<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) DECEMBER 8 , 1999
--------------------------------
VIRTUAL ACADEMICS.COM
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 33-25900 75-2228820
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
6421 CONGRESS AVENUE, SUITE 201, BOCA RATON, FLORIDA 33487
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (561) 994-4446
----------------
Donnebrooke Corp.
16910 DALLAS PARKWAY, SUITE 100, DALLAS, TEXAS 75248
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 7 Financial Exhibits, Pro Forma Financial Information And Exhibits.
(a) Financial Statements and Pro Forma Financial Information
The Company has included with the filing of this Amendment to
Current Report on Form 8-K (i) audited combined Balance Sheet, Statement of
Operations, Statement of Cash Flows and Statement of Partners' Equity as of June
30, 1999 and (ii) unaudited combined statement of operations, statement of
operations, statement of cash flows and statement of partners' equity for the
three months ended September 30, 1999 of International Educational Group,
L.L.C., its predecessor.
(b) Exhibits.
2
<PAGE> 3
ITEM 8. Changes in Fiscal Year
As of December 15, the Company determined to change its fiscal year end
to June 30 and will cover the transition period by filing a Form 10-Q.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned herein duly authorized.
VIRTUAL ACADEMICS.COM., INC.
By: /s/ Steven Bettinger
------------------------------------------
Steven Bettinger, Chief Operating Officer
Dated: February 18, 2000
3
<PAGE> 4
INTERNATIONAL EDUCATIONAL GROUP, L.L.C.
COMBINED FINANCIAL STATEMENTS
WITH
INDEPENDENT AUDITOR'S REPORT
JUNE 30, 1999
<PAGE> 5
INTERNATIONAL EDUCATIONAL GROUP, L.L.C.
JUNE 30, 1999
TABLE OF CONTENTS
Independent Auditor's Report........................................... 2
Combined Balance Sheet ............................................. 3
Combined Statement of Operations....................................... 4
Combined Statement of Cash Flows....................................... 5
Combined Statement of Partners' Equity................................. 6
Notes to Financial Statements.......................................... 7-11
<PAGE> 6
To the Partners
International Educational Group, L.L.C.
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying combined balance sheet of International
Educational Group, L.L.C. as of June 30, 1999 and the related combined statement
of operations for the twelve month periods ending June 30, 1999 and 1998, and
combined statement of cash flows and the combined statement of partners' equity
for the twelve months ended June 30, 1999. These financial statements are the
responsibility of International Educational Group, L.L.C.'s management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of
International Educational Group, L.L.C. as of June 30, 1999 and the results of
its operations for the twelve month periods ending June 30, 1999 and 1998 and
its cash flows and partners' equity for the twelve months ended June 30, 1999,
in conformity with generally accepted accounting principles.
Michael G. Chandross, CPA, P.A.
Pompano Beach, Florida
August 26, 1999 (except as to note 3, which is as of September 29, 1999
and note 6, which is as of October 6, 1999)
2
<PAGE> 7
International Educational Group L.L.C.
Notes to Financial Statements
September 30, 1999
The combined balance sheet as of September 30, 1999, the combined statement of
operations and partners' equity and cash flows for the three months ended as of
September 30, 1999 have been prepared by the Company without audit. In the
opinion of management, all adjustments necessary to present the financial
position, the results operations and cash flows for the periods reported have
been made. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These combined financial statements
should be read in conjunction with the financial statements and the notes
thereto included in the Company's annual report.
<PAGE> 8
INTERNATIONAL EDUCATIONAL GROUP, L.L.C.
COMBINED BALANCE SHEET
JUNE 30, 1999
ASSETS
CURRENT ASSETS
Cash and Equivalents $ 9,722
Tuition Receivable, Current, net of allowance for doubtful
accounts of $ 67,383 556,541
Prepaid Recruiting Fees, Current 144,403
--------
Total Current Assets $710,666
========
PROPERTY AND EQUIPMENT
Computer Equipment 14,826
Furniture and Fixtures 20,060
--------
Sub-total 34,886
--------
Less: Accumulated Depreciation 13,011
--------
Total Property and Equipment 21,875
OTHER ASSETS
Tuition Receivable, Non-current, net of allowance for doubtful
accounts of $ 16,846 139,135
Prepaid Recruiting Fess, Non-current 14,311
Security Deposits 4,400
--------
TOTAL ASSETS $890,387
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Accounts Payable 17,259
Unearned Revenue, Current 638,387
Accrued Recruiting Fees, Current 125,890
Income Taxes Payable 4,427
Other Accrued Expenses and Taxes Payable 5,442
--------
Total Current Liabilities 791,405
OTHER LIABILITIES
Unearned Revenue, Non-current 63,268
Accrued Recruiting Fees, Non-current 31,472
--------
Total Other Liabilities 94,740
PARTNERS' EQUITY 4,242
--------
TOTAL LIABILITIES AND PARTNERS' EQUITY $890,387
See Independent Accountant's Report and Notes to Financial Statements.
3
<PAGE> 9
INTERNATIONAL EDUCATIONAL GROUP, L.L.C.
Combined Balance Sheet
September 30, 1999
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
<S> <C>
CURRENT ASSETS
Cash and Equivalents $ 49,608
Tuition Receivable, Current, net of allowance for doubtful
accounts of $ 67,383 and $83,964 693,476
Prepaid Recruiting Fees, Current 171,911
----------
Total Current Assets 914,995
----------
PROPERTY AND EQUIPMENT
Computer Equipment 14,826
Furniture and Fixtures 20,060
----------
Sub-total 34,886
Less: Accumulated Depreciation 14,150
----------
Total Property and Equipment 20,736
----------
OTHER ASSETS
Tuition Receivable, Non-current, net of allowance for doubtful
accounts of $ 16,846 and $20,991 173,369
Prepaid Recruiting Fess, Non-current 32,505
Security Deposits 4,400
----------
TOTAL ASSETS $1,146,005
----------
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 18,244
Unearned Revenue, Current 759,999
Accrued Recruiting Fees, Current 156,864
Income Taxes Payable 7,741
Other Accrued Expenses and Taxes Payable 8,727
----------
Total Current Liabilities 951,575
----------
OTHER LIABILITIES
Unearned Revenue, Non-current 143,699
Accrued Recruiting Fees, Non-current 39,216
----------
Total Other Liabilities 182,915
----------
PARTNERS' EQUITY 11,515
----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $1,146,005
----------
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE> 10
International Educational Group, L.L.C.
Notes to Financial Statements
June 30, 1999
Note 1 - Summary of Significant Accounting Policies
Nature of Business:
International Educational Group, L.L.C. (the Company) was organized as a limited
liability company under the laws of the State of New York on March 20, 1998. The
Company is the successor to International Educational Group, Inc., which was
incorporated under the laws of the State of New York on May 1, 1995.
The Company is the administrative and marketing arm for Barrington University,
Inc. (Barrington), a distance learning school that provides Internet education
to students throughout the world. The companies are under common control.
Business is conducted under the name of Barrington University and Virtual
Academics. The International Association of Universities and Schools and the
Global Accreditation Association accredits Barrington; the Alabama Department of
Education licenses Barrington. The Company's administrative and sales offices
are currently located in New York City. Pursuant to a lease entered into in
September 1999, the Company relocated its primary sales and administrative
offices to Boca Raton, Florida. Barrington's business is conducted in Alabama.
Barrington also has arrangements with certain international universities that
want to confer dual degrees (from a United States college and international
universities) whereas, based on Barrington's approval of the curriculum, a
degree will be issued by Barrington upon satisfactory completion of studies at
an international university.
Accounting Principles
The financial statements and the accompanying notes are prepared in accordance
with generally accepted accounting principles.
Principles of Combination
The financial statements include the operations of Barrington University, Inc.,
a Florida Corporation, Barrington University, Inc., an Alabama Corporation,
Barrington University, Inc., an Iowa Corporation, Spanish University of America,
Inc., International Educational Group, Inc. and International Educational Group,
L.L.C., all of which are under common control.
7
<PAGE> 11
International Educational Group, L.L.C.
Notes to Financial Statements
June 30, 1999
International Educational Group, Inc. has ceased operating and was succeeded by
International Group, L.L.C. Barrington University, Inc. (Florida and Iowa), have
both ceased operating and were succeeded by the Alabama Corporation. All of the
companies have December 31st year-ends.
Significant intercompany transactions and balances have been eliminated
The following represents the capital structure of the companies included in the
combined financial statements:
Barrington University, Inc. (a Florida Corporation)
Authorized 7,500 shares - $1.00 par value - no longer in operation
Barrington University, Inc. (an Alabama Corporation)
Authorized 7,500 shares - $1.00 par value, issued and outstanding 100 shares
Barrington University, Inc. (an Iowa Corporation)
Authorized 7,500 shares - $1.00 par value - no longer in operation
Spanish University of America, Inc. (a Florida Corporation)
Authorized 7,500 shares - $1.00 par value, issued and outstanding 100 shares
International Educational Group, L.L.C. (a New York Limited Liability Company)
International Educational Group, Inc. (a New York Corporation)
Authorized 200 shares without par value - no longer in operation.
Cash and Equivalents:
All cash and money market accounts are reported as Cash and Equivalents.
Property and Equipment:
Property and equipment are stated at cost and depreciated using the
straight-line method over the estimated life of the assets ranging from five to
seven years.
Expenditures for major renewals and betterments that extend the useful lives of
property and equipment are capitalized. Expenditures for maintenance and repairs
are charged to expense as incurred.
8
<PAGE> 12
International Educational Group, L.L.C.
Notes to Financial Statements
June 30, 1999
Income Taxes:
International Educational Group, L.L.C. is a Limited Liability Company and is
not required to pay any federal or state income tax. Income tax expense for
Barrington University, Inc. was $6,060 for the twelve-month period ended June
30, 1999. Income tax expense for Barrington University, Inc. and International
Educational Group, Inc. was $2,011 for the twelve-month period ended June 30,
1998.
Use of Estimates:
The preparation of financial statements requires management to make certain
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses. An example is the provision for doubtful
accounts, unearned revenue, and the accrued recruiting fees. Actual results may
differ from these estimates.
Revenue Recognition
The school's curriculum is designed to allow a student to earn a degree by
self-study. Upon registration, each student is given an identification number
and password to begin his studies. Enrollment is completed upon the receipt of
an initial payment at which time all of the course materials including books are
delivered to the student. 80% of the students complete the courses required to
earn a degree during the first twelve months after making their initial payment.
The balance of the students complete their studies within twenty-four months
after making an initial payment.
Revenue is recognized when enrollment is completed. Revenue recognition is based
upon the obligation that the school has to provide services to the students. A
twenty-four month period is used for this calculation. Unearned revenue is the
amount of tuition that has not yet been recognized as revenue.
Revenue earned from affiliations with foreign universities is recognized upon
receipt.
At June 30, 1999 there was approximately $1,700,000 in tuition due from students
that have registered but have not made an initial payment. This tuition has not
been recognized as revenue, nor has it been recorded as a receivable by the
Company.
Tuition Receivable
The school offers a variety of degree programs and students are required to
complete payment within one year of enrollment, two year payment plans are
offered to students with hardships. Degrees are not conferred if a student is
not fully paid.
9
<PAGE> 13
International Educational Group, L.L.C.
Notes to Financial Statements
June 30, 1999
Tuition receivable is recorded when a student completes enrollment by making an
initial payment. Tuition receivable is broken down into two categories:
o Tuition Receivable - Current; is tuition due from students that is
payable within the succeeding twelve months.
o Tuition Receivable - Non-current; is tuition due from students that is
payable beyond twelve months.
Research and Development
All costs incurred for research and development is expensed.
Recruiting Fees
Students learn about the school via the Internet or are recruited through a
worldwide network of recruiters. Recruiters are paid when the Company receives
the tuition. In 1999 the Company expanded its network of recruiters and
recruiting costs have increased accordingly. Recruiting fees are accrued for
tuition receivable.
Note 2 - Other Liabilities
Other liabilities consist of the non-current portion of unearned revenue (see
revenue recognition) based upon the Company's policy of income recognition, and
the non-current portion of accrued recruiting fees (see accrued recruiting fees)
based upon the Company's policy of accruing recruiting fees.
Note 3 - Long-term Leases and Subsequent Event
The Company leases its New York City sales and administrative offices under a
lease that expires May 31, 2001. On September 29, 1999 the Company entered into
a three-year lease for sales and administrative offices to be located in Boca
Raton, Florida. Future minimum rental payments required under these operating
leases are as follows:
Period Ended June 30, 2000 $ 44,275
Period Ended June 30, 2001 79,863
Period Ended June 30, 2002 21,863
10
<PAGE> 14
International Educational Group, L.L.C.
Notes to Financial Statements
June 30, 1999
Rent expense for the twelve-month period ended June 30, 1999 and 1998 was
$58,800 and $83,884 respectively.
Note 4 - Related Party Transactions
Significant transactions are recorded between the commonly controlled companies;
all of the intercompany transactions and balances have been eliminated. During
1998 one of the partners was reimbursed $132,000 for start up expenses and
$55,000 for legal fees. All of the costs were expensed upon receipt of the
partners accounting.
Note 5 - Y2K and Factors that May Affect Future Operations
Computers frequently use only two digits to recognize years and on January 1,
2000 many computer systems, as well as equipment that uses embedded computer
chips, may be unable o distinguish between the years 1900 and 2000; if not
remediated this problem could create system errors and failures resulting in the
disruption of normal business operations.
The Company has tested, and where appropriate, modified its data processing
equipment to be Y2K compliant. However, there may be some third parties, such as
governmental agencies, utilities, telecommunication companies, vendors,
suppliers and customers who may not be able to continue business with the
Company due to their own Year 2000 problems. Also, risks, associated with some
foreign third parties may be greater since there is general concern that some
entities operating outside the United States are not addressing Year 2000 issues
on a timely basis. There can be no assurance that any efforts made will fully
mitigate the effect of Year 2000 issues.
Note 6 - Other Business Developments
On October 6, 1999 the owners of the combined companies entered into an
agreement to acquire 4,200,000 common shares of Donnebroke Corporation for
$325,000. Pursuant to the agreement, Donnebroke will receive all of the
outstanding capital stock interests in Barrington University, Inc., an Alabama
Corporation, Barrington University, Inc., a Florida Corporation, and Spanish
University of America Foundations, Inc. Upon completion of this transaction,
International Educational Group, L.L.C. will cease operating and Donnebroke
Corporation will change its name to Virtual Academics.com, Inc. and be the
successor.
11
<PAGE> 15
INTERNATIONAL EDUCATIONAL GROUP, L.L.C.
COMBINED BALANCE SHEET
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash and Equivalents $ 49,608
Tuition Receivable, Current, net of allowance for doubtful
accounts of $ 65,261 539,010
Prepaid Recruiting Fees, Current 140,054
--------
Total Current Assets 728,672
--------
PROPERTY AND EQUIPMENT
Computer Equipment 14,826
Furniture and Fixtures 20,060
--------
Sub-total 34,886
Less: Accumulated Depreciation 14,150
--------
Total Property and Equipment 20,736
--------
OTHER ASSETS
Tuition Receivable, Non-current, net of allowance for doubtful
accounts of $ 16,315 134,752
Prepaid Recruiting Fees, Non-current 19,763
Security Deposits 4,400
--------
TOTAL ASSETS $908,323
========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 21,744
Unearned Revenue, Current 619,164
Accrued Recruiting Fees, Current 121,924
Income Taxes Payable 7,741
Other Accrued Expenses and Taxes Payable 8,727
--------
Total Current Liabilities 779,300
--------
OTHER LIABILITIES
Unearned Revenue, Non-current 87,368
Accrued Recruiting Fees, Non-current 30,481
--------
Total Other Liabilities 117,849
--------
PARTNERS' EQUITY 11,174
--------
TOTAL LIABILITIES AND PARTNERS' EQUITY $908,323
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE> 16
INTERNATIONAL EDUCATIONAL GROUP, L.L.C.
COMBINED STATEMENT OF OPERATIONS AND PARTNERS EQUITY
FOR THE THREE MONTHS ENDING SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
REVENUE $ 265,311
---------
COSTS AND EXPENSES
Recruiting Fees 43,855
Other Cost of Delivering Services 20,937
General and Administrative Expenses 136,982
Depreciation 1,139
---------
Total Costs and Expenses 202,913
---------
INCOME BEFORE INCOME TAX 62,398
Income Tax Expense 3,314
---------
NET INCOME 59,084
PARTNERS' EQUITY
At Beginning of Period 4,242
Less: Distributions (52,152)
---------
At End of Period $ 11,174
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE> 17
INTERNATIONAL EDUCATIONAL GROUP, L.L.C.
COMBINED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDING SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit $ 59,084
Adjustment to Reconcile Net Profit to Net Cash Provided
by Operating Activities
Depreciation 1,139
(Increase) Decrease in:
Tuition Receivable, Current 17,531
Prepaid Recruiting Fees, Current 4,349
Other Assets
Tuition Receivable, Non-current 4,383
Prepaid Recruiting Fees, Current (5,452)
Increase (Decrease) in :
Accounts Payable 4,485
Unearned Revenue, Current (19,223)
Accrued Recruiting Fees, Current (3,966)
Income Taxes Payable 3,314
Other Accrued Expenses and Taxes Payable 3,285
Other Liabilities
Unearned Revenue, Non-current 24,100
Accrued Recruiting Fees, Non-current (991)
--------
Net Cash Provided by Operating Activities 92,038
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Fixed Assets --
--------
Net Cash Used by Investing Activities --
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to Partners (52,152)
--------
Net Cash Used by Financing Activities (52,152)
--------
Net Decrease in Cash and Equivalents 39,886
CASH AND EQUIVALENTS
At Beginning of Period 9,722
--------
At End of Period $ 49,608
========
SUPPLEMENTAL DISCLOSURE
Interest Paid $ --
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE> 18
VIRTUAL ACADEMICS.COM, INC.
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
On December 8, 1999, Steven Bettinger and Robert Bettinger (the Bettingers)
acquired 4,200,000 shares of Donnebrooke Corp. Prior to the purchase of these
shares, Donnebrooke Corp. had 6,346,733 shares outstanding (after cancellation
of 5,274,383 shares). Accordingly, the Bettingers will own 66% of Donnebrooke
Corp. outstanding shares after their purchase. In connection with the purchase
of the Donnebrooke Corp. shares, the Bettingers, also the owners of
International Education Group, LLC (IEG) and IEG subsidiaries, Barrington
University, Inc. (a Florida corporation), Barrington University, Inc. (an
Alabama corporation), and Spanish University of America Foundation, Inc.,
transferred their interest in these companies to Donnebrooke Corp. Donnebrook
Corp. then changed its name to Virtual Academics.com, Inc.
Donnebrooke Corp. had no assets or operating activity; as a result, the
transaction (the acquisition of the Donnebrooke Corp. shares and transfer of the
Bettinger-owned companies, referred to in the previous paragraph to Donnebrooke
Corp.) is accounted for as a reverse merger and recapitalization on December 8,
1999, for an additional 2,146,733 shares (the outstanding Donnebrooke shares) in
exchange for no assets. The 4,200,000 shares purchased by the Bettingers have
been accounted for as if they were issued from inception of the Bettinger-owned
companies.
The unaudited pro forma information is presented for illustrative purposes only
and is not indicative of future operating results or financial position.
The pro forma information has been applied to the September 30, 1999, and June
30, 1999, Virtual Academics.com, Inc. (formerly International Education Group,
LLC) financial statements and should be read in conjunction with the separate
financial statements of Virtual Academics.com, Inc., and IEG, which appear
elsewhere herein.
15
<PAGE> 19
VIRTUAL ACADEMICS.COM, INC.
Condensed Pro Forma Balance Sheet
September 30, 1999
<TABLE>
<CAPTION>
Historical Pro Forma
(Unaudited) (Unaudited)
-------- --------
<S> <C> <C>
ASSETS
Current Assets $728,672 $728,672
Property and Equipment 20,736 20,736
Other Assets 158,915 158,915
-------- --------
TOTAL ASSETS $908,323 $908,323
-------- --------
LIABILITIES AND EQUITY
Current Liabilities $779,300 $779,300
-------- --------
Other Liabilities 117,849 117,849
-------- --------
TOTAL LIABILITIES 897,149 897,149
-------- --------
EQUITY
Members Equity 11,174 --
Common Stock, $.00001 par value; 50,000,000 shares authorized;
and 6,346,733 shares issued and outstanding on a pro forma basis -- 63
Additional Paid in Capital -- --
Retained Earnings -- 11,111
-------- --------
TOTAL EQUITY 11,174 11,174
-------- --------
TOTAL LIABILITIES AND EQUITY $908,323 $908,323
======== ========
</TABLE>
VIRTUAL ACADEMICS.COM, INC.
Condensed Pro Forma Statement of Income
<TABLE>
<CAPTION>
Three Months
For the Year Ended June 30, Ended
--------------------------- September 30,
1999 1998 1999
---------- ----------- --------------
<S> <C> <C> <C>
Revenues $ 773,281 $ 554,596 $ 265,311
Costs and Expenses 590,515 548,056 206,227
---------- ---------- ----------
Profit before Pro Forma Adjustments 182,766 6,540 59,084
Pro Forma Ajustments
Provision for Income Taxes 64,000 2,300 20,700
---------- ---------- ----------
Pro Forma Net Income $ 118,766 $ 4,240 $ 38,384
========== ========== ==========
Weighted Average Shares Outstanding 4,200,000 4,200,000 4,200,000
========== ========== ==========
Net Income Per Share - Basic and Diluted $ .03 $ .00 $ .01
========== ========== ==========
</TABLE>
16
<PAGE> 20
VIRTUAL ACADEMICS.COM, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. The unaudited pro forma gives effect to the issuance of 6,346,733
Donnebrooke Corp. shares; $.00001 par value; 4,200,000 shares since
inception; and 2,146733 shares to reflect the reverse merger and
recapitalization.
2. Prior to the reverse merger and recapitalization, the entity was a
limited liability corporation, as such, income taxes are paid by the
owners of the entity; accordingly, a pro forma provision for taxes on
income has been calculated at a statutory rate of 35%.
3. The pro form income per share for basic and diluted assume 4,200,000
shares outstanding.
4. The following represents an unaudited reconciliation of outstanding
shares from December 31, 1998 through the acquisition date, December 8,
1999.
Shares outstanding December 31, 1998 38,072
March, 1999 - Issuance to controlling shareholder 3,602,300
June 30, 1999 - Sale of shares for $10,000 cash 300,000
July 29, 1999 - Shares issued for 3 for 1 forward
split/dividend 7,880,744
-----------
11,821,116
Cancellation of Shares (5,474,383)
-----------
Shares Outstanding - December 8, 1999 6,346,733 (a)
===========
(a) At the date of acquisition 1,750,000 issued and outstanding
Donnebrooke shares were transferred from existing shareholders to
new shareholders for their efforts relating to the reverse merger
and recapitalization.
17
<PAGE> 21
INTERNATIONAL EDUCATIONAL GROUP L.L.C.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
Note 1:
The combined balance sheet as of September 30, 1999, the combined statement of
operations and partners' equity and cash flows for the three months ended as of
September 30, 1999 have been prepared by the Company without audit. In the
opinion of management, all adjustments necessary to present the financial
position, the results operations and cash flows for the periods reported have
been made. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These combined financial statements
should be read in conjunction with the financial statements and the notes
thereto included in the Company's annual report.
Note 2:
The financial statements include a group of companies that are under common
control. Income tax resulting from the profits of the limited liability company
is accrued at the partners level. The income tax shown on the financial
statements represents the income tax on the C Corporations.
18
