UNITED STATES
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 Event: April 11, 2001
Home Mortgage and Loan, Inc.
----------------------------
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
0-31417 88-0356047
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\ (Commission File Number) (IRS Employer Identification Number)
c/o Sandra Jorgensen, President
3809 South West Temple, Suite 1B, Salt Lake City, Utah 84101
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(Address of principal executive offices)
(801) 994-0385
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(Registrant's telephone number, including area code)
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
This Amendment to the 8-K filed by the Registrant on April 12, 2001 has the sole
purpose of filing the Audited Financial Statements for the Registrant through
the periods ended December 31, 2000 and 1999 by the Registrant's independent
auditors, Jones Simkins LLP, Logan, Utah and to do so as required by Item 7
(a)(4). This information does not include prior information regarding Cybergate,
Inc. information as this information was found to be of no material significance
by the Auditors and management of the Company.
ITEM 7. Financial Statements and Exhibits
The following exhibit is included:
2.2 Audited Financial Statements as of December 31, 2000 and 1999,
dated August 9, 2001 performed by Jones Simkins LLP the
Registrant's independent auditors.
23.1 Consent of Independent Public Accounts - Jones Simkins LLP,
Registrant's independent auditors
Pursuant to the requirement of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Home Mortgage and Loan, Inc.
Signature Date
By: /s/ Sandra Jorgensen February 28, 2002
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Name: Sandra Jorgensen
Title: President
2
HOME MORTGAGE AND LOAN, INC.
FINANCIAL STATEMENTS
December 31, 2000 and 1999
HOME MORTGAGE AND LOAN, INC.
INDEX
Page
Independent Auditors' Report F-2
Balance Sheet F-3
Statements of Operations F-4
Statements of Stockholders' Equity F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
INDEPENDENT AUDITORS' REPORT
To the Stockholders' and
Board of Directors of
Home Mortgage and Loan, Inc.
We have audited the accompanying balance sheet of Home Mortgage and Loan, Inc.
as of December 31, 2000 and 1999 and the related statements of operations,
stockholders' equity, 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 auditing standards generally accepted
in the United States of America. 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 Home Mortgage and Loan, Inc.,
as of December 31, 2000 and 1999 and the results of its operations and its cash
flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has incurred losses since inception and has
not been able to generate positive cash flows from operations. These conditions
raise substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
JONES SIMKINS LLP
Logan, Utah
August 9, 2001
F-2
HOME MORTGAGE AND LOAN, INC.
BALANCE SHEETS
December 31, 2000 and 1999
ASSETS 2000 1999
------ ------------- -------------
Current assets:
Cash $ 3,291 11,859
Accounts receivable, net 80,522 -
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Total current assets 83,813 11,859
Property and equipment, net 115,593 137,841
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$ 199,406 149,700
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 28,259 -
Accrued expenses 27,913 14,492
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Total current liabilities 56,172 14,492
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Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $.001 par value; 5,000,000 shares
no shares issued or outstanding - -
Common stock, $.001 par value; 20,000,000 shares
authorized, issued and outstanding 20,000 20,000
Additional paid-in capital 545,491 299,640
Accumulated deficit (422,257) (184,432)
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Total stockholders' equity 143,234 135,208
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$ 199,406 149,700
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F-3
HOME MORTGAGE AND LOAN, INC.
STATEMENTS OF OPERATIONS
Years Ended December 31, 2000 and 1999
2000 1999
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Sales, net $ 213,832 502,065
Cost of sales 319,993 204,524
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Gross (loss) profit (106,161) 297,541
General and administrative expenses 131,664 421,620
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Net loss before income taxes (237,825) (124,079)
Provision for income taxes - -
---------------- -------------
Net loss $ (237,825) (124,079)
=============== =============
Loss per common share - basic and diluted $ (.01) (.01)
=============== =============
Weighted average common shares -
basic and diluted 20,000,000 20,000,000
=============== =============
F-4
HOME MORTGAGE AND LOAN, INC.
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STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 2000 and 1999
Preferred Stock Common Stock Additional
------------------------ ---------------------------- Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit Total
--------- ----------- ------------- ------------- --------------- -------------- -------------
Balance at January 1, 1999 - $ - 20,000,000 $ 20,000 $ 194,024 $ (60,353) $ 153,671
Contributed capital - - - - 105,616 - 105,616
Net loss - - - - - (124,079) (124,079)
--------- ----------- ------------- ------------- --------------- -------------- -------------
Balance at December 31, 1999 - - 20,000,000 20,000 299,640 (184,432) 135,208
Contributed capital - - - - 245,851 - 245,851
Net loss - - - - - (237,825) (237,825)
--------- ----------- ------------- ------------- --------------- -------------- -------------
Balance at December 31, 2000 - $ - 20,000,000 $ 20,000 $ 545,491 $ (422,257) $ 143,234
========= =========== ============= ============= =============== ============== =============
F-5
HOME MORTGAGE AND LOAN, INC.
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STATEMENTS OF CASH FLOWS
Years Ended December 31, 2000 and 1999
2000 1999
Cash flows from operating activities:
Net loss $ (237,825) (124,079)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 35,990 34,748
Provision for losses on accounts receivable 33,000 -
Increase in accounts receivable (113,522) -
Increase in:
Accounts payable 28,259 -
Accrued liabilities 13,421 14,492
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Net cash used in operating activities (240,677) (74,839)
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Cash flows from investing activities:
Purchase of property and equipment (13,742) (18,918)
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Net cash used in investing activities (13,742) (18,918)
---------------- --------------
Cash flows from financing activities:
Contributed capital 245,851 105,616
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Net cash provided by financing activities 245,851 105,616
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Net (decrease) increase in cash (8,568) 11,859
Cash, beginning of year 11,859 -
---------------- --------------
Cash, end of year $ 3,291 11,85
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F-6
HOME MORTGAGE AND LOAN, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
Note 1 - Organization and Summary of Significant Accounting Policies
Organization
Home Mortgage and Loan, Inc. (the Company) was organized under the laws of the
State of Utah. The Company's operations consist of the sales of home mortgage
loans and a home equity program.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.
Concentration of Credit Risk
The Company maintains its cash in bank deposit accounts, which, at times, may
exceed federally insured limits. The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash and cash equivalents.
Financial instruments which potentially subject the Company to concentration of
credit risk consist primarily of trade receivables. In the normal course of
business, the Company provides credit terms to its customers. Accordingly, the
Company performs ongoing credit evaluations of its customers and maintains
allowances for possible losses which, when realized, have been within the range
of management's expectations.
The Company's customer base consists primarily of individual homeowners.
Although the Company is directly affected by the well being of the residential
mortgage industry, management does not believe significant credit risk exists at
December 31, 2000.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is determined using the straight-line method over the estimated
useful lives of the assets. Expenditures for maintenance and repairs are
expensed when incurred and betterments are capitalized. Gains and losses on sale
of property and equipment are reflected in operations.
Income Taxes
Deferred income taxes are provided in amounts sufficient to give effect to
temporary differences between financial and tax reporting, principally related
to net operating loss carryforwards.
Earnings Per Share
The computation of basic earnings per common share is based on the weighted
average number of shares outstanding during the year.
F-7
HOME MORTGAGE AND LOAN, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
Note 1 - Organization and Summary of Significant Accounting Policies (continued)
- --------------------------------------------------------------------
The computation of diluted earnings per common share is based on the weighted
average number of shares outstanding during the year plus the common stock
equivalents which would arise from the exercise of stock options and warrants
outstanding using the treasury stock method and the average market price per
share during the year. Common stock equivalents are not included in the diluted
earnings per share calculation when their effect is antidilutive. The Company
does not have any stock options or warrants outstanding at December 31, 2000 and
1999.
Use of Estimates in the Preparation of Financial Statements
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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2 - Going Concern
As of December 31, 2000, the Company has incurred losses since inception and has
not been able to generate positive cash flows from operations. These factors
raise substantial doubt about the Company's ability to continue as a going
concern.
Management intends to seek additional funding through business ventures. There
can be no assurance that such funds will be available to the Company, or
available on terms of acceptable to the Company.
Note 3 - Accounts Receivable
Accounts receivable consist of the following at December 31:
2000 1999
----------- -----------
Trade receivables 113,522 -
Allowance for doubtful accounts (33,000) -
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$80,522 -
F-8
HOME MORTGAGE AND LOAN, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
Note 4 - Property and Equipment
Property and equipment consists of the following at December 31:
2000 1999
----------- -----------
Office furniture and fixtures $ 45,451 45,451
Office equipment 141,944 128,202
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187,395 173,653
Less accumulated depreciation (71,802) (35,812)
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$ 115,593 137,841
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Note 5 - Income Taxes
The difference between income taxes at statutory rates and the amount presented
in the financial statements is a result of the following for the years ended
December 31:
2000 1999
----------- -----------
Income tax benefit at statutory rate $ 80,000 42,000
Change in valuation allowance (80,000) (42,000)
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$ - $ -
============ ===========
Deferred tax assets are as follows at December 31:
2000 1999
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Net operating loss carryforwards $ 143,000 63,000
Valuation allowance (143,000) (63,000)
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$ - $ -
============ ===========
As of December 31, 2000, the Company has net operating loss carryforwards of
approximately $422,000. The amount of net operating loss carry forward that can
be used in any one year will be limited by significant changes in the ownership
of the Company and by the applicable tax laws which are in effect at the time
such carryforwards can be utilized.
F-9
HOME MORTGAGE AND LOAN, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
Note 5 - Income Taxes (continued)
A detail of the Company's net operating loss carryforwards are as follows at
December 31, 2000:
Year Year of
Generated Amount Expiration
1998 $ 60,000 2018
1999 124,000 2019
2000 238,000 2020
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$ 422,000
Note 6 - Preferred Stock
The Company's preferred stock may have such rights, preferences and designations
and may be issued in such series as determined by the Board of Directors. No
shares are issued and outstanding at December 31, 2000 and 1999.
Note 7 - Supplemental Cash Flow Information
No amounts were paid for interest or income taxes during the years ended
December 31, 2000 and 1999.
Note 8 - Commitments and Contingencies
The Company may become or is subject to investigations, claims or lawsuits
ensuing out of the conduct of its business, including those related to
environmental safety and health, commercial transactions etc. The Company is
currently not aware of any such items, which it believes could have a material
adverse affect on its financial position.
Note 9 - Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (FAS) No. 141, "Business Combinations" and No.
142, "Goodwill and Other Intangible Assets." The statements eliminate the
pooling-of-interests method of accounting for business combinations and require
that goodwill and certain intangible assets not be amortized. Instead, these
assets will be reviewed for impairment annually with any related losses
recognized in earnings when incurred. The adoption of these statements is not
expected to have a material effect on the company's financial position or
results of operations.
F-10
HOME MORTGAGE AND LOAN, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
Note 9 - Recent Accounting Pronouncements (continued)
In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities, an amendment of SFAS No. 133" and in
June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments
and Hedging Activities - Deferral of the Effective date of FASB Statement No.
133." SFAS 138 and 133 establishes accounting and reporting standards for
derivative instruments and requires recognition of all derivatives as assets or
liabilities in the statement of financial position and measurement of those
instruments at fair value. SFAS 133 is now effective for fiscal years beginning
after June 15, 2000. The Company believes that the adoption of SFAS 138 and 133
will not have any material effect on the financial statements of the Company.
Note 10 - Subsequent Event
On April 11, 2001, the Company closed on a stock purchase agreement with
Mortgage Financial Link.com, Inc. (MFL) (formerly Cybergate, Inc.). Terms of the
agreement provide for MFL to acquire all of the issued and outstanding common
stock of the Company from the sole shareholder in exchange for 16,500,000 shares
of MFL common stock. The transaction will be accounted for as a recapitalization
of MFL because the number of shares being issued (16,500,000) represents
approximately eighty percent of the total issued and outstanding shares of MFL.
Condensed pro-forma results of operations have not been presented as the
operations of MFL are immaterial.
F-11