8-K Still Continued, again and again...
WINNERS INTERNET NETWORK, INC.
Notes to Financial Statements
December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION:
On July 14, 1997, Winners Internet Network, Inc. (WIN) was incorporated under
the laws of Nevada. The Company's fiscal year end is December 31. On July 15,
1997 Winners Internet Network, Inc. and Comstock-Empire International, Inc., a
Washington Corporation merged pursuant to 368(a)(1)(A) and 368(a)(1)(F) of the
Internal Revenue Code of 1986 as amended. Comstock-Empire merged into WIN,
acquiring all issued and outstanding shares of Comstock-Empire for and in
exchange for 294,944 shares of WIN common stock. Additional stocks were
presented after the original date of the acquisition and thus have been issued
WIN stock in 1998 and 1999. On July 31, 1997 Winners Internet Network, Inc. and
Davki Agency LTD, Inc., a Delaware Corporation, merged in a plan of
reorganization. WIN acquired all issued and outstanding shares of Davki Agency
LTD, Inc. for and in exchange of 8,000,000 shares of WIN common stock. This
stock transfer is pursuant to 368(a)(1)(B) of Internal Revenue code of 1986 as
amended, as a tax-free exchange. The Davki Agency LTD, Inc. became a wholly
owned subsidiary of WIN. Both entities were acquired by the purchase method and
all inter-company transactions were eliminated in the acquisition. The impact of
these acquisitions was not material in relation to the Company's results of
operations. The Company is primarily engaged in the operation of an Internet
E-commerce enterprise.
CAPITAL STOCK TRANSACTIONS:
The authorized capital stock of the corporation was 20,000,000 shares of common
stock with a par value of $.001. On March 17, 1998 the authorized capital stock
of the corporation was increased to 50,000,000 shares of common stock.
CASH AND CASH EQUIVALENTS:
The Company considers all highly liquid debt instruments, purchased with an
original maturity of three months or less, to be cash equivalents.
PROPERTY AND EQUIPMENT:
Property and equipment is stated at cost. The cost of ordinary maintenance and
repairs is charged to operations while renewals and replacements are
capitalized. Depreciation is figured on a straight-line basis as follows:
Computer Software 7 years
Equipment 7 years
Furniture & Fixtures 10 years
Vehicle 7 years
Depreciation expense for 1999 was $38,713.
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WINNERS INTERNET NETWORK, INC.
Notes to Financial Statements
December 31, 1999
REVENUE RECOGNITION:
Revenue from leases of software and software documentation products is generally
recognized upon product shipment provided that no significant vendor obligations
remain and collection of the resulting receivable is deemed probable. The
Company has entered into agreements whereby its licenses products to certain
entities. These agreements generally provide for commitments, which are
recognized upon contract signing and product acceptance.
USE OF 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 and disclosures. Accordingly, actual results
could differ from those estimates.
FOREIGN CURRENCY TRANSLATION
The Company has determined that the local currency of its international
transaction is the functional currency. In accordance with Statement of
Financial Accounting Standard No. 52, "Foreign Currency Translation", the assets
and liabilities denominated in foreign currency are translated into U.S. dollars
at the current rate of exchange existing at period-end and revenues and expenses
are translated at average monthly exchange rates. Related translation
adjustments are reported as a separate component of stockholders' equity,
whereas, gains or losses resulting from foreign currency transactions are
included in results of operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash, accounts receivable, accounts payable and accrued
expenses are considered to be representative of their respective fair values
because of the short-term nature of these financial instruments. The carrying
amount of the notes payable and long-term debt are reasonable estimates of fair
value as the loans bear interest based on market rates currently available for
debt with similar terms.
NOTE 2 - NOTES PAYABLE
Note payable as of December 31, 1999 consist of the following:
<TABLE>
<S> <C>
Note payable to Ford Credit dated December 1998. Payable in
60 monthly installments of $320, including interest of .09% $10,788
Less current portion 3,600
-------
Long Term Debt $ 7,188
=======
</TABLE>
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WINNERS INTERNET NETWORK, INC.
Notes to Financial Statements
December 31, 1999
NOTE 3 - ACCOUNTS RECEIVABLE
Accounts receivable licensing fees for $310,000 represents 6 entities, who have
signed licensing agreements. Accounts receivable credit cards represents
balances due from credit card companies for processing.
NOTE 4 - NET (LOSS) PER COMMON SHARE
The net (loss) per share has been computed by dividing net income (loss) by the
weighted average number of common shares and equivalents outstanding.
NOTE 5 - INCOME TAXES
Significant components of the Company's deferred tax liabilities and assets are
as follows:
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<S> <C>
Deferred Tax Liability $ 0
==========
Deferred Tax Assets
Net Operating Loss Carryforwards $2,018,366
Book/Tax Differences in Bases of Assets 10,788
Less Valuation Allowance (2,029,154
==========
Total Deferred Tax Assets $ 0
==========
Net Deferred Tax Liability $ 0
==========
</TABLE>
As of December 31, 1999, the Company had a net operating loss carryforward for
federal tax purposes approximately equal to the accumulated deficit recognized
for book purposes, which will be available to reduce future taxable income. The
full realization of the tax benefit associated with the carryforward depends
predominantly upon the Company's ability to generate taxable income during the
carryforward period. Because the current uncertainty of realizing such tax
assets in the future, a valuation allowance has been recorded equal to the
amount of the net deferred tax asset, which caused the Company's effective tax
rate to differ from the statutory income tax rate. The net operating loss
carryfoward, if not utilized, will begin to expire in the year 2010.
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WINNERS INTERNET NETWORK, INC.
Notes to Financial Statements
December 31, 1999
NOTE 6 - SUBSEQUENT EVENTS
A final agreement on the Letter of Intent was entered between SupraNet, AG
(SupraNet), a Liechtenstein Company and Winners Internet Network, Inc. (WINR), a
US Corporation dated March 1, 1999. On January 12, 2000 an option was exercised
by WINR to acquire the common share interest of 19% of SupraNet. Management
believes that the growth of SupraNet of over 80% for the last 5 years will
continue in to the foreseeable future.
On December 13, 1999 INTERTREHAND, AG, a Liechtenstein Corporation entered into
a final agreement with Winners Internet Network, Inc. (WINR), a US Corporation
for the right, title, and interest in the "Plus Network." This right will also
include any and all domains registered by CMS/WINR in the future to secure a
broader market for processing. All future registrations by CMS will be for the
benefit of Winners Internet Network, Inc.
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