ($46,581)
-------- -------- -------- -------- -------- --------
Balances
December 31,
1999 ............ 1,253 $ 100 $ 16,000 $ 3,837 ($46,581) ($26,644)
======== ======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
HOME LOANS.COM, INC.
STATEMENT OF CASH FLOWS
For the Period October 4, 1999 (Inception)
Thru December 31, 1999
December 31, 1999
-----------------
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES:
Net Loss ............................................. $(46,581)
Adjustments to Reconcile
Net (Loss) to Cash Flow
From Operating Activities:
Depreciation ................................ 497
(Increase) in Receivable .................... (19,094)
(Increase) in Security Deposit .............. (13,875)
Increase in Payables and Overdraft ................... 66,115
--------
Cash Used by Operating Activities .................... (12,938)
--------
CASH FLOWS FROM
INVESTING ACTIVITIES:
(Increase) in fixed assets ........................... (30,128)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of
Common stock ......................................... 100
Common Stock Subscribed .............................. 16,000
Contributed Capital .................................. 3,837
Increase in Line of Credit ........................... 23,573
--------
Net cash provided by financing
Activities ........................................... 43,510
--------
Net Increase in Cash ................................. 444
Cash, Beginning of the Period ........................ 0
--------
Cash, End of the Period ............................... $ 444
========
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
HOME LOAN.COM, INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1- ORGANIZATION AND HISTORY
------------------------
The Company is a Colorado corporation, incorporated October 1999 to engage in
the mortgage and finance business. The Company entered into a merger agreement
with the following Colorado Corporations, Mortgage Partners Lending Corp. and
Mortgage Partners Funding Corp.
As of October 4, 1999, the separate existence of Mortgage Partners Lending Corp.
and Mortgage Partners Funding Corp. ceased and Home Loan.Com, Inc. continued its
corporate existence and was the "Surviving Corporation".
As of October 4, 1999, the 4,000 issued and outstanding shares of Mortgage
Partners Funding Corp. was converted into one share of the "Surviving
Corporation". The 530 issued and outstanding shares of Mortgage Partners Lending
Corp. was converted into 252 shares of the "Surviving Corporation".
On March 28, 2000, the Surviving Corporation changed its name to Loanmining.Com,
Inc.
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Method
-----------------
The Company records income and expenses on the accrual method.
Cash and cash equivalents
-------------------------
Cash and cash equivalents include cash on hand, cash on deposit and highly
liquid investments with maturities generally of three months or less.
Year End
--------
The Company has elected to have a fiscal year ended December 31.
8
<PAGE>
Janet Loss, C.P.A. P.C.
Certified Public Accountant
1780 South Bellaire Street, Suite 500
Denver, Colorado 80222
303-782-0878
Board of Directors
Mortgage Partners Lending Corp.
3131 South Vaughn Way, Suite 520
Aurora, Colorado 80014
I have audited the accompanying Balance Sheet of Mortgage Partners Lending Corp.
as of October 4, 1999 and the statements of operations, Stockholder's Equity and
Cash Flows for the period January 28, 1999 (Inception) thru October 4, 1999. The
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on the financial statements based on my
audit.
My examination was made in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurances as to whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management as evaluating the overall financial statement presentation. I believe
that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Mortgage Partners Lending Corp. as
of October 4, 1999, and the results of its operations and changes in cash flow
for the period January 28, 1999 (Inception) thru October 4, 1999, in conformity
with generally accepted accounting principles applied on a consistent basis
/s/ Janet Loss
Janet Loss, C.P.A., P.C.
November 6, 2000
9
<PAGE>
MORTGAGE PARTNERS LENDING CORP.
BALANCE SHEET
October 4, 1999
ASSETS
CURRENT ASSETS:
Cash in Checking ....................................... $ 8,267
Prepaid Expenses ....................................... 1,931
Receivable, Mortgage Partners
Funding Corp (affiliated company) ...................... 28,960
-------
Total current assets ................................... 39,158
-------
Fixed assets net, of
accumulated depreciation
of $896 ................................................ 7,460
Security Deposit ....................................... 1,985
-------
TOTAL ASSETS ........................................... $48,603
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .............................. $15,042
Corporate income taxes payable ................ 3,234
-------
Total current liabilities ..................... 18,276
-------
LONG-TERM LIABILITIES:
Line of Credit,
U. S. Bancorp ................................. 18,504
-------
STOCKHOLDERS' EQUITY:
Common stock, no par value,
50,000 shares authorized, 530
shares issued and outstanding ................. 500
Retained earnings ............................. 11,323
-------
Total Stockholders' Equity .................... 11,823
-------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY .......................... $48,603
=======
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
MORTGAGE PARTNERS LENDING CORP.
STATEMENT OF OPERATIONS
For the Period January 28, 1999 (Inception)
Thru October 4, 1999
REVENUES
Mortgage Brokerage Revenue ................................... $ 204,186
Cost of Mortgage Brokerage ................................... 136,752
---------
Net Profit ................................. 67,434
OPERATING EXPENSES:
General Administrative Expenses .............................. 52,161
NET INCOME BEFORE
OTHER INCOME (EXPENSES) ............................. 15,273
---------
OTHER INCOME AND EXPENSES
Interest (Expense) ......................... (716)
---------
Net income before Provision
for Income Taxes ........................... 14,557
Provision for Income Taxes ................. 3,234
---------
NET INCOME .......................................... $ 11,323
=========
NET INCOME PER SHARE ................................ $ 21.23
=========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING ......................................... 530
=========
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
MORTGAGE PARTNERS LENDING CORP.
STATEMENT OF STOCKHOLDERS' EQUITY
For the period January 28, 1999 (Inception)
Thru October 4, 1999
Common
Stock Common Total
Number of Stock Retained Stockholders'
Shares Amount Earning Equity
------------------------------------------------------
Balance
January 28, 1999
(Inception) 530
shares issued ......... 530 $ 500 0 $ 500
Net income for
The Period
January 28,1999
(Inception) thru
October 4, 1999 .... -- -- $11,323 $11,323
------- ------- ------- -------
Balances
October 4, 1999 .... 530 $ 500 $11,323 $11,823
======= ======= ======= =======
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
MORTGAGE PARTNERS LENDING CORP.
STATEMENT OF CASH FLOWS
For the Period January 28,1999 (Inception)
Thru October 4, 1999
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES:
Net Income .......................................... $ 11,323
Adjustments to Reconcile
Net (Loss) to Cash Flow
From Operating Activities:
Depreciation ............................... 896
(Increase) in Prepaid Expenses ...................... (1,931)
(Increase) in Receivable
Mortgage Funding Corp. .............................. (28,960)
(Increase) in Security Deposit ...................... (1,985)
Increase in Payables ................................ 15,042
Increase in corporate income
Taxes payable ....................................... 3,234
--------
Cash Used by Operating Activities ................... (2,381)
--------
CASH FLOWS FROM
INVESTING ACTIVITIES:
(Increase) in fixed assets .......................... (8,356)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of
Common stock ........................................ 500
Increase in Line of Credit,
U. S. Bancorp ....................................... 18,504
--------
Net cash provided by financing
Activities .......................................... 19,004
--------
Net Increase in Cash ................................ 8,267
Cash, Beginning of the Period ....................... 0
--------
Cash, End of the Period ............................. 8,267
========
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
MORTGAGE PARTNERS LENDING CORP.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1- ORGANIZATION AND HISTORY
------------------------
The Company is a Colorado corporation and has been incorporated since January
28,1999. The business purpose of the corporation was to engage in mortgage
brokerage and finance business.
On October 4, 1999, the Company merged into Home Loan. Com, Inc., a Colorado
corporation. The separate existence of Mortgage Partners Lending Corp. ceased
and Home Loan. Com, Inc. continued its corporate existence and was the
"Surviving Corporation."
On the effective date of the merger, October 4, 1999, the 530 issued and
outstanding shares of the Company's common stock was converted into 252 shares
of the "Surviving Corporation."
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Method
-----------------
The Company records income and expenses on the accrual method.
Cash and cash equivalents
-------------------------
Cash and cash equivalents include cash on hand, cash on deposit and highly
liquid investments with maturities generally of three months or less.
Year End
--------
The Company has elected to have a fiscal year ended December 31.
Revenues
--------
The Company recognizes revenue as it has been earned rather than received.
Fixed assets and accumulated depreciation.
-----------------------------------------
Fixed assets consists of office equipment and are stated at cost less
accumulated depreciation, which is provided for by charges to operations over
the estimated useful lives of the assets.
14
<PAGE>
Use of estimates.
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and revenue and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 3- AGING OF ACCOUNTS PAYABLE
-------------------------
Current 35%
30-60 days 40%
Over 60 days 25%
NOTE 4- LINE OF CREDIT
--------------
The Company has obtained a line of credit. The interest rate varies and is
approximately 10.50 percent.
NOTE 5- LEASES AND OTHER COMMITMENTS
----------------------------
The Company leases its space for $ 1930.79 per month and had a three year lease.
Upon the completion of the merger, the lease was assumed by the original
stockholder of the Company.
NOTE 6- PROVISION FOR TAXES ON INCOME.
-----------------------------
The estimated provision for income taxes are based on the statutory federal and
state income tax rates.
NOTE 7- RELATED PARTY TRANSACTIONS.
--------------------------
The Company has received advances of monies for its operating expenses from an
affiliate company, Mortgage Funding Corp.
15
<PAGE>
Janet Loss, C.P.A. P.C.
Certified Public Accountant
1780 South Bellaire Street, Suite 500
Denver, Colorado 80222
303-782-0878
Board of Directors
Mortgage Partners Funding Corp.
9033 East Easter Avenue, Suite 100
Englewood, Colorado 80112
I have audited the accompanying Balance Sheets of Mortgage Partners Funding
Corp. as of October 4, 1999 and December 31, 1998, and the Statements of
Operations, Stockholder's Equity and Cash Flows for the Period January 23, 1998
(Inception) thru December 31, 1998 and for the Period January 1, 1999 thru
October 4, 1999. The financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on the
financial statements based on my audit.
My examination was made in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurances as to whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management as evaluating the overall financial statement presentation. I believe
that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Mortgage Partners Funding Corp. as
of October 4, 1999, and December 31, 1998, and the results of its operations and
changes in cash flow for the Period January 23, 1998 (Inception) thru December
31, 1998 and for the Period January 1, 1999 thru October 4, 1999, in conformity
with generally accepted accounting principles applied on a consistent basis
/s/ Janet Loss
Janet Loss, C.P.A., P.C.
November 6, 2000
16
<PAGE>
MORTGAGE PARTNERS FUNDING CORP.
BALANCE SHEETS
October 4, December 31,
ASSETS 1999 1998
--------- -----------
CURRENT ASSETS:
Cash in Checking ............................... $ 29,498 $ 5,734
Prepaid Expenses ............................... 4,012 2,043
-------- --------
Total current assets ........................... 33,510 7,777
-------- --------
Fixed assets net, of
accumulated depreciation
of $5,268 and $3,823x .......................... 14,435 18,330
-------- --------
Security Deposit ............................... 4,458 2,111
-------- --------
TOTAL ASSETS ................................... $ 52,403 $ 28,218
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable ...................... $ 14,970 $ 6,719
Payroll Taxes Payable ................. 16,119 11,540
-------- --------
Total current liabilities ............. 31,089 18,259
-------- --------
LONG-TERM LIABILITIES:
Payable Mortgage Lending
Corp. (Affiliate Company) ............. 28,960 0
Stockholders Loans .................... 340 0
-------- --------
Total Long Term Liabilities ........... 29,300 0
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, no par value,
50,000 shares authorized, 4000
shares issued and outstanding ......... 4,000 4000
Retained earnings (deficit) ........... (11,986) 5,959
-------- --------
Total Stockholders' Equity (Deficit) .. (7,986) 9,959
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY .................. $ 52,403 $ 28,218
======== ========
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
MORTGAGE PARTNERS FUNDING CORP.
STATEMENTS OF OPERATIONS
For the Period January 23, 1998 (Inception)
thru December 31, 1998 and for the Period
January 1, 1999 thru October 4, 1999
October 4, December 31,
1999 1998
--------- -----------
REVENUES
Mortgage Brokerage Revenues .................... $ 907,657 $ 515,185
Cost of Mortgage Brokerage ..................... 498,000 292,945
--------- ---------
Net Profit ................... 409,657 222,240
OPERATING EXPENSES:
General and Administrative Expenses ............ 426,667 216,049
NET INCOME (LOSS) BEFORE
OTHER INCOME (EXPENSES) ............... (17,010) 6,191
--------- ---------
OTHER INCOME AND (EXPENSES)
Interest (Expense) ........... (1,181) (232)
Gain on Disposition
of assets .................... 246 0
--------- ---------
TOTAL OTHER INCOME AND
(EXPENSES) ............................ (935) (232)
--------- ---------
NET INCOME (LOSS) ..................... (17,945) $ 5,959
========= =========
NET INCOME (LOSS)
PER SHARE ............................. $ (4.48) $ 1.49
--------- ---------
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING ........................... 4,000 4,000
--------- ---------
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
MORTGAGE PARTNERS FUNDING CORP.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the period January 23, 1998 (Inception)
Thru December 31, 1998 and for the Period
January 1,1999 thru October 4, 1999
Common
Stock Common Retained Total
Number of Stock Earnings Stockholders'
Shares Amount (deficit) Equity
--------- ------ -------- ------------
Balance
January 23, 1998
(Inception), 4000
shares issued .............. 4,000 $ 4,000 $ 0 $ 4,000
Net income for
The Period
January 23,1998
(Inception) thru
December 31, 1998 ......... -- -- $ 5,959 $ 5,959
-------- -------- -------- --------
Balances, December
31, 1998 .................. 4,000 $ 4,000 $ 5,959 $ 9,959
Net (loss) for the
Period January 1,
1999 thru October 4,
1999 ...................... -- -- ($17,945) ($17,945)
-------- -------- -------- --------
Balances,
October 4, 1999 ............ 4,000 $ 4,000 $(11,986) $ (7,986)
======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
MORTGAGE PARTNERS FUNDING CORP.
STATEMENTS OF CASH FLOWS
For the Period January 23,1998 (Inception)
Thru December 31,1998 and for the Period
January 1, 1999 thru October 4, 1999
October 4, December 31,
1999 1998
--------- ------------
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES:
Net Income (Loss) ................ $(17,945) $ 5,959
Adjustments to Reconcile
Net (Loss) to Cash Flow
From Operating Activities:
Depreciation .............................. 5,819 3,823
(Increase) in Prepaid Expenses ............ (1,969) (2,043)
(Increase) in Security Deposit ............ (2,347) (2,111)
Increase in Payables ...................... 16,971 18,259
-------- --------
Cash Used by Operating Activities ......... $ 529 $ 23,887
-------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES:
(Increase) in fixed assets- net
of Disposition of assets .................. (1,924) (22,153)
-------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of
Common stock .............................. 0 4,000
Increase in Loans ......................... 25,159 0
-------- --------
Net Cash Provided by
Financing Activities ...................... 25,159 4,000
-------- --------
NET INCREASE IN CASH ...................... 23,764 5,734
-------- --------
CASH, BEGINNING OF PERIOD ................. 5,734 0
-------- --------
CASH, END OF PERIOD ....................... $ 29,498 $ 5,734
======== ========
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
MORTGAGE PARTNERS FUNDING CORP.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1- ORGANIZATION AND HISTORY
------------------------
The Company is a Colorado corporation and has been incorporated since January
23,1998. The business purpose of the corporation was to engage in mortgage
brokerage and finance businesses.
On October 4, 1999, the Company merged into Home Loan. Com, Inc., a Colorado
corporation. The separate existence of Mortgage Partners Funding Corp. ceased
and Home Loan. Com, Inc. continued its corporate existence and was the
"Surviving Corporation."
On the effective date of the merger, October 4, 1999, the 4,000 issued and
outstanding shares of the Company's common stock was converted into one share of
the "Surviving Corporation."
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Method
-----------------
The Company records income and expenses on the accrual method.
Cash and cash equivalents
-------------------------
Cash and cash equivalents include cash on hand, cash on deposit and highly
liquid investments with maturities generally of three months or less.
Year End
--------
The Company has elected to have a fiscal year ended December 31.
Revenues
--------
The Company recognizes revenue as it has been earned rather than received.
Fixed assets and accumulated depreciation.
-----------------------------------------
Fixed assets consists of office equipment and are stated at cost less
accumulated depreciation, which is provided for by charges to operations over
the estimated useful lives of the assets.
21
<PAGE>
Use of estimates.
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and revenue and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 3- AGING OF ACCOUNTS PAYABLE
-------------------------
Current 30%
30-60 days 38%
Over 60 days 32%
NOTE 4- LEASES AND OTHER COMMITMENTS
----------------------------
The Company leases its space for $ 2,042.50 per month and had a three-year
lease. Upon the completion of the merger (Note 1), the lease was assumed by the
original stockholder of the Company.
NOTE 5- PROVISION FOR TAXES ON INCOME.
-----------------------------
The Company has elected to be a Subchapter "S" Corporation. Therefore, all
income and losses flows thru to the individual stockholders, who then report
their share of income or loss on their individual tax return.
NOTE 6- RELATED PARTY TRANSACTIONS.
--------------------------
The Company has advanced monies to an affiliate company, Mortgage Partners
Lending Corp., for its operating expenses.
22
<PAGE>
The accompanying unaudited comparative statement of operations and statement of
cash flows for the predecessor companies, Mortgage Partners Funding Corp.,
Mortgage Partners Lending Corp. for the period ended March 31, 1999, and
Loanmining.com, Inc. (formerly Home Loan.com, Inc.) for the period ended March
31, 2000, and the Balance Sheet as of March 31, 2000 for Loanmining.com, Inc.
have been prepared by management based upon the historical financial statements
of the companies. The unaudited financial statements should be read in
conjunction with the historical financial statements and notes thereto of
Loanmining.com, Inc., Mortgage Partners Funding Corp. and Mortgage Lending Corp.
contained elsewhere in this document. These unaudited financial statements are
presented as if the acquisition of Loanmining.com, Inc. had not occurred at the
beginning of each period presented.
<TABLE>
<CAPTION>
MORTGAGE PARTNERS FUNDING CORP.
AND
MORTGAGE PARTNERS LENDING CORP.
AND
LOANMINING.com, INC.
STATEMENT OF OPERATIONS
(Unaudited)
For the period ended March 31, l999 For the period ended
-------------------------------------------- March 31, 2000
Mortgage Partners Mortgage Partners --------------------
Funding Corp. Lending Corp. Loanmining.com, Inc.
----------------- ----------------- --------------------
<S> <C> <C> <C>
Revenue
Mortgage brokerage revenues ............... $ 269,803 $ 60,788 $ 150,612
Cost of sales
Cost of mortgage brokerage ................ 148,713 40,034 78,377
Net profit .................................. 121,090 20,754 72,235
Operating Expenses
General and administrative expenses ....... 128,291 14,614 $ (199,822)
Net profit .................................. $ (7,201) 6,140 $ (127,587)
Net (loss) per common share-basic and diluted $ (1.80) $ 11.58 --
Weighted average common shares outstanding-
basic and diluted ........................... 4,000 530 --
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
MORTGAGE PARTNERS FUNDING CORP.
AND
MORTGAGE PARTNERS LENDING CORP.
AND
LOANMINING.com, INC.
STATEMENT OF CASH FLOWS
For the period ended March 31, l999 For the period ended
------------------------------------ March 31, 2000
Mortgage Partners Mortgage Partners --------------------
Funding Corp. Lending Corp. Loanmining.com, Inc.
----------------- ----------------- --------------------
<S> <C> <C> <C>
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES:
Net income (loss) .................. $ (7,201) $ 6,140 $ (127,647)
Adjustments to reconcile
Net income (loss) to cash flow
From Operating Activities:
Depreciation .................... 1,791 269 714
(Increase) Decrease in receivable ... -- -- 9,779
(Increase) in Security deposit ...... (1,337) (1,985) --
Increase (Decrease) in payables .... 20,445 8,677 $ (30,047)
(Decrease) in line of credit ....... -- -- $ (18,573)
Increase - notes payable ........... -- -- 67,000
Cash Used by Operating Activities .. 12,790 13,101 $ (98,774)
CASH FLOWS FROM
INVESTING ACTIVITIES:
(Increase) in fixed assets ........ (5,774) (2,507) --
CASH FLOW FROM
FINANCING ACTIVITIES:
Proceeds from issuance of
Common stock ...................... -- 500 101,663
Net cash provided by
financing activities
Net increase in cash ............... 7,016 -- $ 2,889
Cash beginng of period ............. 0 0 444
Cash, end of the period ............ 7,016 11,094 3,333
</TABLE>
24
<PAGE>
LOANMINING. com, INC.
Balance Sheet As of March 31, 2000
ASSETS
Current Assets
Cash ....................................................... $ 3,333
Other ...................................................... 9,315
--------
Total Current Assets ............................ 12,648
Property and equipment, net .................................. 28,917
Other ........................................................ 13,875
--------
$ 55,440
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ........................................... 36,068
Line of credit ............................................. 5,000
Notes payable .............................................. 67,000
--------
Total Current Liabilities ........................ 108,068
Total Liabilities ................................ 108,068
--------
Stockholders' Equity
Common stock ............................................... 121,600
Retained earnings (deficit) ................................ -174,228
--------
Total Stockholders' Equity ...................... -52,628
--------
$ 55,440
========
25
<PAGE>
Item 7. Financial Statements, Pro Forma Information and Exhibits (continued)
(b) Pro Forma Financial Information
On April 7, 2000 the Company completed performance of closing requirements for
its acquisition of privately held Loanmining. Com ("LMC") by issuance of 5.83
million shares (the "Shares") of the Company's common stock. The Shares are
restricted Securities pursuant to Rule 144, are to be included in a Registration
Statement by the Company after it updates its audits and reports to the
Securities and Exchange Commission, and are to be subject to monthly sale
restrictions for holdings in excess of 200,000 shares. The recipients of the
Shares were the several stockholders of LMC, including its majority stockholder
(Regina Mitchell) who received over 4 million of the Shares.
In consideration for the Shares, the Company acquired rights to the names
Loanmining.Com and Home Loan.com; rights to a team of mortgage brokers,
telemarketers, processing and closing staff represented to be capable of
promptly equaling and then growing the $1.4 million annual revenue rate produced
at LMC in 1999 on a brick & mortar basis; and rights to the LMC preliminary
internet web site development, the related business plan for home improvement
financing, and the business model/implementation plan for LMC as both a brick &
mortar as well as a highly automated internet mortgage banker focused on the
sub-prime mortgage niche. Substantial equity financings will be required to
compete for mortgage lending business on the Internet.
In connection with this acquisition, the Company has closed on initial private
placement financing of $245,000 in exchange for 7% Convertible Notes and
Warrants. All but $25,000 of these financing proceeds was received in the first
quarter of 2000. The Notes are due in periods of six to nine months from the
date of issuance and are repayable or convertible into Common Stock of the
Company t $0.20 per share (except for $25,000 at $0.50 per share). Warrants for
the purchase of an aggregate 1,400,000 shares were issued as part of the Notes
and are exercisable at $5 and $7.50 during years one and two, respectively, and
expire at various dates from February 2002 to April 2002. The Company utilized
$63,000 of the proceeds to finance stock redemption and releases from dissident
stockholders of LMC. The balance of the funding was utilized for existing
obligations, and to commence development of LMC's operation in anticipation of
further funding, which has not yet transpired.
The total acquisition cost of LMC is as follows:
Value of securities issued $617,535
Preliminary allocation of Acquisition Cost:
Annual Useful
Amount Amortization Live
------ ------------ ------
Value of securities
Issued $605,835 $ 302,900 2 years
26
<PAGE>
The accompanying unaudited historical Pro Forma Condensed Combined Statement of
Operations for the year ended December 31, l999 and for the three months ended
March 31, 2000 and the Unaudited Pro Forma Condensed Combined Balance Sheet as
of March 31, 2000 should be read in conjunction with the financials statements
of North Lily Mining Company (the Company) as previously filed and the financial
statements of the LMC included herein. This unaudited financial is based on
historical financial statements of the Company and LMC after giving effect to
the acquisition and the assumptions and adjustments described in the
accompanying Notes to the Unaudited Pro Forma Condensed Combined Statements of
Operations and Unaudited Pro Forma Condensed Combined Balance Sheet. The pro
forma information does not purport to be indicative of the results, which would
have been reported if the above transaction had been in effect for the periods
presented or which may result in the future.
27
<PAGE>
<TABLE>
<CAPTION>
NORTH LILY MINING COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
Mortgage
North Lily Loanmining Mortgage Parnters Partners Pro forma Pro forma
Mining Co. .com,Inc. Funding Corp. Lending Corp. Adjustments Combined
---------- ---------- ----------------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Mortgage brokerage revenues ...............$ -- $ 305,949 $ 907,657 $ 204,186 -- $ 1,417,792
Land sales ................................ 425,859 -- -- -- -- 425,859
--------- -------- -------- -------- -------- ----------
425,859 305,949 907,657 204,186 -- $ 1,843,651
--------- -------- -------- -------- -------- ----------
Costs of sales
Cost of mortgage brokerage ................ -- 158,641 498,000 136,752 -- 793,393
Cost of land sales ........................ 228,616 -- -- -- -- 228,616
--------- -------- -------- -------- -------- ----------
228,616 158,641 498,000 136,752 -- 1,022,009
--------- -------- -------- -------- -------- ----------
Gross profit ................................ 197,243 147,308 409,657 67,434 -- 821,642
--------- -------- -------- -------- -------- ----------
Operating Expenses
General and administrative expenses ....... 330,105 192,251 426,667 52,161 -- 1,001,184
--------- -------- -------- -------- -------- ----------
Operating (loss) income ..................... (132,862) (44,943) (17,010) 15,273 -- (179,542)
--------- -------- -------- -------- -------- ----------
Other income (expenses)
Interest income ........................... 1,346 -- -- -- -- 1,346
Interest expense .......................... (43,193) (1,638) (1,181) (716) -- (46,728)
Unrealized loss on marketable securities .. (4,495) -- -- -- -- (4,495)
Amortization of investment in Loanmining .. -- -- -- -- (d) (302,900) (302,900)
Other, net ................................ 54,436 -- -- -- -- 54,436
--------- -------- -------- -------- -------- ----------
8,094 (1,638) (1,181) (716) (302,900) (298,341)
--------- -------- -------- -------- -------- ----------
Net (loss) before minority interest ......... (124,768) (46,581) (18,191) 14,557 (302,900) (477,883)
Minority interest ........................... (55,408) -- -- -- -- (55,408)
--------- -------- -------- -------- -------- ----------
Net (loss) income ...........................$(180,176) $ (46,581) $ (18,191) $ 14,557 $ (302,900) $ (533,291)
========= ======== ======== ======== ======== ==========
Net (loss) per common share-basic and diluted -- -- -- -- -- $ (0.05)
========= ======== ======== ======== ======== ==========
Weighted average common shares outstanding-
basic and diluted ........................... -- -- -- -- (b) -- 10,784,722
========= ======== ======== ======== ======== ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed combined
28
<PAGE>
<TABLE>
<CAPTION>
NORTH LILY MINING COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2000
(UNAUDITED)
North Lily Loanmining Pro forma Pro forma
Mining Co. .com, Inc. Adjustments Combined
---------- ---------- ------------ ---------
<S> <C> <C> <C> <C>
Revenue
Mortgage brokerage revenues ........................ $ -- $ 150,612 $ -- $ 150,612
---------- ----------- ------------ -----------
Cost of sales
Cost of mortgage brokerage ......................... -- 78,377 -- 78,377
---------- ----------- ------------ -----------
Gross profit ......................................... -- 72,235 -- 72,235
---------- ----------- ------------ -----------
Operating expenses
General and administrative expenses ................ 106,312 199,882 -- 306,194
Silver City Project ................................ 38,125 -- -- 38,125
---------- ----------- ------------ -----------
144,437 199,882 -- 344,319
---------- ----------- ------------ -----------
Other income (expenses)
Interest income .................................... 2,100 -- -- 2,100
Amortization of goodwill ........................... -- -- (75,700)(d) (75,700)
Other, net ......................................... 953 -- -- 953
---------- ----------- ------------ -----------
3,053 -- (75.700) (72,647)
---------- ----------- ------------ -----------
Net (loss) ........................................... $ (141,384) $ (127,647) $ (75,700) $ (344,731)
========== =========== =========== ===========
Net (loss) per common share-basic and diluted ........ -- -- -- $ (0.03)
========== =========== =========== ===========
Weighted average common shares outstanding
basic and diluted .................................... -- -- -- (b) 11,945,871
========== =========== =========== ===========
</TABLE>
See notes to the pro forma condensed financial statements
29
<PAGE>
<TABLE>
<CAPTION>
NORTH LILY MINING COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(UNAUDITED)
Historical Pro Forma Pro Forma
North Lily Loanmining.com Adjustments Combined
ASSETS ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Current Assets
Cash ....................................... $ 26,395 $ 3,333 $ 0 $ 29,728
Marketable securities ...................... 6,086 0 0 6,086
Accounts and notes receivable .............. 26,473 0 0 26,473
Other ...................................... 6,966 9,315 0 16,281
---------- ---------- --------- ------------
Total Current Assets ............. 65,920 12,648 0 78,568
---------- ---------- --------- ------------
Property and equipment, net .................. 29,761 28,917 0 58,678
Land ......................................... 1,037,226 0 0 1,037,226
Reclamation bond ............................. 202,653 0 0 202,653
Advance to Loanmining.com .................... 50,000 0 (50,000)(a) 0
Investment in Loanmining.com ................. 53,207 0 174,228 (c) 605,835
0 0 (121,600)(c) 0
0 0 500,000 (b) 0
Other ........................................ 20,500 13,875 0 34,375
---------- ---------- --------- ------------
$ 1,459,267 $ 55,440 $ 502,628 $ 2,017,335
========== ========== ========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ........................... $ 246,101 $ 36,068 $ 0 $ 282,169
Line of credit ............................. 2,947 5,000 0 7,947
Notes payable .............................. 0 67,000 (50,000)(a) 17,000
Reclamation liabilities .................... 180,059 0 0 180,059
Convertible notes .......................... 220,000 0 0 220,000
---------- ---------- --------- ------------
Total Current Liabilities .......... 649,107 108,068 (50,000) 707,175
---------- ---------- --------- ------------
Due to officers .............................. 28,000 0 0 28,000
---------- ---------- --------- ------------
Accounts payable in stock .................... 261,835 0 0 261,835
---------- ---------- --------- ------------
Minority Interest in LLC ..................... 161,984 0 0 161,984
---------- ---------- --------- ------------
Stockholders' Equity
Common stock ............................... 611,327 121,600 (121,600)(c) 1,194,587
0 0 583,260 (b) 0
Additional paid-in capital ................. 52,407,591 0 (83,260)(b) 52,324,331
Retained earnings (deficit) ................ (52,660,577) (174,228) 174,228 (c) (52,660,577)
---------- ---------- --------- ------------
Total Stockholders' Equity ........ 358,341 (52,628) 552,628 858,341
---------- ---------- --------- ------------
$ 1,459,267 $ 55,440 $ 502,628 $ 2,017,335
========== ========== ========= ============
</TABLE>
See notes to the pro forma condensed financial statements
30
<PAGE>
NORTH LILY MINING COMPANY
AND
LOANMINING.COM, INC.
NOTES TO PRO FORMA CONS0LIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF TRANSACTION
The accompanying unaudited pro forma financial statements are presented to
reflect the acquisition of Loanmining.com, Inc. (formerly Home Loan.com,
Inc.) And the predecessor companies Mortgage Partners Funding Corp. and
Mortgage Partners Lending Corp. The acquisition of Loanmining and the
predecessor companies was completed on April 7, 2000.
The accompanying consolidated pro forma balance sheet of March 31, 2000 has
been prepared to give effect to the acquisition of Loanmining as if the
acquisition had occurred on March 31, 2000. The accompanying unaudited pro
forma statements of operations combine North Lily for the year ended
December 31, 1999 and the three months ended March 31, 2000, the mortgage
operating revenues and expenses of Loanmining for each of the periods,
respectively, and are presented as if the acquisition had occurred at the
beginning of each of the periods presented.
NOTE 2 - PRO FORMA ADJUSTMENTS
The unaudited pro forma financials statements reflect the following pro
forma adjustments:
(a) Eliminate advance to Loanming.com from North Lily.
(b) On April 7, 2000 North Lily completed the closing requirements for the
acquisition of Loanming.com by the issuance of 5,832,600 common shares
for 100% of the outstanding shares of Loanming.com. The recipients of
the shares were the shareholders of Loanming.com. North Lily valued
the acquisition of Loanming.com at $500,000.
(c) Eliminate common stock of Loanmining.com and Loanmining.com retained
earnings as of date of acquisition by North Lily.
(d) Record amortization of North Lily's investment in Loanmining over a
two year period.
31
