--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 24, 2001
800America.com, Inc.
(Exact name of issuer as specified in its charter)
Nevada 000-28547 87-0567884
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
420 Lexington Avenue
New York, NY 10170
(Address of principal executive offices and zip code)
(800) 999-5048
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 24, 2001, 800America.com, Inc. ("the Company") completed
the acquisition of substantially all of the assets, including the name and
assumed certain liabilities of cs-live.com, Inc. The assets consisted primarily
of intellectual property. Headquartered in Ontario Canada, cs-live provided
enhanced real time communications using the Internet as the delivery medium. The
purchase price was $50,000 and 450,000 shares of the Company's Common Stock. The
Company used its own funds. The consideration paid by the Company was determined
by the parties through a privately negotiated arm's length transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
(b) Pro Forma Financial Information.
(c) Exhibits.
Exhibit Number Description
-------------- -----------------------------------------------------
2 Form of Asset Purchase Agreement between cs-live,
Inc. and 800America.com, Inc., dated as of August 30,
2001.
ITEM 7a
KPMG LLP
CHARTERED ACCOUNTANTS
Suite 1000 Telephone (613) 560-0011
45 O'Connor St. Telefax (613) 560-2896
Ottawa, ON KIP 1A4 www.kpmg.ca
Canada
AUDITORS' REPORT
To the Directors
We have audited the balance sheet of cs-live.com inc. as at December 31, 2000
and the statements of operations and deficit and cash flows for the period from
incorporation on January 13, 2000 to December 31, 2000. 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 Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 2000 and the
results of its operations and its cash flows for the period then ended in
accordance with Canadian generally accepted accounting principles.
"KPMG LLP"
Chartered Accountants
Ottawa, Canada
January 25, 2001 (except for note 12,
which is as of February 23, 2001)
cs-live.com inc.
Balance Sheet
December 31, 2000
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Assets
Current assets:
Cash and cash equivalents $ 120,769
Accounts receivable 41,524
Investment tax credits receivable 175,000
Prepaid expenses 16,151
----------------------------------------------------------------
353,444
Capital assets (note 3) 208,469
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$ 561,913
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accred liabilities $ 296,605
Deferred revenue 3,700
Note payable (note 4) 94,000
Shareholders' loans (note 5 and 12(b)) 127,500
----------------------------------------------------------------
521,805
Shareholders' equity
Share capital (note 6) 1,602,726
Contributed surplus (note 6) 149,567
Deficit (1,712,185)
----------------------------------------------------------------
40,108
Going concern (note 1)
Commitments (note 8)
Subsequent events (note 12)
-------------------------------------------------------------------------
$ 561,913
-------------------------------------------------------------------------
See accompanying notes to financial statements.
cs-live.com inc.
Statement of Operations and Deficit
For the period from incorporation on January 13, 2000 to December 31, 2000
--------------------------------------------------------------------------------
Revenue $ 21,698
Cost of revenue 49,295
--------------------------------------------------------------------------------
(27,597)
Expenses:
General and administrative (note 6(b)) 704,762
Sales and marketing 605,456
Research and development 342,619
Amortization 34,646
Interest and bank charges 8,366
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1,695,849
---------------------------------------------------------------------
(1,723,446)
Investment income 11,261
--------------------------------------------------------------------------------
Net loss, being deficit, end of period $(1,712,185)
--------------------------------------------------------------------------------
Loss per share (note 9) $ (0.35)
--------------------------------------------------------------------------------
Weighted average number of common shares 4,883,181
--------------------------------------------------------------------------------
See accompanying notes to financial statements
cs-live.com, inc.
Statement of Cash Flows
For the period from incorporation on January 13, 2000 to December 31, 2000
--------------------------------------------------------------------------------
Cash Flows from operating activities:
Operations:
Net loss $(1,712,185)
Items not involving cash:
Amortization 34,646
Compensation expense (note 6(b)) 149,567
Change in non-cash operating working capital 67,631
--------------------------------------------------------------------
(1,460,341)
Financing:
Issue of common shares 1,602,725
Note payable 94,000
Shareholders' loans 127,500
--------------------------------------------------------------------
1,824,225
Investment:
Purchase of capital assets (243,115)
--------------------------------------------------------------------
Increase in cash and cash equivalents $ 120,769
Cash and cash equivalents, beginning of period -
Cash and cash equivalents, end of period $ 120,769
-----------------------------------------------------------------------------
Supplemental cash flow information:
Interest paid $ 3,514
-----------------------------------------------------------------------------
The Company considers cash and cash equivalents to be highly liquid investments
with original maturities of three months or less.
See accompanying notes to financial statements.
cs-live.com inc.
Notes to Financial Statements
For the period from incorporation on January 13, 200 to December 31 2000
--------------------------------------------------------------------------------
cs-live.com Inc. (the "Company") was incorporated under the Canada Business
Corporations Act on January 13, 2000. The Company develops and markets software
that enables businesses to implement a real time customer service function over
the Internet.
1. Significant accounting policies:
(a) Going concern: These financial statements have been prepared on the
basis of accounting principles applicable to a going concern which
assumes that the Company will realize the carrying value of its assets
and satisfy its obligations as they become due in the normal course of
operations.
Th ability of the company to continue s a gong concern and to realize
the carrying value of its assets is dependent on the success of future
operations, and the continuing support of its shareholders and lenders.
It cannot be determined at this tine whether these objectives will be
realized.
These financial statements do not reflect adjustments in the carrying
values of its accounts receivable, investment tax credits receivable,
prepaid expenses or capital assets that would be necessary if the going
concern assumption were not appropriate should the Company not be able
to continue its normal course of business.
(b) Use of estimates:
The preparation of financial statements in conformity with Canadian
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ
from those estimates
(c) Capital assets:
Capital assets are recorded at cost less accumulated amortization.
Amortization is provided on the declining balance basis using the
following annual rates:
------------------------------------------------------------------
Asset Type Rate
------------------------------------------------------------------
Office furniture and equipment 20%
Computer equipment 30%
Software 30%
------------------------------------------------------------------
Leasehold improvements are amortized on a straight-line basis over the
related lease term.
cs-live.com inc.
Notes to Financial Statements, page 2
For the period from incorporation on January 13, 2000 to December 31, 2000
--------------------------------------------------------------------------------
1. Significant accounting policies (continued):
(d) Revenue recognition:
The Company generates revenues from licensing its software. License
revenues are recognized over the term of the license.
Consulting and software customization revenues are recognized as the
services are rendered. Billings in advance of services rendered are
recorded as deferred revenue and are recognized at the time services
are rendered.
(e) Research and development expense:
Research costs are expensed as incurred. Development costs are expensed
in the year incurred unless management believes a development project
meets the generally accepted accounting criteria for deferral and
amortization. In the opinion of management, no development costs
incurred to date meet all the criteria for deferral and amortization.
Therefore, all development costs have been expensed as incurred.
(f) Income taxes:
Future tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Future tax assets and liabilities are measured
using enacted or substantively 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 future tax assets
and liabilities of a change in tax rates is recognized in income in the
period that included the enactment date.
(g) Foreign currency:
Foreign currency transactions are translated into Canadian dollars of
exchange rates in effect on the date of the transactions. Monetary
assets and liabilities are translated into Canadian dollars at the
exchange rate in effect as at the balance sheet date. Foreign currency
gains and losses are included in income.
(h) Stock option plan:
The Company applies the intrinsic value-based method of accounting for
its stock compensation granted to employees. Under this method,
compensation expense is recorded on the measurement date (which is
generally the date of grant) only if the current market price of the
underlying stock exceeded the exercise price. The Company applies the
fair value-based method of accounting for stock compensation granted to
non-employees. Under this method, compensation expense is measured at
the grant date based on the fair value of the award determined using an
option pricing method.
cs-live.com inc.
Notes to Financial Statements, page 3
For the period from incorporation on January 13, 2000 to December 31, 2000
--------------------------------------------------------------------------------
2. Amalgamation of ADR Explorations Ltd. (ADR):
Effective august 30, 2000, the Company amalgamated with ADR and continued
under the name "new cs-live.com inc.". This transaction was treated as a
reverse takeover of ADR by "old cs-live.com inc.", and accounted for under
the purchase method, as provided by Canadian generally accepted accounting
principles.
Under reverse takeover accounting, the financial statements of their
amalgamated entity are considered a continuation of the financial
statements of "old cs-live in.". For the purposes of this share exchange,
"old cs-live.com inc." is deemed to have acquired ADR for an ascribed
purchase price of $1, which represents the assets and liabilities,
acquired. As such, the net assets of "old cs-livec.com inc." have remained
at their carrying values. In addition, as "old cs-live.com inc." commenced
operations January 13, 2000, no comparative figures have bee presented,
3. Capital assets:
--------------------------------------------------------------------------------
Accumulated Net book
Cost amortization value
--------------------------------------------------------------------------------
Office furniture and equipment $55,382 $5,300 $50,082
Computer equipment 112,623 17,700 90,923
Software 35,569 5,146 30,423
Leasehold improvements 39,541 6,500 33,041
--------------------------------------------------------------------------------
$243,115 $34,646 $208,469
--------------------------------------------------------------------------------
4. Note payable:
The note payable is due in 36 equal monthly installments, beginning
November 2000, carries an interest rat of prime plus 3%, is due on demand
and is secured by certain equipment.
5. Shareholders' loans"
The shareholders' loans are repayable on demand and are interest-free.
6. Share capital:
(a) Authorized:
The authorized share capital consists of an unlimited number of voting
common shares and an unlimited number of non-voting Class A shares.
cs-live.com inc.
Notes to Financial Statements, page 4
For the period from incorporation on January 13, 2000 to December 31, 2000
--------------------------------------------------------------------------------
6. Share capital (continued):
(b) Issued:
The Company's issued and outstanding shares are as follows:
--------------------------------------------------------------------------------
Number of
Common Shares Amount
--------------------------------------------------------------------------------
Issued for cash 6,019,718 $1,703,107
Issued to effect amalgamation 670,244 1
Share issuance costs - (100,382)
--------------------------------------------------------------------------------
6,689,962 $1,602,726
--------------------------------------------------------------------------------
Included in general and administrative expenses and contributed surplus
is $149,567, which represents the fair value of common shares issued to
non-employees in exchange for services.
(c) Purchases warrants:
On April 28, 2000, 571,158 common share purchase warrants were issued
as part of a share offering. Each warrant is exercisable until April
28, 2001 to acquire one common share at a price between $0.80 and $1.20
per share.
On August 30, 2000, 670, 244 common share purchase warrants were issued
as part of the amalgamation of ADR Explorations Ltd. Each warrant is
exercisable to acquire one common share at $1.00 per share anytime
within 12 months of the date of commencement of the quotation or
trading of the common shares on the Canadian Venture Exchange.
At December 31, 2000, 1,241,402 purchase warrants were outstanding.
(d) Stock options:
Under the terms of the Stock Option Pan, the Company is authorized to
issue up to 15% of the common shares outstanding on a non-diluted basis
to its employees, officers, directors and other service providers. The
exercise price of each option equals the market price of the Company's
stock on the date prior to the date of the grant. The maximum term of
an option is five years. Options are granted at the discretion of the
Board and vest annually in three equal tranches starting on the first
anniversary of the grant.
cs-live.com inc.
Notes to Financial Statements, page 5
For the period from incorporation on January 13, 2000 to December 31, 2000
--------------------------------------------------------------------------------
A summary of the status of the Company's Stock Option Plan as of
December 31, 2000, and changes from the date of incorporation are
presented below:
---------------------------------------------------------------------------------
Number of Weighted
Shares exercise price
---------------------------------------------------------------------------------
Granted 1,164,435 $0.58
Exercised (176,600) 0.25
Forfeited (15,000) 1.60
---------------------------------------------------------------------------------
Options outstanding, end of period 972,835 $0.63
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Options exercisable, end of period 518,868 $0.45
---------------------------------------------------------------------------------
The following table summarizes information about stock options
outstanding at December 31, 2000:
--------------------------------------------------------------------------------------------------
Options Options
outstanding exercisable
--------------------------------------------------------------------------------------------------
Weighted Weighted Weighted
Range Number average average Number average
Of exercise outstanding remaining exercise exercisable exercise
Prices at 12/31/00 contractual life price at 12/31/00 price
--------------------------------------------------------------------------------------------------
$0.25 to $0.50 356,050 4.3 years $0.27 356,050 $0.27
$0.75 to $0.83 583,875 4.2 years 0.80 154,908 0.82
41.50 to $1.60 32,910 4.7 years 1.58 7,910 1.51
--------------------------------------------------------------------------------------------------
972,835 4.3 years $0.63 518,868 $0.45
--------------------------------------------------------------------------------------------------
cs-live.com inc.
Notes to financial Statements, page 6
For the period from incorporation January 13, 2000 to December 31, 2000
--------------------------------------------------------------------------------
7. Income taxes:
Deferred income taxes reflect the impact of temporary differences between
amounts of assets and liabilities for financial reporting purposes and such
amounts as measured by tax laws. The tax effects of temporary differences
that gave rise to significant portions of the future tax asset and future
tax liability are as follows:
------------------------------------------------------------------------------
2000
------------------------------------------------------------------------------
Expected tax rate 44.0%
Expected tax expense applied to net loss $(753,000)
Increase (decrease) in taxes resulting from:
Non-deductible compensation expense (note 6) 47,000
Valuation allowance 711,000
Share issue costs (9,000)
Other miscellaneous items 4,000
------------------------------------------------------------------------------
Income tax expense $ -
------------------------------------------------------------------------------
8. Commitments:
The Company is committed to payments under operating leases for office
space and equipment. Annual payments are approximately: 2001 - $78,000;
2002 - $57,700; 2003 - $52,000; and 2004 - $3,000.
9. Loss per share:
For the purposes of the loss per share computation, the weighted average
number of common shares has been used. Had the stock options and purchase
warrants been exercised, the effect on the loss per share would be
anti-dilutive.
10. Segmented information:
Management has determined that, as of December 31, 2000, the Company
operates in one industry segment, which involves the development and
marketing of software that enables organizations to implement a real-time
customer service function over the internet, and one geographic segment,
being Canada.
11. Financial instruments:
Concentrations of credit risk:
The company is exposed to credit-related losses in the event of
non-performance by counterparts. Credit exposure is minimized by dealing
with only creditworthy counterparties.
Fair values:
The carrying values of cash and cash equivalents, accounts receivable,
investment tax credits receivable, accounts payable and accrued
liabilities, note payable and shareholder loan approximate fair values due
to the short-term maturities of these instruments.
cs-live inc.
Notes to Financial Statements page, 7
For the period from incorporation on January 13, 2000 to December 31, 2000
--------------------------------------------------------------------------------
12. Subsequent events:
(a) On February 23, 2001, the Company completed a private placement of
convertible debentures (the "Debentures") having a principle value of
$350,000. The Debentures have a two-year term and bear interest at a
rate of 20% per annum, payable annually, in arrears. At the option of
the holder, the Debentures can be converted, in whole or in part, into
common shares of the company at a conversion price equal to the greater
of $1 and the twenty-day weighted average closing price of the
Company's common shares on the Canadian Venture Exchange.
Purchasers of the Debentures also receive one Class A purchase warrant
and one Class B purchase warrant for each $2 of Debentures purchased.
Each Class A purchase warrant entitles the holder to acquire one common
share of the Company for a period of 24 months at an exercise price of
$1 or if the Company completes an offering of securities raising at
least $500,000 during the 12-month period following the closing of the
Debenture offering, the exercise price shall be the per share offering
price of the subsequent offering. Each Class B purchase warrant
entitles the holder to acquire one common share of the Company for a
period of 24 months at an exercise an equivalent number of Class A
purchase warrants.
(b) Subsequent to year end, the shareholders' loans of $127,500 were
converted into the Debentures described above having a principle value
of $127,500. The shareholders' were no issued and Class A or Class B
purchase warrants.
ITEM 7b
800America.com, Inc.
ProForma Financial Information
Unaudited ProForma Combined Condensed
Financial Information
On September 24, 2001 800america.com, Inc. (800America) acquired all
the outstanding common and preferred stock of cslive.com, Inc. (cslive). In
exchange for 450,000 shares of common stock of 800America and fifty thousand
dollars ($50,000) the acquisition was accounted for as a purchase.
The unaudited proforma combined condensed balance sheet has been
prepared to reflect the transactionan as of June 30, 2001. The following
unaudited proforma combined condensed statements of income combine the results
of operations of cslive and 800America for the year ended December 31, 2000 and
for the six months ended June 30, 2001 as if the acquisitions of cslive, which
closed on September 24, 2001 had occurred on January 1, 2000 and January 1, 2001
respectively. The proforma information was prepared based on historic financial
statements and the related notes of cslive and 800 America.
The unaudited proforma combined condensed financial statements and the
notes thereto should be read in conjunction with the historic financial
statements and related notes of cslive and 800America appearing elsewhere in
this report. The proforma information is not necessarily indicative of the
result that would have been obtained had such events actually occurred on the
dates specified nor is it necessarily indicative of the future results of the
combined company. Actual statements of income of the combined companies will be
consolidated commencing on the date of acquisition.
The common stock component of the purchase price was computed from the
average trading price of the stock over three (3) days either side of the trade
date September 24, 2001, resulting in an average price of two (2) dollars per
share. The purchase price was reduced by fifty thousand ($50,000), due to the
restricted conditions of the stock and its volatility. The resulting purchase
price then is as follows:
Common Stock 900,000
Less Valuation Allowance (50,000)
---------
850,000
Cash 50,000
--------
900,000
Allocations of the purchase price is as follows:
Web Development 450,000
Goodwill 450,000
-------
900,000
Cs-live web development and technology provides real-time
communications using the Internet as the delivery medium. Cs-live technology
enables companies with a web presence to maximize the effectiveness of the
Internet with applications that provide enhanced real-time communications over
the web, including live chat and rich media. Cs-live provides solutions for
eLearning, eMarketing, eSupport and eSurveys, brings cs-live's customers web
sites to the next level with live and interactive customer management solutions.
The goodwill will not be amortized as the Company adopts Financial
Accounting Standards Board Opinion Number 142 on January 1, 2002 which will
require a (at a minimum) an annual review for impairment and recognition of such
losses as they occur in the future.
800America . com, Inc.
Pro Forma Combined Consolidate Income Statement
For Year Ended December 31, 2000
Historical Historical ProForma ProForma
800 cslive .com Adjustment Combined
America Inc.
Revenues $15,980,529 $21,698 $16,002,227
-------------------------------------------------------------------------
Cost of Revenues
Cost of Goods Sold
Internet Hosting
Web Site Operations 233,938 49,295 283,233
Other
Rebates 8,913,351 8,913,351
-------------------------------------------------------------------------
Total Cost of Revenues 9,147,289 49,295 9,196,584
-------------------------------------------------------------------------
Selling, General and Administrative
Sales and Marketing 1,878,318 605,456 2,483,774
Depreciation - Amortization 486,480 34,646 180,000 701,126
Research and Development 342,619 342,619
General and Administrative 1,354,542 704,762 2,059,304
-------------------------------------------------------------------------
Total Selling, General and Administrative 3,719,340 1,687,483 180,000 5,586,823
-------------------------------------------------------------------------
Operating Income 3,113,900 -1,715,080 -180,000 1,218,820
Other Income (Expense) 26,243 2,895 29,138
Income Tax (Expense) Benefit -1,067,649 653,249 -414,400
-------------------------------------------------------------------------
Net Income $2,072,494 ($1,712,185) $473,249 $833,558
-------------------------------------------------------------------------
See Accompanying Notes to Unaudited Combined Consolidated Financial Statements
800America . com, Inc.
Pro Forma Combined Consolidate Income Statement
For Six Months Ended June 30, 2001
Historical Historical ProForma ProForma
800 cslive .com Adjustment Combined
America Inc.
Revenues 9,302,749 139,218 9,441,967
--------------------------------------------------------------------
Cost of Revenues
Cost of Goods Sold
Internet Hosting
Web Site Operations $191,188 $35,475 $226,663
Other
Rebates
--------------------------------------------------------------------
Total Cost of Revenues 191,188 35,475 226,663
--------------------------------------------------------------------
Selling, General and Administrative
Sales and Marketing 1,147,119 184,712 1,331,831
Depreciation - Amortization 426,968 36,600 90,000 553,568
Research and Development 236,161 236,161
General and Administrative 1,516,141 29,339 1,808,480
--------------------------------------------------------------------
Total Selling, General and Administrative 3,090,228 749,812 90,000 3,930,000
--------------------------------------------------------------------
Operating Income 6,021,333 -646,069 -90,000 5,285,264
Other Income (Expense) 43,506 -40,069 3,437
Income Tax (Expense) Benefit -2,094,900 1,089,292 -1,005,608
Net Gain (Loss) From Continuing Operations 3,969,939 -686,138 999,292 4,283,093
Gain on Disposal of Discontinued Operations Net of Tax 330,000 330,000
--------------------------------------------------------------------
Net Income $4,299,939 ($686,138) $999,292 $4,613,093
--------------------------------------------------------------------
See Accompanying Notes to Unaudited Combined Consolidated Financial Statements
800America . com, Inc.
Pro Forma combined Consolidated Balance Sheet
June 30, 2001
Historical cs-live . ProForma Combined
800 com, Inc Adjustments Proforma
America 800America
Assets
Current Assets
Cash and Cash Equivalents $5,370,914 $71,125 ($71,125) $5,370,914
Accounts Receivable (Net) 868,310 76,020 -76,020 868,310
Inventory 14,405 -14,405
Prepaid Assets
Income Tax Benefit 52,360 175,000 -175,000 52,360
-------------------------------------------------------------------
Total Current Assets 6,291,584 336,550 -336,550 6,291,584
-------------------------------------------------------------------
Property and Equipment
Equipment (Net) 447,460 77,024 -77,024 447,460
Furniture Fixture (Net) 44,082 -44,082
Software (Net) 314,857 28,965 28,965 314,857
Web Development (Net) 450,000 450,000
Leasehold Improvements (Net) 26,437 -26,437
-------------------------------------------------------------------
Total Property & Equipment 762,317 176,508 273,492 1,212,317
-------------------------------------------------------------------
Other Assets
Goodwill (Net) 186,666 450,000 636,666
Investments in Affiliates 2,568,075 2,568,075
-------------------------------------------------------------------
Total Other Assets 2,754,741 450,000 3,204,741
-------------------------------------------------------------------
Total Assets 9,808,642 513,058 386,942 10,708,642
===================================================================
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable 207,989 283,793 -283,793 207,989
Income Tax Payable 1,288,906
Notes Payable 104,306 -104,306 1,288,906
Debenture Payable 721,000 -721,000
-------------------------------------------------------------------
Total Current Liabilities 1,496,895 1,109,099 -1,109,099 1,496,895
-------------------------------------------------------------------
Stockholders' Equity
Common Stock 15,429 1,652,715 -1,652,715 15,879
450
Preferred Stock
Additional Paid in Capital 1,943,134 149,567 -149,567 2,842,684
899,550
Retained Earnings (Deficit) 6,353,184 -2,398,323 2,398,323 6,353,184
-------------------------------------------------------------------
Total Stockholders' Equity 8,311,747 -596,041 1,496,041 9,211,747
-------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $9,808,642 $513,058 $386,942 $10,708,642
===================================================================
See Accompanying Notes To Unaudited Combined Consolidated Financial Statements
800America.com, Inc.
Notes to Unaudited Pro Forma
Combined Condensed Financial Information
Note 1 - Significant Accounting Policies and Basis of Presentation
The accompanying historical financial statements of 800America.com,
Inc. (800America) and cslive.com, Inc. (cslive) have been derived from financial
statements prepared in accordance with U. S. generally accepted accounting
principles.
800America and cslive's historic financial statements for the year
ended December 31, 2000, used in the pro forma financial statements, were for
each company based on their audited financial statements of and for the period
ended December 31, 2000.
800America and cslive's financial statements as of and for the six
months ended June 30, 2001, used in the pro forma financial statements are
derived from each company's unaudited financial statements for that period.
Note 2 - Pro Forma Adjustments Balance Sheet
a. Balance sheet adjustments - to record the consideration paid for
the net assets acquired at their fair market value.
Web Development $450,000
Goodwill 450.000
--------
Stock issued $900,000
--------
b. The above consideration was in the form of 450,000 shares of
800America common stock and cash $50,000 issued for all the
outstanding common stock of cslive.
c. The fair market value of the stock determined above was the
average price traded for the month of the merger (September 2001)
reduced by fifty thousand dollars ($50,00) for its restricted
status and volatility. The Web Site composition is contained in
the opening information. No other assets of cslive were
considered of any value and no liabilities of cslive were assumed
by 800America.
Note 3 - Pro Forma Adjustment Income Statement
a. Intangibles resulting from the purchase will be amortized as
follows until January 2, 2002 when Financial Accounting Standards
Board Opinion No. 142 will be adopted dispensing with the
amortization for Goodwill and requiring, at a minimum, annual
test for impairment and recognition of impairment losses in the
future.
Web Site Development 5 years
b. To record income tax effects of the merger and pro forma
adjustments. The net operating loss created during the year of
merger would be used during the year of the merger and the
subsequent year. The tax benefit will be created during the year
of the merger.
SIGNATURE
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.
800AMERICA.COM, INC.
Date: May 9, 2002 By: /s/ David E. Rabi
------------------------
David E. Rabi
Chief Executive Officer
INDEX TO EXHIBITS
-----------------
Exhibit Number Description
--------------- ------------
2 Form of Asset Purchase Agreement between cs-live,
Inc. and 800America.com, Inc., dated as of August 30,
2001.