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) August 8, 1997
INTERJET NET CORPORATION
(Exact name of registrant as specified in its charter)
PICOMETRIX, INC.
(Former Name)
Delaware
(State or other jurisdiction of incorporation)
0-24408 33-0611753
(Commission File Number) (IRS Employer Identification No.)
15554 FM 529, Suite 123, Houston, Texas 77095
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 723-2183
<PAGE>
Item 1. Change in Control of Registrant.
Item 2. Acquisition or Disposition of Assets.
As previously reported on a Current Report on Form 8-K dated
August 8, 1997, on August 8, 1997, Interjet Net Corporation, (formerly
Picometrix, Inc.) (the "Registrant") acquired Interjet Net, Inc., a Nevada
corporation ("Interjet") pursuant to an Agreement and Plan of Reorganization.
Item 5. Other Events.
The following information is provided with respect to the
Registrant.
BUSINESS
Industry Background
The Internet, a network of hundreds of interconnected, separately
administered public and commercial networks, has emerged as a global
communications medium enabling millions of people to share information and
conduct business electronically. During the past few years, the number of
Internet users, advertisers and content developers and businesses online has
grown dramatically. With readily-available, low-cost Internet access, consumers
and businesses are making increased use of Web browsers, electronic mail,
corporate intranets, telecommuting, online advertising and electronic commerce.
According to Wireless Broadcasting Magazine, there are over 12 million Internet
users in the United States. According to Jupiter Communications, the number of
Internet households worldwide will grow from an estimated 23.4 million in 1996
to 66.6 million by 2000. The Company believes that this growth in the number of
users will drive more substantial increases in both Internet advertising, which
International Data Corporation ("IDC") estimates will grow from $181 million in
1996 to $2.9 billion in 2000, and Internet commerce, which IDC estimates will
grow from $318 million in 1995 to $95 billion in 2000.
Internet usage continues to be stimulated by a number of factors,
including the emergence of the World Wide Web, the increasing sophistication of
Internet browsers and Web-enabled software, the availability of low-cost,
flat-rate pricing for Internet access and online services, and the wealth of
increasingly useful information published on the Internet. Increased Internet
usage and the availability of powerful new tools for the development and
distribution of Internet content have led to a proliferation of Internet-based
services, such as advertising, online magazines, specialized news feeds,
interactive games and educational and entertainment applications, that are
increasingly incorporating multimedia information such as video and near-CD-
quality audio clips. The Internet has the potential to become a platform through
which consumers and businesses easily access rich multime-dia information and
entertainment, creating new sources of revenue for advertisers, content
providers and businesses. The growth of
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Internet advertising and commerce depends, in part, on the ability of
advertisers and online merchants to deliver a compelling multi-media message to
attract viewers and potential customers.
It is estimated that approximately 40% of US households have
personal computers and that 60% of businesses already have Internet access or
will have access within one year. Almost all of the access is provided over
local telephone company circuits, most of which are limited by current
technology to providing 56 Kbps access. Many telephone companies also offer ISDN
telephone service, with 128 Kbps or T-1 lines, with 1.4 Mbps, but such lines are
not available in every area and are more expensive. Currently, the typical
Internet users uses a modem with 14.4 Kbps to 33.6 Kbps capabilities. In early
1997, dial-up modems offering a peak data transmission speed of 56 Kbps were
introduced for use with ISP/OSPs over existing telephone lines, although many
ISP/OSPs do not yet support this transmission speed. The lack of a universal
standard has slowed the rate of adoption of faster modems. Integrated Services
Digital Network ("ISDN") technology enables a peak data transmission speed of
128 Kbps between the user and the ISP/OSP over specially conditioned telephone
lines. Although ISDN technology has been available for several years, it has not
been widely deployed due primarily to its high costs. Asymmetric Digital
Subscriber Line ("ADSL") is currently the most prominent implementation of
Digital Subscriber Line ("xDSL") technology, an emerging telecommunications
protocol originally developed to deliver video on demand. ADSL enables peak data
transmission speeds of 8.4 Mbps downstream from the ISP/OSP to the user and 640
Kbps upstream from the user to the ISP/OSP; however, typical implementations
realize substantially lower data transmission speeds. ADSL access is priced
significantly above other access services and is not expected to be widely
available in the near term. Cable modem technology offers data transmission at
speeds of 10 Mbps downstream and 10 Mbps upstream, with speeds comparable to
wireless available only in those metropolitan areas where hybrid fiber-coaxial
("HFC") cable is installed at significant cost. The perceived advantage of cable
modem access to the Internet is the availability of current infrastructure.
However, businesses, which are the heaviest users of Internet services, are not
typically wired for cable, and cable companies are already laden with debt and
are burdened with a negative consumer perception.
Satellite-delivered approaches such as direct broadcast satellite
("DBS") currently provide a peak data transmission speed of approximately 400
Kbps downstream and rely on dial-up modems and the telephony network for
upstream transmission ("telephone return"). These approaches have scaling
limitations due to the necessity of dividing a finite amount of satellite
bandwidth among subscribers in a broad geographic area. Other wireless offerings
rely on ground-based radios instead of satellites. Such offerings include
multichannel multipoint distribution service ("MMDS"), low power television
stations in the VHF bandwidth ("LPTV") and local multipoint distribution service
("LMDS"), which are one-way and two-way high-bandwidth wireless digital
broadcasting systems,
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respectively. MMDS and LMDS are not yet widely available, require unobstructed
"line-of-sight" transmission paths and may require additional radio frequency
spectrum allocations, an entirely new distribution infrastructure and new
equipment (including specialized radio modems).
Interjet Net System
The Interjet Net system operates over a wireless spectrum
allocated by the FCC, specifically in the microwave frequency of 6Mhz bandwidth.
In the Salt Lake City area, Interjet Net has leased this frequency for ten years
from an MMDS, Hispanic Information Telecommunications Network, Inc. ("HITN").
The HITN antenna is currently located in downtown Salt Lake City but is intended
to be moved to a new site on Farnsworth Peak, which is in the line of sight to
substantially all of the population area of Greater Salt Lake City. The antenna
will operate at 10 watts and the space for the antenna will be licensed from a
local television station. Salt Lake City is an ideal first market for the
Company. The topography of the Salt Lake City area gives excellent line of sight
transmission to the entire population area of 1.3 million. The Salt Lake City
metropolitan area is rapidly growing, with a concentration of high technology
enterprises.
In each service area the Company will acquire ITFS transmitting
equipment and a Hybrid Networks 64 QAM wireless modem system. The level of
equipment currently in place in Salt Lake City, together with software packaged
with the equipment, constitutes all the equipment necessary to service 6,000
subscribers simultaneously. Each subscriber is required to install software
supplied by the Company and to purchase a wireless modem. Data is sent to the
subscriber using the microwave bandwidth, while subscriber's transmissions
(which typically involve only nominal amounts of data) are transmitted over
conventional telephone lines and modems.
This system is patented by Hybrid Networks, Inc.
Additional markets will be opened in a manner similar to Salt Lake
City, using channels (MMDS or LPTV) either owned or leased. As of the date of
this Memorandum the Company has secured rights in over 25 metropolitan areas
with aggregate populations over 16 million. The second market to be opened is
Beaumont, Texas, with 400,000 population.
Employees
The Company has ten employees, including its officers. Upon the
close of this offering, the Company intends to hire eight additional persons
including one administrative, three in sales and marketing, and four technical.
Competition
The markets for consumer and business Internet services are
extremely competitive, and the Company expects that competition
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<PAGE>
will intensify in the future. The Company's most direct competitors in these
markets are ISPs, national long distance carriers and local exchange carriers,
wireless service providers, OSPs and Internet content aggregators. Many of these
competitors are offering (or may soon offer) technologies that will attempt to
compete with some or all of the Company's high-speed data service offerings.
Such technologies include Integrated Services Digital Network ("ISDN") and
Digital Subscriber Line ("xDSL"). The Company also competes with other wireless,
telephone or cable-based data services. The bases of competition include
transmission speed, reliability of service, ease of access, price/performance,
ease-of-use, content quality, quality of presentation, timeliness of content,
customer support, brand recognition and operating experience. ISPs, such as BBN
Corporation ("BBN"), Earthlink Network, Inc. ("Earth-link"), MindSpring
Enterprises, Inc. ("MindSpring"), Netcom On-Line Communications Services, Inc.
("Netcom") and PSInet Inc. ("PSI-net"), provide basic Internet access to
residential consumers and businesses, generally using existing telephone network
infrastruc-tures. This method is widely available and inexpensive. Barriers to
entry are low, resulting in a highly competitive and fragmented market. Long
distance inter-exchange carriers, such as AT&T Corp. ("AT&T"), MCI
Communications Corporation ("MCI"), Sprint Corporation ("Sprint") and WorldCom,
Inc. ("WorldCom"), have deployed large-scale Internet access networks and sell
connectivity to business and residential customers. The regional Bell operating
companies ("RBOCs") and other local exchange carriers have also entered this
field and are providing price competitive services, and cable television
companies are also offering Internet access. Many of such carriers are offering
diversified packages of telecommunications services, including Internet access
service, to residential customers and could bundle such services together, which
could place the Company at a competitive disadvantage.
Wireless service providers, including AT&T and Hughes Network
Systems, are developing wireless Internet connectivity, such as multichannel
multipoint distribution service, local multi-point distribution service and
digital broadcast satellite. OSPs include companies such as America Online, Inc.
("America Online"), CompuServe Corporation ("CompuServe"), Microsoft's Microsoft
Network ("MSN"), Prodigy, Inc. ("Prodigy") and WebTV Networks Inc. ("WebTV")
(which has agreed to be acquired by Microsoft) that provide, over the Internet
and on proprietary online services, content and applications ranging from news
and sports to consumer video conferencing. These services are designed for broad
consumer access over telecommunications-based transmission media, which enables
the provision of data services to the large group of consumers who have personal
computers with modems. In addition, they provide basic Internet connectivity,
ease-of-use and consistency of environment. In addition to developing their own
content or supporting proprietary third-party content developers, online
services often establish relationships with traditional broadcast and print
media outlets to bundle their content into the service, such as the relationship
of Microsoft with NBC to provide multime-
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dia news and information programming over both cable television and
MSN.
Content aggregators seek to provide a "one-stop" shop for Internet
and online users. Their success depends on capturing audience flow, providing
ease-of-use and offering a range of content that appeals to a broad audience.
Their business models are predicated on attracting and retaining an audience for
their set of offerings. Leading companies in this area include America Online,
CompuServe, Excite, Inc. ("Excite"), Microsoft and Yahoo! Inc. ("Yahoo!"). In
this market, competition occurs in acquiring both content providers and
subscribers. The principal bases of competition in attracting content providers
include quality of demographics, audience size, cost- effectiveness of the
medium and ability to create differentiated experiences using aggregator tools.
The principal bases of competition in attracting subscribers include richness
and variety of content and ease of access to the desired content. The
proprietary online services such as America Online, CompuServe and MSN have the
advantage of a large customer base, industry experience, many content
partnerships and significant resources.
Many cable have developed their own cable-based services and
market those services to unaffiliated cable system operators that are planning
to deploy data services. Several cable system operators, including Time Warner
Inc. ("Time Warner") and the Continental Cablevision subsidiary of U S WEST,
Inc. ("US West"), have deployed high-speed Internet access services over their
existing local HFC cable networks. Specifically, Time Warner, which is the
second largest cable company in the United States, has established its own
cable-based ISP with proprietary content, called Road Runner, which features a
variety of Time Warner publications and services. Time Warner plans to market
the Road Runner service through Time Warner's own cable systems as well as to
other cable system operators nationwide. Continental Cablevision has developed
another service called Highway One, which offers high--speed Internet services
to its existing customers. Others that have publicly announced limited-area
trials for their own cable-based Internet services include Adelphia, BellSouth
Corporation ("Bell-South") and Jones Intercable, Inc. ("Jones Intercable"). Some
of these companies such as Time Warner have their own substantial libraries of
multimedia content and the other competitors could establish strategic
relationships with content providers, which could provide them with a
significant competitive advantage.
Many of the Company's competitors and potential competitors have
substantially greater financial, technical and marketing resources, larger
subscriber bases, longer operating histories, greater name recognition and more
established relationships with advertisers and content and application providers
than the Company. Such competitors may be able to undertake more extensive
marketing campaigns, adopt more aggressive pricing policies and devote
substantially more resources to developing Internet services or online content
than the Company. There can be no assurance that the
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Company will be able to compete successfully against current or future
competitors or that competitive pressures faced by the Company will not
materially adversely affect the Company's business, operating results or
financial condition. Further, as a strategic response to changes in the
competitive environment, the Company may make certain pricing, service or
marketing decisions or enter into acquisitions or new ventures that could have a
material adverse effect on the Company's business, operating results or
financial condition.
Properties
The Company rents 300 square feet of office space in Houston,
Texas for $500 per month on a month to month basis. The Company leases 700
square feet of office space in Newport Beach, California for $1,500 per month on
a month to month basis. Additional office space is leased in downtown Salt Lake
City for $2,800 per month on a five year lease for 2,800 square feet. The
Company rents 2,000 square feet in Beaumont, Texas on a month to month basis for
$3,000 per month.
MANAGEMENT
Directors and Executive Officers
The members of the Board of Directors of the Company serve until
the next annual meeting of stockholders, or until their successors have been
elected. The officers serve at the pleasure of the Board of Directors. The
following are the directors and executive officers of the Company.
Name Age Position
Jon H. Marple 57 President and Director
Mary E. Blake 44 Chief Financial Officer
Secretary, and
Director
Brooks M. Freeman 53 Director
Jon H. Marple - Mr. Marple is the President and co-founder of
Interjet Net, Inc. He is also President of 720 Wireless, Inc. a
telecommunications consulting firm incorporated in 1991. Previous-
ly Mr. Marple owned and operated an Everett Washington radio
station, KRKO-AM. He has worked as a communications attorney for
both the Federal Communications Commission as well as the Washing-
ton DC law firm of Dow Jones and Albertson. While associated with
the FCC, Mr. Marple argued extensively before the Circuit Court of
Appeals and prepared numerous briefs presented to the Supreme Court
of the United States of America. Prior to his work with the FCC
he served as a Sr. Trial Attorney for the United States Department
of Justice. Mr. Marple received his law degree from the University
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of Washington in 1966 and his Bachelor of Science Degree from Brigham Young
University in 1963.
Mary E. Blake - Ms. Blake held the position of Director, Secretary and
Treasurer of Micro-Lite Television since its inception. Ms. Blake was previously
the Business Manager for Pro Maine Electronics and Ship Shape Yachts from
1989-1991, where she supervised the commissioning, outfitting and renovating of
luxury yachts. From 1980-1988 Ms. Blake was the Business Manager for Kenneth A.
Satin & Associates, a law firm. She was also employed by Southwestern Bell
Telephone Co. from 1976-1980 where she was the Business Office Supervisor
managing sales, services and collections of over 25,000 accounts. He first two
years in college were spent in Huntsville, Texas attending Sam Houston State
University from 1971-1973 and then she transferred to Texas A&M University from
1973-1975, attending their business college.
Brooks M. Freeman - Mr. Freeman is currently General Manger of
Client/Server Computing for IBM's Asia Pacific Service Corporation in Hong Kong,
responsible for implementation of wireless networks encompassing seven Asian
countries. He is a former Director of Engineering at IBM (Scientific and
Technical Computing, a $400 million business unit). Mr. Freeman acts as Managing
General Partner of Caminito Cellular Partnership, a cellular telephone business,
and as a partner in several communications related projects.
PRINCIPAL STOCKHOLDERS
The following table sets forth information relating to the beneficial
ownership of Company Common Stock, by those persons beneficially holding more
than 5% of the Company's capital stock, by each of the Company's directors and
executive officers, and by all of the Company's directors and executive officers
as a group.
<TABLE>
<CAPTION>
Name Number of Shares Percent of Class
<S> <C> <C>
Mary E. Blake(1) 8,650,000 76.4%
Jon Marple(1) -- --
Brooks M. Freeman -- --
All officers and directors as
a group (3 persons) 8,650,000 76.4%
</TABLE>
(1) Mr. Marple is the husband of Ms. Blake and disclaims benefi-
cial ownership of the 8,650,000 shares held by her.
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Item 7. Financial Statements, Pro Forma Financial Informa-
tion and Exhibits.
(a)(b) The required financial statements and pro forma
financial information is filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: September 18, 1997 INTERJET NET CORPORATION
By:
Jon H. Marple
President
9
Smith & Company
Certified Public Accountants
Members of:
American Institute of Crandall Building Suite 700
Certified Public Accountants 10 West 100 South
Utah Association of Salt Lake City, Utah 84101
Certified Public Accountants Telephone: (801) 575-8297
Board of Directors
InterJet Net
Salt Lake City, Utah
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of Interjet Net (a development
stage company) as of June 30, 1997, and the related statements of operations,
changes in stockholders' equity, and cash flows for the period from January 15,
1997 (date of inception) to June 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of InterJet Net as of June 30,
1997 and the results of its operations, changes in stockholders' equity and cash
flows for the period from January 15, 1997 (date of inception) to June 30, 1997
in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The information in Schedule 1 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements, and in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
As discussed in Note 7 to the financial statements, effective July 31, 1997, the
Company
<PAGE>
entered into an Agreement and Plan of Reorganization with Picometrix, Inc., a
publicly held Delaware corporation, whereby all of the outstanding shares of the
Company were exchanged for 9,964,286 shares of Picometrix which is now known as
Interjet Net Corporation. There was also a private placement of Interjet Net
Corporation stock which was fully subscribed as of August 27, 1997. This private
placement was for 680,000 shares at a price of $1.95 per share and provided the
Company with total equity proceeds of $1,326,000.
SMITH & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
September 4, 1997
<PAGE>
<TABLE>
<CAPTION>
INTERJET NET
(A Development Stage Company)
BALANCE SHEET
ASSETS June 30, 1997
CURRENT ASSETS
<S> <C>
Cash in bank $ 406,871
Stock subscription receivable (Note 6) 75,000
Prepaid expenses 5,905
TOTAL CURRENT ASSETS $ 487,776
PROPERTY AND EQUIPMENT (Notes 1 and 4) $ 270,450
OTHER ASSETS
Organization costs (Note 1) 11,241
Licenses and other (Note 5 745,183
TOTAL OTHER ASSETS $ 756,424
$ 1,514,650
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 179,178
Accrued liabilities 22,158
Income taxes payable 800
TOTAL CURRENT LIABILITIES $ 202,136
SHAREHOLDERS EQUITY Common Stock, no par value:
Authorized 10,000 shares;
Issued and outstanding 1,107.1429 shares $1,695,252
Deficit accumulated during development stage (382,738)
TOTAL SHAREHOLDERS' EQUITY $ 1,312.514
$ 1,514,650
</TABLE>
See Notes to the Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
INTERJET NET
(A Development Stage Company)
STATEMENT OF OPERATIONS
Period from
1/15/97
(date of
inception) to
6/30/97
<S> <C>
Sales $ 0
Cost of sales 0
GROSS PROFIT $ 0
General and administrative expenses (Schedule 1) $ 379,415
Depreciation and amortization (Note 1) 0
Interest and bank charges 3,323
$ 382,738
Net Loss $ (382,738)
EARNINGS (LOSS) PER COMMON SHARE
Net income (loss) $ (382.74)
Weighted average number of common shares
used to compute net income (loss) per
weighted average share 1,000
</TABLE>
See Notes to the Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
INTERJET NET
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Common Stock accumulated
No Par Value during
development
Shares Amount stage
<S> <C> <C> <C>
Balance at inception 1/15/97 0 $ 0 $ 0
Issuance of common stock for
new business at $1,042.54
per share 1,000 1,042,536
Sale of common stock at
$6,100.15 per share 107.1429 652,716
Net loss for period (382,738)
1,107.1429 1,695,252 (382,738)
</TABLE>
See Notes to the Financial Statements
5
<PAGE>
<TABLE>
<CAPTION>
INTERJET NET
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Period from
1/15/97
(date of
inception) to
6/30/97
OPERATING ACTIVITIES
<S> <C>
Net loss $ (382,738)
Changes in assets and liabilities:
Prepaid expenses (5,905)
Accounts payable 179,178
Accrued liabilities 22,158
Income taxes 800
NET CASH REQUIRED BY OPERATING ACTIVITIES (186,507)
INVESTING ACTIVITIES
Organization costs $ (6,622)
NET CASH REQUIRED BY INVESTING ACTIVITIES $ (6,622)
FINANCING ACTIVITIES
Sale of common stock $ 600,000
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 600,000
INCREASE IN CASH AND CASH EQUIVALENTS 406,871
Cash and cash equivalents at beginning of period 0
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 406,871
Supplemental Disclosure of Cash Flow Information Cash paid during the period
for:
Interest $ 0
Income taxes 0
</TABLE>
Noncash investing and financing activities
During the period ended June 30, 1997, the Company issued 1,000 shares
of common stock for assets valued at $699,000 and expenses of $321,252.
See Notes to the Financial Statements
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<PAGE>
INTERJET NET
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity:
The Company was incorporated on January 15, 1997 in Nevada as
Lightspeed Net. On February 26, 2997 the name was changed to
InterJet Net. There have been no sales of products or services
through June 30, 1997. The Company acquired the bulk of its
assets during June of 1997 in anticipation of beginning
operations in the third quarter of 1997. No depreciation or
amortization has yet been recognized.
Earnings (Loss) Per Share
Earnings (Loss) per share amounts are calculated based on the
weighted average number of shares outstanding during the
period.
Organization costs:
Organization costs will be amortized over a five year period.
Property and Equipment:
Property and equipment will be depreciated over their
estimated useful lives. Depreciation and amortization will be
computed using straight-line methods over an estimated life of
five to seven years.
Cash and Cash Equivalents:
For financial statement purposes, the Company considers all
highly liquid investments with an original maturity of three
months or less when purchased to be cash equivalents.
Income taxes:
The Company records the income tax effect of transactions in
the same year that the transactions enter into the
determination of income, regardless of when the transactions
are recognized for tax purposes. Tax credits are recorded in
the year realized.
The Company utilizes the liability method of accounting for
income taxes as set forth in Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes"(SFAS 109).
Under the liability method, deferred taxes are determined
based on the difference between the financial statement and
tax
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<PAGE>
INTERJET NET
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
(continued)
June 30, 1997
bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to
reverse. An allowance against deferred tax assets is recorded
when it is more likely than not that such tax benefits will
not be realized.
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, liabilities, revenues and expenses during
the reporting period. Estimates also effect the disclosure of
contingent assets and liabilities at the date of the financial
statements. Actual results could differ from these estimates.
NOTE 2: DEVELOPMENT STAGE COMPANY - MANAGEMENT'S PLANS
The Company has been in the development stage since its
inception. The Company, subsequent to June 30, 1997, has
commenced operations to provide high-speed wireless internet
access for home and business use in the Salt Lake City, Utah
market.
NOTE 3: RELATED PARTY TRANSACTIONS
The Company acquired assets valued at $699,000 from an officer
in exchange for 1,000 shares of common stock. The officer paid
costs of $321,252 on behalf of the Company as additional
consideration for the stock. The assets were recorded on the
Company's books at their historical cost to the officer.
The officers and directors of the Company are involved in
other business activities and may, in the future, become
involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face
a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy
for the resolution of such conflicts.
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<PAGE>
INTERJET NET
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
June 30, 1997
NOTE 4: PROPERTY AND EQUIPMENT
Property and equipment as of June 30, 1997 are summarized as
follows:
<TABLE>
<CAPTION>
Cost Depreciation Net Book Value
<S> <C> <C> <C>
Furniture $ 9,489 $ 0 $ 9,489
Equipment 248,427 0 248,427
Transmission
Equipment 12,534 0 12,534
$ 270,450 $ 0 $ 270,450
</TABLE>
NOTE 5: LICENSES AND OTHER
The Company owns various MMDS and LPTV (wireless cable)
licenses to operate in various cites. A summary is as follows:
MMDS Channel rights $ 40,183
LPTV rights and licenses 705,000
$ 745,183
NOTE 6: STOCK SUBSCRIPTION RECEIVABLE
The Company sold 107.1429 shares of common stock June 30, 1997
subject to receipt of the $675,000 subscription price. The
first installment of $75,000 was received July 2, 1997. For
purposes of these financial statements, it is assumed that the
shares were issued on June 30, 1997.
NOTE 7: SUBSEQUENT EVENTS
In July, 1997 the Company entered into a one-year operating
leases for office space in Salt Lake City, Utah ($3,208 per
month) and Newport Beach, California ($5,015 per month).
9
<PAGE>
INTERJET NET
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
June 30, 1997
NOTE 7: Effective July 31, 1997, the Company entered into an Agreement
and Plan of
(contd.) Reorganization with Picometrix, Inc., a publicly held Delaware
corporation,
whereby all of the outstanding shares of the Company were
exchanged for 9,964,286 shares of Picometrix which is now
known as Interjet Net Corporation. There was also a private
placement of Interjet Net Corporation stock which was fully
subscribed as of August 7, 1997. The private placement was for
680,000 shares at a price of $1.95 per share and provided the
Company with total equity proceeds of $1,326,000.
10
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 1
INTERJET NET
(A Development Stage Company)
GENERAL AND ADMINISTRATIVE EXPENSES
Period from
1/15/97
(date of
inception) to
6/30/97
<S> <C>
Accounting $ 400
Automobile expense 17,944
Consulting 25,472
Insurance 14,511
Legal 5,155
Marketing and advertising 115
Meals and entertainment 3,712
Office expense 10,005
Outside services 3,864
Payroll taxes and benefits 4,467
Postage 4,794
Relocation expense 1,299
Rent expense 33,003
Salaries 205,115
Taxes and licenses 800
Telephone 18,864
Travel 29,905
$ 379,415
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The accompanying pro forma financial statements give effect to the
acquisition of Interjet Net, a Nevada Corporation, ("Interjet Nevada") by
Interjet Net Corporation, a Delaware Corporation formerly known as Picometrix,
Inc. (the "Company") for 9,964,286 shares of Company Common Stock, or
approximately 88% of the outstanding shares of Company Common Stock. As a
result, Interjet Nevada is described for financial reporting purposes to have
acquired the company by the issuance of 1,356,377 for its net assets valued at
$0.
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<CAPTION>
Pro Forma Balance Sheets
June 30, 1997
ASSETS
Interjet Net, Inc. Picometrix, Inc. Pro Forma
Historical Historical Pro Forma Balance
June 30, 1997 June 30, 1997 Adjustments Sheets
Current Assets
<S> <C> <C>
Cash $ 406,871 $ $ $ 406,871
Prepaid Expenses 5,905 5,905
Stock Subscription Receivables 75,000 75,000
Total Current Assets $ 487,776 $ $ $ 487,776
Property and Equipment $ 270,450 $ $ $ 270,450
Other Assets
Licenses and other 745,183 745,183
Organization Costs 11,241 11,241
Total Other Assets $ 756,424 $ $ $ 756,424
Total Assets $ 1,514,650 $ $ $ 1,514,650
LIABILITIES AND CAPITAL
Current Liabilities
Accounts Payable $ 179,178 $ 2,252 $ (2,252)(A) $ 179,178
Accrued Liabilities 22,158 22,158
Income Taxes Payable 800 800
Total Current Liabilities $ 202,136 $ 2,252 $ (2,252)(A) $ 202,136
Stockholders' Equity
Common Stock $ 1,695,252 $ 425 $ (1,684,357)(B) $ 11,320
Paid-in Capital 0 821 1,683,111(B) 1,683,932
Accumulated Deficit (382,738) (3,498) 3,498 (382,738)
Total Stockholders' Equity $ 1,312,514 $ (2,252) $ 2,252 $ 1,312,514
Total Liabilities and
Stockholders' Equity $ 1,514,650 $ $ $ 1,514,650
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Pro Forma Income Statement
Inception (January 1997) to June 30, 1997
Pro Forma
Pro Forma Income
Interjet Net Picometrix, Inc. Adjustments Statement
<S> <C> <C> <C> <C>
Sales $ -- $ -- $ -- $ --
Expenses
General and Administrative 382,738 537 (537)(C) 382,738
Total Expenses $ 382,738 $ $ $ 382,738
Net Operating Income $ (382,738) $ (537) $ 537(C) $ (382,738)
Other Income
Forgiveness of Debt 697 (697)(C)
Total Other Income 697 (697)(C)
Net Income (Loss) $ (382,738) $ 160 $ (160)(C) $ 382,738
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Notes to Proforma Statements
(A) Represents $2,252 in accounts payable to a former officer, of which
$1,555 was converted to 362,690 shares of Common Stock and $697 was
forgiven. All share numbers give effect to a 2.339936355-for-one stock
dividend effected immediately before closing of the acquisition
(B) Proforma adjustments to Stockholders' equity are calculated as follows:
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Total
Number of Paid In Accumulated Stockholders
Shares Amount Capital Deficit Equity
Interjet
<S> <C> <C> <C> <C> <C>
Prior to Acquisition 1,107.1429 $ 1,695,252 $ 0 $ (382,738) $ 1,312,514
Exchange for Company Shares
par value $.001 9,963,178.8751 (1,695,252) -
Issuance of Shares to
acquire assets of
Picometrix 1,356,277 1,356 (1,356) (3,498) (3,498)
Elimination of Deficit
Earnings of Picometrix 3,498 3,498
Totals 11,320,563 11,320 1,683,932 (382,738) 1,312,514
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