SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
OR
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________to ______________
Commission file number 0-27494
LEISUREPLANET HOLDINGS, LTD.
----------------------------
(Exact name of Registrant as Specified in Its Charter)
Bermuda Not Applicable
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
Clarendon House, Church Street, Hamilton HM CX, Bermuda
-------------------------------------------------------
(Address of Principal Executive Offices with Zip Code)
Registrant's Telephone Number, Including Area Code: 809-295-1422
------------
---------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report.
Indicate by check mark whether the registrant (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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ____No __
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of common stock outstanding as of May 10, 2000 was
8,391,899.
LEISUREPLANET HOLDINGS, LTD.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2000
PART I - FINANCIAL INFORMATION
ITEM 1 Unaudited Consolidated Balance Sheets at March 31, 2000 and June 30,
1999
Unaudited Consolidated Statements of Income/(loss) and
Comprehensive Income/(loss) for the three and nine months
ended March 31, 2000 and 1999
Unaudited Consolidated statements of Cash Flows for the nine
months ended March 31, 2000 and 1999
Unaudited Consolidated Statement of Changes in Stockholders
Investment for the period June 30, 1999 to March 31, 2000
Notes to the Unaudited Consolidated Financial Statements
SIGNATURES
THE PURPOSE OF THIS AMENDMENT IS TO CORRECT CERTAIN TYPOGRAPHICAL ERRORS MADE IN
THE FINANCIAL STATEMENTS INCLUDED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2000 AS ORIGINALLY FILED ON MAY 15, 2000.
LEISUREPLANET HOLDINGS, LTD.
CONSOLIDATED BALANCE SHEETS
ASSETS
- --------------------------------------------------------------------------------
JUNE 30,
MARCH 31, 2000 1999
------------------- -------------------
(DOLLARS)
---------------------------------------
CURRENT ASSETS
Cash on hand 38,406,792 20,813,301
Trade accounts receivable 15,065,992 13,388,561
Less: Allowances for bad debts (388,599) (443,172)
-------------------- --------------------
14,677,393 12,945,389
Inventories (net) 8,948,699 9,152,575
Prepaid expenses and other current assets 25,677,364 5,236,587
Deferred income taxes - 539,884
-------------------- --------------------
TOTAL CURRENT ASSETS 87,710,248 48,687,736
Property, plant and equipment 31,681,481 30,777,399
Less: Accumulated depreciation (12,619,664) (11,488,982)
-------------------- --------------------
19,061,817 19,288,417
Intangible assets (net) 27,549,000 34,024,745
Deferred charges (net) 269,909 868,944
Other assets 37,075 33,988
-------------------- --------------------
134,628,049 102,903,830
==================== ====================
LIABILITIES AND STOCKHOLDERS INVESTMENT
- --------------------------------------------------------------------------------
JUNE 30,
MARCH 31, 2000 1999
------------------- -------------------
(DOLLARS)
---------------------------------------
CURRENT LIABILITIES
Bank overdraft payable 441,803 -
Current portion of long term debt 996,523 3,088,435
Trade accounts payable 10,311,397 9,058,811
Other provisions and accruals 3,999,436 4,618,283
Dividends payable - 1,870,959
Other taxes payable 222,055 558,669
Income tax payable 566,634 1,214,292
---------- ---------
TOTAL CURRENT LIABILITIES 16,537,848 20,409,449
Long term debt 19,981,484 33,598,244
Deferred income taxes 1,205,985 1,551,724
---------- ---------
37,725,317 55,559,417
========== ==========
Minority stockholders investment 45,144,428 32,198,314
Preferred stock 23,224,530 9,891,197
STOCKHOLDERS' INVESTMENT
Capital stock:
A class common stock, $0.01 par value - authorized 23,000,000
shares, issued and outstanding 8,363,676 shares 83,636 53,832
B class common stock, $0.01 par value - authorized 2,000,000
shares, issued and outstanding 946,589 shares 9,466 9,466
FSAH B Class common stock 599 580
Preferred stock, $0.01 par value - authorized 5,000,000 shares,
issued and outstanding nil shares - -
Capital in excess of par 51,081,196 22,971,261
Retained earnings/(loss) (2,698,777) (3,084,700)
---------- ----------
48,476,120 19,950,439
Foreign currency translation adjustments (19,942,346) (14,695,537)
----------- -----------
28,533,774 5,254,902
134,628,049 102,903,830
=========== ===========
-2-
LEISUREPLANET HOLDINGS, LTD.
CONSOLIDATED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE
INCOME/(LOSS) FOR THE THREE MONTHS ENDED MARCH 31,
1999
2000 RESTATED
------------------- -------------------
(DOLLARS)
Revenues 21,100,519 20,221,736
Operating expenses
Cost of sales 14,648,524 12,195,024
Selling, general and administrative costs 12,167,952 7,038,218
Loss on sale of investment in First SA Lifestyle Holdings Limited - 1,094,190
Amortization of intangibles 404,462 754,877
Depreciation 1,063,819 536,429
------------------- -------------------
28,284,757 21,618,738
------------------- -------------------
Operating loss (7,184,238) (1,397,002)
Other income 2,677,666 442,348
Interest income/(expense) 413,425 (444,742)
------------------- -------------------
Loss from consolidated companies before income taxes and minority interests (4,093,147) (1,399,396)
Provision for taxes on income 302,617 (294,056)
------------------- -------------------
Loss from continuing operations before minority interests (3,790,530) (1,693,452)
Minority interest in consolidated subsidiary companies 2,423,463 (855,696)
------------------- -------------------
Loss from continuing operations (1,367,067) (2,549,148)
Income from discontinued operations - 85,596
------------------- -------------------
Net (loss)/income (1,367,067) (2,463,552)
Other comprehensive (loss)/income
Foreign currency translation difference (4,076,618) 1,031,350
------------------- -------------------
Comprehensive loss (5,443,685) (1,432,202)
------------------- -------------------
Basic loss per share from continuing operations ($0.15) ($0.42)
Basic earnings per share from discontinued operations - 0.01
------------------- -------------------
Total basic loss per share ($0.15) ($0.41)
Diluted loss per share from continuing operations ($0.15) ($0.42)
Diluted earnings per share from discontinued operations - 0.01
------------------- -------------------
Total diluted loss per share ($0.15) ($0.41)
------------------- -------------------
Diluted earnings per share have not been reflected, as the result is
anti-dilutive.
-3-
LEISUREPLANET HOLDINGS, LTD.
CONSOLIDATED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE
INCOME/(LOSS) FOR THE NINE MONTHS ENDED MARCH 31,
1999
------------------
2000 RESTATED
(DOLLARS)
Revenues 73,877,806 65,533,336
================== ==================
Operating expenses
Cost of sales 49,403,704 39,736,935
Selling, general and administrative costs 29,542,007 21,662,051
Loss on sale of investment in First SA Lifestyle Holdings Limited - 1,094,190
Amortization of intangibles 1,323,843 1,318,037
Depreciation 3,014,091 1,874,843
------------------ ------------------
83,283,645 65,686,056
================== ==================
Operating loss (9,405,839) (152,720)
Other income 9,754,465 582,254
Interest expense (95,440) (125,913)
------------------ ------------------
Income from consolidated companies before income taxes and
minority interests 253,186 303,621
Provision for taxes on income (1,599,707) (1,647,484)
------------------ ------------------
Income/(loss) from continuing operations before minority interests (1,346,521) (1,343,863)
Minority interest in consolidated subsidiary companies 1,688,190 (2,369,370)
------------------ ------------------
Income from continuing operations 341,669 (3,713,233)
Income from discontinued operations - (841,831)
------------------ ------------------
Net (loss)/income 341,669 (4,555,064)
Other comprehensive (loss)/income
Foreign currency translation difference (5,246,809) 2,173,564
------------------ ------------------
Comprehensive income/(loss) (4,905,140) (2,381,500)
------------------ ------------------
Basic loss per share from continuing operations $0.05 ($0.56)
Basic loss per share from discontinued operations - (0.13)
------------------ ------------------
Total basic loss per share $0.05 ($0.69)
Diluted loss per share from continuing operations $0.18 ($0.56)
Diluted loss per share from discontinued operations - (0.13)
------------------ ------------------
Total diluted loss per share $0.18 ($0.69)
------------------ ------------------
Diluted earnings per share for 1999 has not been reflected as the result is
anti-dilutive
-4-
LEISUREPLANET HOLDINGS, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31
1999
2000 RESTATED
(DOLLARS)
Cash flows from operating activities:
Net Income/(loss) 341,669 (4,555,064)
Loss from discontinued operations - 841,831
----------------- ------------------
Loss from continuing operations 341,669 (3,713,233)
ADJUSTMENTS TO RECONCILE LOSS TO NET CASH (UTILIZED)/GENERATED BY OPERATING
ACTIVITIES:
Depreciation and amortization 4,337,934 3,192,880
Deferred income taxes 291,528 250,076
Net loss on sale of assets 63,167 -
Net gain on sale of portion of investment in First Lifestyle Holdings - (747,093)
Net loss/(gain) on transactions with minorities (13,572,877) (2,976,622)
Effect of changes in current assets and current liabilities (5,363,601) (6,202,985)
Minority interest in consolidated subsidiary companies (1,688,190) 2,622,490
Creation of debenture redemption reserve fund 393,750 562,500
----------------- ------------------
Net cash utilized by continuing operating activities (15,196,620) (7,011,987)
Net cash utilized by discontinued operations - (841,831)
----------------- ------------------
Net cash utilized by operating activities (15,196,620) (7,835,818)
----------------- ------------------
Cash flows from investing activities:
Proceeds on minority shares issued in LPI Limited 20,844,442 -
Proceeds on minority shares issued in First Lifestyle
Holdings Limited 16,645 -
Proceeds on dilution in First SA Lifestyle holdings Limited - 10,352,556
Proceeds on First Lifestyle Holdings shares sold 437,773 -
Additional shares in First Lifestyle Holdings acquired - (33,655)
Additional intangibles acquired (1,103,008) (17,896)
Additions to property, plant and equipment (4,447,356) (2,794,041)
Proceeds on disposal of property, plant and equipment 36,445 482,766
Restraint of trade payments - (1,385,197)
Additional purchase price payments - (2,484,510)
Other assets acquired (6,190) (175,812)
Acquisition of subsidiaries (net of cash) - (2,434,902)
Proceeds on disposal of subsidiary (Net of cash of $10,562) - 14,189
----------------- ------------------
Net cash realized by investing activities 15,778,751 1,523,498
----------------- ------------------
Cash flows from financing activities:
Net borrowings in bank overdrafts 466,057 739,916
Repayments of long term debt (1,516,732) (1,775,955)
Repayments of short term debt (1,942,165) (1,314,396)
Proceeds on preference stock issued - 9,891,197
Proceeds/(redemption)on stock issues 21,101,884 (1,900,574)
----------------- ------------------
Net cash provided in financing activities 18,109,044 5,640,188
Effect of exchange rate changes on cash (1,097,684) 4,040,042
------------------ ------------------
Cash generated by operations 17,593,491 3,367,910
Cash on hand at beginning of period 20,813,301 17,948,991
------------------ ------------------
Cash on hand at end of period 38,406,792 21,316,901
================= =================
-5-
LEISUREPLANET HOLDINGS, LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS INVESTMENT
FIRST SOUTH
LEISUREPLANET LEISUREPLANET AFRICAN
HOLDINGS, LTD. HOLDINGS, LTD. HOLDINGS B
A CLASS COMMON B CLASS COMMON CLASS COMMON CAPITAL IN
STOCK STOCK STOCK EXCESS OF PAR
---------------- ----------------- ------------- ----------------
(DOLLARS)
Balance at June 30, 1999 53,832 9,466 580 22,971,261
Options exercised 800 - - 159,200
Debentures converted 165 - - 98,835
Share issue expenses written off - - - (25,092)
Net loss - - - -
Translation difference - - - -
---------- ----------- --------- ----------
Balance at September 30, 1999 54,797 9,466 580 23,204,204
Options exercised 255 - - 120,870
Debentures converted 3,585 - - 2,147,409
A warrants exercised 724 - - 476,626
Escrow shares issued 5,905 - - (5,905)
New shares issued 13,793 - - 19,986,207
FSAH B class shares issued - - 19 567,842
Share issue expenses incurred - - - (896,382)
Net profit - - - -
Dividends reversed - - - -
Translation difference - - - -
---------- ----------- --------- ----------
Balance at December 31, 1999 carried forward 79,059 9,466 599 45,600,871
========== =========== ========== ==========
OTHER
COMPREHENSIVE
(LOSS) /INCOME
(FOREIGN
CURRENCY
RETAINED TRANSLATION
(LOSS)/EARNINGS ADJUSTMENTS) TOTAL
----------------- ------------- --------------
Balance at June 30, 1999 (3,084,700) (14,695,537) 5,254,902
Options exercised - - 160,000
Debentures converted - - 99,000
Share issue expenses written off - - (25,092)
Net loss (2,833,436) - (2,833,436)
Translation difference - 518,541 518,541
---------- ----------- ---------
Balance at September 30, 1999 (5,918,136) (14,176,996) 3,173,915
Options exercised - - 121,125
Debentures converted - - 2,150,994
A warrants exercised - - 477,350
Escrow shares issued - - -
New shares issued - - 20,000,000
FSAH B class shares issued - 567,861
Share issue expenses incurred - - (896,382)
Net profit 4,542,176 - 4,542,176
Dividends reversed 44,250 - 44,250
Translation difference - (1,688,732) (1,688,732)
---------- ----------- ---------
Balance at December 31, 1999 carried forward (1,331,710) (15,865,728) 28,492,557
========== =========== ==========
-6-
LEISUREPLANET LEISUREPLANET FIRST SOUTH
HOLDINGS, LTD. HOLDINGS, LTD. AFRICAN HOLDINGS
A CLASS COMMON B CLASS COMMON B CLASS COMMON CAPITAL IN
STOCK STOCK STOCK EXCESS OF PAR
----------------- ------------------ ---------------- -----------------
(DOLLARS)
Balance at December 31, 1999 brought forward 79,059 9,466 599 45,600,871
Options exercised 745 353,130
Warrants exercised 1,699 - - 1,070,057
Escrow shares reversed (4,700) - - 4,700
Debentures converted 6,833 - - 4,952,438
Share issue expenses incurred - - - (900,000)
Net loss - - - -
Translation difference - - - -
---------- ----------- ---------- ------------
Balance at March 31, 2000 83,636 9,466 599 51,081,196
========== =========== ========== ===========
OTHER
COMPREHENSIVE
(LOSS) /INCOME
(FOREIGN CURRENCY
RETAINED TRANSLATION
(LOSS)/EARNINGS ADJUSTMENTS) TOTAL
- ------------------ ---------------- ------------
Balance at December 31, 1999 brought forward (1,331,710) (15,865,728) 28,492,557
Options exercised - - 353,875
Warrants exercised - - 1,071,756
Escrow shares reversed - - -
Debentures converted - - 4,959,271
Share issue expenses incurred - - (900,000)
Net loss (1,367,067) - (1,367,067)
Translation difference - (4,076,618) (4,076,618)
---------- ----------- ----------
Balance at March 31, 2000 (2,698,777) (19,942,346) 28,533,774
========== =========== ==========
-7-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
1. ORGANIZATION AND PRINCIPAL ACTIVITIES OF THE GROUP
Leisureplanet Holdings, Ltd. (formerly First South Africa Corp., Ltd.)
(the "Company") was founded on September 6, 1995. The purpose of the
Company is to acquire and operate South African companies and acquire
and develop Internet related companies with an emphasis on European
based e-commerce related businesses.
The principal activities of the group include the following:
LIFESTYLE PRODUCTS
The manufacture, sale and distribution of lifestyle enhancing products,
which includes both consumable food products and semi-durable outdoor
and indoor products.
INTERNET RELATED ACTIVITIES
The maintenance and provision of an Internet travel service to Internet
subscribers, providing the convenience of one stop travel planning with
on-line booking and flexibility.
2. SUMMARY OF ACCOUNTING POLICIES
The consolidated financial statements have been prepared in accordance
with US generally accepted accounting principles and incorporate the
following significant accounting policies:
CONSOLIDATION
The Company consolidates its majority owned subsidiaries. The
consolidated financial statements include the accounts of the Company
and its subsidiaries. Minority interests have been taken into account
when determining the net income due to the Company. Intercompany
transactions have been eliminated on consolidation.
ACCOUNTING ESTIMATES
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 at the date of the financial statements, disclosure of
contingent liabilities at the financial statement date and reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
EARNINGS/(LOSS) PER SHARE
Earnings/(loss) per share on common shares is based on net
income/(loss) and reflects dilutive effects of any stock options and
warrants that exist at period end.
INTANGIBLE ASSETS
Goodwill, recipes and other intellectual property, and trademarks are
being amortized on a straight-line basis over a period of twenty to
twenty five years. If facts and
-8-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
circumstances were to indicate that the carrying amount of goodwill,
recipes and other intellectual property is impaired, the carrying
amount would be reduced to an amount representing the discounted future
cash flows to be generated by the operation.
Also included in intangible assets are non-competition agreements that
are being amortized on a straight-line basis over the six-year term of
the agreements.
The Company has adopted Statement of Financial Accounting Standards No.
121 ("SFAS-121"), Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of. No impairments in
long-lived assets have taken place.
FOREIGN CURRENCY TRANSLATION
The functional currency of the underlying companies in the Lifestyle
enhancing segment is that of South African Rand. Accordingly, the
following rates of exchange have been used for translation purposes:
Assets and liabilities are translated into United States Dollars using
the exchange rates at the balance sheet date.
Common stock and capital in excess of par are translated into United
States Dollars using historical rates at date of issuance.
Revenue, expenses, gains and losses are translated into United States
Dollars using the weighted average exchange rates for each year.
The resultant translation adjustments are reported in the component of
stockholders' investment designated as "Foreign currency translation
adjustment."
FOREIGN ASSETS AND LIABILITIES
Transactions in foreign currencies arise as a result of inventory
purchases from foreign countries and intercompany funding transactions
between the Company and its subsidiaries. Transactions in foreign
currencies are accounted for at the rates ruling on transaction dates.
Exchange gains and losses are charged to the income statement during
the period in which they are incurred. Foreign assets and liabilities
of the group which are not denominated in United States Dollars are
converted into United States Dollars at the exchange rates ruling at
the financial year-end or at the rates of forward cover purchased.
Forward cover is purchased to cover the currency exposure on foreign
liabilities.
INVENTORIES
Inventories are valued at the lower of cost and net realizable value,
using both the first-in, first-out and the weighted average methods.
The value of work-in-progress and finished goods includes an
appropriate portion of manufacturing overheads. A valuation reserve has
been established to reduce the values of certain identified inventories
(determined to be obsolete or otherwise impaired) to their estimated
net realizable values (market or selling price less costs to dispose).
-9-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
PROPERTY, PLANT AND EQUIPMENT
Land is stated at cost and is not depreciated. Buildings are
depreciated on the straight-line basis over estimated useful lives of
20 years.
Plant and equipment, and motor vehicles are written off over their
estimated useful lives of 5 to 10 years.
INCOME TAXES
Income tax expense is based on reported earnings before income taxes.
Deferred income taxes represent the impact of temporary differences
between the amounts of assets and liabilities recognized for financial
reporting purposes and such amounts recognized for tax purposes.
Deferred taxes are measured by applying currently enacted tax laws.
FAIR VALUE OF FINANCIAL INSTRUMENTS
As at March 31, 2000, the carrying value of accounts receivable,
accounts payable and investments approximate their fair value. The
carrying value of long-term debt approximates fair value, as the debt,
other than convertible debentures, interest rates are keyed to the
prime lending rate. The convertible debentures are believed to
approximate fair market.
REVENUES
Revenues comprise net invoiced sales of shipped Lifestyle enhancing
products and Internet travel related commissions. Combined revenues
exclude sales to group companies.
Revenues are stated net of allowances granted to customers and trade
discounts. Returns of defective products are offset against revenues.
GAIN ON DISPOSAL OF SUBSIDIARY STOCK
Subsidiary stock disposed of during the period is recognized as a gain
in the statement of income and is separately disclosed as a
non-operating gain.
CASH FLOWS
For the purposes of the statements of cash flows, cash includes cash on
hand and deposits held on notice.
RECLASSIFICATION
Certain items in the prior year financial statements have been
reclassified to conform to the current period presentation.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the FASB adopted SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting
and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts)
be recorded in the balance sheet as either an asset or liability
measured at its fair value and that changes in the derivatives fair
value be recognized currently in earnings unless specific hedge
accounting criteria are met. Special
-10-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
accounting for qualifying hedges allows derivatives gains and losses to
offset related results on the hedged item in the income statement and
requires that the Company must formally document, designate and assess
the effectiveness of transactions that receive hedge accounting. SFAS
No. 133 is effective for fiscal years beginning after June 15, 2000.
The Company believes that the future adoption of this statement will
not have a significant impact on the results of operations or financial
position of the Company.
3. INVENTORIES
Inventories consist of the following:
MARCH 31, JUNE 30,
2000 1999
----------------- ---------------
DOLLARS
Finished goods 4,307,613 4,655,361
Work in progress 515,983 587,544
Raw materials and ingredients 3,087,475 2,983,298
Supplies 1,155,025 1,066,595
--------- ---------
Inventories (Gross) 9,066,096 9,292,798
Less: Valuation allowances (117,397) (140,223)
--------- ---------
Inventories (Net) 8,948,699 9,152,575
========= =========
4. DISCONTINUED OPERATIONS
During the previous fiscal year, the Company discontinued its
operations in the Industrial manufacturing and Packaging business
segments in order to concentrate all of its efforts on its core
operations of Lifestyle enhancing products and Internet travel related
businesses.
-11-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
5.EARNINGS PER SHARE
Earnings/(loss) per share data is calculated as follows:
BASIC LOSS PER SHARE FOR THE THREE MONTHS ENDED
MARCH 31, 2000
Net loss available to common stockholders (1,367,067)
SHARES FRACTION OF WEIGHTED AVERAGE
DATES OUTSTANDING OUTSTANDING PERIOD SHARES
----------- ------ ------
January 1, 2000 8,852,536 1.00 8,852,536
January 1, 2000 to March 31, 2000
Options converted to shares during the quarter 74,500 0.90 66,973
Warrants exercised during the quarter 169,911 0.40 67,298
Escrow shares reversed during the quarter (469,975) 1.00 (469,975)
Debentures converted into shares during the quarter 683,293 0.71 485,566
--------- ---------
WEIGHTED AVERAGE SHARES 9,310,265 9,002,398
========= =========
BASIC LOSS PER SHARE FOR THE NINE MONTHS ENDED
MARCH 31, 2000
Net loss available to common stockholders 341,669
SHARES FRACTION OF WEIGHTED AVERAGE
DATES OUTSTANDING OUTSTANDING PERIOD SHARES
July 1, 1999 6,329,731 1.00 6,329,731
July 1, 1999 to March 31, 2000
New shares issued during the year 1,379,310 0.02 473,194
Options converted to shares during the year 180,000 0.57 97,317
Escrow shares issued during the year 120,621 0.51 80,561
A Warrants exercised during the year 242,311 0.08 49,856
Debentures converted into shares during the year 1,058,292 0.12 312,526
--------- ---------
WEIGHTED AVERAGE SHARES 9,310,265 7,343,185
========= =========
BASIC LOSS PER SHARE FOR THE THREE MONTHS ENDED
MARCH 31, 1999
Net loss available to common stockholders from
continuing operations (2,549,148)
Net income available to common stockholders from
discontinued operations 85,596
----------
Total net loss (2,463,552)
==========
-12-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
SHARES FRACTION OF WEIGHTED AVERAGE
DATES OUTSTANDING OUTSTANDING PERIOD SHARES
Balance at January 1, 1999 6,254,649 1.00 6,254,649
Redemption of shares during the quarter (142,918) 1.00 142,918
Options converted to shares during the quarter 25,500 1.00 25,500
--------- ---------
WEIGHTED AVERAGE SHARES 6,137,231 6,137,231
BASIC LOSS PER SHARE FOR THE NINE MONTHS ENDED MARCH 31, 1999
Net loss available to common stockholders from
continuing operations (3,713,233)
Net loss available to common stockholders from
discontinued operations (841,831)
-----------
Total net loss (4,555,064)
-----------
SHARES FRACTION OF WEIGHTED AVERAGE
DATES OUTSTANDING OUTSTANDING PERIOD SHARES
----------- ------ ------
July 1, 1998 7,472,324 1.00 7,472,324
July 1 - September 30, 1998
Additional purchase price payments 242,684 0.67 162,085
Warrants converted to shares during the quarter 127,200 0.96 122,558
October 1 - December 31, 1998
Redemption of escrow shares during the quarter (1,583,059) 0.51 (1,057,299)
January 1 - March 31, 1999
Redemption of shares during the quarter (142,918) 0.33 (46,944)
Options converted to shares during the quarter 21,000 0.33 6,898
WEIGHTED AVERAGE SHARES 6,137,231 6,659,622
DILUTED LOSS PER SHARE FOR THE THREE MONTHS
ENDED MARCH 31, 2000
Net loss available to common stockholders (1,367,067)
Add impact of assumed conversions 401,832
----------
ADJUSTED NET INCOME (965,235)
----------
Weighted average shares 9,002,398
Warrants and options not yet exercised 1,795,774
9% convertible debentures 148,603
Increasing rate debentures 1,312,281
----------
ADJUSTED WEIGHTED AVERAGE SHARES 12,259,056
==========
-13-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
DILUTED LOSS PER SHARE FOR THE NINE MONTHS ENDED
MARCH 31, 2000
Net loss available to common stockholders 341,669
Add impact of assumed conversions 1,628,401
---------
ADJUSTED NET INCOME 1,970,070
---------
Weighted average shares 7,343,185
Warrants and options not yet exercised 1,312,751
9% convertible debentures 522,282
Increasing rate debentures 1,491,356
---------
ADJUSTED WEIGHTED AVERAGE SHARES 10,669,574
==========
DILUTED LOSS PER SHARE FOR THE THREE MONTHS
ENDED MARCH 31, 1999
Net loss available to common stockholders from continuing
operations (2,549,148)
Add impact of assumed conversions 653,794
---------
(1,895,354)
Net income available to common stockholders from discontinued
operations 85,596
---------
ADJUSTED NET LOSS AVAILABLE TO COMMON
STOCKHOLDERS (1,809,938)
==========
Weighted average shares 6,137,231
Warrants and options not yet exercised 19,852
9% convertible debentures 921,666
Increasing rate debentures 1,578,947
---------
ADJUSTED WEIGHTED AVERAGE SHARES 8,657,696
==========
DILUTED LOSS PER SHARE FOR THE NINE MONTHS
ENDED MARCH 31, 1999
Net loss available to common stockholders from
continuing operations (3,713,233)
Add impact of assumed conversions 1,633,757
---------
(2,079,476)
Net loss available to common stockholders from
discontinued operations (841,831)
ADJUSTED NET LOSS AVAILABLE TO COMMON
STOCKHOLDERS (2,921,307)
==========
Weighted average shares 6,659,622
Warrants and options not yet exercised 6,617
9% convertible debentures 979,358
Increasing rate debentures 1,578,947
---------
ADJUSTED WEIGHTED AVERAGE SHARES 9,224,544
==========
-14-
6. SUBSEQUENT EVENTS
EMPLOYMENT AGREEMENT FOR CLIVE KABATZNIK
On April 12, 2000, the Company's Board of Directors approved a revised
Employment Agreement with Clive Kabatznik (the "Employment Agreement"). Pursuant
to the Employment Agreement, Mr. Kabatznik will serve as the Chief Executive
Officer, President and Chief Financial Officer of the Company beginning as of
February 1, 2000 and continuing through and until January 31, 2005. As
compensation for his services, Mr. Kabatznik will receive an annual base salary
of $300,000 (with five percent increases each year), and an annual bonus of five
percent of net realized capital gains upon the sale, liquidation or
distribution by the Company of any Portfolio Company (as defined in the
Employment Agreement). A Portfolio Company does not include any of the South
African entities currently owned by the Company. In the event of a Change in
Control (as defined in the Employment Agreement), Mr. Kabatznik may also be
entitled to a payment of five percent of any net unrealized capital gains on any
Portfolio Company, which gains may, at the option of the Company, be paid in
cash, stock of the Portfolio Company or any combination of the foregoing.
INVESTMENT IN MAGNOLIA BROADBAND
On April 14, 2000, the Company entered into a Securities Purchase Agreement
(the "Agreement") with Magnolia Broadband, Inc. ("Magnolia"). Magnolia is a
start-up company which plans to develop fixed wireless broadband solutions.
Magnolia is seeking to develop technology that provides residential and small
business users of the Internet with high speed access to Internet services at
lower capital costs and with faster deployment. Magnolia will initially target
its products in the United States and plans to later penetrate international
markets.
Pursuant to the Agreement, the Company invested $2,500,000 in Magnolia and
received shares of preferred stock in Magnolia. The Company also received
certain board representation rights and registration rights. The shares of
Magnolia preferred stock owned by the Company are convertible into common stock
of Magnolia, and the Company is entitled to voting rights (on an as-converted
basis) and certain preferred dividend, liquidation and anti-dilution rights. The
Company initially owns approximately 48% of Magnolia. Certain of the shares
owned by the founders of Magnolia are subject to repurchase by Magnolia if the
founders' employment with Magnolia terminates before October 15, 2002. Magnolia
has reserved additional shares of its common stock for issuance to founders,
employees, consultants, directors and other investors. Assuming full issuance of
such shares, the Company's ownership interest in Magnolia will be reduced to
33%.
-15-
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 duly authorized.
Date: May 18, 2000
LEISUREPLANET HOLDINGS, LTD.
/s/ Clive Kabatznik
----------------------------------
Clive Kabatznik
Chief Executive Officer, President
and Chief Financial Officer