EUROWEB INTERNATIONAL CORP.
INDEX
Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1998 (Unaudited) ..................................... 2
Pro Forma Condensed Consolidated Statement of Loss and
Comprehensive Income for the Year Ended
December 31, 1997 (Unaudited) ...................................... 3
Pro Forma Condensed Consolidated Statement of Loss and
Comprehensive Loss for the Nine Months Ended
September 30, 1998 (Unaudited) ..................................... 4
Notes to Pro Forma Condensed Consolidated Financial
Statements (Unaudited) ............................................. 5
<PAGE>
EUROWEB INTERNATIONAL CORP.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
-------------------------------------------------------
ASSETS
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents $ 803,918 $ 300,000(B) $ 3,303,918
2,200,000(A)
Prepaid and other current assets 566,946 566,946
----------- ---------- -----------
Total current assets 1,370,864 2,500,000 3,870,864
Property and equipment and condominium
building held for sale, net 1,705,566 1,705,566
Goodwill, net of accumulated amortization 1,267,707 (587,097)(C) 680,610
Other non-current assets 121,436 121,436
----------- ---------- -----------
$ 4,465,573 $1,912,903 $ 6,378,476
=========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 621,980 $ 621,980
Other 76,000 76,000
----------- -----------
697,980 697,980
----------- -----------
Deferred Revenue 58,041 58,041
----------- -----------
Minority interest - 286,454(D) 286,454
----------- --------- -----------
Common stock subject to mandatory redemption 125,000 125,000
----------- -----------
Stockholders' Equity:
Common stock 6,142 6,142
Additional paid-in capital 20,491,155 147,000(B) 20,638,155
Accumulated deficit (16,954,665) 1,479,449(E) (15,475,216)
Accumulated other comprehensive gain, net 41,920 41,920
----------- ---------- ------------
Total stockholders' equity 3,584,552 1,626,449 5,211,001
----------- ---------- ------------
$ 4,465,573 $1,912,903 $ 6,378,476
=========== ========== ============
</TABLE>
Explanation of pro forma adjustments:
(A) To record sale of EuroWeb Rt as of September 30, 1998
(B) To record the capital contribution by PanTel Rt. to EuroWeb Rt.
(C) To reflect reduction of goodwill as result of sale of minority interest
(D) To reflect minority interest
(E) To reflect gain on the sale of 51% interest in EuroWeb Rt.
See accompanying notes to pro forma unaudited condensed
consolidated financial statements.
2
<PAGE>
EUROWEB INTERNATIONAL CORP.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS
YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
--------------------------------------------------------
<S> <C> <C> <C>
Revenue - Internet $ 1,270,135 $ 1,270,135
----------- -----------
Expenses - (Income)
Compensation and related costs 810,543 810,543
Amortization of goodwill 383,000 $(195,330)(A) 187,670
Interest expense - net 893,166 893,166
Other 1,713,654 1,713,654
----------- ----------- -----------
Total 3,800,363 (195,330) 3,605,033
----------- ----------- -----------
Net income(loss) before minority interest (2,530,228) 195,330 (2,334,898)
Minority interest - (116,374)(B) (116,374)
----------- ---------- -----------
Net income(loss) (2,530,228) 311,704 (2,218,524)
Other comprehensive loss (35,900) (35,900)
----------- ---------- -----------
Comprehensive loss $(2,566,128) $ 311,704 $(2,254,424)
=========== ========== ===========
Net loss per share - basic and diluted $ (.60)
===========
Weighted average number of common
shares outstanding 3,728,000
</TABLE>
Notes:
(A) Reduction of amortization of goodwill due to sale of 51% of EuroWeb Rt.
(B) Represents 51% of net loss of EuroWeb Rt. for the period
See accompanying notes to pro forma unaudited condensed
consolidated financial statements.
3
<PAGE>
EUROWEB INTERNATIONAL CORP.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
----------------------------------------------------------
<S> <C> <C> <C>
Revenues
Internet $1,345,953 $1,345,953
Construction and rent income 1,827,021 1,827,021
---------- ----------
3,172,974 3,172,974
---------- ----------
Expenses(Income)
Cost of construction 1,723,870 1,723,870
Amortization of goodwill 291,000 $(148,410)(A) 142,590
Other 1,924,566 1,924,566
---------- --------- ---------
Total 3,939,436 (148,410) 3,791,026
---------- --------- ---------
Net income(loss) before minority interest (766,462) 148,410 (618,052)
Minority interest - 68,968 (B) 68,968
---------- --------- ----------
Net income(loss) (766,462) 79,442 (687,020)
Other comprehensive income 77,820 - 77,820
---------- --------- ----------
Comprehensive loss $ (688,642) $ 79,442 $(609,200)
========== ========= =========
Net loss per share - basic and diluted $ .13
=========
Weighted average number of common
shares outstanding 5,247,261
</TABLE>
Notes:
(A) Reduction of amortization of goodwill due to sale of 51% of EuroWeb Rt.
(B) Represents 51% of net income of EuroWeb Rt. for the period
See accompanying notes to pro forma unaudited condensed consolidated
financial statements.
4
<PAGE>
EUROWEB INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unauditedf pro forma financial statements include the
accounts of EuroWeb International Corp. (the "Company") and its two
wholly-owned subsidiaries and its 49% retained interest in EuroWeb Rt.
All intercompany balances and transactions have been eliminated.
2. The balances shown include the account balances of all the companies,
adjusted to reflect the following transactions which are based on an
agreement consummated November 20, 1998, between the Company and PanTel
Rt., an unrelated Hungarian company:
a. The sale by the Company of 51% of its ownership of EuroWeb Rt.
for $2,200,000 in cash.
b. The contribution by the purchaser of $300,000 to the capital of
EuroWeb Rt.
3. Although the Company will retain only 49% of the stock of EuroWeb Rt.,
management believes that it will continue to exercise managerial and
operating control. The Company's management further believes that the
presentation of its financial statements in consolidated format rather
than applying the equity method, its financial condition and the results
of operations are set forth in greater detail and therefore are more
informative to the interested reader. Accordingly, the accompanying pro
forma financial statements have been prepared on a consolidated basis,
rather than using the equity method for the 49% investment in EuroWeb Rt.
The Company's management is continuing to evaluate its ability to
exercise control of EuroWeb Rt. and the continued use of the consolidated
basis of accounting for its retained 49% interest in EuroWeb Rt. If the
equity method had been used in preparing the accompanying pro forma
statements, net loss for each period and stockholders' equity at
September 30, 1998 would be unchanged from the amounts shown in the
accompanying financial statements.
4. The unaudited pro forma financial statements are intended for
informational purposes and are not necessarily indicative of the future
financial position or future results of operations of the companies, or of
the financial position or the results of operations of the companies that
would have actually occurred if the sale of 51% of EuroWeb Rt. had
occurred at the date or during the periods shown on each pro forma
financial statements.
5
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
EUROWEB INTERNATIONAL CORP.
445 Park Avenue
New York, NY 10022
(Registrant)
By: /s/Frank R. Cohen
------------------
Frank R. Cohen
Chairman of Board
Dated: December 7, 1998
New York, New York
