<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
(AMENDMENT NO.1)
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OR OF 1934
Date of Report (Date of earliest event reported): August 7, 2000
----------------------------------------------------------------
TELEHUBLINK CORPORATION
-----------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-25002 59-3200879
------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
24 NEW ENGLAND EXECUTIVE PARK, BURLINGTON, MASSACHUSETTS 01803
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 229-1102
------------------------------------------------------------------
<PAGE>
The undersigned Registrant hereby amends its Current Report on Form 8-K,
originally filed by the Registrant with the Securities and Exchange Commission
on August 16, 2000, to read in its entirety as follows:
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Registrant publicly announced on August 5, 2000 that it had signed a
definitive agreement under which it would acquire all of the outstanding stock
of MVP Systems, Inc., a California corporation ("MVP"). Under the terms of the
agreement, the Registrant will acquire the MVP stock for a total consideration
of 600,000 shares of the Registrant's stock and $100,000 cash.
The undersigned registrant hereby amends Item 7 of its Current Report on Form 8-
K, originally filed by the registrant with the Securities and Exchange
Commission on August 16, 2000, to read in its entirety as follows:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
------------------------------------------------------------------------------
(a) Financial statements of business acquired.
-----------------------------------------
The audited financial statements of MVP Systems, Inc. required to be filed are
included in Exhibit 99.2 hereto and are herein incorporated by reference.
(b) Pro forma financial information.
-------------------------------
The pro forma financial statements required to be filed are filed as Exhibit
99.3 hereto and are incorporated herein by reference.
<PAGE>
(c) Exhibits.
--------
The following exhibits are filed as part of this report pursuant to Item 601 of
Regulation S-K:
Exhibit
Number Description
22.1 Consent of KPMG LLP filed herewith.
99.1 The Registrant's Press Release dated August 7, 2000 Previously filed
99.2 MVP Systems, Inc.Audited Financial Statements as of December 31, 1999
and 1998.
99.3 MVP Systems, Inc. and TeleHubLink Corporation Unaudited Pro Forma
Financial Statements (i) Balance Sheet as of July 29, 2000; (ii)
Statements of Operations for the year ended January 29, 2000 and for
the six months ended July 29, 2000 and (iii) related Notes to
Unaudited Pro Forma Financial Statements.
<PAGE>
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 hereunto duly authorized.
TeleHubLink Corporation
------------------------
(Registrant)
Date: October 23, 2000 /s/ Douglas A. Miller
---------------------
Douglas A. Miller, Vice President of Finance
<PAGE>
Independent Auditors' Report
The Board of Directors
MVP Systems, Inc.:
We have audited the accompanying balance sheets of MVP Systems, Inc. (the
"Company") as of December 31, 1999 and 1998, and the related statements of
income, stockholders' equity (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 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 MVP Systems, Inc. as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
/s/ KPMG LLP
Boston, Massachusetts
September 22, 2000
<PAGE>
MVP SYSTEMS, INC.
Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
December 31, June 30,
-------------------
Assets 1999 1998 2000
-------- -------- -----------
(unaudited)
<S> <C> <C> <C>
Current assets:
Cash $ 38 20 525
Accounts receivable 556 157 418
-------- -------- -----------
Total current assets 594 177 943
-------- -------- -----------
Property and equipment:
Furniture and office equipment 5 4 5
Computer equipment 14 -- 14
-------- -------- -----------
Total property and equipment 19 4 19
Less accumulated depreciation 3 1 5
-------- -------- -----------
Property and equipment, net 16 3 14
-------- -------- -----------
Total assets $ 610 180 957
======== ======== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 35 68 100
Customer advances 12 40 13
Accrued taxes payable 4 -- --
Deferred income taxes 208 14 311
Loans payable to stockholders -- 12 15
-------- -------- -----------
Total current liabilities 259 134 439
-------- -------- -----------
Stockholders' equity:
Common stock; no par value; 10,000,000 shares
authorized; 4,000,000 shares issued and outstanding 5 5 5
Additional paid-in capital 15 -- 15
Retained earnings 331 41 498
-------- -------- -----------
Total stockholders' equity 351 46 518
-------- -------- -----------
Total liabilities and stockholders' equity $ 610 180 957
======== ======== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
MVP SYSTEMS, INC.
Statements of Income
(In thousands)
<TABLE>
<CAPTION>
Years Ended December 31, Six Months Ended June 30,
-------------------------- ---------------------------
1999 1998 2000 1999
----------- ----------- ------------ ------------
(unaudited)
<S> <C> <C> <C> <C>
Revenue $ 1,933 785 1,297 404
Cost of services 1,339 681 972 331
----------- ----------- ------------ ------------
Gross profit 594 104 325 73
General and administrative expenses 102 43 53 31
----------- ----------- ------------ ------------
Income before income taxes 492 61 272 42
Income tax expense 202 14 105 10
----------- ----------- ------------ ------------
Net income $ 290 47 167 32
=========== =========== ============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
MVP SYSTEMS, INC.
Statements of Stockholders' Equity (Deficit)
(In thousands, except share data)
<TABLE>
<CAPTION>
Retained Total
Common stock Additional earnings stockholders'
-------------------- paid-in (accumulated equity
Shares Amount capital deficit) (deficit)
---------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1997 4,000,000 $ 5 -- (6) (1)
Net income -- -- -- 47 47
---------- -------- ---------- ------------ -------------
Balances at December 31, 1998 4,000,000 5 -- 41 46
Contribution of capital -- -- 15 -- 15
Net income -- -- -- 290 290
---------- -------- ---------- ------------ -------------
Balances at December 31, 1999 4,000,000 5 15 331 351
Net income (unaudited) -- -- -- 167 167
---------- -------- ---------- ------------ -------------
Balances at June 30, 2000
(unaudited) 4,000,000 $ 5 15 498 518
========== ======== ========== ============ =============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
MVP SYSTEMS, INC.
Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Years Ended Six Months
December 31, Ended June 30,
------------------ --------------------
1999 1998 2000 1999
------ ------ ------ ------
(unaudited)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $ 290 47 167 32
Adjustments to reconcile net
income to net cash provided by operating activities:
Depreciation and amortization 2 1 2 1
Changes in operating assets and liabilities:
Accounts receivable (399) (144) 138 13
Accounts payable (33) 49 65 (4)
Customer advances (28) 40 1 (36)
Accrued taxes payable 4 -- (4) --
Deferred income taxes 194 14 103 7
------ ------ ------ ------
Net cash provided
by operating activities 30 7 472 13
------ ------ ------ ------
Cash flows from investing activity:
Purchases of property and equipment (15) -- -- (1)
------ ------ ------ ------
Net cash used in investing activity (15) -- -- (1)
------ ------ ------ ------
Cash flows from financing activity:
Loans payable to stockholders 3 -- 15 (12)
------ ------ ------ ------
Net cash provided by (used in)
financing activity 3 -- 15 (12)
------ ------ ------ ------
Net increase in cash 18 7 487 --
Cash, beginning of year 20 13 38 20
------ ------ ------ ------
Cash, end of year $ 38 20 525 20
====== ====== ====== ======
Supplemental cash flow disclosure
Cash paid during the year for:
Income taxes $ 6 1 4 3
====== ====== ====== ======
Conversion of loans payable to stockholders
to contributed capital $ 15 -- -- --
====== ====== ====== ======
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
TELEHUBLINK CORPORATION
Notes to Financial Statements
(In thousands, except share data)
(1) Description of the Business
MVP Systems, Inc. (the "Company") was incorporated in the state of
California in October 1997 by a team of technology professionals. The
Company is headquartered in Freemont, California and specializes in
providing software technology services to customers with its main focus on
Internet and Intranet applications for MS Windows and Unix platforms.
(2) Summary of Significant Accounting Policies
(a) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting periods. Actual results could differ
from those estimates.
(b) Revenue Recognition
The Company earns revenue primarily through consulting services with
third parties. The Company recognizes revenues under the accrual
method of accounting over the period in which the work is performed.
Payments received in advance of services performed are recorded as
customer advances on the accompanying balance sheets.
(c) Property and Equipment
Property and equipment includes furniture and office equipment and
computer equipment which is stated at cost. Depreciation is provided
over the estimated useful lives of the assets, generally three to five
years, using the straight-line method for financial reporting
purposes.
(d) Impairment of Long-Lived Assets
The Company accounts for long-lived assets in accordance with the
provisions of Statement of Financial Accounting Standards (SFAS) No.
121, Accounting for the Impairment of Long-Lived Assets to Be Disposed
Of. This Statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used
is measured by a comparison of the carrying amount of an asset to
future net undiscounted cash flows expected to be generated by the
asset. If such assets are considered to be impaired, the impairment to
be recognized is measured by the amount by which the carrying amount
of the assets exceeds the fair value of the assets.
6 (Continued)
<PAGE>
TELEHUBLINK CORPORATION
Notes to Financial Statements
(In thousands, except share data)
(e) Comprehensive Income
The Company adopted SFAS No. 130, Reporting Comprehensive Income,
which requires that all components of comprehensive income be reported
in the financial statements in the period in which they are
recognized. For each period presented, the Company's comprehensive
income is equal to its net income reported in the accompanying
statements of income.
(f) Fair Value of Financial Instruments
The Company's financial instruments which includes cash, accounts
receivable, accounts payable, customer advances and loans to
stockholders are carried at cost, which approximates their fair values
due to the short-term nature of conversion to cash.
(g) Income Taxes
The Company accounts for income taxes under the asset and liability
method. Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax
credit carryfowards. 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 income in the
period that includes the enactment.
(h) Segment Reporting
The Company has adopted SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information. SFAS No. 131 establishes standards
for the way that public business enterprises report selected
information about operating segments in annual and interim financial
statements. It also establishes standards for related disclosures
about products and services, geographic areas and major customers.
SFAS No. 131 requires the use of the "management approach" in
disclosing segment information, based largely on how senior management
generally analyzes the business operations. In accordance with the
provisions of SFAS No. 131, the Company has determined that it
currently operates in only one segment, and as such, no additional
disclosures are required.
7 (Continued)
<PAGE>
TELEHUBLINK CORPORATION
Notes to Financial Statements
(In thousands, except share data)
(i) Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on its results of
operations, financial position or cash flows.
(3) Income Taxes
Income tax provision for the years ended December 31, 1999 and 1998
consisted of:
Current Deferred Total
---------- ------------ ---------
1999:
Federal $ 3 155 158
State 3 41 44
---------- ------------ ---------
Total $ 6 196 202
========== ============ =========
1998:
Federal $ 2 7 9
State 1 4 5
---------- ------------ ---------
Total $ 3 11 14
========== ============ =========
The following table reconciles the Federal statutory income tax rate to the
Company's effective income tax rate:
Years ended December 31,
------------------------
1999 1998
--------- ---------
Federal statutory income tax rate 34.0% 34.0
Increase (decrease) in tax expense resulting from:
State tax, net of federal benefit 5.9 7.5
Graduated tax rates .9 (18.5)
Other .3 --
--------- ---------
Effective income tax rate 41.1% 23.0%
========= =========
8 (Continued)
<PAGE>
TELEHUBLINK CORPORATION
Notes to Financial Statements
(In thousands, except share data)
Deferred income tax assets and liabilities result from temporary
differences in the recognition of income and expense for tax and financial
reporting purposes. The sources and tax effects of these temporary
differences are presented below:
December 31,
-----------------------
1999 1998
--------- ---------
Deferred tax liabilities:
Accrual to cash basis adjustments $ 203 11
Other 5 1
--------- ---------
Total deferred tax liabilities $ 208 12
========= =========
(4) Related Party Transactions
The Company borrows funds from stockholders when operating capital is
needed. The borrowings are unsecured and repayments are made at the
Company's discretion. Interest is computed using the Internal Revenue
Service's monthly rates on short-term debt. As of December 31, 1999 and
1998, loans payable to stockholders amounted to $-0- and $12, respectively.
During 1999, the stockholder forgave the outstanding loan of $15. This has
been treated as a contribution of capital for financial statement purposes.
(5) Major Customers
The following table summarizes revenue from major customers (revenues in
excess of 10% for the year) as a percentage of total revenue for the years
ended December 31, 1999 and 1998:
1999 1998
-------------- --------------
Customer A 27% --%
Customer B 23% --%
Customer C 18% --%
Customer D 11% 94%
Customer E 10% --%
The loss of any of these customers could have a material adverse effect on
the operations of the Company.
9 (Continued)
<PAGE>
TELEHUBLINK CORPORATION
Notes to Financial Statements
(In thousands, except share data)
(6) Subsequent Event
On August 7, 2000, Telehublink Corporation ("THLC") purchased all the stock
of the Company for 600,000 shares of common stock (530,000 restricted
shares and 70,000 registered shares) and $100,000 in cash. As a result,
THLC assumed all of the assets and liabilities of the Company. The
financial statements do not reflect any adjustments related to the
acquisition.
10
<PAGE>
TELEHUBLINK CORPORATION
Unaudited Pro Forma Balance Sheet
(In thousands, except share data)
<TABLE>
<CAPTION>
Telehublink
Corporation MVP Systems, Inc. Pro Forma Pro Forma
Assets July 29, 2000 June 30, 2000 Adjustments Combined
------------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 5,342 525 (100)/(1)/ 5,767
Accounts receivable, net 166 405 -- 571
Prepaid expenses and other current assets 80 -- -- 80
------------- ----------------- ----------- ---------
Total current assets 5,588 930 (100) 6,418
Property and equipment, net 850 14 -- 864
Intangible assets, net 1,765 -- 1,360 /(1/) 3,125
Other assets 19 -- -- 19
------------- ----------------- ----------- ---------
Total assets $ 8,222 944 1,260 10,426
============= ================= =========== =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 229 100 -- 329
Accrued expenses 752 -- -- 752
Deferred income taxes -- 311 -- 311
Equipment loan 196 -- -- 196
Loans payable to stockholders -- 15 -- 15
------------- ----------------- ----------- ---------
Total current liabilities 1,177 426 -- 1,603
------------- ----------------- ----------- ---------
Total liabilities 1,177 426 -- 1,603
------------- ----------------- ----------- ---------
Stockholders' equity:
Common stock 279 5 1 /(2)/ 285
Additional paid-in capital 29,110 15 1,757 /(1)//(2)/ 30,882
Deferred compensation (1,761) -- -- (1,761)
Accumulation deficit (20,583) 498 (498) /(2)/ (20,583)
------------- ----------------- ----------- ---------
Total stockholders' equity 7,045 518 1,260 8,823
------------- ----------------- ----------- ---------
Total liabilities and stockholders' equity $ 8,222 944 1,260 10,426
============= ================= =========== =========
</TABLE>
See notes to unaudited pro forma financial statements.
11
<PAGE>
TELEHUBLINK CORPORATION
Unaudited Pro Forma Statement of Operations
(In thousands, except share data)
<TABLE>
<CAPTION>
Telehublink
Corporation MVP Systems, Inc.
Year ended Year ended Pro Forma Pro Forma
January 29, 2000 December 31, 1999 Adjustments Combined
---------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $ 1,152 1,933 -- 3,085
Cost of revenue 796 1,339 -- 2,135
---------------- ----------------- ----------- -----------
Gross profit 356 594 -- 950
---------------- ----------------- ----------- -----------
Operating expenses:
Stock-based charges 14,126 -- -- 14,126
Selling, general and administrative expenses 2,219 100 -- 2,319
Operating losses of WEC prior to acquisition 312 -- -- 312
Depreciation and amortization 167 2 453 /(3)/ 622
---------------- ----------------- ----------- -----------
Total operating expenses 16,824 102 453 17,379
---------------- ----------------- ----------- -----------
Operating income (loss) (16,468) 492 (453) (16,429)
Other income (expense):
Interest expense (320) -- -- (320)
Foreign currency loss (21) -- -- (21)
---------------- ----------------- ----------- -----------
Income (loss) before income taxes (16,809) 492 (453) (16,770)
Income tax expense -- 202 (202)/(6)/ -
---------------- ----------------- ----------- -----------
Net income (loss) (16,809) 290 (251) (16,770)
Charge for pricing modification of warrants (229) -- -- (229)
---------------- ----------------- ----------- -----------
Net income (loss) available to common stockholders $ (17,038) 290 (251) (16,999)
================ ================= =========== ===========
Basic and diluted net loss per share $ (.96) $ (.92)
================ ===========
Weighted average shares of common stock outstanding
used in computing basic and diluted net loss per share 17,792,181 600,000 /(5)/ 18,392,181
================ =========== ===========
</TABLE>
See notes to unaudited pro forma financial statements.
12
<PAGE>
TELEHUBLINK CORPORATION
Unaudited Pro Forma Statement of Operations
(In thousands, except share data)
<TABLE>
<CAPTION>
Telehublink
Corporation MVP Systems, Inc.
Twenty-six Six months
weeks ended ended Pro Forma Pro Forma
July 29, 2000 June 30, 2000 Adjustments Combined
------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $ 5,298 1,297 (241)/(4)/ 6,354
Cost of revenue 4,614 972 -- 5,586
------------- ----------------- ----------- -----------
Gross profit 684 325 (241) 768
------------- ----------------- ----------- -----------
Operating expenses:
Stock-based charges 615 -- -- 615
Research and development 827 -- (241)/(4)/ 586
Selling, general and administrative expenses 1,468 51 -- 1,519
Provision for bad debt 286 -- -- 286
Depreciation and amortization 656 2 227 /(3)/ 885
------------- ----------------- ----------- -----------
Total operating expenses 3,852 53 (14) 3,891
------------- ----------------- ----------- -----------
Operating income (loss) (3,168) 272 (227) (3,123)
Other income (expense):
Interest expense (352) -- -- (352)
Interest and other income 198 -- -- 198
------------- ----------------- ----------- -----------
Income (loss) before income taxes (3,322) 272 (227) (3,277)
Income tax expense -- 105 (105) /(6)/ --
------------- ----------------- ----------- -----------
Net income (loss) $ (3,322) 167 (122) (3,277)
============= ================= =========== ===========
Basic and diluted net loss per share $ (.13) $ (.12)
============= ===========
Weighted average shares of common stock
outstanding used in computing basic
and diluted net loss per share 26,126,932 600,000/(5)/ 26,726,932
============= =========== ===========
</TABLE>
See notes to unaudited pro forma financial statements.
13
<PAGE>
TELEHUBLINK CORPORATION
Notes to Unaudited Pro Forma Financial Statements
(In thousands, except share data)
Basis of Presentation
The unaudited pro forma statements of operations give effect to the
acquisition MVP Systems, Inc. by Telehublink Corporation in August 2000 as
if the acquisition had occurred on January 30, 1999. The unaudited pro
forma consolidated balance sheet gives effect to the acquisition of MVP
Systems, Inc. as if the acquisition had occurred on July 29, 2000. The
unaudited pro forma statement of operations for the year ended January 29,
2000 is based on the historical audited financial statements of Telehublink
Corporation for the year ended January 29, 2000 and MVP Systems, Inc. for
the year ended December 31, 1999. The unaudited pro forma balance sheet and
the unaudited pro forma statement of operations for the six months ended
July 29, 2000 is based on the unaudited historical financial statements of
Telehublink Corporation as of and for the twenty-six weeks ended July 29,
2000 and MVP Systems, Inc. as of and for the six months ended June 30, 2000
and the estimates and assumptions set forth below.
The effect of the acquisition of MVP Systems, Inc. has been presented using
the purchase method of accounting, and accordingly, the purchase price was
allocated to the assets and liabilities assumed based upon management's
best preliminary estimate of fair value with any excess purchase price
being allocated to goodwill or other identifiable intangible assets. The
preliminary allocation of the purchase price will be subject to further
adjustments, which are not anticipated to be material, as management
finalizes the allocations of the purchase price in accordance with
generally accepted accounting principles. The pro forma adjustments related
to the purchase price allocations of MVP Systems, Inc. represents
management's best estimate of the effect of the acquisition.
The pro forma adjustments are based upon estimates, currently available
information and certain assumptions that management deems appropriate. The
unaudited pro forma consolidated financial data presented herein are not
necessarily indicative of the results we would have obtained had such
events occurred on January 30, 1999, as assumed, or of our future results.
14
<PAGE>
TELEHUBLINK CORPORATION
Notes to Unaudited Pro Forma Financial Statements
(In thousands, except share data)
Pro Forma Adjustments
(1) The pro forma adjustment to record the acquisition of MVP Systems, Inc. The
purchase price is comprised of the following:
Total
---------
Purchase Consideration:
Cash $ 100
Issuance of common stock 1,778
---------
Total purchase consideration $ 1,878
---------
The anticipated purchase price allocation and related effects of such allocation
on the unaudited pro forma consolidated balance sheet are as follows:
Total
---------
Tangible assets and liabilities:
Cash $ 525
Accounts receivable, net 418
Property and equipment, net 14
Accounts payable 100
Deferred income taxes 311
Customer deposits 13
Other liabilities 15
---------
Net tangible assets 518
---------
Intangible assets:
Noncompete agreements 650
Workforce in place 430
Goodwill 280
---------
Total intangible assets 1,360
---------
Total purchase price allocation $ 1,878
=========
Intangible assets are expected to include noncompete agreements, workforce in
place and goodwill, which will be amortized over their estimated useful lives of
three years. THLC is in the process of completing full valuations of the
tangible and intangible assets. In management's opinion, the preliminary
estimates regarding the allocation of the purchase price and amortization
periods are not expected to differ materially from the final allocation.
15
<PAGE>
TELEHUBLINK CORPORATION
Notes to Unaudited Pro Forma Financial Statements
(In thousands, except share data)
(2) The pro forma adjustment to stockholders' equity reflects the elimination
of the historical equity balances of MVP Systems, Inc. and the issuance of
600,000 shares of THLC's common stock with a value of $1,778.
(3) The pro forma adjustment to depreciation and amortization reflects an
increase in amortization expense to reflect the amortization of intangible
assets associated with the purchase of MVP Systems, Inc. as of the
beginning of the period presented.
(4) The pro forma adjustment reflects the elimination of intercompany
transactions between THLC and MVP Systems, Inc. prior to the acquisition.
(5) Pro forma loss per share reflects the actual weighted average shares of
common stock outstanding adjusted to include an increase of 600,000 shares
to reflect the shares of common stock issued in connection with the
purchase of MVP Systems, Inc.
(6) The pro forma adjustment to income tax expense reflects the elimination of
MVP Systems, Inc. tax expense due to THLC's net operating loss.
16
