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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 29, 2001
--------------------------
NEXTGEN COMMUNICATIONS CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-22388 99-0273889
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
11850 Jones Road, Houston, Texas 77070
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(Address of Principal Executive Offices) (Zip Code)
(281) 970-9859
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(Registrant's Telephone Number, Including Area Code)
U S INDUSTRIAL SERVICES, INC.
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(Former Name or Former Address, if Changed Since Last Report)
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As previously reported, Nextgen Communications Corporation (formerly U S
Industrial Services, Inc.) (the "Company") completed the acquisition of Point To
Point Network Services, Inc., a Massachusetts corporation ("Point To
Point-Mass.") on June 29, 2001, in accordance with the terms and conditions of
the Reorganization Agreement and Plan of Merger, dated as of June 29, 2001, by
and among the Company, the Company's wholly-owned subsidiary, Point To Point
Network Services, Inc., a Delaware corporation, Point To Point-Mass., and the
sole shareholder of Point To Point-Mass.
On July 19, 2001, the Company filed with the Securities and Exchange Commission
a current report on Form 8-K disclosing the acquisition of Point To Point-Mass.,
but omitted the financial statements required by Item 7 of Form 8-K, as
permitted by applicable rules and regulations.
Through this Form 8-K/A, the Company amends its current report filed on July 19,
2001 to include the information required by Item 7 of Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements
POINT TO POINT NETWORK SERVICES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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MFA Moody, Famiglietti & Andronico, LLP
Certified Public Accountants and Consultants
To the Board of Directors
Point to Point Network Services, Inc.
Methuen, Massachusetts 01844
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of Point to Point Network
Services, Inc. as of December 31, 2000 and 1999, and the related statements of
operations and retained earnings and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 Point to Point Network
Services, Inc. as of December 31, 2000 and 1999, and the results of its
operations and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States.
/s/ MOODY, FAMIGLIETTI & ANDRONICO, LLP
Moody, Famiglietti & Andronico, LLP
August 3, 2001
793 Turnpike Street, North Andover, MA 01845-6177
(978) 688--7300 (800) 244-2081 fax (978) 685-2333
info@mfa-cpa.com www.mfa-cpa.com
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BALANCE SHEETS POINT TO POINT NETWORK SERVICES, INC.
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DECEMBER 31 2000 1999
---------- ----------
ASSETS
Current Assets:
Cash $ 418,322 $ 462,002
Accounts Receivable, Net of Allowance for Doubtful Accounts
of $150,000 and $100,000, Respectively 2,985,591 2,724,130
Inventory, Net of Reserve for Obsolescence of $38,000 and
$250,000, Respectively 323,667 608,550
Costs and Estimated Earnings in Excess of Billings (Note 2) 519,147 709,213
Prepaid Expenses and Other Current Assets 49,143 30,818
---------- ----------
Total Current Assets 4,295,870 4,534,713
Property and Equipment, Net of Accumulated Depreciation (Note 3) 644,087 538,220
Other Assets 19,817 19,492
---------- ----------
TOTAL ASSETS $4,959,774 $5,092,425
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Line of Credit (Note 4) $ 670,251 $ 690,000
Accounts Payable 1,202,483 1,286,114
Accrued Expenses 719,382 746,321
Deferred Revenue 208,567 77,823
Billings in Excess of Costs and Estimated Earnings (Note 2) 341,777 98,031
Deferred Income Taxes (Note 6) 139,000 155,000
Current Maturities of Long-Term Debt (Note 14) 143,680 100,856
---------- ----------
Total Current Liabilities 3,425,140 3,154,145
Long-Term Debt, Net of Current Maturities (Note 14) 139,208 169,347
Due to Stockholder (Note 5) 351,167 550,258
---------- ----------
Total Liabilities 3,915,515 3,873,750
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Stockholder's Equity:
Common Stock, $.01 Par Value, 200,000 Shares Authorized;
1,000 Shares Issued and Outstanding 10 10
Additional Paid-in Capital 990 990
Retained Earnings 1,043,259 1,217,675
---------- ----------
Total Stockholder's Equity 1,044,259 1,218,675
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $4,959,774 $5,092,425
========== ==========
The accompanying notes are an integral part of these financial statements.
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STATEMENTS OF OPERATIONS AND RETAINED EARNINGS POINT TO POINT NETWORK SERVICES, INC.
================================================================================================
FOR THE YEARS ENDED DECEMBER 31 2000 1999
------------ ------------
Revenues $ 16,888,791 $ 13,892,411
Cost of Revenues 12,214,025 9,811,919
------------ ------------
Gross Profit 4,674,766 4,080,492
Selling, General and Administrative Expenses 4,624,894 3,767,062
------------ ------------
Income from Operations 49,872 313,430
------------ ------------
Other Income (Expense):
Interest Expense (106,160) (141,944)
Interest Income 18,582 17,112
Other Expense (Note 12) (16,140) (300,000)
Loss on Sale of Property and Equipment (6,617) --
------------ ------------
Total Other Expense (110,335) (424,832)
------------ ------------
Loss Before Provision for Income Taxes (60,463) (111,402)
Benefit from (Provision for) Income Taxes (Note 6) 4,700 (2,300)
------------ ------------
Net Loss (55,763) (113,702)
------------ ------------
Retained Earnings, Beginning, As Previously Reported 1,217,675 1,822,377
------------ ------------
Prior Period Adjustment (Note 13) -- (491,000)
------------ ------------
Retained Earnings, Beginning, As Restated 1,217,675 1,331,377
------------ ------------
Distributions to Stockholder (118,653) --
------------ ------------
Retained Earnings, Ending $ 1,043,259 $ 1,217,675
============ ============
The accompanying notes are an integral part of these financial statements.
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STATEMENTS OF CASH FLOWS POINT TO POINT NETWORK SERVICES, INC.
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FOR THE YEARS ENDED DECEMBER 31 2000 1999
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Cash Flows from Operating Activities:
Net Loss $ (55,763) $(113,702)
Adjustments to Reconcile Net Loss to Net Cash Provided by
Operating Activities:
Depreciation 131,987 130,241
Deferred Income Taxes (16,000) (336,000)
Provision for Bad Debts 65,272 38,390
Loss on Sale of Property and Equipment 6,617 --
Increase in Accounts Receivable (326,733) (463,110)
Decrease (Increase) in Inventory 284,883 (353,537)
Decrease in Costs and Estimated Earnings in Excess of Billings 190,066 202,716
(Increase) Decrease in Prepaid Expenses and Other Current Assets (18,325) 17,460
Increase in Other Assets (325) (675)
(Decrease) Increase in Accounts Payable (83,631) 665,976
(Decrease) Increase in Accrued Expenses (26,939) 599,172
Increase in Deferred Revenue 130,744 77,823
Increase (Decrease) in Billings in Excess of Costs and Estimated Earnings 243,746 (130,827)
--------- ---------
Net Cash Provided by Operating Activities 525,599 333,927
--------- ---------
Cash Flows from Investing Activities:
Acquisitions of Property and Equipment (222,192) (55,196)
Proceeds from Sale of Property and Equipment 16,000 --
--------- ---------
Net Cash Used in Investing Activities (206,192) (55,196)
--------- ---------
Cash Flows from Financing Activities:
Net Repayments of Amounts Due to Stockholder (199,091) (37,467)
Principal Repayments of Long-Term Debt (125,594) (96,267)
Distributions to Stockholder (118,653) --
Proceeds from Borrowings Under Long-Term Debt 100,000 --
Net Repayments Under Line of Credit (19,749) (70,000)
--------- ---------
Net Cash Used in Financing Activities (363,087) (203,734)
--------- ---------
Net (Decrease) Increase in Cash (43,680) 74,997
--------- ---------
Cash, Beginning 462,002 387,005
--------- ---------
Cash, Ending $ 418,322 $ 462,002
========= =========
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Years for:
Interest $ 107,946 $ 135,158
State Income Taxes 35,351 --
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
During the year ended December 31, 2000, the Company financed the
acquisition of certain motor vehicles with long-term debt in the amount of
$38,279.
The accompanying notes are an integral part of these financial statements.
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NOTES TO FINANCIAL STATEMENTS POINT TO POINT NETWORK SERVICES, INC.
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Reporting Entity: Point to Point Network Services, Inc. (the Company) was
incorporated on January 11, 1994, as a Massachusetts corporation. The Company's
primary business activities consist of the installation and integration of
communications networking design and build-out services, which include voice,
data, video cable and designs, data networks and phone systems, for customers in
the communications and telecommunications industries located throughout New
England and the State of New York.
Cash: The Company maintains cash in bank deposit accounts, which at times may
exceed federally insured limits.
Revenue Recognition: The Company reports revenues from fixed priced contracts
using the percentage of completion method for financial reporting purposes.
Under the percentage of completion method, revenues with respect to individual
contracts are recognized in the proportion that costs incurred to date bear to
total estimated costs. Revenue and cost estimates are subject to revision during
the terms of the contracts, and any required adjustments are made in the periods
in which the revisions become known. Provision is made, where applicable, for
the entire amount of future estimated losses on contracts in progress when such
losses are determined. General and administrative costs are not allocated to
contract costs and are charged to expense as incurred.
The Company recognizes revenues from time and materials contracts and consulting
services as those services are performed. Advance payments made under these
contracts are recorded as deferred revenue and recognized when the related
services are performed.
Inventory: Inventory is stated at the lower of cost (first-in, first-out) or
market.
Property and Equipment: Property and equipment are recorded at cost.
Depreciation is calculated using straight-line and accelerated methods for both
financial and income tax reporting purposes over the estimated useful and
statutory lives of the related assets, respectively.
Income Taxes: The Company and its stockholder have elected to be treated as an S
corporation under the provisions of the Internal Revenue Code, which provide
that, in lieu of federal and certain state corporate income taxes, the
stockholder is taxed on the Company's taxable income. Therefore, no provision or
liability for federal and certain state income taxes are presented in these
financial statements, other than taxes associated with built-in gains (Note 6).
The Commonwealth of Massachusetts limits the S corporation status for companies
with revenues in excess of $6 million. As a result, the Company is subject to
"modified S Corporation status" for Massachusetts income tax purposes.
The Company reports under the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109), which requires an
asset and liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amounts expected
to be realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities.
Advertising Costs: The Company expenses advertising costs as incurred.
Advertising expense incurred by the Company during the years ended December 31,
2000 and 1999, amounted to $25,922 and $56,322, respectively.
Use of Estimates: Management has used estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent assets and
liabilities in its preparation of the financial statements in accordance with
accounting principles generally accepted in the United States. Actual results
experienced by the Company may differ from those estimates.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED) POINT TO POINT NETWORK SERVICES, INC.
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2. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS:
Costs, estimated earnings and billings on uncompleted contracts as of December
31, 2000 and 1999, are summarized as follows:
2000 1999
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Costs Incurred on
Uncompleted Contracts $3,265,500 $3,029,466
Estimated Earnings 553,498 359,564
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3,818,998 3,389,030
Less: Billings to Date 3,641,628 2,777,848
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$ 177,370 $ 611,182
========== ==========
Included in the accompanying balance sheets under the following captions:
2000 1999
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Costs And Estimated Earnings
In Excess of Billings $ 519,147 $ 709,213
Billings in Excess of Costs
And Estimated Earnings (341,777) (98,031)
--------- ---------
$ 177,370 $ 611,182
========= =========
3. PROPERTY AND EQUIPMENT:
Property and equipment as of December 31, 2000 and 1999, consists of the
following:
2000 1999
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Furniture, Fixtures and
Equipment $ 356,868 $ 371,406
Leasehold Improvements 314,782 314,782
Motor Vehicles 290,414 236,551
Computer Equipment and
Software 283,561 135,506
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1,245,625 1,058,245
Less: Accumulated
Depreciation 601,538 520,025
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$ 644,087 $ 538,220
========== ==========
4. LINE OF CREDIT:
The Company is a party to a revolving bank line of credit agreement, which is
collateralized by substantially all assets of the Company. Under the terms of
the line of credit, borrowings are limited to 75% of qualified accounts
receivable, less outstanding letters of credit, up to a maximum borrowing of
$2,500,000. Interest on the outstanding balance is calculated based on the prime
rate in effect during the borrowing term. As of December 31, 2000 and 1999,
borrowings outstanding under the line of credit amounted to $670,251 and
$690,000, respectively. As of December 31, 2000, the prime rate amounted to
9.5%.
Under the terms of the revolving bank line of credit, which is personally
guaranteed by the Company's stockholder, the Company is required to maintain
certain financial covenants. As of December 31, 2000, the bank waived compliance
with these financial covenants (See Note 11).
5. DUE TO STOCKHOLDER:
Due to stockholder represents unsecured cash advances made to the Company by its
sole stockholder during the normal course of business. As of December 31, 2000
and 1999, the Company has net cash advances due to its sole stockholder in the
amount of $351,167 and $550,258, respectively. The cash advances, which bear
interest at 8.25%, have no stated repayment terms and are subordinated in full
to all outstanding bank obligations. During the years ended December 31, 2000
and 1999, the Company incurred interest expense related to the cash advances in
the amount of $35,988 and $55,954, respectively.
6. INCOME TAXES:
The benefit from (provision for) income taxes for the years ended December 31,
2000 and 1999, consists of the following:
2000 1999
--------- ---------
Current $ (11,300) $(338,300)
Deferred 16,000 336,000
--------- ---------
$ 4,700 $ (2,300)
========= =========
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NOTES TO FINANCIAL STATEMENTS (CONTINUED) POINT TO POINT NETWORK SERVICES, INC.
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6. INCOME TAXES (CONTINUED):
As discussed in Note 1, the Company reports under SFAS No. 109. Deferred income
taxes reflect the impact of "temporary differences" between amounts of assets
and liabilities for financial reporting purposes and such amounts as measured by
tax laws. As of December 31, 2000 and 1999, the temporary difference that gives
rise to a substantial portion of the deferred tax liability pertains to
estimated future built-in gains taxes resulting from the Company's election to
be treated as an S Corporation on September 1, 1998.
7. OPERATING LEASE COMMITMENTS:
The Company leases its office and warehousing facility in Methuen, Massachusetts
under a non-cancelable lease agreement, which expires in June, 2003. The Company
has an option to renew the lease for an additional term of five years. Under the
terms of the lease agreement, the Company is required to remit a minimum monthly
rental in the amount of $13,912, plus certain operating costs. During the years
ended December 31, 2000 and 1999, rent expense incurred by the Company under
this lease agreement, including operating costs, amounted to $189,024 and
$179,602, respectively (See Note 12).
On March 1, 2000, the Company entered into a non-cancelable lease agreement for
its office facility in Windham, Maine, which expires in February, 2002. The
Company has an option to renew the lease for an additional term of three years.
Under the terms of this lease agreement, the Company is required to remit a
minimum monthly rental of $1,200. Prior to March 1, 2000, the Company leased an
office facility in Windham, Maine under a non-cancelable lease agreement, which
required the remittance of minimum monthly rentals in the amount of $600. During
the years ended December 31, 2000 and 1999, rent expense incurred by the Company
under these lease agreements, amounted to $13,200 and $7,200, respectively.
The Company leased an office and warehousing facility in Syracuse, New York
under a non-cancelable lease agreement, which required minimum monthly rentals
in the amount of $875 through expiration in October, 2000. Subsequent to October
2000, the Company moved its Syracuse, New York facilities to a new location and
entered into a tenant-at-will agreement requiring minimum monthly rentals of
$200. During the years ended December 31, 2000 and 1999, rent expense incurred
by the Company under these agreements, including operating costs, amounted to
$9,150 and $10,500, respectively.
The Company leases a certain vehicle under a non-cancelable lease agreement
expiring in November, 2004. The Company previously leased certain vehicles under
non-cancelable lease agreements expiring at various dates through May, 2000.
During the years ended December 31, 2000 and 1999, lease expense incurred by the
Company under these lease agreements amounted to $11,582 and $27,168,
respectively.
Future minimum lease payments due under the non-cancelable portion of these
lease agreements as of December 31, 2000, are as follows:
YEAR ENDED
DECEMBER 31,
------------
2001 $ 213,128
2002 201,128
2003 9,684
2004 8,070
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$ 432,010
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8. RETIREMENT PLAN:
The Company maintains a 401(k) retirement plan covering substantially all of its
employees who meet certain age and hour requirements. The plan allows each
employee participant an election to defer a percentage of their compensation up
to the maximum allowed for federal income tax purposes. The Company contributes
25% of the participant's contribution, up to a maximum of 6% of each
participant's salary. Contributions may be suspended at the option of the
Company's Board of Directors. During the years ended December 31, 2000 and 1999,
the Company contributed approximately $18,000 and 24,000, respectively, into the
plan.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED) POINT TO POINT NETWORK SERVICES, INC.
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9. ECONOMIC DEPENDENCY:
During the year ended December 31, 1999, the Company provided a substantial
portion of its services to five customers. Sales to these customers represented
approximately 44%, 19%, 12%, 12% and 10% of the Company's revenues during the
year ended December 31, 1999.
During the years ended December 31, 2000 and 1999, the Company purchased a
substantial portion of its materials from three and two vendors, respectively.
Purchases from these vendors represented approximately 22%, 21% and 11%, and 20%
and 18% of the Company's purchases during the years ended December 31, 2000 and
1999, respectively.
10. CONCENTRATION OF CREDIT RISK:
Financial instruments that potentially expose the Company to concentrations of
credit risk include trade accounts receivable. To minimize this risk, ongoing
credit evaluations of customers' financial condition are performed, although
collateral is not required. The Company maintains reserves for potential credit
losses.
As of December 31, 2000, two customers represented approximately 15% and 14%,
respectively, of gross accounts receivable.
11. SUBSEQUENT EVENTS:
On June 29, 2001, the Company and its sole stockholder entered into a plan of
merger agreement with U.S. Industrial Services, Inc. (USIS) and its wholly owned
Delaware subsidiary, Point to Point Network Services, Inc. In accordance with
the terms and provisions of the agreement and plan of merger, USIS acquired all
of the 1,000 shares of issued and outstanding common stock of the Company from
its stockholder in exchange for cash consideration in the amount of $677,622 and
2,000,000 shares of the common stock of USIS.
In connection with the above transaction, the Company extinguished its
outstanding line of credit and certain installment debt obligations (See Notes 4
and 14).
12. COMMITMENTS AND CONTINGENCIES:
As of December 31, 2000, the Company had an outstanding letter of credit in the
amount of $167,500, which was utilized as security under the terms of the
Company's Methuen, Massachusetts lease agreement (See Note 7).
In 1996 and 1997, the New York State Department of Labor and Bureau of Public
Works claimed that the Company failed to pay or provide prevailing wages and
supplements to workers it employed on various public works projects in the State
of New York. In connection with these claims, the Company waived its rights to a
hearing and judicial review and consented to an order and determination to be
made and filed. In connection with the above filed claims, the Company incurred
legal settlement costs in the amount of $16,140 and $300,000 during the years
ended December 31, 2000 and 1999, respectively.
Approximately 50% of the Company's installation labor force is covered by
collective bargaining agreements, which expire on various dates through June,
2003.
13. PRIOR PERIOD ADJUSTMENT:
During the year ended December 31, 2000, through the availability of additional
information, the Company became aware of an understatement of the deferred
income tax liability as of December 31, 1998, in the amount of $491,000.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED) POINT TO POINT NETWORK SERVICES, INC.
================================================================================
14. LONG-TERM DEBT:
Long-term debt as of December 31, 2000 and 1999, consists of the following:
2000 1999
-------- --------
Prime rate construction installment note, payable in monthly principal and
interest installments of $6,588 through January, 2003, collateralized by
substantially all assets of the Company and personally guaranteed by the
Company's sole stockholder (See Note 12) $148,612 $211,922
8.89% equipment installment note, payable in monthly principal and interest
installments of $4,530 through June, 2002, collateralized by substantially all
assets of the Company and personally guaranteed by the Company's sole
stockholder (See Note 12) 77,072 --
6.73% to 12.5% installment notes, payable in aggregate monthly principal and
interest installments of $4,697, maturing on various dates through August, 2004,
collateralized by certain vehicles and a time share unit 57,204 58,281
-------- --------
Total Long-Term Debt 282,888 270,203
Less: Current Maturities 143,680 100,856
-------- --------
Long-Term Debt, Net of Current Maturities $139,208 $169,347
======== ========
Maturities of long-term debt as of December 31, 2000, consist of the following:
YEAR ENDED
DECEMBER 31,
------------
2001 $ 143,680
2002 118,311
2003 15,203
2004 5,694
-------------
$ 282,888
=============
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(b) Pro Forma Financial Information.
The Company's consolidated balance sheet at June 30, 2001, as reported in the
Company's Form 10-QSB for the quarter ended June 30, 2001, reflects the
Company's financial position after giving effect to the acquisition of Point To
Point on June 29, 2001.
The following unaudited pro forma summaries for the (i) twelve months ended
September 30, 2000, (ii) three months ended December 31, 2000, and (iii) six
months ended June 30, 2001, present the condensed consolidated results of
operations as if the acquisition of Point To Point had occurred as of October 1,
1999, after giving effect to certain adjustments.
The Company has accounted for the acquisition of Point To Point using the
purchase method of accounting and, accordingly, recorded the acquired assets and
liabilities at their estimated fair values at the closing date. The purchase
price allocations are preliminary. Final allocations will be made based upon
other studies that have not yet been completed.
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets".
Under this Statement, goodwill will no longer be required to be amortized, but
will be subject to annual impairment tests in accordance with the new rules. The
Company plans to adopt the Statement in the first quarter of fiscal 2002, and as
such, will discontinue the amortization of its goodwill at such time.
The pro forma adjustments presented are based on available information and
include certain assumptions and adjustments that are considered reasonable under
the circumstances. These adjustments are directly attributable to the
transaction referenced above and are expected to have a continuing impact on the
Company's results of operations and financial condition.
The pro forma information has been prepared for comparative purposes only, and
does not purport to be indicative of the Company's results of operations that
would have actually occurred had the transaction been in effect as of the date
or for the periods presented, or of results that may occur in the future. The
unaudited pro forma consolidated financial statements should be read in
conjunction with the Company's historical financial statements and related
notes.
Unaudited Pro Forma Condensed Statement of Operations
For the Twelve Months Ended September 30, 2000
(In thousands, except per share amounts)
Nextgen Point To Point Pro Forma
9/30/00 9/30/00 Subtotal Adjustments Proforma
------------- ------------- ------------- ------------- -------------
Revenue $ 13,511 $ 15,843 $ 29,354 $ 0 $ 29,354
Income (loss) from
operations (3,090) 530 (2,560) (79)A (2,639)
Net income (loss) $ (6,225) $ 340 $ (5,885) $ (79) $ (5,965)
============= ============= ============= ============= =============
Net loss per share $ (0.71) $ (0.55)
============= =============
Weighted average number
of common shares
outstanding 8,764 2,000 B 10,764
============= ============= =============
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Unaudited Pro Forma Condensed Statement of Operations
For the Three Months Ended December 31, 2000
(In thousands, except per share amounts)
Nextgen Point To Point Pro Forma
12/31/00 12/31/00 Subtotal Adjustments Proforma
------------- ------------- ------------- ------------- -------------
Revenue $ 0 $ 4,630 $ 4,630 $ 0 $ 4,630
Loss from operations (157) (623) (780) (20)A (800)
Net loss $ (73) $ (617) $ (690) $ (20) $ (710)
============= ============= ============= ============= =============
Net loss per share $ (0.01) $ (0.07)
============= =============
Weighted average number
of common shares
outstanding 8,764 2,000 B 10,764
============= ============= =============
Unaudited Pro Forma Condensed Statement of Operations
For the Six Months Ended June 30, 2001
(In thousands, except per share amounts)
Nextgen Point To Point Pro Forma
6/30/01 6/30/01 Subtotal Adjustments Proforma
------------- ------------- ------------- ------------- -------------
Revenue $ 30 $ 6,814 $ 6,844 $ 0 $ 6,844
Loss from operations (598) 118 (480) 455 A (25)
Net income (loss) $ (419) $ (756) $ (1,175) $ 1,265 $ 90
============= ============= ============= ============= =============
Net income (loss)
per share $ (0.04) $ 0.01
============= =============
Weighted average number
of common shares
outstanding 8,792 2,000 B 10,792
============= ============= =============
PRO FORMA ADJUSTMENTS:
A Includes additional amortization expense resulting from the $3,151 of
goodwill generated by the acquisition of Point To Point, offset by a
decrease in selling, general and administrative expenses to
retroactively reflect the reductions that occurred upon acquisition.
B To reflect the shares of common stock issued in the acquisition.
C To adjust for Point To Point's loss on sale of assets of $732 and
nonrecurring charges of $110.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTGEN COMMUNICATIONS CORPORATION
Date: September 4, 2001 By: /s/ FRANK J. FRADELLA
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Frank J. Fradella
President and Chief Executive Officer
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