SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 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) June 14, 2000
______________
Euroweb International Corp.
_____________________________
(Exact name of registrant as specified in its charter)
Delaware
__________
(State or other jurisdiction of incorporation)
1-1200 13-3696015
________ ___________
(Commission File Number) (IRS Employer Identification No.)
445 Park Avenue, 15th Floor, New York, NY 10022
_________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 758 9870
_______________
N/A
_____
(Former name or former address, if changed since last report)
<PAGE>
8K/A
INFORMATION INCLUDED IN REPORT
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following financial statements and pro forma financial information
omitted from the Company's Report on Form 8-K for the event dated
June 14, 2000 filed with the Commission on June 27, 2000, in reliance
upon instructions 7(a) and 7(b) on Form 8-K, are filed herewith
(a) Financial Statements of business acquired
1. Financial statements for Euroweb Romania S.A. (formerly known
as "Mediator S.A.") as of and for the year ended December 31, 1999.
2. Interim Financial Statements for Euroweb Romania S.A. as of June 30,
2000 and for the six months period ended June 30, 2000, and 1999.
(b) Unaudited Pro Forma condensed consolidated financial information
1.Unaudited pro forma condensed consolidated balance sheet
as of June 30, 2000.
2.Unaudited pro forma condensed consolidated statement of operations
for the year ended December 31, 1999 and for the six months period
ended June 30, 2000.
<PAGE>
Euroweb Romania S.A.
Financial Statements
December 31, 1999
(With Independent Auditors' Report thereon)
<PAGE>
Euroweb Romania, S.A.
Financial Statements
December 31, 1999
Table of Contents
Page
Independent Auditors' Report F-1
Balance Sheet F-2
Statement of Operations F-3
Statement of Changes in Stockholders' Equity F-4
Cash Flow Statement F-5
Notes to Financial Statements F-6
Interim Financial Statements as of June 30, 2000 and For the Six
Month Periods ended June 30, 2000 and 1999 F-13
<PAGE>
Independent Auditors' Report
The Board of Directors
Euroweb Romania, S.A.:
We have audited the accompanying balance sheet of Euroweb Romania S.A.
(the "Company") as of December 31, 1999 and the related statement of
operations, stockholders' equity and cash flows for the year ended December
31, 1999. 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 International Standards on
Auditing, which are substantially the same as those followed in the United
States. These 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 the 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 Euroweb Romania S.A. as
of December 31, 1999, and the results of its operations and its cash flows
for the year ended December 31, 1999, in conformity with generally accepted
accounting principles in the United States.
KPMG Romania SRL
18 August 2000
Madeline Alexander
Audit Partner
F-1
<PAGE>
EUROWEB ROMANIA, S.A.
Balance Sheet
December 31, 1999
<TABLE>
<S> <C>
Assets
Current assets:
Cash and cash equivalents $ 51,841
Trade accounts receivable, less allowance for
doubtful accounts of $0 9,556
Inventories 4,649
Deferred taxes (note 6) 667
Other current assets (note 3) 7,772
----------------
Total current assets 74,485
----------------
Property and equipment (note 4) 175,364
----------------
Total assets $ 249,849
================
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $ 30,072
Other liabilities (note 5) 33,930
Taxes payable 26,595
Accrued expenses 6,133
----------------
Total liabilities 96,730
----------------
Stockholders' equity:
Common stock, ROL 5,000 par value. Authorized 80,000 shares; issued
and outstanding 80,000 shares 31,181
Retained earnings (note 8) 121,938
----------------
Total stockholders' equity 153,119
----------------
Total liabilities and stockholders' equity $ 249,849
================
See accompanying notes to financial statements.
</TABLE>
F-2
<PAGE>
EUROWEB ROMANIA, S.A.
Statement of Operations
Year ended December 31, 1999
<TABLE>
<S> <C>
Sales (note 9) $ 438,291
Cost of sales and services (268,009)
------------------------
Gross profit 170,282
General, selling and administrative expenses (note 10) (25,675)
Depreciation (37,353)
------------------------
107,254
Other income (expenses):
Other operating income 455
Interest income 516
Foreign currency translation 27,272
------------------------
Income before taxes 135,497
Income tax expense (note 6) (27,939)
------------------------
Net income $ 107,558
========================
Basic earnings per share $ 2.27
========================
Weighted average number of common shares outstanding used
in basic EPS calculation $ 47,288
=======================
See accompanying notes to financial statements.
</TABLE>
F-3
<PAGE>
EUROWEB ROMANIA, S.A.
Statement of Changes in Stockholders' Equity
December 31, 1999
<TABLE>
<S> <C> <C> <C>
Common Retained Total
stock earnings Stockholders' Equity
--------------------- ----------------- -----------------------------
Balance at December 31, 1998 $ 12,373 14,380 26,753
Issuance of 60,000 ordinary shares at
USD 0.31 per share 18,808 - 18,808
Net income - 107,558 107,558
---------------------- ---------------- -------------------------------
Balance at December 31, 1999 $ 31,181 121,938 153,119
====================== ================= ===============================
See accompanying notes to financial statements.
</TABLE>
F-4
<PAGE>
EUROWEB ROMANIA, S.A.
Statement of Cash Flows
Year ended December 31, 1999
<TABLE>
<S> <C>
Net income $ 107,558
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 37,353
Deferred taxes (667)
Increase in trade accounts receivable (1,157)
Increase in inventories (4,649)
Decrease in other current assets 17,882
Decrease in trade accounts payable (21,387)
Increase in taxes payable 18,035
Decrease in other liabilities (2,596)
Decrease in accrued expenses 6,133
---------------------
Cash flows from operating activities 156,505
---------------------
Investing activities:
Purchase of property and equipment (164,858)
---------------------
Cash flows used in investing activities (164,858)
Financing activities:
Proceeds from issuance of share capital 18,808
---------------------
Cash flows from used in financing activities 18,808
---------------------
Net increase in cash and cash equivalents 10,455
Cash and cash equivalents at the beginning of the year 41,386
---------------------
Cash and cash equivalents at the end of the year $ 51,841
=====================
Interest received 1,504
Taxes paid (10,571)
See accompanying notes to financial statements.
</TABLE>
F-5
<PAGE>
EUROWEB ROMANIA, S.A.
Notes to Financial Statements
December 31, 1999
(1) Background and principal activities
Euroweb Romania S.A. ("the Company"), formerly Mediator S.A., was
registered with the Romanian Trade Register as a joint-stock company
in March 1998, but the activity started in November 1998. Euroweb
International Corporation acquired 100% of the shares in June 2000.
Euroweb Romania S.A. offers a wide range of products and services
like internet subscriptions, hosting services and sales of modems,
routers and related devices to customers, being one of the market
leaders in this industry. Currently, the Company has around 8,500
subscribers according to a market survey published in
the Economic Daily and has a developed network in 43 cities in Romania.
(2) Significant Accounting Policies and Practices
The significant accounting policies adopted in the preparation of the
financial statements of the Company are set out below.
(a) Basis of Presentation
These financial statements have been prepared in accordance
with generally accepted accounting principles in the United States.
(b) Reporting Currency
The Company's reporting currency is the U.S. dollar.
(c) Functional Currency
The Company conducts business and maintains its accounts in
the Romanian Lei ("ROL"). Romania is considered
highly-inflationary and, therefore, the U.S. dollar is used as the
functional currency. The Company's financial statements presented
in ROL are remeasured into U.S. dollars using the following
policies.
o Monetary assets and liabilities are remeasured into the functional
currency using the exchange rate at the balance sheet date.
o Non-monetary assets and liabilities are remeasured into the functional
currency using historical exchange rates.
o Revenues, expenses, gains and losses are remeasured into the
functional currency using the average exchange rate for the period,
except for revenues and expenses related to non-monetary items that
are remeasured using historical exchange rates.
F-6
<PAGE>
The translation adjustment is recorded in the statement of
operations in the caption "Foreign currency translation."
On December 31, 1999, the exchange rate was ROL 18,255 per $1.00.
(d) Cash Equivalents
For purposes of the statements of cash flows, the Company
considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents.
(e) Estimates
Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and
the disclosure of contingent assets and liabilities to prepare
these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
(f) Inventories
Inventories are stated at the lower of cost and net
realizable value. Net realizable value is the estimated selling
price in the ordinary course of business, less selling expenses.
Cost is determined using the first-in first-out principle.
(g) Property and Equipment
Depreciation of property and equipment is calculated on the
straight-line method over the estimated useful lives of the assets as
follows:
o Computers and other hardware 3 years
o Vehicles 5 years
o Furniture and fixtures 5 to 10 years
F-7
<PAGE>
(h) Revenue Recognition
Sales are recorded at the time goods are sold, and services
rendered, to third parties exclusive of value-added-taxes.
No revenue is recognized if there are significant uncertainties
regarding recovery of the consideration due, associated
costs or the possible return of goods.
(i) Deferred Taxes
The Company accounts for income taxes in accordance with SFAS No.
109 "Accounting for Income Taxes". Deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carry
forwards. Deferred tax assets and liabilities are measured using
enacted tax rates 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 the statement of operations
in the period that includes the enactment date.
(j) Earnings per Share
Basic earnings per share is computed by dividing income available to
common stockholders by the weighted average number
of common shares outstanding for the period. Diluted earnings per
share reflects the effect of common shares issued upon exercise of
stock options and warrants. The Company has not presented diluted
earnings per share because no common stock equivalents were outstanding
during the year ended December 31, 1999.
(3) Other Current Assets
Accrued revenue $ 2,684
Value-Added-Taxes receivable 5,088
---------------
Total other current assets $ 7,772
===============
(4) Property and Equipment
<TABLE>
<S> <C> <C> <C>
December 31, 1999
--------------------------------------------------------
Accumulated Net book
depreciation
Cost depreciation value
---------------- ---------------------- ----------------
---------------- ---------------------- ----------------
Computers and other hardware $ 187,552 32,766 154,786
Vehicles 24,957 4,575 20,382
Fixtures and fittings 208 12 196
---------------- ---------------------- ----------------
---------------- ---------------------- ----------------
Total $ 212,717 37,353 175,364
================ ====================== ================
</TABLE>
F-8
<PAGE>
(5) Other Liabilities
Due to shareholders $ 21,912
Deferred income 5,390
Others 6,628
-----------------
Total other liabilities $ 33,930
=================
(6) Income Taxes
Income tax expense attributable to income from continuing operations of:
Current tax expense $ 28,606
Deferred tax revenue (667)
--------------
Total income tax expense $ 27,939
==============
The statutory corporate tax rate for the year ended December 31, 1999
was 38%. The statutory corporate tax rate effective January 2000 is 25%.
Income tax expense attributable to income from continuing operations
was $27,939 for the year ended December 31, 1999 and differed from
the amounts computed by applying the statutory corporate income tax
rate of 38% to pretax income from continuing operations as a result of
the following:
Computed "expected" tax expense $ 51,489
Increase (reduction) in income taxes resulting from:
Timing differences 667
Permanent differences (24,045)
Other, net (172)
---------------
$ 27,939
===============
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1999 are presented below.
Deferred tax assets:
Inventory $ (10)
Deferred income 677
---------------
---------------
Total gross deferred tax assets 667
Less valuation allowance -
---------------
---------------
Net deferred tax assets $ 667
===============
F-9
<PAGE>
(7) Fair Value of Financial Instruments
The fair value of cash and cash equivalents, trade accounts
receivable, trade accounts payable, other liabilities and taxes
payable approximate fair value because of the short maturity of
these instruments.
(8) Retained Earnings
Retained earnings are not available for distribution as dividends as
there are no distributable retained earnings for Romanian
statutory financial statements.
(9) Sales
Revenues from services $ 341,117
Revenues from goods sold 97,174
----------------
Total sales $ 438,291
================
(10) General, Selling and Administrative Expenses
Wages and salaries $ 8,159
Social security contributions 3,392
Debts to state budget 6,628
Rent expenses 4,344
Advertising expenses 1,214
Other 1,938
---------------
---------------
Total general, selling and administrative expenses $ 25,675
===============
F-10
<PAGE>
(11) Commitments and Contingencies
The Directors are not aware of any commitments or contingencies at
December 31, 1999.
The Company is not involved in any material litigation at December 31,
1999.
Romanian Legal Environment
The legislation and fiscal environment in Romania and their
implementation into practice change frequently and
are subject to different interpretations by various Ministries of the
Government. The Romanian government has a number of agencies that
are authorized to conduct audits ("controls") of Romanian
companies as well as foreign companies doing business in Romania.
These controls are similar in nature to tax audits performed by
taxing authorities in many countries, but may extend not only to tax
matters, but to other legal or regulatory matters in which the
applicable agency may be interested. In addition, the agencies
conducting these controls appear to be subject to significantly
less regulation and the company under review appears to have
significantly less practical safeguards than is customary in many
countries.
Management believes that it has adequately provided for tax
liabilities in the accompanying financial statements; however,
the risk remains that tax authorities could take different
positions with regard to interpretation and the effect could be
significant.
F-11
<PAGE>
(12) Related Parties
Other liabilities includes a balance due to Mr. Gheorghe Rusu amounting
to USD 21,912 as of December 31, 1999.
(13) Recently Issued Accounting Standards
In December 1999, the Securities and Exchange Commission released
Staff Accounting Bulletin No. 101, Revenue Recognition in
Financial Statements (SAB101), providing the staff's views in
applying generally accepted accounting principles to selected
revenue recognition issues. For companies such as Euroweb Romania
S.A., with fiscal years that begin between December 16,
1999 and March 15, 2000, portions of SAB 101 become effective for
the fourth quarter of 2000. The Company believes that
adopting these portions of SAB 101 will not have a material effect
on the Company's financial position or overall trends in
results of operations.
The Financial Accounting Standards Board ("FASB") Statement No.
137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No.
133, an Amendment of FASB Statement No. 133" ("Statement
137") was issued in June 1999. Statement 137 defers the effective date
of FASB 133, "Accounting for Derivative Instruments and
Hedging Activities" ("Statement 133") for one year. Statement 133
generally requires that changes in fair value of a
derivative be recognized currently in earnings unless specific hedge
accounting criteria are met. The Company does not expect
the adoption of Statement 133 to have a significant impact on its
financial statements.
F-12
<PAGE>
EUROWEB ROMANIA, S.A.
Interim Balance Sheet
June 30, 2000
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 57,044
Trade accounts receivable, less allowance 30,063
for doubtful accounts of $0
Inventories 10,576
Deferred taxes 4,319
Other current assets 8,842
--------------
--------------
Total current assets 110,844
--------------
Property and equipment 158,704
Total assets $ 269,548
==============
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable 25,801
Other liabilities 13,016
Taxes payable 26,831
Accrued expenses 20,554
--------------
--------------
Total liabilities 86,202
--------------
Stockholders' equity:
Common stock, ROL 5,000 par value. Authorized 292,050 shares;
issued and outstanding 292,050 shares 81,181
Retained earnings 102,165
--------------
Total stockholders' equity 183,346
--------------
Total liabilities and stockholders' equity $ 269,548
==============
See accompanying notes to interim financial statements.
F-13
<PAGE>
EUROWEB ROMANIA, S.A.
Interim Statements of Operations
For the six months ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<S> <C> <C>
2000 1999
--------------- --------------
--------------- --------------
Sales $ 340,111 189,636
Cost of sales and services (256,767) (100,570)
--------------- --------------
Gross profit 83,344 89,066
General, selling and administrative expenses (53,994) (9,436)
Depreciation (36,112) (12,581)
--------------- --------------
(6,762) 67,049
Other income (expenses):
Other operating income 657 211
Other operating expenses (10,220) -
Interest income 1,429 177
Foreign currency translation (loss) gain (1,947) 14,933
--------------- --------------
Income (loss) before taxes (16,843) 82,370
Income tax expense (2,930) (1,630)
--------------- --------------
Net income (loss) $ (19,773) $ 80,740
=============== ==============
Basic earnings (loss) per share $ (0.22) $ 4.04
=============== ===============
Weighted average number of common shares outstanding used in
basic EPS calculation 89,231 20,000
=============== ===============
</TABLE>
See accompanying notes to interim financial statements.
F-14
<PAGE>
EUROWEB ROMANIA, S.A.
Interim Statements of Cash Flows
For the six months ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<S> <C> <C>
Six months ended
June 30
------------------------------------
2000 1999
---------------- ----------------
Net income (loss) $ (19,773) $ 80,740
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 36,112 12,581
Loss on sale of property and equipment 17,886 -
Deferred taxes (3,652) (696)
Increase in trade accounts receivable (20,507) (2,062)
Increase in inventories (5,927) -
Decrease in other current assets (1,070) 21,310
Decrease in trade accounts payable (4,271) (17,466)
Increase in taxes payable 236 (6,518)
Decrease in other liabilities (20,914) (11,267)
Decrease in accrued expenses 14,421 2,210
---------------- ----------------
Cash flows from operating activities (7,459) 78,832
---------------- ----------------
Investing activities:
Purchase of property and equipment (37,338) (89,705)
---------------- ----------------
Cash flows used in investing activities (37,338) (89,705)
---------------- ----------------
Financing activities:
Proceeds from issuance of share capital 50,000 -
---------------- ----------------
Cash flows from used in financing activities 50,000 -
---------------- ----------------
Net increase in cash and cash equivalents 5,203 (10,873)
Cash and cash equivalents at the beginning of the period 51,841 41,386
---------------- ----------------
Cash and cash equivalents at the end of the period $ 57,044 $ 30,513
================ ================
Interest received $ 1,428 $ 605
================ ================
Tax paid $ (6,346) $ (8,844)
================ ================
See accompanying notes to interim financial statements.
</TABLE>
F-15
<PAGE>
EUROWEB ROMANIA, S.A.
Notes to Interim Financial Statements
June 30, 2000 and 1999
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited Consolidated Financial Statements were
prepared in accordance with the instructions for Form 10-QSB and,
therefore, do not include all disclosures necessary for a complete
presentation of financial condition, results of operations, and
cash flows in conformity with generally accepted accounting
principles. All adjustments which are, in the opinion of management,
of a normal recurring nature and are necessary for a fair
presentation of the interim financial statements, have been
included. The results of operations for the period ended June 30,
2000 are not necessarily indicative of the results that may be
expected for the entire fiscal year or any other interim period.
(2) Earnings per Share
Basic earnings per share is computed by dividing income available
to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per
share reflects the effect of common shares issued upon
exercise of stock options and warrants. The Company has not
presented diluted earnings per share because no common stock
equivalents were outstanding during the six month periods ended June
30, 2000 and 1999.
(3) Subsequent Event
On June 14, 2000, the Company was purchased by Euroweb International
Corporation. On June 23, 2000, the company sold an additional 212,050
shares with a par value of ROL 5,000 per share.
F-16
<PAGE>
EUROWEB INTERNATIONAL CORP.
AND EUROWEB ROMANIA, S.A.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
1
<PAGE>
Contents
Page:
Basis of Preparation 3
Unaudited Pro Forma Consolidated Balance Sheet 4
Unaudited Pro Forma Consolidated Statements of Operations 5-6
Notes to Unaudited Pro Forma Consolidated Financial Statements 7
2
<PAGE>
EUROWEB INTERNATIONAL CORP.
AND EUROWEB ROMANIA, S.A.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Basis of Preparation
On June 14, 2000 the Company acquired from six shareholders 100% of the
common shares of Euroweb Romania S.A. (formerly Mediator S.A.) for cash
consideration of USD$2,040,000 and a note payable to the selling shareholders
of USD$540,000. The Company also incurred expenditures directly related to the
acquisition of USD$29,712 which are considered part of the purchase
price. The acquisition was accounted for under the purchase method of
accounting.
The following Unaudited Pro Forma Condensed Consolidated Financial Statements
are based on the historical financial statements of Euroweb International
Corporation and the historical financial statements of Euroweb Romania S.A.
adjusted to give effect to the acquisition of Euroweb Romania S.A.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30,
2000 gives effect to the acquisition of Euroweb Romania S.A. as if it had
occurred as of June 30, 2000. The Unaudited Pro Forma Condensed Consolidated
Statements of Operations for the year ended December 31, 1999 and for the six
month period ended June 30, 2000 give effect to the acquisition of Euroweb
Romania S.A. as if it had occurred as of January 1, 1999. The pro forma
adjustments are described in the accompanying notes are based upon available
information and certain assumptions that management believes are reasonable.
3
<PAGE>
EUROWEB INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2000
<TABLE>
<S> <C> <C> <C> <C>
Euroweb Euroweb Romania
International S.A. Pro Forma Pro Forma
Corporation Adjustments Combined
Cash and cash equivalents $ 3,892,674 $ 57,044 $ - $ 3,949,718
Investment in securities 14,044,652 - - 14,044,652
Other current assets 1,094,673 53,800 - 1,148,473
___________ ________ ___________ ____________
Current assets 19,031,999 110,844 - 19,142,843
Goodwill, net 5,196,087 - 2,416,019 (A) 7,612,106
Prepaid investment in pending acquisitions 4,220,838 - (2,599,365) (A) 1,621,473
Other non current assets 2,268,171 158,704 - 2,426,875
___________ ________ ___________ ___________
Non current assets 11,685,096 158,704 (183,346) 11,660,454
$ 30,717,095 $ 269,548 $ (183,346) $ 30,803,297
============ ========= =========== ============
Liabilities $ 1,620,876 $ 86,202 $ - $ 1,707,078
___________ ________ __________ ___________
Total liabilities 1,620,876 86,202 - 1,707,078
Common stock 23,268 81,181 (81,181) (A) 23,268
Additional paid-in capital 47,086,539 - - 47,086,539
Accumulated earnings/(deficit) (17,869,574) 102,165 (102,165) (A) (17,869,574)
Accumulated other comprehensive (loss) (144,014) - - (144,014)
___________ ________ __________ ___________
Stockholders equity 29,096,219 183,346 (183,346) 29,096,219
$30,717,095 $269,548 $(183,346) $30,803,297
============ ======== ========== ===========
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
4
<PAGE>
EUROWEB INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C>
Euroweb Euroweb Romania
International S.A. Pro Forma Pro Forma
Corporation Adjustments Combined
Revenue $ 1,233,567 $ 438,291 $ - $ 1,671,858
Network and related costs 628,880 268,009 - 896,889
___________ _________ _________ ___________
Gross margin 604,687 170,282 - 774,969
Depreciation and amortization 489,434 37,353 483,204 (B) 1,009,991
Expenses 1,279,440 (2,568) 29,584 (C) 1,306,456
__________ _________ _________ ___________
Income (Loss) from operation (1,164,187) 135,497 (512,788) (1,541,478)
Income taxes and minority interest 8,021 27,939 - 35,960
(Loss) from discontinued operation (50,858) - - (50,858)
____________ _________ __________ ______________
Net income/(loss) $ (1,223,066) $ 107,558 $(512,788) $ (1,628,296)
============ ========= ========== ==============
Net (loss) per share $ (.14) $ (.19)
Weighted average shares outstanding 8,593,000 8,593,000
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
5
<PAGE>
EUROWEB INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2000
<TABLE>
<S> <C> <C> <C> <C>
Euroweb Euroweb Romania
International S.A. Pro Forma Pro Forma
Corporation Adjustments Combined
Revenue $ 1,650,039 $ 340,111 $ - $ 1,990,150
Network and related costs 717,971 256,767 - 974,738
___________ _________ ________ ___________
Gross margin 932,068 83,344 - 1,015,412
Depreciation and amortization 684,032 36,112 241,602 (B) 961,746
Expenses 1,097,518 64,075 10,153 (C) 1,171,746
___________ _________ _________ ___________
Loss from operation (849,482) (16,843) (251,755) (1,118,080)
Income taxes and minority interest 36,347 2,930 - 39,277
___________ _________ __________ _____________
Net loss $ (885,829) $ (19,773) $ (251,755) $ (1,157,357)
========== ========== =========== =============
Net (loss) per share $ (.04) $ (.06)
Weighted average shares outstanding 20,157,361 20,157,361
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
6
<PAGE>
Notes:
(A) To reflect the excess of acquisition cost over the estimated fair
value of net assets acquired (goodwill). The purchase price,
purchase-price allocation, and financing of the transaction are
summarized as follows:
<TABLE>
<S> <C>
Purchase price paid as:
Cash paid $ 2,040,000
Fair value of note payable to selling shareholder 479,653
Acquisition expenditures incurred 29,712
___________
Total purchase consideration 2,549,365
Allocated to:
Fair value of Euroweb Romania S.A.'s
assets and liabilities $ 133,346
___________
Excess purchase price over allocation to identifiable
assets and liabilities (Goodwill) $ 2,416,019
===========
</TABLE>
(B) To reflect the increase in amortization expense due to the
amortization of goodwill on a straight-line basis over 5 years.
(C) To reflect the amortization of the discount that resulted from
recording the note payable to selling shareholder at fair value.
(D) No adjustments were made to reflect the income tax effect of
increased amortization of goodwill and discount on note payable
to selling shareholder since Euroweb International Corporation has
significant net operating loss carryforwards and, therefore,
does not expect to have taxable income in the foreseeable future.
(E) No business transactions took place between Euroweb International
Corporation and Euroweb Romania S.A.(formerly Mediator S.A.) other
than those eliminated in the financial statements above.
7
<PAGE>
SIGNATURES
Pursuant to the requirements 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
Chief Financial Officer and
Chairman of the Board
Date: August 28, 2000
New York, New York
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