SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 2 to
FORM 10-KSB/A
[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the fiscal year ended March 31, 1999
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the transition period from to
Commission file number 0-24408
IJNT.net, Inc.
(Exact name of small business issuer in its charter)
DELAWARE 33-0611753
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2800 Post Oak Blvd.
Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 462-4222
----------------------
Securities registered pursuant to Section 12(b) of the Act: None
--------------------
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $.001
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the issuer
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
State issuer's revenues for its most recent fiscal year: $1,552,194
The aggregate market value of the voting stock held by non-affiliates
of the issuer as of July 8, 1999 was equal to $35,719,159 based on the average
bid and ask price of $3.75
The number of shares outstanding of the issuer's classes of Common
Stock as of July 8, 1999:
Common Stock, $.001 Par Value - 17,183,756 shares
DOCUMENTS INCORPORATED BY REFERENCE: NONE
1
<PAGE>
EXPLANATORY NOTE
This Annual Report on Form 10-KSB/A ("Form-KSB/A") is being filed as
Amendment No. 2 to the Registrant's Annual Report on Form 10-KSB for the fiscal
year ended March 31, 1999 filed with the Securities and Exchange Commission on
July 13, 1999 ("Form 10-KSB") for the purpose of making amendments to Item 7 of
Part II (in particular, changes to the Consolidated Statements of Operations)
and Item 13 of Part III of IJNT.net, Inc.'s Annual Report on Form 10-KSB.
2
<PAGE>
IJNT.net, Inc.
Form 10-KSB/A
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
INDEX
Page
Part II
Item 7. Financial Statements and Supplementary Data 4
Part III
Item 13. Exhibits List and Reports on Form 8-K F-7
3
<PAGE>
PART II
Item 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The selected financial data presented below for the years ended March 31, 1999
and March 31, 1998 were derived from the consolidated financial statements of
the Company, which were audited by Smith & Company, independent certified public
accountants, and which are included elsewhere in this Form 10-KSB. This selected
consolidated financial data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's consolidated financial statements (including the notes thereto)
included elsewhere in this Form 10-KSB.
As the Company was not involved in operations prior to the acquisition of IJNT,
Inc., the financial data has not been presented in a comparative format.
4
<PAGE>
IJNT.net, Inc.
and Subsidiaries
Condensed Consolidated Income Statement
For the Years Ended March 31, 1999 and March 31, 1998
<TABLE>
<CAPTION>
March 31, 1999 March 31, 1998
-------------------- ------------------
<S> <C> <C>
Sales $ 1,552,194 $ 147,057
Cost of Sales 543,657 66,405
-------------------- ------------------
GROSS PROFIT 1,008,537 80,652
General and Administrative Costs 5,851,475 2,044,431
Depreciation and Amortization 270,173 82,874
Interest and Bank Charges 24,240 10,071
-------------------- ------------------
TOTAL OPERATING EXPENSES 6,145,888 2,137,376
Net Operating Loss (5,137,351) (2,056,724)
Other Income (Expense)
Interest income 65,474 12,947
Acquisition costs (1,510) (351,707)
-------------------- ------------------
NET LOSS $ (5,073,387) $ (2,395,484)
==================== ==================
EARNINGS (LOSS) PER COMMON SHARE
Net income (loss) $ (5,073,387) $ (2,395,484)
Recognition of Beneficial Conversion Feature
of Redeemable Preferred Stock (Quasi-dividend) (564,260) 0
-------------------- ------------------
Net loss used to compute net income per share $ (5,637,647) $ (2,395,484)
==================== ==================
Net loss per share $ (.39) $ (.21)
==================== ==================
Weighted average number of common shares
used to compute net income (loss) per
weighted average share 14,372,270 11,528,021
</TABLE>
5
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
IJNT.NET, INC. CORPORATION
AND SUBSIDIARIES
Page
Independent Auditor's Report............................................... F-1
Consolidated Balance Sheet as of March 31, 1999............................ F-2
Consolidated Statements of Operations for the years ended
March 31, 1999 and March 31, 1998..................................... F-3
Consolidated Statements of Changes in Stockholders Equity for the years
ended March 31, 1999 and March 31, 1998............................... F-4
Consolidated Statements of Cash Flows for the years ended
March 31, 1999 and March 31, 1998..................................... F-5
Notes to the Consolidated Financial Statements............................. F-6
Consolidated General and Administrative Expenses
for the two years ended March 31, 1999 and March 31, 1998............. F-9
6
<PAGE>
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits of the Company are included herein
Sequential
Exhibit No. Document Description Page No.
3. Certificate of Incorporation and Bylaws -
3.1 Articles of Incorporation(1)
3.2 Bylaws(1)
27.1 Financial Data Schedule 19
99.1 Appraisal of Acquired Channel Rights(2) 20
(1) Incorporated by reference to such exhibit as filed with the Company's
registration statement on Form 10-SB, File No. 0-24408
(2) Previously filed with Amendment No. 1 to the Company's Annual Report
on Form 10-KSB/A for the fiscal year ended March 31, 1999.
(b) Reports on Form 8-K
None filed during the fourth quarter
7
<PAGE>
Smith
&
Company
A Professional Corporation of Certified Public Accountants
Board of Directors
IJNT.net, Inc.
Salt Lake City, Utah
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying consolidated balance sheet of IJNT.net, Inc.
and Subsidiaries as of March 31, 1999, and the related consolidated statements
of operations, changes in stockholders' equity, and cash flows for the years
ended March 31, 1999 and 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated 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 consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of IJNT.net, Inc. and
Subsidiaries as of March 31, 1999 and the results of their operations, changes
in stockholders' equity, and cash flows for the years ended March 31, 1999 and
1998 in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the consolidated
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.
Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
July 7, 1999
10 West 100 South, Suite 700 o Salt Lake City, Utah 84101-1554
Telephone: (801) 575-8297 Facsimile: (801) 575-8306
E-mail: [email protected]
Members: American Institute of Certified Public Accountants
Utah Association of Certified Public Accountants
F-1
<PAGE>
IJNT.net, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
March 31,
1999
-----------------
ASSETS
CURRENT ASSETS
<S> <C>
Cash in bank $ 902,757
Accounts receivable - Trade 291,642
Stockholder receivable (Note 3) 79,693
Other receivables 207,980
Inventory 86,645
Prepaid expenses 300,720
-----------------
TOTAL CURRENT ASSETS 1,869,437
PROPERTY AND EQUIPMENT (Notes 1 and 4) 2,313,953
OTHER ASSETS
Deposits 65,422
Organization costs (Note 1) 6,743
Licenses and other (Note 5) 2,072,423
-----------------
TOTAL OTHER ASSETS 2,144,588
-----------------
$ 6,327,978
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 283,249
Accrued liabilities 200,266
Income taxes payable 4,811
Note payable 0
Loans from stockholders (Note 3) 156,690
Current portion of long-term debt (Note 6) 26,497
-----------------
TOTAL CURRENT LIABILITIES 671,513
LONG-TERM LIABILITIES (Note 6) 195,679
-----------------
TOTAL LIABILITIES 867,192
REDEEMABLE PREFERRED STOCK (Note 10)
Series A Preferred stock $.01 par value:
Authorized 1,000,000 shares;
Issued and outstanding 2,000 shares 2,364,260
STOCKHOLDERS' EQUITY
Common stock, $.001 par value:
Authorized 20,000,000 shares;
Issued and outstanding 15,975,129 shares 15,975
Additional paid-in capital 10,727,136
Retained deficit (7,646,585)
-----------------
TOTAL STOCKHOLDERS' EQUITY 3,096,526
-----------------
$ 6,327,978
=================
</TABLE>
See Notes to the Consolidated Financial Statements.
F-2
<PAGE>
IJNT.net, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years ended March 31,
1999 1998
------------------ ---------------
<S> <C> <C>
Sales $ 1,552,194 $ 147,057
Cost of sales 543,657 66,405
------------------ ---------------
GROSS PROFIT 1,008,537 80,652
General and administrative expenses (Schedule 1) 5,851,475 2,044,431
Depreciation and amortization (Note 1) 270,173 82,874
Interest and bank charges 24,240 10,071
------------------ ---------------
6,145,888 2,137,376
------------------ ---------------
Net operating loss (5,137,351) (2,056,724)
Other Income (Expense)
Interest income 65,474 12,947
Acquisition costs (1,510) (351,707)
------------------ ----------------
NET LOSS $ (5,073,387) $ (2,395,484)
================== ===============
EARNINGS (LOSS) PER COMMON SHARE
Net income (loss) $ (5,073,387) $ (2,395,484)
Recognition of Beneficial Conversion Feature
of Redeemable Preferred Stock (Quasi-dividend) (564,260) 0
------------------ ---------------
Net loss used to compute net income per share $ (5,637,647) $ (2,395,484)
================== ===============
Net loss per share $ (.39) $ (.21)
================== ===============
Weighted average number of common shares
used to compute net income (loss) per
weighted average share 14,372,270 11,528,021
================== ===============
</TABLE>
See Notes to the Consolidated Financial Statements.
F-3
<PAGE>
IJNT.net, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional
Series A Preferred Stock Common Stock Paid-In Retained
Shares Amount Shares Amount Capital Deficit
------------- -------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balances at 3/31/97 0 $ 0 10,388,886 $ 10,389 $ 1,677,259 $ (177,714)
Issue stock for note payable
7/31/97 155,000 155 1,400
Stock split 2.339936535 for 1
7/31/97 776,677 776 (776)
Sale of shares in private
placement 8/20/97 680,000 680 1,325,320
Issue shares to acquire Access
Comm. 1/1/98 211,000 211 421,789
Issue shares for services
1/27/98 15,000 15 31,485
Sale of shares in private placement
1/27/98 69,620 70 146,064
2/1/98 48,200 48 101,172
3/1/98 9,762 10 20,490
3/10/98 500,000 500 890,635
Net loss (2,395,484)
------------- -------------- ------------- ------------- -------------- -------------
Balances at 3/31/98 0 0 12,854,145 12,854 4,614,838 (2,573,198)
Issued stock to acquire WebIt
4/17/98 (net of $43,878
acquisition costs) 20,000 20 15,102
Issued stock for services:
4/17/98 20,637 21 82,527
7/2/98 11,500 11 45,988
7/8/98 30,000 30 119,970
8/7/98 2,000 2 7,998
8/18/98 38,000 38 116,962
9/14/98 22,000 22 87,978
10/9/98 10,000 10 19,990
10/23/98 89,550 90 223,785
11/20/98 20,000 20 59,980
Sale of shares in private
placement 7/7/98 100,000 100 204,860
Sale of Reg. S shares 7/15/98 700,000 700 1,829,857
Issue stock to acquire
MRHM, Inc. 8/4/98 (net of 37,163 37 107,463
$100,000 acquisition costs)
Sale of Reg. D shares 8/18/98 563,950 564 1,156,619
Issue stock for warrants 8/24/98 512,821 513 999,487
Issue stock to retire debt 8/24/98 70,000 70 69,930
Sale of Series A Preferred
shares 12/31/98 (net of $200,000
commissions) 2,000 1,800,000
Issue additional shares to settle
prior year acquisition of
Access Comm. 1/12/99 30,333 30 (4,518)
Issue stock for services:
2/1/99 118,334 118 266,133
2/4/99 25,091 25 49,975
3/1/99 41,886 42 88,752
Issue stock for assets:
2/17/99 200,000 200 499,800
3/31/99 207,719 208 688,170
Issue stock to acquire Global
Broadband 2/22/99 (net of 250,000 250 (60,250)
$590,000 acquisition costs)
Recognition of Beneficial Conversion
Feature of Redeemable Preferred
Stock (Note 10) 564,260 (564,260)
Net loss (5,073,387)
------------- -------------- ------------- ------------- -------------- -------------
Balances at 3/31/99 2,000 $ 2,364,260 15,975,129 $ 15,975 $ 10,727,136 $ (7,646,585)
============= ============== ============= ============= ============== =============
</TABLE>
See Notes to the Consolidated Financial Statements.
F-4
<PAGE>
IJNT.net, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended March 31,
1999 1998
----------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C>
Net loss $ (5,073,387) $ (2,395,484)
Add items not requiring the use of cash
Stock issued for services 1,170,467 31,500
Amortization and depreciation 270,173 82,874
Acquisition costs 0 351,707
Changes in assets and liabilities:
Accounts receivable 254,922 (39,912)
Inventory (41,811) (44,834)
Prepaid expenses (288,612) (12,108)
Accounts payable (106,495) 401,262
Accrued liabilities 153,874 (41,108)
Income taxes 4,011 800
----------------- ----------------
NET CASH REQUIRED BY
OPERATING ACTIVITIES (3,656,858) (1,665,303)
INVESTING ACTIVITIES
Purchase equipment (1,323,229) 0
Deposits (56,515) (8,907)
Organization costs (401) (8,978)
----------------- ----------------
NET CASH REQUIRED BY
INVESTING ACTIVITIES (1,380,145) (17,885)
FINANCING ACTIVITIES
Sale of preferred stock 1,800,000 0
Sale of common stock 4,192,700 1,690,664
Proceeds from loans 0 83,690
Principal payments on loans and leases (116,243) (27,863)
----------------- ----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 5,876,457 1,746,491
----------------- ----------------
INCREASE IN CASH AND
CASH EQUIVALENTS 839,454 63,303
Cash and cash equivalents at beginning of period 63,303 0
----------------- ----------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 902,757 $ 63,303
================= ================
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest $ 24,240 $ 10,071
</TABLE>
Noncash investing and financing activities
During the period ended March 31, 1999, the Company issued 745,215 shares
of common stock for assets valued at $1,246,512, and the Company issued
70,000 shares to satisfy debt. Equipment at a cost of $377,344 was acquired
by incurring contracts and leases payable in the same amount.
See Notes to the Consolidated Financial Statements.
F-5
<PAGE>
IJNT.net, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements for 1998 include the accounts
of the Company and its wholly-owned subsidiaries IJNT, Inc., which
was incorporated January 15, 1997 under the laws of the State of
Nevada, and Access Communications, Inc., a Texas corporation, which
was purchased January 1, 1998. The consolidated financial
statements for 1999 include the accounts of the Company and its
wholly-owned subsidiaries IJNT, Inc., Access Communications, Inc.,
WebIt of Utah, Inc., a Utah corporation purchased April 17, 1998;
UrJet Backbone Network, Inc., which was incorporated in December
1998 under the laws of Nevada; Man Rabbit House Multimedia, Inc., a
California corporation purchased August 14, 1998; and Global
Broadband Services, Inc., a Nevada corporation purchased February
22, 1999. All significant intercompany balances and transactions
have been eliminated in consolidation.
Business Activity
The Company was incorporated on June 11, 1992 in Delaware as
Picometrix, Inc. On August 8, 1997 the name was changed to Interjet
Net Corporation. During the year ended March 31, 1999, the name was
changed to IJNT.net Corporation, then to IJNT International, Inc.
and finally to IJNT.net, Inc. The Company acquired the bulk of its
assets July 31, 1997 with the acquisition of IJNT, Inc. The Company
and its subsidiaries are engaged in the business of providing
wireless internet access through microwave technology, dial-up
internet access, web site design, web hosting services, fiber
backbone connectivity, and a variety of telecommunications carrier
services.
Basis of Accounting
The consolidated financial statements are prepared using the
accrual basis of accounting where revenues are recognized when
earned and expenses are recognized when incurred. Wireless internet
service requires certain hardware items which must be installed at
the customer's location. The sale of the equipment and installation
labor are recognized as revenue in the period in which it was
installed. Internet access revenue is recognized monthly as it is
billed. Web site development services revenue is recognized based
on stages of development, typically over a period of one to three
months, as the stages are authenticated by the customer.
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 are being amortized over a five year period.
Property and Equipment
Property and equipment are depreciated over their estimated useful
lives. Depreciation and amortization are 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 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.
F-6
<PAGE>
IJNT.net, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
March 31, 1999
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 affect the disclosure of contingent assets
and liabilities at the date of the financial statements. Actual
results could differ from these estimates.
NOTE 2: FORMER DEVELOPMENT STAGE COMPANY
The Company was in the development stage from its inception until
December 31, 1997. Commencing January 1, 1998, the Company has
sufficient revenue through operations of its subsidiaries that
management considers it to be no longer in the development stage.
NOTE 3: RELATED PARTY TRANSACTIONS
During 1997, the Company's subsidiary, IJNT, Inc. 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 IJNT,
Inc. as additional consideration for the stock. The assets were
recorded on IJNT, Inc.'s books at their historical cost to the
officer.
In March 1999, the Company acquired channel rights from a related
party for $450,000, which was the book value of the acquired assets
on the books of the seller. The Company obtained an independent
appraisal supporting such valuation as an approximation of the
market value of the acquired assets.
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.
At March 31, 1999, the Company owed two stockholders $156,690,
payable within the next 12 months without interest. At that date
the Company was owed $79,693 by a stockholder, payable within the
next 12 months without interest.
NOTE 4: PROPERTY AND EQUIPMENT
Property and equipment as of March 31, 1999 are summarized as
follows:
<TABLE>
<CAPTION>
Cost Depreciation Net Book Value
-------------- ---------------- ------------------
<S> <C> <C> <C>
Furniture $ 180,075 $ 40,940 $ 139,135
Equipment 620,145 118,534 501,611
Transmission Equipment 1,865,789 202,144 1,663,645
Leased Vehicle 12,749 3,187 9,562
-------------- ---------------- ------------------
$ 2,678,758 $ 364,805 $ 2,313,953
============== ================ ==================
</TABLE>
NOTE 5: LICENSES AND OTHER
The Company owns various MMDS, ITFS, and LPTV (wireless cable)
licenses to operate in various cities. The Company has also
recently purchased customer bases from two entities and signed a
non-compete agreement with an officer. These assets are recorded at
cost and amortized on a straight-line basis over the life of the
assets (up to 10 years). The Company reviewed publicly available
documents concerning acquisitions of similar licenses and rights by
the following companies:
F-7
<PAGE>
IJNT.net, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
March 31, 1999
1. Sprint's acquisition of Videotron USA for approximately
$108.0 million in May 1999.
2. Antilles Wireless, LLC acquisition of wireless cable
channel rights from American Telecasting, Inc. for
approximately $6.2 million in April 1999.
3. MCI Worldcom Inc.'s acquisition of entire capital stock
of CAI for approximately $408.0 million in April 1999.
4. Sprint's acquisition of People's Choice TV Corp. for
approximately $100.2 million in April 1999.
The Company has also consulted with Mr. Andrew Nestor, an industry
expert, regarding the valuation of its licenses and lease rights.
Based on the above-described research and analysis, management
believes that the cost of assets as carried on the books is an
appropriate approximation of the fair value of such licenses and
lease rights.
A summary is as follows:
MMDS Channel rights (see Note 3) $ 450,000
LPTV rights and licenses (see Note 3) 699,000
ITFS rights 634,746
Customer bases 238,677
Non-compete agreement 50,000
-------------
$ 2,072,423
=============
NOTE 6: LONG-TERM LIABILITIES
Long-term debt at March 31, 1999 is detailed as follows:
<TABLE>
<CAPTION>
Interest Principal Balance
Rate Payment Current Long-term
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Vehicle contract 9.75 $ 1,099 $ 13,183 $ 19,097
Vehicle contract 13.30 378 4,536 8,384
Vehicle lease 9.90 531 8,778 3,604
Note payable to consultant 0 0 0 133,344
Note payable to corporation 0 0 0 31,250
-------------- ------------- ------------- --------------
$ 26,497 $ 195,679
============= ==============
</TABLE>
Scheduled principal reductions of the debt are as follows:
2000 $ 26,497
2001 175,969
2002 19,710
--------------
$ 222,176
==============
NOTE 7: COMMITMENTS AND CONTINGENCIES
The Company conducts its operations in leased facilities under
noncancellable operating leases expiring through 2001. In addition,
the Company leases equipment under noncancellable operating leases
expiring through 2007. The minimum future rental commitments under
operating leases are as follows:
F-8
<PAGE>
IJNT.net, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
March 31, 1999
<TABLE>
<CAPTION>
Year ending
March 31, Facilities Equipment Total
---------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
2000 $ 535,002 $ 82,028 $ 617,030
2001 487,272 71,400 558,672
2002 466,272 71,400 537,672
2003 434,404 71,400 505,804
Beyond 2003 185,334 71,400 256,734
-------------- ------------- -------------
$ 2,108,284 $ 367,628 $ 2,475,912
============== ============= =============
</TABLE>
Payments under these leases (included in general and administrative
expenses) were $317,417 for the year ended March 31, 1999 and
$190,944 for the year ended March 31, 1998.
NOTE 8: INCOME TAXES
No federal income taxes were due for the years ended March 31,1999
or 1998.
At March 31, 1999, the Company has a federal net operating loss
carryover of approximately $7,500,000. The federal loss will expire
starting March 31, 2012.
At March 31, 1999, the Company has a deferred tax asset in the
amount of $0. There is a potential asset based on future reduction
of income taxes using the net operating loss carryforward. The
amount has been reserved 100% due to the Company's losses.
Management believes that the Company will realize sufficient income
in the future to utilize the net operating loss carryforward.
However, since future income can only be estimated, there is not
sufficient basis for recognition of any deferred tax asset at this
time.
NOTE 9: ACQUISITION OF SUBSIDIARIES
The Company issued 548,496 shares to acquire subsidiaries (treated
as purchase transactions) as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
January 1, 1998 Access Communications, Inc. 241,333
April 17, 1998 WebIt of Utah, Inc. 20,000
August 4, 1998 Man Rabbit House Multimedia, Inc. 37,163
February 22, 1999 Global Broadband Services, Inc. 250,000
-------------
548,496
=============
</TABLE>
NOTE 10: REDEEMABLE PREFERRED STOCK
At December 1, 1998, The Company issued 2,000 shares of Series A
Preferred Stock with $0.01 par value and $1,000 liquidation value.
The base carrying value (net of $200,000 commissions) is
$1,800,000. These shares were immediately convertible (at the
shareholder's option) to common stock at a 20% discount from the
average closing price for the five days immediately preceding a
request for conversion. Based on the quoted closing prices (OTCBB:
LJNT) for the period from November 25-30, 1998, the 2,000 shares
could have been immediately converted to 687,285 shares of common
stock with fair market value of $2,364,260. A Beneficial Conversion
Feature in the amount of $564,260 has been recognized in the
balance sheet, along with an immediate offset to additional paid-in
capital because the Company has not retained earnings from which to
pay dividends. At March 31, 1999 none of the preferred shares had
been converted.
F-9
<PAGE>
SCHEDULE 1
IJNT.net, Inc. AND SUBSIDIARIES
CONSOLIDATED GENERAL AND ADMINISTRATIVE EXPENSES
Years ended March 31,
1999 1998
----------------- ----------------
Accounting $ 51,375 $ 26,035
Automobile expense 42,368 35,947
Bad debts 554 0
Computer expense 116,268 85,311
Consulting 646,727 131,489
Insurance 106,034 48,280
Lease - channel 70,620 136,682
Legal 269,548 82,852
Marketing and advertising 567,073 60,933
Meals and entertainment 57,306 25,779
Office expense 360,572 72,215
Outside services 117,211 40,061
Payroll taxes and benefits 215,154 60,666
Postage 54,203 23,005
Relocation expense 7,755 5,310
Repairs and maintenance 7,294 4,039
Rent expense 317,417 190,944
Salaries 2,154,535 713,482
Taxes and licenses 13,459 9,498
Telephone 473,651 113,928
Travel 202,351 177,975
----------------- ----------------
$ 5,851,475 $ 2,044,431
================= ================
F-10
<PAGE>
SIGNATURES
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 October 7, 1999.
IJNT.net, Inc.
By: /s/ Jon Marple
Jon H. Marple
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on October 7, 1999.
By: /s/ Jon H. Marple President, Treasurer, Chief Executive Officer,
-------------------------- Chief Financial Officer and Chairman
Jon H. Marple
By: /s/ Mary E. Blake Vice President, Secretary and Director
--------------------------
Mary E. Blake
By: /s/ Richard W. Torney Director
--------------------------
Richard W. Torney
By: /s/ Robert B. Santore Director, Web Site Design Director
--------------------------
Robert B. Santore
By: /s/ Jeffrey R. Matsen Director
--------------------------
Jeffrey R. Matsen
<PAGE>
EXHIBIT INDEX
Sequential
Exhibit No. Document Description Page No.
3. Certificate of Incorporation and Bylaws -
3.1 Articles of Incorporation(1)
3.2 Bylaws(1)
27.1 Financial Data Schedule 19
99.1 Appraisal of Acquired Channel Rights(2) 20
(1) Incorporated by reference to such exhibit as filed with the Company's
registration statement on Form 10-SB, File No. 0-24408
(2) Previously filed with Amendment No. 1 to the Company's Annual Report
on Form 10-KSB/A for the fiscal year ended March 31, 1999.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from IJNT.net, Inc. March 31, 1999 financial statements and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 902,757
<SECURITIES> 0
<RECEIVABLES> 291,642
<ALLOWANCES> 0
<INVENTORY> 86,645
<CURRENT-ASSETS> 1,869,437
<PP&E> 2,678,758
<DEPRECIATION> 364,805
<TOTAL-ASSETS> 6,327,978
<CURRENT-LIABILITIES> 671,513
<BONDS> 0
0
2,364,260
<COMMON> 15,975
<OTHER-SE> 3,080,551
<TOTAL-LIABILITY-AND-EQUITY> 6,327,978
<SALES> 1,552,194
<TOTAL-REVENUES> 1,552,194
<CGS> 543,657
<TOTAL-COSTS> 6,145,888
<OTHER-EXPENSES> 1,510
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,240
<INCOME-PRETAX> (5,637,647)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,637,647)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,637,647)
<EPS-BASIC> (.39)
<EPS-DILUTED> (.39)
</TABLE>
