SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K/A2
CURRENT REPORT
Pursuant to Section 10 or 15(d) of the
Securities Exchange Act of 1934
JULY 10, 2000
------------------------------------------------
Date of Report (date of earliest event reported)
MARGATE INDUSTRIES, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-13817 84-8963939
---------------------------- ------------ ----------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation File Number) Identification Number)
129 N. MAIN STREET
YALE, MICHIGAN 48097
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(Address of Principal Executive Offices
Including Zip Code)
(810) 387-4300
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(Registrant's telephone number,
including area code)
NOT APPLICABLE
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(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements of B2B Eurowireless.com.
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
________
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
________
JUNE 30, 2000
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
- CONTENTS -
PAGE NUMBER
-----------
Independent Auditors' Report 4
Financial Statements:
Balance Sheet 5
Statement of Operations 6
Statement of Changes in Stockholders' Equity 7
Statement of Cash Flows 8
Notes to Financial Statements 9 - 13
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<PAGE>
Independent Auditors' Report
To the Board of Directors
B2B EUROwireless.com
New York, New York
We have audited the accompanying balance sheet of B2B EUROwireless.com (a
development stage enterprise) as of June 30, 2000 and the related
statements of operations, changes in stockholders' equity and cash flows
for the period from March 17, 2000 (inception) to June 30, 2000. These
financial statements are the responsibility of the Company's management.
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 statements 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 B2B EUROwireless.com (a
development stage enterprise) at June 30, 2000 and the results of its
operations and its cash flows for the period March 17, 2000 (inception) to
June 30, 2000, in conformity with generally accepted accounting principles.
As discussed in note 7 to the financial statements, certain additional
expenses resulting in an understatement of amounts due to a related party
as of June 30, 2000 were discovered by management of the Company.
Accordingly the financial statements have been restated to correct the error.
PERRIN, FORDREE & COMPANY, P.C.
/s/ Perrin Fordree & Company, P.C.
Troy, Michigan
September 11, 2000 except for note 7
for which the date is October 6, 2000
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
JUNE 30, 2000
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 21,763
Accounts receivable - related party 5,976
----------
Total current assets 27,739
PROPERTY AND EQUIPMENT -
At cost, net of accumulated depreciation
and amortization of $5,157 88,141
OTHER ASSETS -
Deposits 26,100
----------
$ 141,980
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Notes payable - related party $ 144,300
Accrued expenses 59,002
----------
Total current liabilities 203,302
STOCKHOLDERS' EQUITY:
Common stock - $.001 par value
Authorized - 10,000,000 shares
Issued and outstanding - 6,955,000 shares 6,955
Additional paid-in capital 240,950
Deficit accumulated during the
development stage (309,227)
----------
(61,322)
----------
$ 141,980
==========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MARCH 17, 2000 (INCEPTION) TO JUNE 30, 2000
NET SALES $ -
COST OF SALES -
GROSS PROFIT -
----------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 309,227
----------
NET LOSS $ (309,227)
==========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MARCH 17, 2000 (INCEPTION) TO JUNE 30, 2000
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
PAID-IN FOR DURING THE TOTAL
NUMBER OF IN EXCESS OF DEVELOPMENT STOCKHOLDERS
SHARES AMOUNT PAR VALUE STAGE EQUITY
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balances at March 17, 2000 - $ - $ - $ - $ -
Shares issued for cash 1,317,000 1,317 200,313 - 201,630
Shares issued for services 5,638,000 5,638 40,637 - 46,275
Net Loss - - - (309,227) (309,227)
--------- ------- --------- ---------- ---------
Balances at June 30, 2000 6,955,000 $ 6,955 $ 240,950 $ (309,227) $ (61,322)
========= ======= ========= ========== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MARCH 17, 2000 (INCEPTION) TO JUNE 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS $ (309,227)
Adjustments to reconcile net loss to net
cash from operating activities -
Depreciation and amortization 5,157
Changes in assets and liabilities which
(increase) decrease cash flows:
Accounts receivable (5,976)
Accrued expenses 59,002
----------
Net cash to operating activities $ (251,044)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for deposits (26,100)
Purchase of plant and equipment (93,298)
----------
Net cash to investing activities (119,398)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 247,905
Proceeds from note payable 144,300
----------
Net cash from financing activities 392,205
----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 21,763
CASH AND CASH EQUIVALENTS:
BALANCE - beginning of period -
----------
BALANCE - end of period $ 21,763
==========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM MARCH 17, 2000 (INCEPTION) TO JUNE 30, 2000
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:
This summary of significant accounting policies of B2B
EUROwireless.com (the "Company") is presented to assist in
understanding the Company's financial statements. The financial
statements and notes are representations of the Company's
management, which is responsible for their integrity and
objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied
in the preparation of the financial statements.
BUSINESS ACTIVITY
-----------------
B2B EUROwireless.com is a New York based company involved in
providing wireless Internet connections for business-to business
transactions.
The Company is in the development stage and its efforts through
June 30, 2000 have been principally devoted to organizational
activities, raising capital, marketing and research and
developmental activities.
CASH AND CASH EQUIVALENTS
-------------------------
The Company considers all highly liquid investments purchased
with an original maturity date of three months or less to be cash
equivalents.
PROPERTY AND EQUIPMENT
----------------------
Property and equipment are recorded at cost. Costs of
maintenance and repairs that do not materially extend the life of
an asset are charged to expense when incurred.
Depreciation and amortization of property and equipment is
recorded using the straight-line method over the estimated useful
lives of the assets. Depreciation and amortization expense
totaled $5,157 at June 30, 2000.
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
FOR THE PERIOD FROM MARCH 17, 2000 (INCEPTION) TO JUNE 30, 2000
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED:
PROPERTY AND EQUIPMENT - CONTINUED
----------------------------------
Estimated useful lives of assets in the various classes of
property, plant and equipment are as follows:
Leasehold improvements 10 years
Computer and office equipment 3 - 5 years
Furniture and fixtures 5 years
INCOME TAXES
------------
Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes
currently due plus deferred taxes. Deferred taxes are recognized
for differences between the basis of assets and liabilities for
financial statements and income tax purposes.
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 the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
JUNE 30, 2000
NOTE 2 - PROPERTY AND EQUIPMENT:
Property and equipment are summarized as follows:
Leasehold improvements $ 2,690
Computer and office equipment 63,890
Furniture and fixtures 16,768
Construction in progress 9,950
--------
Total cost 93,298
Less accumulated depreciation 5,157
--------
Net property, and equipment $ 88,141
========
NOTE 3 - RELATED PARTY TRANSACTIONS:
The Company borrowed funds from a stockholder in the amount of
$144,300. The note is unsecured, non-interest-bearing and is
payable upon demand.
NOTE 4 - INCOME TAXES:
As of June 30, 2000, the Company has a net operating loss of
approximately $300,000 for income tax purposes, which will expire
June 30, 2020. A deferred tax asset has not been recognized for
this operating loss as an earnings history has not been established.
NOTE 5 - LEASE COMMITMENTS:
The Company is currently leasing its facility located in New
York, New York. This facility is leased for four years expiring
on January 31, 2004. Rent expense for the period ended June 30,
2000 was $35,000.
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
JUNE 30, 2000
NOTE 5 - LEASE COMMITMENTS - CONTINUED:
The following is a schedule of future minimum lease payments at
June 30, 2000.
Year ended June 30:
2001 $ 105,000
2002 105,000
2003 105,000
2004 61,250
---------
$ 376,250
=========
NOTE 6 - SUBSEQUENT EVENTS:
In July 2000, the Company entered into an Agreement and Plan of
Merger (the "Agreement") with Margate Industries, Inc.
("Margate"). The Agreement provides for Margate to form a new
holding company that will in turn form two new wholly-owned
subsidiaries, one consisting of the Company and the other of
Margate. The Plan is subject to stockholder and regulatory approval.
In July 2000, the Company authorized an additional 10,000,000
shares of common stock. In addition, 446,665 shares were issued
in July for $300,000 of cash.
On July 31, 2000, the Company issued stock warrants to two
entities entitling the holder of these warrants to purchase
125,000 shares each at an exercise of $5.00 per share. These
warrants expire on July 31, 2003.
In August 2000, the Company announced a partnership with a Miami
based telecommunications company to help assist in company goals
to provide wireless Internet access to users.
On August 9, 2000, the Company's board of directors unanimously
approved a change in the Company's name to c-Spectra, Inc.
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<PAGE>
B2B EUROWIRELESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
JUNE 30, 2000
NOTE 7 - RESTATEMENT OF FINANCIAL STATEMENTS:
Subsequent to the issuance of the Company's June 30, 2000
financial statements, management of the Company became aware of
certain additional consulting, development and travel expanses
which were incurred as of June 30, 2000 and paid on its behalf by
a related party. Accordingly these financial statements have been
restated to record these expenses and increase the liability to
the related party.
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<PAGE>
(b) Pro Forma Financial Information.
The following pro forma financial statements reflect the adjustments
for the merger between Margate and B2B as stated in the Agreement. Upon
the completion of the merger, B2B will contribute $8.0 million in cash to
the holding company in exchange for 15.2 million shares of holding company
common stock. Margate shareholders will exchange each share for one share
of common stock of the holding company.
This pro forma information assumes that the merger into the holding
company occurred as of June 30, 2000 although the actual merger is due
to occur in the first quarter of 2001. As such, the pro forma
financial statements are not necessarily indicative of the operating
results that will be achieved by either company at such time.
The June 30, 2000, historical information for Margate is from their
10-Q financial statements and the information for B2B is from their
audited June 30, 2000 financial statements. These financial
statements, along with the December 31, 1999 audited financial
statements of Margate, should be read in conjunction with this statement.
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<PAGE>
MARGATE INDUSTRIES AND SUBSIDIARIES AND B2B EUROWIRELESS.COM
COMBINED BALANCE SHEET
JUNE 30, 2000
<TABLE>
<CAPTION>
UNAUDITED AUDITED
PRO FORMA PRO FORMA
MARGATE B2B-
INDUSTRIES EUROWIRELESS ADJUSTMENTS COMBINED
--------------------------------------------------------
<S> <C> <C> <C> <C>
Cash $ 1,976,554 $ 21,763 $ 8,000,000 (1) $ 9,998,317
Accounts receivable: 1,653,006 5,976 1,658,982
Current maturities of notes receivable 536,136 - 536,136
Inventories 32,000 - 32,000
Prepaid expenses and other 24,786 - 24,786
Deferred tax asset 6,800 - 6,800
--------------------------------------------------------
Total Current Assets 4,229,282 27,739 8,000,000 12,257,021
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment, at cost: 5,808,879 93,298 5,902,177
-
Less: Accumulated Depreciation 2,176,098 5,157 2,181,255
--------------------------------------------------------
3,632,781 88,141 - 3,720,922
NOTES RECEIVABLE - net of current
maturities 513,488 - 513,488
OTHER 34,833 26,100 60,933
--------------------------------------------------------
Total Assets $ 8,410,384 $ 141,980 $ 8,000,000 $16,552,364
========================================================
</TABLE>
(1) The 8,000,000 represents the capital infusion from B2B for the 15.2
million shares of the holding company's common stock.
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<PAGE>
<TABLE>
<CAPTION>
UNAUDITED AUDITED
PRO FORMA PRO FORMA
MARGATE B2B-
INDUSTRIES EUROWIRELESS ADJUSTMENTS COMBINED
--------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Current portion of long term debt $ 50,035 $ 144,300 $ 194,335
Accounts payable 275,441 275,441
Accrued expenses 670,126 59,002 (150,000)(2) 579,128
--------------------------------------------------------
Total Current Liabilities 995,602 203,302 (150,000) 1,048,904
DEFERRED TAX LIABILITY 259,800 - 259,800
OTHER POSTRETIREMENT BENEFITS 508,282 - 508,282
NOTES PAYABLE - Long-term 103,508 - 103,508
STOCKHOLDER'S EQUITY:
Common stock - $.015 par value
Issued and outstanding -
1,596,542 at June 30, 2000 23,948 6,955 221,045 (1) 251,948
Paid-in for common stock in excess
of par value 7,527,383 240,950 7,778,955 (1) 15,547,288
Accumulated deficit (1,008,139) (309,227) 150,000 (2) (1,167,366)
--------------------------------------------------------
Total Stockholder's Equity 6,543,192 (61,322) 8,150,000 14,631,870
--------------------------------------------------------
Total Liabilities and
Stockholder's Equity $ 8,410,384 $ 141,980 $ 8,000,000 $16,552,364
========================================================
</TABLE>
(1) The 8,000,000 represents the capital infusion from B2B for the 15.2
million shares of the holding company's stock.
(2) Net of tax effect of nonrecurring legal and professional fees
related to the merger.
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<PAGE>
MARGATE INDUSTRIES AND SUBSIDIARIES AND B2B EUROWIRELESS.COM
COMBINED STATEMENT OF INCOME
FOR THE PERIOD ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
UNAUDITED AUDITED
PRO FORMA PRO FORMA
MARGATE B2B-
INDUSTRIES EUROWIRELESS ADJUSTMENTS COMBINED
--------------------------------------------------------
SIX MONTHS MARCH 17, 2000-
ENDED JUNE 30, 2000
<S> <C> <C> <C> <C>
NET SALES $ 5,765,468 $ - $ 5,765,468
COST OF SALES 4,489,045 - 4,489,045
--------------------------------------------------------
GROSS PROFIT 1,276,423 - 1,276,423
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 505,204 309,227 (18,000)(2) 796,431
--------------------------------------------------------
INCOME FROM OPERATIONS 771,219 (309,227) 18,000 479,992
DIVIDEND AND INTEREST INCOME
(EXPENSES) - NET 75,862 - 75,862
OTHER INCOME (EXPENSES) (158,807) - 200,000 (2) 41,193
--------------------------------------------------------
INCOME BEFORE PROVISION FOR
INCOME TAXES 688,274 (309,227) 218,000 597,047
PROVISION FOR FEDERAL
INCOME TAXES 252,000 - 68,000 (2) 320,000
--------------------------------------------------------
NET INCOME $ 436,274 $ (309,227) $ 150,000 $ 227,047
========================================================
BASIC EARNINGS PER COMMON SHARE $0.023 ($0.045)
WEIGHTED AVERAGE SHARES
OUTSTANDING 1,595,243 6,901,717
</TABLE>
(2) Nonrecurring legal and professional fees directly related to the merger
with applicable tax effect.
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<PAGE>
(c) Exhibits:
10.3 Agreement and Plan of Reorganization between Margate
Industries, Inc. and B2B Euro Wireless.com, Inc. dated
July 10, 2000.*
_____________________
* previously filed
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.
MARGATE INDUSTRIES, INC.
Dated: October 30, 2000 By: /s/ William H. Hopton
-------------------------------
William H. Hopton, President
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