================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
October 13, 2000
Date of Report
---------------------------------
(Date of Earliest Event Reported)
SYNDICATION NET.COM, INC.
-----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
The Hartke Building
7637 Leesburg Pike
Falls Church, Virginia 22043
----------------------------------------
(Address of principal executive offices)
703/748-3480
------------------------------
(Registrant's telephone number)
Delaware 0-29701 52-2218873
- --------------- ------------ -------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
GENERATION ACQUISITION CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
--------------------------------
(Former name and former address)
ITEM 7. FINANCIAL STATEMENTS
The financial statements for the fiscal year ended December 31, 1998 and
1999 audited by the independent public accounting firm of Jones, Jensen &
Company LLC are filed herewith together with the unaudited financial statements
for the period ending September 30, 2000. Also attached are the pro forma
financials as of September 30, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYNDICATIONNET.COM, INC.
By: /s/ Vance Hartke
-----------------
President
Date: July 1, 2001
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
C O N T E N T S
Independent Auditors' Report............................... 3
Consolidated Balance Sheet................................. 4
Consolidated Statements of Operations...................... 5
Consolidated Statements of Stockholders' Equity (Deficit).. 6
Consolidated Statements of Cash Flows...................... 7
Notes to the Consolidated Financial Statements............. 8
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Life2K.com, Inc. and Subsidiary
(Formerly Algonquin Acquisition Corporation)
Boca Raton, Florida
We have audited the accompanying consolidated balance sheet of Life2K.com, Inc.
and Subsidiary (formerly Algonquin Acquisition Corporation) at December 31, 1999
and the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the years ended December 31, 1999 and 1998. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Life2K.com, Inc. and Subsidiary (formerly Algonquin Acquisition Corporation) as
of December 31, 1999 and the consolidated results of their operations and their
cash flows for the years ended December 31, 1999 and 1998 in conformity with
generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 8 to the
consolidated financial statements, the Company has incurred significant losses
which have resulted in an accumulated deficit and a deficit in stockholders'
equity, raising substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 8. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
April 17, 2000
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Consolidated Balance Sheet
ASSETS
------
December 31,
1999
------------
CURRENT ASSETS
Cash $ 5,580
Accounts receivable (Note 1) 487,840
------------
Total Current Assets 493,420
------------
PROPERTY AND EQUIPMENT - NET (Note 2) 2,730
------------
TOTAL ASSETS $ 496,150
============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 785,389
Accrued expenses (Note 3) 22,135
Notes payable - related party (Note 7) 155,000
------------
Total Current Liabilities 962,524
------------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 20,000,000 shares authorized of
$0.0001 par value, 60,000 shares issued and outstanding 6
Common stock: 100,000,000 shares authorized of $0.0001
par value, 16,525,000 shares issued and outstanding 1,652
Additional paid-in capital 264,032
Deficit accumulated during the development stage (732,064)
------------
Total Stockholders' Equity (Deficit) (466,374)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 496,150
============
These accompanying notes are an integral part of these consolidated financial
statements.
4
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Consolidated Statements of Operations
For the Years Ended
December 31,
------------------------
1999 1998
----------- -----------
SALES $5,597,576 $4,494,708
COST OF GOODS SOLD 5,526,429 4,403,509
---------- ----------
GROSS MARGIN 71,147 91,199
---------- ----------
OPERATING EXPENSES
Depreciation 910 910
General and administrative 256,555 174,191
---------- ----------
Total Operating Expenses 257,465 175,101
---------- ----------
OPERATING LOSS (186,318) (83,902)
---------- ----------
OTHER INCOME (EXPENSES)
Interest expense (26,179) (1)
Interest income 277 6
Loss on disposal of assets - (1,393)
---------- ----------
Total Other Income (Expenses) (25,902) (1,388)
---------- ----------
NET LOSS BEFORE INCOME TAXES (212,220) (85,290)
INCOME TAXES (Note 1) - -
---------- ----------
NET LOSS BEFORE EXTRAORDINARY ITEM (212,220) (85,290)
EXTRAORDINARY ITEM (Note 9) - 332,782
---------- ----------
NET INCOME (LOSS) $ (212,220) $ 247,492
========== ==========
BASIC INCOME (LOSS) PER SHARE OF COMMON
STOCK (Note 1)
Loss from continuing operations $ (0.01) $ (0.01)
Income from extraordinary items - 0.02
---------- ----------
BASIC INCOME (LOSS) PER SHARE $ (0.01) $ 0.02
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
5
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Consolidated Statements of Stockholders' Equity (Deficit)
Preferred Stock Common Stock Additional
----------------------------- ----------------------- Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit
--------------- ------------ ---------- ----------- --------- -----------
Balance, December 31, 1997 - $ - 16,200,000 $ 1,620 $ 180,880 $ (767,336)
Capital contributions, 1998 - - - - 10,690 -
Net income for the year ended
December 31, 1998 - - - - - 247,492
--------------- ------------ ---------- ----------- --------- -----------
Balance, December 31, 1998 - - 16,200,000 1,620 191,570 (519,844)
Recapitalization 60,000 6 312,500 31 (37) -
Common stock issued for cash at
$1.00 per share - - 12,500 1 12,499 -
Capital contributions, 1999 - - - - 60,000 -
Net loss for the year ended
December 31, 1999 - - - - - (212,220)
--------------- ------------ ---------- ----------- --------- -----------
Balance, December 31, 1999 60,000 $ 6 16,525,000 $ 1,652 $ 264,032 $ (732,064)
=============== ============ ========== =========== ========= ===========
The accompanying notes are an integral part of these consolidated financial
statements.
6
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Consolidated Statements of Cash Flows
For the Years Ended
December 31,
----------------------
1999 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(212,220) $ 247,492
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 910 910
Loss on disposal of fixed assets - 1,393
Gain on settlement of debt - (332,783)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (50,633) 16
Decrease in prepaids and other current assets - 32,747
Increase in accounts payable 17,786 25,173
Increase in accrued expenses 22,135 -
--------- ---------
Net Cash Used in Operating Activities (209,522) (25,052)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Disposal of fixed assets - 2,639
--------- ---------
Net Cash Used in Investing Activities - 2,639
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - related party 155,000 -
Proceeds from issuance of common stock 12,500 -
Proceeds from additional capital contribution 60,000 6,140
--------- ---------
Net Cash Provided by Financing Activities 215,000 6,140
--------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 5,478 (16,273)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 102 16,375
--------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 5,580 $ 102
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash Payments For:
Income taxes $ - $ -
Interest $ 4,044 $ -
Non-Cash Financing Activities
Stock issued for services $ 60,000 $ -
Equipment contributed by shareholder $ - $ 4,550
The accompanying notes are an integral part of these consolidated financial
statements
7
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The consolidated financial statements presented are those of
Life2K.com, Inc. (Life2K) and its wholly-owned subsidiary, Kemper
Pressure Treated Forest Products, Inc. (Kemper). Collectively, they
are referred to herein as the "Company". Life2K was incorporated under
the name of Algonquin Acquisition Corporation on March 22, 1999 under
the laws of the State of Delaware to engage in any lawful act or
activity. Effective August 16, 1999, Life2K issued 16,200,000 shares
of its common stock and 60,000 shares of its preferred stock in
exchange for the issued and outstanding stock of Kemper.
Kemper was incorporated on December 28, 1987 under the state laws of
Mississippi. Kemper was organized to procure, buy, sell and harvest
forest products for treating poles, conventional lumber and wood
products, as well as preserve and treat wood and forest products for
sale in wholesale and retail markets.
On October 9, 1997, Kemper entered into an asset purchase agreement
and lease assignment under which it conditionally sold all of its
assets as well as reassigned its lease related to its manufacturing
enterprise. From that time, Kemper has acted as a retail broker,
having eliminated virtually all of its manufacturing capacity.
At the time of the acquisition of Kemper, Life2K was essentially
inactive, with no operations and minimal assets. Additionally, the
exchange of Life2K's common stock for the common stock of Kemper
resulted in the former stockholders of Kemper obtaining control of
Life2K. Accordingly, Kemper became the continuing entity for
accounting purposes, and the transaction was accounted for as a
recapitalization of Kemper with no adjustment to the basis of Kemper's
assets acquired or liabilities assumed. For legal purposes, Life2K was
the surviving entity.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a December 31 year end.
c. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Accounts Receivable
Accounts receivable are shown net of the allowance for doubtful
accounts of $-0- at December 31, 1999.
8
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
e. Basic Income (Loss) Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of common shares outstanding during the
period of the consolidated financial statements as follows:
For the Years Ended
December 31,
--------------------------
1999 1998
------------ ------------
Basic loss per share from continuing operations:
Loss (numerator) $ (212,220) $ (85,290)
Shares (denominator) 16,320,411 16,200,000
Per share amount $ (0.01) $ (0.01)
Basic income per share from extraordinary item:
Income (numerator) $ - $ 332,782
Shares (denominator) 16,320,411 16,200,000
Per share amount $ - $ 0.02
Basic income (loss) per share:
Income (loss) (numerator) $ (212,220) $ 247,492
Shares (denominator) 16,320,411 16,200,000
Per share amount $ (0.01) $ 0.02
Common stock equivalents, consisting of warrants and options, have not
been included in the calculation for the year ended December 31, 1999 as
their effect is antidilutive.
There were no common stock equivalents outstanding for the year ended
December 31, 1998. Accordingly, only the basic income (loss) per share
has been calculated for 1998.
9
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
f. Change in Accounting Principle
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share"
and Statement of Financial Accounting Standards No. 129 "Disclosures
of Information About an Entity's Capital Structure." SFAS No. 128
provides a different method of calculating earnings per share than was
previously used in accordance with APB Opinion No. 15 "Earnings Per
Share." SFAS No. 128 provides for the calculation of "Basic" and
"Dilutive" earnings per share. Basic earnings per share includes no
dilution and is computed by dividing income (loss) available to common
shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the
potential dilution of securities that could share in the earnings of
an entity, similar to fully diluted earnings per share. SFAS No. 129
establishes standards for disclosing information about an entity's
capital structure. SFAS No. 128 and SFAS No. 129 are effective for
financial statements issued for periods ending after December 15,
1997. The adoption of these two standards did not have a material
impact on the Company's consolidated financial statements.
The Financial Accounting Standards Board has also issued SFAS No. 130,
"Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 130
establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income
is defined to include all changes in equity except those resulting
from investments by owners and distributions to owners. Among other
disclosures, SFAS No. 130 requires that all items that are required to
be recognized under current accounting standards as components of
comprehensive income be reported in a financial statement that
displays with the same prominence as other financial statements. SFAS
No. 131 supersedes SFAS No. 14 "Financial Reporting or Segments of a
Business Enterprise." SFAS No. 131 establishes standards on the way
that public companies report financial information about operating
segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial
statements issued to the public. It also establishes standards for
disclosure regarding products and services, geographic areas and major
customers. SFAS No. 131 defines operating segments as components of a
company about which separate financial information is available that
is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. The
adoption of these statements did not have a material impact on the
Company's financial statements.
10
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
In February 1998, the Financial Accounting Standards Board ("FASB")
has issued Statement of Financial Accounting Standard ("SFAS") No.
132. "Employers' Disclosures about Pensions and other Postretirement
Benefits" which standardizes the disclosure requirements for pensions
and other Postretirement benefits and requires additional information
on changes in the benefit obligations and fair values of plan assets
that will facilitate financial analysis. SFAS No. 132 is effective for
years beginning after December 15, 1997 and requires comparative
information for earlier years to be restated, unless such information
is not readily available. The adoption of this statement had no
material impact on the Company's financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to record
derivatives as assets or liabilities, measured at fair market value.
Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the
derivative and whether it qualifies for hedge accounting. The key
criterion for hedge accounting is that the hedging relationship must
be highly effective in achieving offsetting changes in fair value or
cash flows. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The adoption of this
statement had no material impact on the Company's financial
statements.
g. Property and Equipment
Property and equipment is recorded at cost. Major additions and
improvements are capitalized. The cost and related accumulated
depreciation of equipment retired or sold are removed form the
accounts and any differences between the undepreciated amount and the
proceeds from the sale are recorded as gain or loss on sale of
equipment. Depreciation is computed using the straight-line method
over a period of five years.
h. Provision for Taxes
At December 31, 1999, the Company had net operating loss carryforwards
of approximately $720,000 that may be offset against future taxable
income through 2019. No tax benefit has been reported in the
consolidated financial statements because the Company believes there
is a 50% or greater chance the net operating loss carryforwards will
not be used. Accordingly, the potential tax benefits of the net
operating loss carryforwards are offset by a valuation allowance of
the same amount.
i. Principles of Consolidation
The consolidated financial statements include those of Life2K and its
wholly-owned subsidiary, Kemper.
All material intercompany accounts and transactions have been
eliminated.
11
12
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
j. 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 revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
k. Advertising
The Company follows the policy of charging the costs of advertising to
expense as incurred.
l. Revenue Recognition Policy
Revenue is recognized upon shipment of goods to the customer.
m. Concentrations of Risk
Concentration of Cash in Excess of Federally Insured Limits
-----------------------------------------------------------
The Company maintains its cash in bank deposit accounts at high credit
quality financial institutions. The balances, at times, may exceed
federally insured limits.
Concentration in the Volume of Business Transacted with a Particular
--------------------------------------------------------------------
Supplier
--------
The Company currently engages the services of only one supplier, which
provides 100% of its wood treating and procurement services. Although
there are a limited number of manufacturers which provide wood
treating and procurement services, management believes that other
suppliers could provide these services on comparable terms. A change
in suppliers, however, could cause a delay in manufacturing and a
possible loss of sales, which would affect operating results
adversely.
Concentration in the Volume of Business Transacted with a Particular
--------------------------------------------------------------------
Customer
--------
The Company currently has one major customer which accounts for 100%
of its revenues. Although the Company is continually negotiating
contracts with potential customers, a loss of this customer could
greatly affect the operating results of the Company.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following at December 31, 1999:
Office equipment $ 4,550
Accumulated depreciation (1,820)
-------
Net property and equipment $ 2,730
=======
13
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 2 - PROPERTY AND EQUIPMENT (Continued)
Depreciation expense for the years ended December 31, 1999 and 1998
was $910 and $910, respectively.
NOTE 3 - ACCRUED EXPENSES
At December 31, 1999, accrued expenses consist of $22,135 of interest
payable associated with the related party - notes payable (Note 6).
NOTE 4 - COMMITMENTS AND CONTINGENCIES
On May 18, 1999, the Company entered into an agreement to acquire a
reporting United States corporation with audited financial statements
showing no material assets or liabilities. The Company agreed to pay
$100,000 for its services in regard to the transaction. Payment of
this amount is to be made as follows:
$10,000 on execution of the agreement, $30,000 on delivery of offering
materials under rules 504 and/or 506, $35,000 on the business
combination and $25,000 on the filing of a Form 8-K with the
Securities and Exchange Commission. If the Company does not elect to
make any offerings under rules 504 or 506, then the payment due on the
business combination will be $60,000.
NOTE 5 - PREFERRED STOCK
The shareholders of the Company have authorized 20,000,000 shares of
preferred stock with a par value of $0.0001. The terms of the
preferred stock are to be determined when issued by the board of
directors of the Company.
Series A
--------
At December 31, 1999, there are 60,000 shares of Series A preferred
stock issued and outstanding. Each share of the preferred stock is
non-voting and convertible on a one-for-one basis into shares of the
Company's voting common stock. These shares may be converted at any
time at the will of the holder and do not include any entitlement to
dividends.
NOTE 6 - STOCK TRANSACTIONS
On October 1, 1999, the Company issued 12,500 shares of its common
stock for $12,500 cash consideration.
14
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 7 - NOTES PAYABLE - RELATED PARTY
Notes payable to related parties consisted of the following at
December 31, 1999:
Note payable to a director, due on demand, plus interest
at 12% per annum, unsecured. $ 105,000
Note payable to a director, due on December 23, 1999,
with interest in a flat sum amount of $6,250, unsecured.
Both principal and interest were subsequently paid in full on
February 15, 2000. 25,000
Note payable to a director, due on January 7, 2000, with
interest in a flat sum amount of $6,250, unsecured. Note is
in default. 25,000
------------
Total notes payable to related parties 155,000
Less: Current Portion (155,000)
------------
Long-Term Notes Payable to Related Parties $ -
============
The aggregate principal maturities of notes payable to related
parties are as follows:
Year Ended
December 31, Amount
--------------- -----------
2000 $ 155,000
2001 -
2002 -
2003 -
2004 and thereafter -
------------
Total $ 155,000
============
NOTE 8 - GOING CONCERN
The Company's consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has
historically incurred significant losses which have resulted in an
accumulated deficit of $719,564 at December 31, 1999 which raises
substantial doubt about the Company's ability to continue as a going
concern. The accompanying consolidated financial statements do not
include any adjustments relating to the recoverability and
classification of liabilities that might result from the outcome of
this uncertainty.
15
LIFE2K.COM, INC. AND SUBSIDIARY
(Formerly Algonquin Acquisition Corporation)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 8 - GOING CONCERN (Continued)
It is management's intent to acquire Internet and E-commerce companies
as well as develop a software for online bidding services. Management
believes this bidding service process will allow Kemper to bid and
package contracts online for the treatment, sale and shipment of
processed wood. In addition, management believes that being a publicly
traded company will enhance their negotiating leverage as well as
provide a source of additional funding if needed.
NOTE 9 - EXTRAORDINARY ITEMS
Extraordinary items for the year ended December 31, 1999 and 1998
totaling $-0- and $332,782, respectively, relate to forgiveness of
debt in the settlement of various accounts payable.
16
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Consolidated Balance Sheets
ASSETS
------
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
CURRENT ASSETS
Cash $ 32,770 $ 5,580
Accounts receivable (Note 1) 550,921 487,840
----------- ---------
Total Current Assets 583,691 493,420
----------- ---------
PROPERTY AND EQUIPMENT - NET (Note 2) 2,047 2,730
----------- ---------
TOTAL ASSETS $ 585,738 $ 496,150
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 812,440 $ 785,389
Notes payable - related party (Note 7) 105,000 155,000
Accrued expenses (Note 3) 19,459 22,135
----------- ---------
Total Current Liabilities 936,899 962,524
----------- ---------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 20,000,000 shares authorized of
$0.0001 par value, zero and 60,000 shares issued
and outstanding, respectively - 6
Common stock: 100,000,000 shares authorized of
$0.0001 par value, 17,153,250 and 16,525,000 shares
issued and outstanding, respectively 1,715 1,652
Additional paid-in capital 709,726 264,032
Accumulated deficit (1,062,602) (732,064)
----------- ---------
Total Stockholders' Equity (Deficit) (351,161) (466,374)
----------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 585,738 $ 496,150
=========== =========
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2000 1999 2000 1999
----------- ---------- ---------- ----------
NET SALES $2,103,735 $1,092,239 $5,484,273 $4,427,780
COST OF SALES 2,090,338 1,074,280 5,448,258 4,367,694
---------- ---------- ---------- ----------
GROSS MARGIN 13,397 17,959 36,015 60,086
---------- ---------- ---------- ----------
OPERATING EXPENSES
Depreciation 228 228 683 683
General and administrative 83,898 102,750 356,046 219,725
---------- ---------- ---------- ----------
Total Operating Expenses 84,126 102,978 356,729 220,408
---------- ---------- ---------- ----------
LOSS FROM OPERATIONS (70,729) (85,019) (320,714) (160,322)
---------- ---------- ---------- ----------
OTHER INCOME (EXPENSE)
Interest expense (3,153) (6,125) (9,824) (10,125)
---------- ---------- ---------- ----------
Total Other Income (Expense) (3,153) (6,125) (9,824) (10,125)
---------- ---------- ---------- ----------
NET LOSS BEFORE INCOME TAXES (73,882) (91,144) (330,538) (170,447)
---------- ---------- ---------- ----------
INCOME TAXES (Note 1) - - - -
---------- ---------- ---------- ----------
NET (LOSS) $ (73,882) $ (91,144) $ (330,538) $ (170,447)
========== ========== ========== ==========
BASIC (LOSS) PER SHARE (Note 1) $ (0.00) $ (0.01) $ (0.02) $ (0.01)
========== ========== ========== ==========
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Consolidated Statements of Stockholders' Equity (Deficit)
Preferred Stock Common Stock Additional
------------------------------- ----------------------- Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit
---------------- ------------- ---------- ----------- --------- ------------
Balance, December 31, 1998 - $ - 16,200,000 $ 1,620 $191,570 $ (519,844)
Recapitalization 60,000 6 312,500 31 (37) -
Common stock issued for cash at
$1.00 per share - - 12,500 1 12,499 -
Capital contributions, 1999 - - - - 60,000 -
Net loss for the year ended
December 31, 1999 - - - - - (212,220)
--------------- ------------ ---------- ----------- -------- -----------
Balance, December 31, 1999 60,000 6 16,525,000 1,652 264,032 (732,064)
Conversion of preferred shares to
common shares (unaudited) (60,000) (6) 60,000 6 - -
Common stock issued for cash at
approximately $0.76 per share
(unaudited) - - 332,500 34 252,467 -
Common stock issued for cash and
services at $0.50 per share
(unaudited) - - 84,000 8 41,992 -
Common stock issued for services
of $1.00 per share (unaudited) - - 120,000 12 119,988 -
Common stock issued for conversion
of debt at $0.98 per share (unaudited) - - 31,750 3 31,247 -
Net loss for the nine months ended
September 30, 2000 (unaudited) - - - - - (330,538)
--------------- ------------ ---------- ----------- -------- -----------
Balance, September 30, 2000
(unaudited) - $ - 17,153,250 $ 1,715 $709,726 $(1,062,602)
=============== ============ ========== =========== ======== ===========
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
--------------------------- -------------------------
2000 1999 2000 1999
------------- ----------- --------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(73,882) $ (91,144) $(330,538) $(170,447)
Adjustments to reconcile net loss
to net cash (used by) operating
activities:
Depreciation 228 228 683 683
Stock issued for services and
interest - 60,000 147,000 60,000
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable 47,907 293,073 (63,081) 81,364
Increase (decrease) in accrued
expenses 3,153 6,125 3,574 10,125
Increase (decrease) in accounts
payable (6,457) (282,511) 27,051 (84,785)
-------- --------- --------- ---------
Net Cash (Used) by Operating
Activities (29,051) (14,229) (215,311) (103,060)
-------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES - - - -
-------- --------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of stock 52,500 - 267,501 -
Proceeds from notes payable - 50,000 - 150,000
Payment on notes payable - - (25,000) -
-------- --------- --------- ---------
Net Cash Provided by Financing
Activities 52,500 50,000 242,501 150,000
-------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 23,449 35,771 27,190 46,940
CASH AT BEGINNING OF PERIOD 9,321 11,271 5,580 102
-------- --------- --------- ---------
CASH AT END OF PERIOD $ 32,770 $ 47,042 $ 32,770 $ 47,042
======== ========= ========= =========
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
2000 1999 2000 1999
----------- ------------- ------------ -----------
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid for:
Interest $ - $ - $ 6,250 $ -
Income taxes $ - $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common and preferred stock issued
for services $ - $ 60,000 $ 147,000 $ 60,000
Common stock issued for debt
conversion $ - $ - $ 31,250 $ -
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The consolidated financial statements presented are those of
Syndicationnet.com, Inc. (formerly Life2k.com, Inc.) and its wholly-
owned subsidiary, Kemper Pressure Treated Forest Products, Inc.
(Kemper). Collectively, they are referred to herein as the "Company".
Life2K was incorporated under the name of Algonquin Acquisition
Corporation on March 22, 1999 under the laws of the State of Delaware
to engage in any lawful act or activity. Effective August 16, 1999,
Life2K issued 16,200,000 shares of its common stock and 60,000 shares
of its preferred stock in exchange for the issued and outstanding stock
of Kemper. Pursuant to a merger agreement subsequent to September 30,
2000, the Company's name was changed to SyndicationNet.Com, Inc. (see
Note 9).
Kemper was incorporated on December 28, 1987 under the state laws of
Mississippi. Kemper was organized to procure, buy, sell and harvest
forest products for treating poles, conventional lumber and wood
products, as well as preserve and treat wood and forest products for
sale in wholesale and retail markets.
On October 9, 1997, Kemper entered into an asset purchase agreement and
lease assignment under which it conditionally sold all of its assets as
well as reassigned its lease related to its manufacturing enterprise.
From that time, Kemper has acted as a retail broker, having eliminated
virtually all of its manufacturing capacity.
At the time of the acquisition of Kemper, Life2K was essentially
inactive, with no operations and minimal assets. Additionally, the
exchange of Life2K's common stock for the common stock of Kemper
resulted in the former stockholders of Kemper obtaining control of
Life2K. Accordingly, Kemper became the continuing entity for accounting
purposes, and the transaction was accounted for as a recapitalization
of Kemper with no adjustment to the basis of Kemper's assets acquired
or liabilities assumed. For legal purposes, Life2K was the surviving
entity.
b. Accounting Method
The Company's consolidated financial statements are prepared using the
accrual method of accounting. The Company has elected a December 31
year end.
c. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Accounts Receivable
Accounts receivable are shown net of the allowance for doubtful
accounts of $-0- and $-0- at September 30, 2000 and December 31,1999,
respectively.
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Notes to the Consolidated Financial statements
September 30, 2000 and December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
e. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of common shares outstanding during the
period of the consolidated financial statements as follows:
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
Income (loss) (numerator) $ (73,882) $ (91,144) $ (330,538) $ (170,447)
Weighted average shares
outstanding (denominator) 16,990,815 16,525,000 16,990,815 16,525,000
----------- ----------- ----------- -----------
Basic loss per share $ (0.00) $ (0.01) $ (0.02) $ (0.01)
=========== =========== =========== ===========
Common stock equivalents, consisting of warrants and options, have not
been included in the calculations as their effect is antidilutive.
f. Change in Accounting Principle
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share"
and Statement of Financial Accounting Standards No. 129 "Disclosures of
Information About an Entity's Capital Structure." SFAS No. 128 provides
a different method of calculating earnings per share than was
previously used in accordance with APB Opinion No. 15 "Earnings Per
Share." SFAS No. 128 provides for the calculation of "Basic" and
"Dilutive" earnings per share. Basic earnings per share includes no
dilution and is computed by dividing income (loss) available to common
shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings of an entity, similar to
fully diluted earnings per share. SFAS No. 129 established standards
for disclosing information about an entity's capital structure. SFAS
No. 128 and SFAS No. 129 are effective for financial statements issued
for periods ending after December 15, 1997. The adoption of these two
standards did not have a material impact on the Company's consolidated
financial statements.
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
f. Change in Accounting Principle (Continued)
The Financial Accounting Standards Board has also issued SFAS No. 130,
"Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 130
establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income
is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other
disclosures, SFAS No. 130 requires that all items that are required to
be recognized under current accounting standards as components of
comprehensive income be reported in a financial statement that displays
with the same prominence as other financial statements. SFAS No. 131
supersedes SFAS No. 14 "Financial Reporting or Segments of a Business
Enterprise." SFAS No. 131 establishes standards on the way that public
companies report financial information about operating segments in
annual financial statements and requires reporting of selected
information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosure
regarding products and services, geographic areas and major customers.
SFAS No. 131 defines operating segments as components of a company
about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding
how to allocate resources and in assessing performance. The adoption of
these statements did not have a material impact on the Company's
financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to record
derivatives as assets or liabilities, measured at fair market value.
Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the
derivative and whether it qualifies for hedge accounting. The key
criterion for he3dge accounting is that the hedging relationship must
be highly effective in achieving offsetting changes in fair value or
cash flows. SFAS No. 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. The adoption of this statement had
no material impact on the Company's financial statements.
g. Property and Equipment
Property and equipment is recorded at cost. Major additions and
improvements are capitalized. The cost and related accumulated
depreciation of equipment retired or sold are removed from the accounts
and any differences between the undepreciated amount and the proceeds
from the sale are recorded as gain or loss on sale of equipment.
Depreciation is computed using the straight-line method over a period
of five years.
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
h. Provision for Taxes
The income tax benefit differs from the amount computed at federal
statutory rates as follows:
For the Nine Months Ended
September 30,
-------------------------
2000 1999
---------- -----------
Income tax benefit at statutory rate $ 112,000 $ 58,000
Change in valuation allowance (112,000) (58,000)
---------- -----------
$ - $ -
========== ===========
Deferred tax assets (liabilities) at September 30, 2000 are comprised
of the following:
Net operating loss carryforward $ 1,060,000
Depreciation -
-----------
Valuation allowance (1,060,000)
-----------
$ -
===========
At September 30, 2000, the Company has a net operating loss
carryforward available to offset future taxable income of approximately
$1,060,000, which will expire in 2020. If substantial changes in the
Company's ownership should occur, there would also be an annual
limitation of the amount of NOL carryforwards which could be utilized.
No tax benefit had been reported in the financial statements, because
the Company believes there is a 50% or greater chance the carryforwards
will expire unused. The tax benefits of the loss carryforwards are
offset by a valuation allowance of the same amount.
i. Principles of Consolidation
The consolidated financial statements include those of
Syndicationnet.com, Inc. (formerly Life2k.com, Inc.) and its wholly-
owned subsidiary, Kemper.
Any material intercompany accounts and transactions have been
eliminated.
j. 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 revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
k. Advertising
The Company follows the policy of charging the costs of advertising to
expense as incurred.
l. Revenue Recognition Policy
Revenue is recognized upon shipment of goods to the customer.
m. Concentrations of Risk
Concentration of Cash in Excess of Federally Insured Limits
-----------------------------------------------------------
The Company maintains its cash in bank deposit accounts at high credit
quality financial institutions. The balances, at times, may exceed
federally insured limits.
Concentration in the Volume of Business Transacted with a Particular
--------------------------------------------------------------------
Supplier
--------
The Company currently engages the services of only one supplier, which
provides 100% of its wood treating and procurement services. Although
there are a limited number of manufacturers which provide wood treating
and procurement services, management believes that other suppliers
could provide these services on comparable terms. A change in
suppliers, however, could cause a delay in manufacturing and a possible
loss of sales, which would affect operating results adversely.
Concentration in the Volume of Business Transacted with a Particular
--------------------------------------------------------------------
Customer
--------
The Company currently has one major customer which accounts for 100% of
its revenues. Although the Company is continually negotiating contracts
with potential customers, a loss of this customer could greatly affect
the operating results of the Company.
n. Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements include
all of the adjustments which, in the opinion of management, are
necessary for a fair presentation. Such adjustments are of a normal
recurring nature.
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
Office equipment $ 4,550 $ 4,550
Accumulated depreciation (2,503) (1,820)
------------- ------------
Net property and equipment $ 2,047 $ 2,730
============= ============
Depreciation expense for the nine months ended September 30, 2000 and
the year ended December 31, 1999 was $683 and $910, respectively.
NOTE 3 - ACCRUED EXPENSES
At September 30, 2000 and December 31, 1999, accrued expenses consist
of $19,459 and $22,135, respectively, of interest payable associated
with the related party - notes payable (Note 7).
NOTE 4 - COMMITMENTS AND CONTINGENCIES
On May 18, 1999, the Company entered into an agreement to acquire a
reporting United States corporation with audited financial statements
showing no material assets or liabilities. The Company agreed to pay
$100,000 for its services in regard to the transaction. Payment of this
amount is to be made as follows:
$10,000 on execution of the agreement, $30,000 on delivery of offering
materials under rules 504 and/or 506, $35,000 on the business
combination and $25,000 on the filing of a Form 8-K with the Securities
and Exchange Commission. If the Company does not elect to make any
offering under rules 504 or 506, then the payment due on the business
combination will be $60,000. Through September 30, 2000, the Company
had paid $50,000 in connection with the agreement.
NOTE 5 - PREFERRED STOCK
The shareholders of the Company have authorized 20,000,000 shares of
preferred stock with a par value of $0.0001. The terms of the preferred
stock are to be determined when issued by the board of directors of the
Company.
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 5 - PREFERRED STOCK
Series A
--------
At September 30, 2000 and December 31, 1999, there were zero and 60,000
shares of Series A preferred stock issued and outstanding,
respectively. On January 1, 2000, the 60,000 Series A preferred shares
were converted into the shares of the Company's voting common stock.
NOTE 6 - STOCK TRANSACTIONS
On October 1, 1999, the Company issued 12,500 shares of its common
stock for $12,500 cash consideration.
On January 1, 2000, the Company converted 60,000 shares of Series A
preferred stock into voting common stock on a one-for-one basis.
On March 21, 2000, the Company issued 84,000 shares of its common stock
at $0.50 per share for $15,000 cash consideration and services valued
at $27,000.
Through March 4, 2000, the Company issued 120,000 shares of its common
stock at $1.00 per share for services valued at $120,000.
On June 7, 2000, the Company issued 31,750 shares of its common stock
for the conversion of $31,250 of debt.
From January 1, 2000, through September 30, 2000, the Company issued
332,500 shares of common stock at an average price of $0.76 per share
for $252,501 cash consideration.
NOTE 7 - NOTES PAYABLE - RELATED PARTY
Notes payable to related parties consisted of the following:
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
Note payable to a shareholder, due on demand,
plus interest at 12% per annum, unsecured $ 105,000 $ 105,000
Note payable to a shareholder, due on
December 23, 1999, with interest in a flat
sum amount of $6,250, unsecured - 25,000
Note payable to a shareholder, due on January 7,
2000, with interest in a flat sum amount of
$6,250, unsecured - 25,000
------------- ------------
Total notes payable to related parties 105,000 155,000
Less: Current Portion (105,000) (155,000)
------------- ------------
Long-Term Notes Payable to Related Parties $ - $ -
============= ============
SYNDICATIONNET.COM, INC.
(Formerly Life2k.com, Inc.)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 8 - GOING CONCERN
The Company's consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has
historically incurred significant losses which have resulted in an
accumulated deficit of $1,062,602 at September 30, 2000 which raises
substantial doubt about the Company's ability to continue as a going
concern. The accompanying consolidated financial statements do not
include any adjustments relating to the recoverability and
classification of liabilities that might result from the outcome of
this uncertainty.
NOTE 9 - SUBSEQUENT EVENT
On October 13, 2000, the Company entered into an Agreement and Plan of
Merger, whereby Life2k.com, Inc. was acquired by Generation Acquisition
Corporation, a public reporting company, as a wholly-owned subsidiary.
Subsequently, Life2k.com, Inc. was merged with and into Generation
Acquisition Corporation which simultaneously changed its name to
Syndicationnet.com, Inc.
SYNDICATIONNET.COM, INC.
CONSOLIDATED PROFORMA FINANCIAL STATEMENTS
September 30, 2000
C O N T E N T S
Consolidated Proforma Balance Sheet........................................ 3
Consolidated Proforma Statement of Operations.............................. 5
Statement of Assumptions and Disclosures................................... 6
SYNDICATIONNET.COM, INC.
Consolidated Proforma Balance Sheet
September 30, 2000
(Unaudited)
ASSETS
------
Proforma
Generation Adjustments
Syndicationnet Acquisition Increase Proforma
.com, Inc. Corporation (Decrease) Consolidated
--------------- ----------- ------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 32,770 $ 500 $ - $ 33,270
Accounts receivable 550,921 - - 550,921
--------------- ----------- ------------ ------------
Total Current Assets 583,691 500 - 584,191
--------------- ----------- ------------ ------------
FIXED ASSETS
Office equipment 4,550 - - 4,550
Accumulated depreciation (2,503) - - (2,503)
--------------- ----------- ------------ ------------
Total Fixed Assets 2,047 - - 2,047
--------------- ----------- ------------ ------------
TOTAL ASSETS $ 585,738 $ 500 $ - $ 586,238
=============== =========== ============ ============
See Summary of Assumptions and Disclosures.
3
SYNDICATIONNET.COM, INC.
Consolidated Proforma Balance Sheet (Continued)
September 30, 2000
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
Proforma
Generation Adjustments
Syndicationnet Acquisition Increase Proforma
.com, Inc. Corporation (Decrease) Consolidated
--------------- ------------ ---------- -------------
CURRENT LIABILITIES
Accounts payable $ 812,440 $ - $ - $ 812,440
Accrued expenses 19,459 - - 19,459
Notes payable - related party 105,000 - - 105,000
-------------- ----------- --------- ------------
Total Current Liabilities 936,899 - - 936,899
-------------- ----------- --------- ------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 20,000,000
shares authorized of $0.0001
par value, zero shares issued
and outstanding - - - -
Common stock: 120,000,000
shares authorized of $0.0001
par value, 10,656,750 shares
issued and outstanding 1,715 500 (1,149) 1,066
Additional paid-in capital 709,726 535 614 710,875
Accumulated deficit (1,062,602) (535) 535 (1,062,602)
-------------- ----------- --------- ------------
Total Stockholders' Equity
(Deficit) (351,161) 500 - (350,661)
-------------- ----------- --------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIT) $ 585,738 $ 500 $ - $ 586,238
============== =========== ========= ============
See Summary of Assumptions and Disclosures.
4
SYNDICATIONNET.COM, INC.
Consolidated Proforma Statement of Operations
For the Nine Months Ended September 30, 2000
(Unaudited)
Proforma
Generation Adjustments
Syndicationnet Acquisition Increase Proforma
.com, Inc. Corporation (Decrease) Consolidated
--------------- ----------- ---------- -------------
NET SALES $ 5,484,273 $ - $ - $ 5,484,273
COST OF SALES 5,448,258 - - 5,448,258
-------------- ----------- --------- ------------
GROSS MARGIN 36,015 - - 36,015
-------------- ----------- --------- ------------
OPERATING EXPENSES
Depreciation 683 - - 683
General and administrative 356,046 - - 356,046
-------------- ----------- --------- ------------
Total Operating Expenses 356,729 - - 356,729
-------------- ----------- --------- ------------
LOSS FROM OPERATIONS (320,714) - - (320,714)
-------------- ----------- --------- ------------
OTHER INCOME (EXPENSE)
Interest expense (9,824) - - (9,824)
-------------- ----------- --------- ------------
Total Other Income (Expense) (9,824) - - (9,824)
-------------- ----------- --------- ------------
NET LOSS $ (330,538) $ - $ - $ (330,538)
============== =========== ========= ============
See Summary of Assumptions and Disclosures.
5
SYNDICATIONNET.COM, INC.
Summary of Assumptions and Disclosures
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Business Organization
The accompanying proforma financial statements are prepared to present
the acquisition of Syndicationnet.com, Inc. (formerly Life2K.com, Inc.)
by Generation Acquisition Corporation to aid the user in understanding
the acquisition. The proforma balance sheet is presented as though the
acquisition took place on September 30, 2000 and the statement of
operations as though the acquisition took place January 1, 2000.
The financial statements presented are those of Syndicationnet.com,
Inc. (formerly Life2k.com, Inc.) and its wholly-owned subsidiary,
Kemper Pressure Treated Forest Products, Inc. (Kemper). Collectively,
they are referred to herein as the "Company". Life2K was incorporated
under the name of Algonquin Acquisition Corporation on March 22, 1999
under the laws of the State of Delaware to engage in any lawful act or
activity. Effective August 16, 1999, Life2K issued 16,200,000 shares of
its common stock and 60,000 shares of its preferred stock in exchange
for the issued and outstanding stock of Kemper.
Kemper was incorporated on December 28, 1987 under the state laws of
Mississippi. Kemper was organized to procure, buy, sell and harvest
forest products for treating poles, conventional lumber and wood
products, a well as preserve and treat wood and forest products for
sale in wholesale and retail markets.
On October 9, 1997, Kemper entered into an asset purchase agreement and
lease assignment under which it conditionally sold all of its assets as
well as reassigned its lease related to its manufacturing enterprise.
From that time, Kemper has acted as a retail broker, having eliminated
virtually all of its manufacturing capacity.
At the time of the acquisition of Kemper, Life2K was essentially
inactive, with no operations and minimal assets. Additionally, the
exchange of Life2K's common stock for the common stock of Kemper
resulted in the former stockholders of Kemper obtaining control of
Life2K. Accordingly, Kemper became the continuing entity for accounting
purposes, and the transaction was accounted for as a recapitalization
of Kemper with no adjustment to the basis of Kemper's assets acquired
or liabilities assumed. For legal purposes, Life2K was the surviving
entity.
Generation Acquisition Corporation was incorporated in Delaware on
March 24, 1999 to serve as a vehicle to effect a merger, exchange of
capital stock, asset acquisition or other business combination with a
domestic or foreign private business. At September 30, 2000, the
Company had not yet commenced any formal business operations, and in
accordance with SFAS #7, was considered a development stage company.
6
SYNDICATIONNET.COM, INC.
Summary of Assumptions and Disclosures
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
b. Proforma Adjustments
The proforma financial statements have been prepared as though the
acquisition of Syndicationnet.com, Inc. (formerly Life2K.com, Inc.) by
Generation Acquisition Corporation occurred on January 1, 2000.
1) Additional paid-in capital $ 614
Common stock (1,149)
Accumulated deficit 535
----------
$ -
==========
To record the acquisition of Syndicationnet.com, Inc. (formerly
Life2K.com, Inc.) through the issuance of 10,406,750 shares of common
stock. In addition, to record the cancellation of 4,750,000 shares of
Generation Acquisition Corporation that were previously outstanding.
7