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
December 30, 1999
(Date of report)
VIANET TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
<S> <C> <C>
NEVADA 033-55254-19 87-0434285
(State of Incorporation) (Commission File Number) (IRS Employer ID)
</TABLE>
83 Mercer Street, New York, New York 10012
(Address of Principle Executive Offices)
(212) 219-7680
(Registrant's Telephone Number)
Vianet Technologies, Inc. (the "Company") initially filed a Current Report on
Form 8-K with the Securities and Exchange Commission on January 7, 2000, which
is hereby amended by this Form 8-K/A to comply with Item 7 of Form 8-K and the
provisions of Rule 3-05 of Regulation S-X.
<PAGE>
ITEM 2. Acquisition or Disposition of Assets
On December 30, 1999, Vianet Technologies, Inc. (the "Company") completed a
Merger Agreement (the "Merger") under the terms of which the Company acquired
all of the outstanding shares of PSI Communications, Inc. ("PSI"). PSI, a
designer and manufacturer of fiber optic access equipment, specializes in the
application of advanced technologies that help Access and Exchange networks
operate and interact efficiently and reliably. Serving the emerging commercial
multimedia communications markets, PSI focuses on providing equipment to
interface for carrier access and enterprise fiber optic networks with their DLC
Mux product. PSI has built a product for the weakest link in the
Internet/Intranet link - the last mile, also known as the local loop.
The DLC system has the capability to transport Bellcore and ITU-T standard voice
and data interfaces over fiber optic T-1, E-1 and V.35 with plans to add
broadband Internet interfaces including ISDN, BRI / PRI, xDSL, IP video and
Frame Relay. This combination will result in the first true integrated V5.2 DLC
fiber optics multiplexer. This technology solves a long time telco concern: how
to reach the consumer market with high bandwidth capabilities, cost effectively.
The Merger provided for PSI shareholders to receive 2,500,000 shares of common
stock of the Company in exchange for all the outstanding shares of PSI.
<PAGE>
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
The Company acquired 100% of the outstanding shares of capital
stock of PSI Communications, Inc. ("PSI") on December 30,
1999. For financial statement presentation the effective date
of the Merger is December 31, 1999. The financial statements
of PSI filed herein as Addendum I include:
(1) Independent Auditors' Report
(2) Balance Sheets at December 31, 1999 and December 31, 1998- (Audited)
(3) Statements of Operations and Accumulated Deficit for the year ended
December 31, 1999 and for the period from February 18, 1998 (Inception) to
December 31, 1998- (Audited)
(4) Statements of Cash Flows for the year ended December 31, 1999 and for
the period from February 18, 1998 (Inception) to December 31, 1998- (Audited)
(5) Notes to Financial Statements
(b) Pro Forma Financial Information filed herein as Addendum II are as
follows:
(1) Pro Forma Consolidated Balance Sheets (Unaudited) as of December 31,
1999.
(2) Pro Forma Consolidated Statements (Unaudited) of Operations for the
twelve months ended December 31, 1999
(c) Exhibits (Previously filed as an exhibit to the Company's Form 8-K,
filed on January 7, 2000).
(1) Merger Agreement
(2) Employment contract with John Shaunfield, Jr.
(3) Employment contract with John Shaunfield, Sr.
(4) Employment contract with Todd Grassi
(5) Employment contract with Michael Pearson
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the Undersigned, thereunto duly authorized.
Vianet Technologies, INC.
(Registrant)
March 14, 2000
/s/ Vincent Santivasci
Vincent Santivasci
Chief Financial Officer
<PAGE>
Addendum I
PSI COMMUNICATIONS, INC.
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999 AND FOR THE PERIOD
FEBRUARY 18, 1998 (INCEPTION) TO DECEMBER 31, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
FINANCIAL STATEMENTS:
<S> <C>
Independent Auditors' Report 1
Balance Sheets - December 31, 1999 and 1998 2
Statements of Operations and Accumulated Deficit - Year Ended
December 31, 1999 and for the Period February 18, 1998
(Inception) to December 31, 1998 3
Statements of Cash Flows - Year Ended December 31, 1999 and for the Period
February 18, 1998 (Inception) to December 31, 1998 4
Notes to Financial Statements 5-8
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
PSI Communications, Inc.
We have audited the accompanying balance sheets of PSI Communications, Inc.
as of December 31, 1999 and 1998, and the related statements of operations and
accumulated deficit, and cash flows for the year ended December 31, 1999 and for
the period February 18, 1998 (inception) to December 31, 1998. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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 PSI Communications, Inc. as
of December 31, 1999 and 1998, and the results of its operations and cash flows
for the year ended December 31, 1999 and for the period February 18, 1998
(inception) to December 31, 1998, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has sustained significant operating losses and
has a significant working capital deficiency. These factors raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Edward Isaacs & Company LLP
New York, New York
February 26, 2000
- 1 -
<PAGE>
PSI COMMUNICATIONS, INC.
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
<TABLE>
<CAPTION>
1999 1998
Current Assets:
<S> <C> <C>
Cash ......................................................................... $ 99,538 $ 6,806
Accounts receivable .......................................................... 6,543 --
----------- -----------
Total Current Assets ..................................................... 106,081 6,806
Property and Equipment ....................................................... 24,489 2,366
----------- -----------
$ 130,570 $ 9,172
=========== ===========
LIABILITIES AND DEFICIENCY IN SHAREHOLDERS' EQUITY
Current Assets:
Accounts payable and accrued liabilities ..................................... $ 433,296 $ 240,550
Payable to Vianet Technologies, Inc. ......................................... 491,970 --
Loans Payable to Shareholders ................................................ 64,326 26,500
----------- -----------
Total Current Liabilities ................................................ 989,592 267,050
----------- -----------
Deficiency in Shareholders' Equity:
Common stock, $0.01 par value, 1,000,000 shares authorized;
104,200 and 84,200 shares outstanding .................................... 1,042 842
Additional paid-in capital ................................................... 721,258 111,158
Accumulated deficit .......................................................... (1,581,322) (369,878)
----------- -----------
Total Deficiency in Shareholders' Equity ................................. (859,022) (257,878)
----------- -----------
$ 130,570 $ 9,172
=========== ===========
</TABLE>
See Independent Auditors' Report and notes to financial statements.
<PAGE>
PSI COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
YEAR ENDED DECEMBER 31, 1999 AND FOR THE PERIOD
FEBRUARY 18, 1998 (INCEPTION) TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
----- ----
Revenue:
<S> <C> <C>
Sales ........................................................ $ 547,060 $ 40,000
----------- -----------
Costs and Expenses:
Cost of Sales ................................................ 525,292 --
Research and development ..................................... 314,480 218,597
Selling, general and administrative .......................... 308,432 191,281
Merger costs ................................................. 610,300 --
----------- -----------
1,758,504 409,878
----------- -----------
Net Loss ................................................. (1,211,444) (369,878)
Accumulated Deficit at beginning .................................. (369,878) --
----------- -----------
Accumulated Deficit at end ............................... $(1,581,322) $ (369,878)
=========== ===========
</TABLE>
See Independent Auditors' Report and notes to financial statements
<PAGE>
PSI COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999 AND FOR THE PERIOD
FEBRUARY 18, 1998 (INCEPTION TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
------- ------
Operating Activities:
<S> <C> <C>
Net loss .............................................. $(1,211,444) $ (369,878)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization ..................... 6,705 753
Issuance of common stock for services ............. 610,300 --
Increase (decrease) in cash attributable to changes
in assets and liabilities:
Accounts receivable .......................... (6,543) --
Accounts payable and accrued liabilities ..... 192,746 240,550
----------- -----------
Net Cash Used In Operating Activities ............. (408,236) (128,575)
----------- -----------
Cash Used in Investing Activities:
Capital expenditures .................................. (28,828) (3,119)
----------- -----------
Financing Activities:
Loans from Vianet Technologies, Inc. .................. 491,970 --
Capital contributed ................................... -- 112,000
Loans from shareholders ............................... 37,826 26,500
----------- -----------
Net Cash Provided By Financing Activities ......... 529,796 138,500
----------- -----------
Net Increase In Cash .............................. 92,732 6,806
Cash at beginning .......................................... 6,806 --
----------- -----------
Cash at end ....................................... $ 99,538 $ 6,806
=========== ===========
</TABLE>
See Independent Auditors' Report and notes to financial statements.
<PAGE>
PSI COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999 AND FOR THE PERIOD
FEBRUARY 18, 1998 (INCEPTION) TO DECEMBER 31, 1998
1. Organization and Business
PSI Communications, Inc. ("PSI") was incorporated in the State of
Delaware, U.S. on April 29, 1999. Effective as of May 20, 1999,
pursuant to an Assignment, Contribution and Assumption Agreement, PSI
issued 84,200 shares of common stock to the limited partners
(assignors) of GNS, Ltd., a Texas limited partnership (the
Partnership, GNS) for the assignors' collective 99.9% interest in the
Partnership. The Partnership was formed February 18, 1998 to develop
and market fiber optic network access equipment for multimedia
communications and telecommunications markets.
The accompanying financial statements include all transactions
for GNS since its inception as predecessor to PSI (collectively the
"Company").
2. Going Concern
The Company has sustained significant operating losses and has a
significant working capital deficiency. Additionally, the Company will
continued to incur operating losses and negative cash flows for the
forseeable future until it completes development of its technologies
and can generate significant revenues. Effective December 31, 1999,
the Company merged into Vianet Technologies, Inc. ("Vianet") (see Note
4). The Company is dependent on Vianet's ability to obtain additional
sources of financing to fund its working capital requirements. There
is no assurance that Vianet will be able to continue to obtain
adequate funding on acceptable terms and there is no assurance that
once obtained such additional funding will result in the Company's
profitable operations.
3. Significant Accounting Policies
Property and Equipment:
Property and equipment are stated at cost and depreciated over
their estimated useful lives, which range from two to seven years.
Long-lived assets are reviewed for impairment whenever the facts and
circumstances indicate that the carrying amount may not be
recoverable.
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 and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Significant
estimates include management's determination of cost of services
performed. Actual results could differ from those estimates.
- 5 -
<PAGE>
PSI COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999 AND FOR THE PERIOD
FEBRUARY 18, 1998 (INCEPTION) TO DECEMBER 31, 1998
3. Significant Accounting Policies (Continued)
Income Taxes:
The Company accounts for income taxes under the asset and
liability method as required by SFAS No. 109, Accounting for Income
Taxes. Under this method, deferred tax assets and liabilities are
determined based on the differences between the financial reporting
and income tax bases of assets and liabilities and are measured using
the enacted tax rates and laws expected to apply to taxable income in
the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
Prior to May 20, 1999, there was no provision for income taxes in
the accompanying financial statements since such taxes, if any, were
the responsibility of the individual partners of GNS.
Research and Development:
Research and development costs are expensed as incurred.
4. Acquisition by Vianet Technologies, Inc.
On July 26, 1999, the Company entered into an option agreement to
sell 100% of the Company's shares to Vianet Technologies, Inc.
("Vianet"), in exchange for common shares of Vianet. As part of the
agreement, the Company received advances from Vianet aggregating
$491,970. Effective as of December 31, 1999, pursuant to the Agreement
and Plan of Merger, Vianet Access, Inc. ("Access") a wholly-owned
subsidiary of Vianet, effected a tax-free reverse subsidiary merger of
Access into PSI, which resulted in Vianet owning all of the issued and
outstanding shares of PSI and the shareholders of PSI receiving
2,500,000 shares of Vianet in exchange for their PSI shares. In
addition, $300,000 was paid to PSI shareholders in proportion to the
shareholder loans and other consideration owed to such shareholders.
The Agreement also provides for certain post closing adjustments. In
connection with the merger, PSI incurred a finders fee and issued
20,000 shares of common stock as consideration less a finder's fee.
The fair value of the shares (based upon Vianet's share price) has
been charged to operations.
5. Property and Equipment
Property and equipment consists of:
<TABLE>
<CAPTION>
1999 1998
-------------- ---------------
<S> <C> <C>
Furniture and equipment $ 31,947 $ 3,119
Less: Accumulated depreciation 7,458 753
-------------- ---------------
$ 24,489 $ 2,366
============ =============
</TABLE>
- 6 -
<PAGE>
PSI COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999 AND FOR THE PERIOD
FEBRUARY 18, 1998 (INCEPTION) TO DECEMBER 31, 1998
6. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consists of:
<TABLE>
<CAPTION>
1999 1998
-------------- ----------------
<S> <C> <C>
Accrued compensation $ 407,780 $ 236,530
Accrued taxes other than on income 20,319 2,811
Other accruals 5,197 1,209
-------------- --------------
$ 433,296 $ 240,550
=========== ==============
</TABLE>
7. Loans Payable to Shareholders
The loans payable to shareholders are noninterest bearing and have no
specified repayment terms.
8. Income Taxes
The tax effects of the temporary differences that give rise to
significant portions of deferred tax assets at December 31, 1999 are as
follows:
Deferred Tax Assets:
<TABLE>
<CAPTION>
<S> <C>
Federal net operating loss carryforward $ 154,000
Accounts payable and accrued liabilities 163,000
Depreciation 2,000
Merger Costs 244,000
-------------
563,000
Less: Valuation allowance (563,000)
-------------
Deferred Tax Asset $ -
=============
</TABLE>
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible. Management considers the projected
future taxable income and tax planning strategies in making this
assessment. The valuation allowance was recorded due to the uncertainty
in the realization of the net operating loss carryforward and other
deferred tax assets.
There was no provision for income taxes for the year ended December 31,
1999 due to the offset of the valuation allowance against the related
tax benefit for Federal income tax purposes. PSI has an unused net
operating loss carryforward of approximately $385,000 expiring in 2019.
The availability of the net operating loss carryforward to offset
income in future years, if any, is limited by Internal Revenue Code
Section 382 as a result of the change in ownership.
- 7 -
<PAGE>
PSI COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999 AND FOR THE PERIOD
FEBRUARY 18, 1998 (INCEPTION) TO DECEMBER 31, 1998
9. Related Party Transactions
Compensation Payable:
Accounts payable and accrued liabilities at December 31, 1999 and
1998 include $407,780 and $236,500 of compensation payable to four
shareholders of the Company.
Sales to Customers:
All sales in 1999 and 1998 were to entities affiliated with one
of Company's principal shareholders.
10. Commitments and Contingencies
Leases:
The Company leases office space under an operating lease
extending to December 2000. The lease provides for payment by the
Company of other expenses. Minimum rental payments under the
noncancellable lease are $52,100.
Rent expense for 1999 and 1998 was $22,000 and $11,200,
respectively.
- 8 -
<PAGE>
Addendum II
On December 30, 1999, the Company acquired all of the outstanding capital
stock of PSI Communications, Inc. ("PSI") for approximately $4.4 million
including acquisition costs. The Merger was accounted for as a purchase. For
financial reporting purposes, the effective date of the Merger is December 31,
1999. A significant portion of the purchase price was identified in an appraisal
as intangible assets, including approximately $2.3 million of acquired
in-process research and development. The in-process research and development was
calculated taking in consideration the expected future revenues over the life of
the technology acquired, the estimated selling and other costs to market the
products and a net present value discount rate determined to be appropriate to
the associated risks of the business.
The following pro forma financial statements have been prepared as if the
acquisition of PSI Communications, Inc. and Subsidiaries by the Company had
occurred on the first day of the periods presented in the pro forma statements
of operations and as of December 31, 1999 in the pro forma balance sheet. The
pro forma financial information is based on the historical financial statements
of the Company and gives effect to the combination under the purchase method of
accounting. The pro forma financial statements should be read in conjunction
with the historical financial statements of the Company and should not be
considered to be a representation of actual results that would have occurred if
the transaction had occurred on the dates indicated.
<PAGE>
VIANET TECHNOLOGIES, INC. AND SUBSIDIARY (VIANET)
PRO FORMA -CONSOLIDATED BALANCE SHEET
December 31, 1999
UNAUDITED
<TABLE>
<CAPTION>
(1) (2)
Proforma
Current Assets: VIANET Adjustments
(Historical) PSI(Historical) PSI Acquisition Proforma
<S> <C> <C> <C> <C>
Cash and cash equivalents ................. $ 115,101 $ 99,538 $ -- $ 214,639
Accounts receivable, net of allowances .... 88,486 6,543 -- 95,029
Prepaid and other current assets .......... 57,338 -- -- 57,338
------------ ------------ ------------ ------------
Total Current Assets ...................... 260,925 106,081 -- 367,006
------------ ------------ ------------ ------------
Property and Equipment .................... 259,185 24,489 -- 283,674
------------ ------------ ------------ ------------
Other Assets
Loans PSI Communications .................. 491,970 -- (491,970)(4) --
Receivable from Develcon .................. 1,624,828 -- -- 1,624,828
Intangible assets from business acquisition 4,900,365 -- 2,061,685(5) 6,962,050
Technology license ........................ 874,047 -- -- 874,047
Other ..................................... 136,415 -- -- 136,415
------------ ------------ ------------ ------------
Total Other Assets ........................ 8,027,625 -- 1,569,715 9,597,340
------------ ------------ ------------ ------------
$ 8,547,735 $ 130,570 $ 1,569,715 $ 10,248,020
============ ============ ============ ============
Current Liabilities:
Notes payable ............................. $ 27,799 $ -- $ -- $ 27,799
Payable to Vianet Technologies, Inc. ...... -- 491,970 (491,970)(4) --
Accounts payable and accruals ............. 2,386,138 433,296 338,125(7) 3,157,559
Demand loans payable-related parties ...... 2,998,970 64,326 -- 3,063,296
------------ ------------ ------------ ------------
Total Current Liabilities ................. 5,412,907 989,592 (153,845) 6,248,654
------------ ------------ ------------ ------------
Convertible Debentures (noncurrent) ....... 1,125,000 -- -- 1,125,000
------------ ------------ ------------ ------------
Long-Term Debt ............................ 50,000 -- -- 50,000
------------ ------------ ------------ ------------
Shareholders' Equity (Deficit)
Common shares ............................. 12,178 1,042 1,458(3)&(8) 14,678
Subscription receivable ................... (500) -- -- (500)
Additional paid-in capital ................ 21,887,359 721,258 2,454,689(3)&(8) 25,063,306
Accumulated deficit ....................... (19,939,209) (1,581,322) (732,587)(6) (22,253,118)
------------ ------------ ------------ ------------
Total Shareholders' Equity (Deficit) ...... 1,959,828 (859,022) 1,723,560 2,824,366
------------ ------------ ------------ ------------
$ 8,547,735 $ 130,570 $ 1,569,715 $ 10,248,020
============ ============ ============ ============
</TABLE>
<PAGE>
NOTES TO PRO FORMA -CONSOLIDATED BALANCE SHEET
(1) December 31, 1999 Historical Consolidated Balance Sheet for Vianet
Technologies, Inc. includes the acquisition of Vianet Labs (Infinop) as well as
the acquisition and subsequent disposal of Develcon Electronics Ltd.
(2) Audited December 31, 1999 Historical Consolidated Balance Sheet for PSI
Communications, Inc.
(3) Shares of common stock issued as part of merger consideration.
(4) Elimination of intercompany balances.
(5) Additional Goodwill as a result of the acquisition of PSI
Communications, Inc and Subsidiary. Includes $40,000 in estimated audit fees and
$22,500 in legal fees associated with the acquisition.
(6) Net adjustment to Accumulated Deficit resulting from the pro forma
effect of the acquisition of PSI including a one-time non-recurring transaction
attributing $2,305,595 to in-process research and development.
(7) $40,000 in estimated audit fees, $22,500 in legal fees, in addition to
an accrual for shares valued at $275,625 to be issued for services associated
with the acquisition.
(8) Adjustment of common stock for $1,042, APIC for $721,258.
Note: Allocation of Purchase Price
The following table outlines the allocation of Purchase Price for the
acquistion of PSI.
Tangible Assets $ 131,000
Intangible Assets (goodwill) 2,062,000
In-Process Research and Development 2,306,000
------------
Subtotal 4,499,000
Liabilities Assumed (990,000)
------------
3,509,000
<PAGE>
VIANET TECHNOLOGIES, INC. AND SUBSIDIARY (VIANET)
Pro Forma Consolidated Statement of Operations
Period from January 1, 1999 to December 31,1999
Unaudited
<TABLE>
<CAPTION>
(1) (2) Pro Forma (3) Pro Forma
VIANET Pro Forma Adjustments Pro Forma PSI Adjustments Pro Forma
(Historical) Infinop Infinop (Historical) PSI as adjusted
Jan. 1 -
Oct. 12 Acquisition AUDITED Acquisition
Revenue:
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales and services $ 46,862 $ 721,322 $ - $ 768,184 $ 547,060 $ - $ 1,315,244
Interest and other income 110,390 - - 110,390 - - 110,390
---------- --------- ----------- ----------- ------------ ------------ -----------
157,252 721,322 - 878,574 547,060 - 1,425,634
---------- --------- ----------- ----------- ------------ ------------ -----------
Costs and Expenses:
Cost of sales and services 21,604 309,079 - 330,683 525,292 - 855,975
Research and development 314,014 712,225 - 1,026,239 314,480 - 1,340,719
Selling, general and
administrative 7,046,268 541,030 1,633,455(4) 9,220,753 308,432 687,228(5) 10,216,413(4)
(5)
Merger costs - - - - 610,300 - 610,300
---------- --------- ----------- ----------- ------------ ------------ -----------
7,381,886 1,562,334 1,633,455 10,577,675 1,758,504 687,228 13,023,407
---------- --------- ----------- ----------- ------------ ------------ -----------
Net Loss $(7,224,634) $ (841,012) $(1,633,455) $ (9,699,101) $ (1,211,444) $ (687,228) $(11,597,773)
============ =========== ============ ============= ============= =========== =============
Loss per share - basic
and diluted $ (0.81) $ (0.92)
Weighted average
number of shares
outstanding 8,912,939 12,608,127
============ ============
</TABLE>
<PAGE>
Notes to Pro Forma Consolidated Statement of Operations
(1) Consolidated Statement of Operations for Vianet Technologies, Inc.
includes the acquisition of Vianet Labs (Infinop) on October 12, 1999.
(2) Unaudited Consolidated Statement of Operations for Vianet Labs
(Infinop) from January 1, 1999 to October 12, 1999.
(3) PSI Communications, Inc. a (PSI) historical (audited)
(4) Amortization of goodwill as a result of acquiring Infinop (3 year
amortization period) $1,633,455.
(5) Amortization of goodwill as a result of acquiring PSI (3 year
amortization period) $687,228.
