Exhibit 99.5(a)
DSS Direct Connect, L.L.C.
Financial Statements
For the periods from inception (March 3, 1998) through September 30, 1998
and the period from October 1, 1998 through June 14, 1999
DSS Direct Connect, L.L.C.
================================================================================
Financial Statements
For the periods from inception (March 3, 1998) through September 30, 1998
and the period from October 1, 1998 through June 14, 1999
DSS Direct Connect, L.L.C.
Contents
================================================================================
Independent Auditor's Report........................... 1
Balance Sheets......................................... 2
Statements of Operations............................... 3
Statement of Shareholders' Deficit..................... 4
Statements of Cash Flows............................... 5
Notes to Financial Statements.......................... 6 - 10
Independent Auditors' Report
To The Shareholders of
DSS Direct Connect, L.L.C.
We have audited the accompanying balance sheets of DSS Direct Connect, L.L.C.
("the Company") as of June 14, 1999 and September 30, 1998 and the related
statements of operations, shareholders' deficit, and cash flows for the periods
from October 1, 1998 through June 14, 1999 and from inception (March 3, 1998)
through September 30, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 DSS Direct Connect, L.L.C. as
of June 14, 1999 and September 30, 1998, and the results of its operations and
its cash flows for the periods from October 1, 1998 through June 14, 1999 and
from inception (March 3, 1998) through September 30, 1998, in conformity with
generally accepted accounting principles.
BDO Seidman, LLP
Seattle, Washington
January 11, 2000
1
DSS Direct Connect, L.L.C.
Balance Sheets
================================================================================
June 14, September 30,
1999 1998
==============================================================================================
ASSETS
Current Assets
Cash $ 2,728 $ --
Accounts receivable 32,545 7,250
Prepaid and other assets 4,600 6,263
Inventory 54,345 20,881
- ----------------------------------------------------------------------------------------------
Total Current Assets 94,218 34,394
- ----------------------------------------------------------------------------------------------
Security Deposits 2,087 2,500
Furniture and Equipment, net of accumulated depreciation of
$11,320 and $4,000 149,198 40,693
- ----------------------------------------------------------------------------------------------
TOTAL ASSETS $ 245,503 $ 77,587
==============================================================================================
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Checks issued in excess of deposits $ -- $ 22,639
Accounts payable 57,483 51,346
Accrued liabilities 492,756 161,415
Current portion of long-term debt 365,000 --
Current portion of long-term debt to related party 450,000 245,000
- ----------------------------------------------------------------------------------------------
Total Current Liabilities 1,365,239 480,400
- ----------------------------------------------------------------------------------------------
LONG-TERM DEBT TO RELATED PARTY, less current portion 300,000 300,000
- ----------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,665,239 780,400
- ----------------------------------------------------------------------------------------------
SHAREHOLDERS' DEFICIT
Common stock, $1 par value; 10,000 shares authorized, 5,000
issued and outstanding 5,000 5,000
Accumulated deficit (1,424,736) (707,813)
- ----------------------------------------------------------------------------------------------
Total Shareholders' Deficit (1,419,736) (702,813)
- ----------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 245,503 $ 77,587
==============================================================================================
See accompanying notes to financial statements.
2
DSS Direct Connect, L.L.C.
Statements of Operations
================================================================================
October 1, 1998 From inception
through (March 3, 1998)
June 14, 1999 September 30, 1998
================================================================================
REVENUES $ 861,367 $ 114,803
COST OF SALES 517,251 83,992
- --------------------------------------------------------------------------------
Gross Profit 344,116 30,811
- --------------------------------------------------------------------------------
OPERATING EXPENSES
Selling Expenses 204,583 37,247
General and administrative 836,824 701,569
- --------------------------------------------------------------------------------
Total Operating Expenses 1,041,407 738,816
- --------------------------------------------------------------------------------
Loss from Operations (697,291) (708,005)
- --------------------------------------------------------------------------------
OTHER INCOME (EXPENSE)
Interest income -- 92
Other income (expense) (19,632) 100
- --------------------------------------------------------------------------------
Total Other Income (Expense) (19,632) 192
- --------------------------------------------------------------------------------
Net Loss $ (716,923) $ (707,813)
================================================================================
Net Loss per Share - Basic and Diluted $ (143.38) $ (141.56)
================================================================================
See accompanying notes to financial statements.
3
DSS Direct Connect, L.L.C.
Statement of Shareholders' Deficit
================================================================================
Common Stock
-------------------- Paid In Accumulated
Shares Amount Capital Deficit Total
============================================================================================================
Issuance of common stock
for cash 5,000 $ 5,000 $ -- $ -- $ 5,000
Net loss -- -- -- (707,813) (707,813)
- ------------------------------------------------------------------------------------------------------------
Balance, September 30, 1998 5,000 5,000 -- (707,813) (702,813)
Net loss -- -- -- (716,923) (716,923)
- ------------------------------------------------------------------------------------------------------------
Balance, June 14, 1999 5,000 $ 5,000 $ -- $(1,424,736) $(1,419,736)
============================================================================================================
See accompanying notes to financial statements.
4
DSS Direct Connect, L.L.C.
Statements of Cash Flows
================================================================================
INCREASE (DECREASE) IN CASH
From inception
October 1, 1998 (March 3, 1998)
through September 30,
June 14, 1999 1998
==========================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(716,923) $(707,813)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 7,320 4,000
Changes in assets and liabilities:
Accounts receivable (25,295) (7,250)
Inventory (33,464) (20,881)
Prepaid and other assets 1,663 (6,263)
Security deposits 413 (2,500)
Checks issued in excess of deposits (22,639) 22,639
Accounts payable 6,137 51,346
Accrued liabilities 331,341 161,415
- ------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities (451,447) (505,307)
- ------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of furniture and equipment (115,825) (44,693)
- ------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (115,825) (44,693)
- ------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable 570,000 545,000
Proceeds from issuance of common stock -- 5,000
- ------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 570,000 550,000
- ------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash 2,728 --
Cash, beginning of period -- --
- ------------------------------------------------------------------------------------------
Cash, end of period $ 2,728 $ --
==========================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid with cash $ 5,614 $ --
==========================================================================================
See accompanying notes to financial statements.
5
DSS Direct Connect, L.L.C.
Notes to Financial Statements
================================================================================
NOTE 1: Description of Business - DSS Direct Connect, L.L.C.
Description of Business ("DSS" or the "Company") was formed on March 3, 1998
and Summary of for the purpose of selling and installing direct
Significant Accounting broadcast satellite system receivers, on behalf of
Policies DirecTV, to end users. The Company obtained a
non-exclusive license to sell these systems to
single family users in specified markets or cities
in Arizona, California, Illinois, Nevada, Oregon,
Texas and Washington. The Company is currently
operating in Washington and Illinois.
The licensing agreement began on April 1, 1998 and
has an initial term of 5 years. Within three months
of the expiration of the agreement, either party may
notify the other of its desire to continue the
agreement beyond the initial term. Terms of any
extension will be negotiated by the parties at that
time.
Inventory - Inventories are valued at the lower of
cost or market, which approximates the first-in,
first-out method.
Furniture and Equipment- Furniture and equipment are
stated at cost. Depreciation is computed for
financial reporting purposes using the straight-line
method over estimated useful lives of primarily 3 to
7 years. Replacements and improvements that
significantly extend asset lives are capitalized.
Leasehold improvements are amortized over 5 years
using the straight-line method. Maintenance and
repairs are charged to expense as incurred.
Revenue Recognition - The Company recognizes revenue
when a receiver system is sold to the consumer. The
Company also receives a commission when the consumer
opens a new account with DirecTV, which is
recognized as revenue when received from DirecTV, as
the Company's earning process is completed at that
time.
If the consumer does not fulfill their obligations
under the equipment purchase and subscription
agreements, the Company will be charged back by
DirecTV and the consumer is required to reimburse
the Company for any amounts charged back related to
their account.
An allowance for potentially uncollectible charge
backs has been provided based on the Company's past
history.
6
DSS Direct Connect, L.L.C.
Notes to Financial Statements
================================================================================
NOTE 1:
Description of Business Income Taxes - The Company accounts for income taxes
and Summary of in accordance with the provisions of Statement of
Significant Financial Accounting Standards No. 109, "Accounting
Accounting Policies for Income Taxes," ("SFAS 109"). SFAS 109 requires
(continued) the recognition of deferred tax assets and
liabilities for the expected future income tax
consequences of events that have been recognized in
a company's financial statements or tax return.
Under this method, deferred tax assets and
liabilities are determined based on the temporary
differences between the financial statement carrying
amounts and their tax basis using enacted tax rates
in effect in the years in which the temporary
differences are expected to reverse. Valuation
allowances are provided when management determines
that the realization of deferred tax assets fails to
meet the more likely than not standard imposed by
SFAS 109.
Advertising Expense - The cost of advertising is
expensed as incurred. The Company incurred $89,775
and $10,082 in advertising costs during the periods
ended June 14, 1999 and September 30, 1998,
respectively.
Concentration of Credit Risk and Financial
Instruments - The Company buys its product from
local and national companies and distributors
throughout the United States and internationally.
Net purchases from the Company's two largest vendors
represented 99% and 99% of net purchases during the
37 weeks ended June 14, 1999, and from inception
(March 3, 1998) to September 30, 1998, respectively.
Use of Estimates - The Company's financial
statements are prepared in conformity with generally
accepted accounting principles which requires
management to make estimates and assumptions that
affect the reported amounts of assets and
liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements
and the reported amounts of revenue and expenses
during the reporting period. Actual results could
differ from the estimates.
Loss per Share - SFAS 128, issued in February 1997,
requires presentation of basic and diluted earnings
per share. Basis earnings per share are computed by
dividing net income by the weighted average number
of common shares outstanding.
The Company has no common stock equivalents or
options outstanding at June 14, 1999 and September
30, 1998.
7
DSS Direct Connect, L.L.C.
Notes to Financial Statements
================================================================================
NOTE 1: Recent Accounting Pronouncements - New accounting
Description of Business pronouncements having relative applicability to the
and Summary of Company include SFAS 130, " Reporting Comprehensive
Significant Income", SFAS 131, "Disclosures about Segments of an
Accounting Policies Enterprise and Related Information", SFAS 133,
(continued) "Accounting for Derivative Instruments and Hedging
Activities", SFAS 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement 133 (an amendment
of FASB Statement 133). Adoption of these statements
did not impact the Company's financial position,
results of operations or cash flows and any effect
was limited to the form and content of its
disclosures.
NOTE 2: Furniture and Equipment is comprised of the following:
Furniture and
Equipment June 14, September 30,
1999 1998
------------------------------------------------------
Computer and equipment $ 78,489 $ 16,389
Equipment 7,012 3,587
Furniture and Fixtures 41,965 6,665
Leasehold improvements 33,052 18,052
------------------------------------------------------
160,518 44,693
Accumulated depreciation (11,320) (4,000)
------------------------------------------------------
Furniture and Equipment, net $ 149,198 $ 40,693
======================================================
NOTE 3: As of June 14, 1999 and September 30, 1998, the
Income Taxes Company had net deferred tax assets of approximately
$243,000 and $240,000 primarily due to loss carry
forwards, which begin to expire in 2018. A 100%
valuation allowance has been recorded against these
deferred tax assets as management has yet to establish
that their recovery is more likely than not.
8
DSS Direct Connect, L.L.C.
Notes to Financial Statements
================================================================================
NOTE 4:
Notes Payable
June 14, September 30,
1999 1998
====================================================================================
Subordinated notes payable to a related company,
interest at 8%, due March 27, 2001, payable at
maturity. $ 300,000 $ 300,000
Note payable to Shareholder, interest at 15%, due
September 27, 1999, payable at maturity. 100,000 100,000
Note payable to Shareholder, interest at 15%, due
September 27, 1999, payable at maturity. 145,000 145,000
Note payable to Shareholder, interest at 15%, due
September 27, 1999, payable at maturity. 120,000 --
Note payable to Shareholder, interest at 10%, due
September 27, 1999, payable at maturity. 200,000 --
Note payable to Shareholder, interest at 10%, due
September 27, 1999, payable at maturity. 250,000 --
------------------------------------------------------------------------------------
Total Long-Term Obligations 1,115,000 545,000
Current portion 815,000 245,000
------------------------------------------------------------------------------------
Long-term obligations, less current portion $ 300,000 $ 300,000
====================================================================================
All the notes payable to shareholder disclosed above
were repaid on or shortly after June 15, 1999.
NOTE 5: The Company conducts its business operations from
Operating Leases facilities that are leased under agreements which
expire at various dates. The Company also pays a pro
rata portion of all common area charges including
property taxes, insurance, and maintenance charges.
Annual minimum rental commitments under operating
leases that have initial or remaining non-cancelable
lease terms are as follows:
Operating
Year ending September 30, Leases
------------------------------------------------------
2000 $ 395,320
2001 367,792
2002 369,914
2003 372,098
2004 361,140
------------------------------------------------------
Future net minimum payments $ 1,866,264
======================================================
9
NOTE 5: Rent expense under operating leases was
Operating Leases approximately $44,000 and $10,500 for the period
(continued) from October 1, 1998 through June 14, 1999 and from
inception (March 3, 1998) to September 30, 1998,
respectively. Significant increases in future rent
expense are expected due to new facilities being
leased to allow the Company to expand its
operations.
NOTE 6: Certain operating expenses are paid by related
Related Party parties, which in turn are reimbursed by the
Transactions Company. For the period ended June 14, 1999 these
expenses were $112,967.
The Company paid key employees under consulting
agreements during the period ended June 14, 1999 and
September 30, 1998. The expense of these agreements
totaled $205,000 and $56,250, respectively. The
consulting agreements terminated on June 14, 1999.
NOTE 7: On June 15, 1999, DSS entered into an equity
Subsequent Events purchase agreement with Transmedia Europe, Inc. and
Transmedia Asia, Inc. (collectively "Transmedia
Group") to sell and transfer all of the outstanding
equity of the Company in exchange for common stock
of Transmedia Group. Additionally Transmedia Group
agreed to provide additional working capital up to
$3 million in the form of cash and assumption of
certain liabilities.
NOTE 8: Like other companies, DSS Direct Connect, L.L.C.
Year 2000 could be adversely affected if the computer systems
(Unaudited) its suppliers or customers use do not properly
process and calculate date-related information and
data from the period surrounding and including
January 1, 2000. This is commonly known as the "Year
2000" issue. Additionally, this issue could impact
non-computer systems and devices such as production
equipment, elevators, etc. While the Company's
project to assess and correct Y2K related issues
regarding the year 2000 has been completed, and the
Company has not experienced any significant Y2K
related events, interactions with other companies'
systems make it difficult to conclude there will not
be future effects. Consequently, at this time,
management cannot provide assurances that the Year
2000 issue will not have an impact on the Company's
operations.
Transmedia Europe, Inc.
Pro-forma Financial Information
Transmedia Europe, Inc
Pro-forma Consolidated Statement of Operations
6 Months ended March 31, 1999
Company DBS Pro-Forma
6 mths ended 6 mths ended 6 mths
March 31, March 31, ended
1999 1999 Pro-forma March 31,
Adjustments Note 1999
Revenues $ 5,060,301 $ 514,495 $ -- $ 5,574,796
------------ ------------ ------------ ------------
Cost of revenues (3,073,315) (133,466) -- (3,206,781)
------------ ------------ ------------ ------------
Gross profit 1,986,986 381,029 -- 2,368,015
Selling, general and
administrative expenses (4,014,612) (888,733) (337,434) 3 (5,240,779)
------------ ------------ ------------ ------------
Loss from operations (2,027,626) (507,704) (337,434) (2,872,764)
Share of losses from affiliated
companies (275) -- -- (275)
Interest expense (323,549) -- -- (323,549)
Interest income 6,353 -- -- 6,353
------------ ------------ ------------ ------------
Loss before tax (2,345,097) (507,704) (337,434) (3,190,235)
Income tax -- -- -- --
Minority interest (103,464) -- 253,852 4 150,388
Preferred share dividend (67,210) -- -- (67,210)
------------ ------------ ------------ ------------
Net loss (2,515,771) (507,704) (83,582) (3,107,057)
============ ============ ============ ============
Net loss per common share (0.12) -- -- (0.13)
Weighted average number of common
shares outstanding 19,877,112 4,589,732 -- 6 24,751,742
Transmedia Europe, Inc
Pro-forma Consolidated Statement of Operations
For the year ended September 30, 1998
DBS 7mths
from
Company inception
Year ended to Pro-Forma
September September Year ended
31, 1998 30, 1998 Pro-forma September
(audited) (audited) Adjustments Note 31, 1998
Revenues $ 10,568,531 $ 114,803 $ -- $ 10,683,334
Cost of revenues (5,680,316) (83,992) -- (5,764,308)
------------ ------------ ------------ ------------
Gross profit 4,888,215 30,811 -- 4,919,026
Selling, general and
administrative expenses (12,660,826) (738,816) (390,130) 3 (13,789,772)
------------ ------------ ------------ ------------
Loss from operations (7,772,611) (708,005) (390,130) (8,870,746)
Share of losses from
affiliated companies (59,170) -- -- (59,170)
Interest expense (295,257) -- -- (295,257)
Interest income 33,334 192 -- 33,526
------------ ------------ ------------ ------------
Loss before tax (8,093,704) (707,813) (390,130) (9,191,647)
Income tax 35,802 -- -- 35,802
Minority interest 362,580 -- 353,907 4 716,487
Preferred share dividend (134,420) -- -- (134,420)
------------ ------------ ------------ ------------
Net loss (7,829,742) (707,813) (36,223) (8,573,778)
============ ============ ============ ============
Net loss per common share (0.47) -- -- (0.45)
Weighted average number of
common shares outstanding 16,548,416 2,653,242 -- 6 19,201,658
Transmedia Europe, Inc
Pro-forma Consolidated Balance Sheet
As of March 31, 1999
Company DBS
March 31, March 31, Pro-Forma
1999 1999 Pro-forma March 31,
(unaudited) (unaudited) Adjustments Note 1999
ASSETS
Current assets
Cash and cash equivalents $ 405,948 $ 8 $ -- $ 405,956
Trade accounts receivable 470,940 7,250 -- 478,190
Restaurant credits 704,740 -- -- 704,740
Amounts due from related
parties 1,403,792 -- 1,500,000 5 2,903,792
Prepaid & other assets 268,238 59,053 -- 327,291
----------- ----------- ----------- -----------
Total current assets 3,253,658 66,311 1,500,000 4,819,969
Non-current assets
Investment in affiliated
companies 311,481 -- -- 311,481
Property and equipment 271,654 35,227 -- 306,881
Goodwill, net of amortization 3,630,189 -- 6,021,125 2&3 9,651,314
Other intangibles 1,323,640 -- -- 1,323,640
Other assets 298,194 7,000 -- 305,194
----------- ----------- ----------- -----------
Total non-current assets 5,835,158 42,227 6,021,125 11,898,510
----------- ----------- ----------- -----------
TOTAL ASSETS 9,088,816 108,538 7,521,125 16,718,479
=========== =========== =========== ===========
Transmedia Europe, Inc
Pro-forma Consolidated Balance Sheet
As of March 31, 1999
Company DBS
March 31, March 31, Pro-Forma
1999 1999 Pro-forma March 31,
US$ US$ Adjustments 1999
(unaudited) (unaudited) US$ Note US$
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Bank line of credit $ 301,528 $ 37,911 $ -- $ 339,439
Trade accounts payable 2,244,472 57,743 -- 2,302,215
Deferred income 543,133 -- -- 543,133
Accrued liabilities 2,009,790 553,901 -- 2,563,691
Amounts due to related parties 2,740,871 -- -- 2,740,871
Notes payable 3,790,000 -- -- 3,790,000
------------ ------------ ------------ ------------
Total current liabilities 11,629,794 649,555 -- 12,279,349
Non-current liabilities 35,070 669,500 -- 704,570
Minority interest 103,464 -- 182,373 2,4&5 285,837
------------ ------------ ------------ ------------
11,768,328 1,319,055 182,373 13,269,756
------------ ------------ ------------ ------------
Shareholders' Equity
Convertible preferred stock 5,909 -- -- 5,909
Common stock 205 5,000 (4,954) 1&2 251
Additional paid-in capital 19,125,695 -- 6,038,775 1 25,164,470
Treasury stock (517,112) -- -- (517,112)
Cumulative foreign currency
adjustment (293,520) -- -- (293,520)
Accumulated deficit (21,000,689) (1,215,517) 1,304,931 2,3&4 (20,911,275)
------------ ------------ ------------ ------------
Total stockholders' equity (2,679,512) (1,210,517) 7,338,752 3,448,723
------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 9,088,816 108,538 7,521,125 16,718,479
============ ============ ============ ============
Transmedia Europe, Inc
Pro-forma Consolidated Balance Sheet
As of September 30, 1998
Company DBS
September September Pro-Forma
30, 1998 30, 1998 Pro-forma September
(audited) (audited) Adjustments Note 30, 1998
ASSETS
Current assets
Cash and cash equivalents $ 747,913 $ -- $ -- $ 747,913
Trade accounts receivable 656,859 7,250 -- 664,109
Restaurant credits 1,075,406 -- -- 1,075,406
----------- ----------- ----------- -----------
Amounts due from related
parties 2,780,234 -- 1,500,000 5 4,280,234
Prepaid & other assets 380,440 27,144 -- 407,584
----------- ----------- ----------- -----------
Total current assets 5,640,852 34,394 1,500,000 7,175,246
----------- ----------- ----------- -----------
Non-current assets
Investment in affiliated
Companies 311,756 -- -- 311,756
Property and equipment 284,602 40,693 -- 325,295
Goodwill, net of amortization 3,686,832 -- 6,358,559 2&3 10,045,391
Other intangibles 989,340 -- -- 989,340
Other assets 155,583 2,500 -- 158,083
----------- ----------- ----------- -----------
Total non-current assets 5,428,113 43,193 6,358,559 11,829,865
----------- ----------- ----------- -----------
TOTAL ASSETS 11,068,965 77,587 7,858,559 19,005,111
=========== =========== =========== ===========
Transmedia Europe, Inc
Pro-forma Consolidated Balance Sheet
As of September 30, 1998
Company DBS
September September Pro-Forma
30, 1998 30, 1998 Pro-forma September
(audited) (audited) Adjustments Note 30, 1998
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Bank line of credit $ 516,471 $ 22,639 $ -- $ 539,110
Trade accounts payable 2,146,034 51,346 -- 2,197,380
Deferred income 721,542 -- -- 721,542
Accrued liabilities 2,062,879 161,415 -- 2,224,294
Sign-on fees payable 296,500 -- -- 296,500
Amounts due to related parties 2,316,405 545,000 -- 2,861,405
Notes payable 4,740,000 -- -- 4,740,000
------------ ------------ ------------ ------------
Total current liabilities 12,799,831 780,400 -- 13,580,231
Non-current liabilities 27,676 -- -- 27,676
Minority interest 585,421 -- 436,225 2,4&5 1,021,646
------------ ------------ ------------ ------------
13,412,928 780,400 436,225 14,629,553
------------ ------------ ------------ ------------
Shareholders' Equity
Convertible preferred stock 5,909 -- -- 5,909
Common stock 184 5,000 (4,954) 1&2 230
Additional paid-in capital 17,018,781 -- 6,038,775 1 23,057,556
Treasury stock (517,112) -- -- (517,112)
Cumulative foreign currency
adjustment (366,808) -- -- (366,808)
Accumulated deficit (18,484,917) (707,813) 1,388,513 2,3&4 (17,804,217)
------------ ------------ ------------ ------------
Total stockholders' equity (2,343,963) (702,813 7,422,334 4,375,558
------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 11,068,965 77,587 7,858,559 19,005,111
============ ============ ============ ============
Transmedia Europe, Inc
DBS - Pro-forma adjustments (1)
Note 1: To record the cost of the acquisition of 50% of the common stock of DBS
September 30, March 31,
1998 1999
Common stock (4,589,732 shares at
$0.00001 per share) $ 46 $ 46
Additional paid-in capital 6,038,775 6,038,775
---------- ----------
Total consideration 6,038,821 6,038,821
---------- ----------
Journal
Dr Investment in subsidiaries 6,038,821 6,038,821
Cr Common stock 46 46
Additional paid-in capital 6,038,775 6,038,775
Note 2: To record goodwill arising on acquisition of DBS
US$
Net liabilities acquired - June 14, 1999 (1,419,736)
----------
Company's share (50%) (709,868)
Consideration 6,038,821
----------
Goodwill 6,748,689
----------
Journal
Dr Goodwill 6,748,689 6,748,689
Common stock 5,000 5,000
Minority interest (BS) 709,868 709,868
Cr Investment in subsidiaries 6,038,821 6,038,821
Accumulated deficit 1,424,736 1,424,736
Transmedia Europe, Inc
DBS - Pro-forma adjustments (2)
Note 3: To record amortization of goodwill
September 30, March 31,
1998 1999
Amortization period 10 years
Amortization charge for period from
March 3, 1999 (date of inception)
through September 30, 1998 $390,130
Amortization for 6 months to March
31, 1999 $337,434
Journal
Dr Goodwill amortization (P&L) 390,130 337,434
Accumulated deficit 390,130
Cr Goodwill amortization (BS) 390,130 727,564
Note 4: To record minority interest in DBS
Losses 707,813 507,704
Company's share (50%) 353,907 253,852
Journal
Dr Minority interest (BS) 353,907 607,759
Cr Minority interest (P&L) 353,907 253,852
Accumulated deficit 353,907
Note 5: To record $3m contracted capital contribution
Journal
Dr Amounts due from related parties -
(Transmedia Asia Pacific, Inc.) 1,500,000 1,500,000
Cr Minority interest (BS) 1,500,000 1,500,000
Transmedia Europe, Inc
DBS - Pro-forma adjustments (3)
Note 6: Weighted average number of shares
September 30, March 31,
1998 1999
Weighted average. - for period from
March 3, 1998 to September 30, 1998
(211 / 365 days) 2,653,242
Shares issued 4,589,732