United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934
Date of earliest event reported May 13, 2004
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ICEWEB INCORPORATED
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OR OTHER JURISDICTION OF INCORPORATION OF ORGANIZATION)
0-27865 13-2640971
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(COMMISSION FILE NUMBER) (I.R.S. ID)
205 VAN BUREN STREET, SUITE 420, HERNDON, VA 20170
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (703) 964-8000
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
GENERAL EXPLANATION
The purpose of this report is to amend the Registrant's Current Report on Form
8-K dated May 13, 2004 that was filed with the Securities and Exchange
Commission on July 23, 2004 (the "Initial Report") which reported on the
acquisition of DevElements, Inc. This report amends the Initial Report so as to
provide the information required under Item 9.01(a) and 9.01(b) of Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
Financial Statements of DevElements, Inc.
Independent Auditors' Report
Balance Sheets Dated as of December 31, 2003 and May 12, 2004
unaudited
Statements of Operations for the Years ended December 31, 2002 and
December 31, 2003 and the period ended May 12, 2004 unaudited.
Statement of Stockholders' Deficit for the Years ended December 31,
2002 and December 31, 2003 and the period ended May 12, 2004
unaudited.
Statements of Cash Flows for the Years ended December 31, 2002 and
December 31, 2003 and the period ended May 12, 2004 unaudited.
Notes to Financial Statements for the Years ended December 31, 2002
and December 31, 2003 and the period ended May 12, 2004 unaudited.
(b) Pro Forma Financial Statements of Business Acquired
Unaudited Pro Forma Combined Financial Statements of DevElements, Inc.
Unaudited Pro Forma Combined Balance Sheet as of May 12, 2004
Unaudited Pro Forma Statements of Operations for the year ended
December 31, 2003 and the period ended May 12, 2004.
page 2
(a) Financial Statements of Business Acquired
FINANCIAL STATEMENTS OF DEVELEMENTS, INC.
INDEX TO FINANCIAL STATEMENTS
Independent auditors' report ........................... 4
Balance sheets .......................................... 5
Statements of operations ............................... 6
Statement of changes in stockholders' deficit ........... 7
Statements of cash flows ................................ 8
Notes to financial statements ........................... 9
page 3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
DevElements
We have audited the accompanying balance sheet of DevElements Inc. as of
December 31, 2003 and the related statements of operations, changes in
stockholders' deficit and cash flows for the years ended December 31, 2002 and
December 31, 2003. 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 the standards of the Public Company
Accounting Oversight Board (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 DevElements Inc. as of December
31, 2003 and the results of operations and their cash flows for the years ended
December 31, 2002 and December 31, 2003 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 12 to the
financial statements, the Company had net losses of $27,721 and $168,622 as of
December 31, 2003 and December 31, 2002 respectively. Additionally the Company
had an accumulated deficit of $33,769 as of December 31, 2003. These matters
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regards to these matters are also described in
Note 12. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
New York, New York /s/ Sherb & Co., LLP
October 25, 2004 Certified Public Accountants
page 4
DevElements, Inc.
BALANCE SHEETS
12/31/2003 5/12/2004
---------- ---------
(Unaudited)
Current assets:
Cash .............................................. $ 10,281 $ 102,706
Accounts receivable, net .......................... 143,557 60,287
Other current assets .............................. - 7,164
--------- ---------
Total current assets .............................. 153,838 170,157
Property and equipment ................................. 125,556 128,042
Less: Accumulated depreciation ......................... (110,893) (125,459)
--------- ---------
Property and equipment, net ............................ 14,663 2,583
--------- ---------
Total assets ........................................... $ 168,501 $ 172,740
--------- ---------
Liabilities and stockholders' equity
Current liabilities:
Accounts payable .................................. 7,872 79,771
Accrued expense ................................... 39,000 13,530
Accrued lease liability ........................... - 439,183
Note payable - related party ...................... - 13,000
Note payable - bank ............................... 145,000 150,000
--------- ---------
Total current liabilities .............................. 191,872 695,484
Stockholders' deficit:
Common Stock (no par value ; 100,000 shares authorized,
37,000 and 40,000 issued and outstanding at
December 31, 2003 and May 12, 2004, respectively) ...... 10,398 10,398
Accumulated deficit .................................... (33,769) (533,142)
--------- ---------
Total stockholders' deficit ............................ (23,371) (522,744)
--------- ---------
Total liabilities and stockholders' deficit ............ $ 168,501 $ 172,740
--------- ---------
See accompanying notes to financial statements
page 5
DevElements, Inc.
STATEMENTS OF OPERATIONS
For the period
Year ended Year ended 1/01/2004 -
12/31/2002 12/31/2003 5/12/2004
----------- ----------- -----------
(Unaudited)
Revenue ..................... $ 3,033,376 $ 2,852,664 $ 681,615
Direct costs ................ 1,958,294 1,991,178 453,948
----------- ----------- -----------
Gross profit ................ 1,075,082 861,486 227,667
Operating expenses:
Salaries and benefits ..... 450,500 464,127 109,960
Professional fees ......... 150,230 24,983 27,812
Rent ...................... 190,397 210,717 509,489
General and administrative 260,698 282,711 61,216
Depreciation .............. 33,125 34,964 14,565
----------- ----------- -----------
Total operating expense . 1,084,950 1,017,502 723,042
Operating loss .............. (9,868) (156,016) (495,375)
Interest expense ............ (17,853) (12,606) (3,998)
----------- ----------- -----------
Net loss .................... ($ 27,721) ($ 168,622) ($ 499,373)
----------- ----------- -----------
See accompanying notes to financial statements
page 6
DevElements, Inc.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
Common Stock Accumulated
Shares Amount Deficit Total
------ ------- ----------- ---------
Balance at December 31, 2001 ........ 40,000 $10,398 $ 387,801 $ 398,199
S Corp. distributions ............... - - ($225,227) ($225,227)
Net loss for the year ............... - - ($ 27,721) ($ 27,721)
------ ------- --------- ---------
Balance at December 31, 2002 ........ 40,000 $10,398 $ 134,853 $ 145,251
====== ======= ========= =========
Common stock surrendered ............ (3,000) $ 0 - $ 0
Net loss for the year ............... - - ($168,622) ($168,622)
------ ------- --------- ---------
Balance at December 31, 2003 ........ 37,000 $10,398 ($ 33,769) ($ 23,371)
====== ======= ========= =========
Common stock issued (unaudited) .... 3,000 $ 0 - $ 0
Net loss for the period (unaudited) - - ($499,373) ($499,373)
------ ------- --------- ---------
Balance at May 12, 2004 (unaudited) 40,000 $10,398 ($533,142) ($522,744)
====== ======= ========= =========
See accompanying notes to financial statements
page 7
DevElements, Inc.
STATEMENTS OF CASH FLOWS
For the period
Year ended Year ended 1/01/2004 -
12/31/2002 12/31/2003 5/12/2004
---------- ---------- --------------
(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net loss ....................................... ($ 27,721) ($168,622) ($499,373)
Adjustments to reconcile net loss to net cash
in operating activities:
Depreciation ................................... 33,125 34,964 14,565
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable ............................ 150,137 133,760 83,272
Other assets ................................... 1,135 - (7,165)
Increase (decrease) in:
Accounts payable ............................... 13,967 (7,143) 71,899
Accrued expense ................................ 30,000 9,000 (25,470)
Accrued lease liability ........................ - - 439,183
--------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES .......... $ 200,643 $ 1,959 $ 76,911
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ............. (16,823) (24,698) (2,486)
--------- --------- ---------
NET CASH (USED) IN INVESTING ACTIVITIES ............ (16,823) (24,698) (2,486)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments to) related parties .... 28,800 (115,800) 13,000
S Corp. distributions .......................... (225,227) - -
Proceeds from line of credit ................... - 145,000 5,000
--------- --------- ---------
NET CASH (USED) IN PROVIDED BY FINANCING ACTIVITIES (196,427) 29,200 18,000
--------- --------- ---------
NET (DECREASE) INCREASE IN CASH .................... (12,607) 6,461 92,425
CASH - beginning of period ......................... 16,427 3,820 10,281
--------- --------- ---------
CASH - end of period ............................... $ 3,820 $ 10,281 $ 102,706
--------- --------- ---------
See accompanying notes to financial statements
page 8
DEVELEMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 2002, December 31, 2003, and period ending May 12, 2004
unaudited
Note 1 - ORGANIZATION
DevElements, Inc., was organized in the state of Virginia in June 1999. The
Company is currently headquartered in Reston, VA, with satellite offices in
Portland, OR and Charlotte, NC
DevElements is a professional IT consultancy that designs, develops and
implements Web-based employee productivity solutions for organizations with
operational efficiency goals. By combining leading edge technologies with an
innovative approach to business process management, the staff builds solutions
that capitalize on an organization's strengths and empower their employees to do
their jobs better, faster and cheaper. From Highly creative, interactive,
sales-focused Web sites to knowledge management and employee information
systems, DevElements solutions embody the vision of the paperless workplace.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial statements
and pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). The accompanying financial statements for the interim
periods are unaudited and reflect all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair presentation of the financial position and operating results for the
periods presented.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, the Company considers
all highly-liquid investments with an original maturity date of three
months or less to be cash equivalents.
b. ACCOUNTS RECEIVABLE
Accounts receivable consist of normal trade receivables. The Company
recorded an allowance of $16,540 in the period ending December 31,
2002, $35,201 in the period ending December 31, 2003, and $0 in the
period ending May 12, 2004. Management performs ongoing evaluations of
its accounts receivable and customer base. Management believes that
all remaining receivables are fully collectable.
c. REVENUE RECOGNITION
Revenue is recorded each month as it is earned. Customers are
generally billed every two weeks based on the units of production for
the project. Each project has an estimated total which is based on the
estimated units of production and agreed upon billing rates.
d. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost, and depreciation is
provided by use of the straight-line method over the estimated useful
lives of the assets.
e. INCOME TAXES
The shareholders of DevElements elected to be taxed as an S
Corporation, as defined in the Internal Revenue Code. Such status was
also elected for state tax purposes. Under this status, taxable income
is passed through and taxed at the shareholder level, rather than at
the corporate level.
page 9
f. USE OF ESTIMATES
Preparation of the financial statements in accordance with accounting
principles generally accepted in the United States of America 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 balance sheets and the reported
amounts of revenues and expenses during the reporting periods. Actual
results could differ from those estimates.
Note 3 - PROPERTY AND EQUIPMENT
The major classes of property and equipment are as follows:
Estimated
Useful Life 12/31/2003 5/12/2004
----------- ---------- -----------
(unaudited)
Computer Hardware .............. 3 years $93,793 $96,279
Phone System ................... 3 years 17,712 17,712
Office Furniture ............... 3 years 14,051 14,051
-------- --------
125,556 128,042
Less accumulated depreciation .. (110,893) (125,459)
-------- --------
Property and equipment, net .... $14,663 $2,583
======== ========
Depreciation expense for the year ended December 31, 2002 was $33,125, December
31, 2003 was $34,964 and the expense for the period ending May 12, 2004 was
$14,565. The period ending May 12, 2004 is unaudited.
Note 4 - RELATED PARTY TRANSACTIONS
On May 12, 2004, the Company has notes payable to Andrew Hill, the CEO, for
$2,000, Bonnie Edenfield, an employee, for $10,000, and Shadi McPherson, an
employee, for $1,000. All three of these notes are payable on-demand and do not
bear interest. All of these related party notes represent short-term loans to
the Company to cover operating cash flow shortages.
Mr. Donald Gauger was hired in August of 2001 for the position on Chief
Operating Officer. He also became a stockholder and sat on the Board of
Directors. He was laid off from the Company in May 2003 and relinquished his
DevElements stock. He remained on the Board of Directors in an advisory role
until August of 2003 when he was voted off the Board.
Note 5 - NOTE PAYABLE
On April 24, 2003 the Company entered into an agreement for a line of credit
with SunTrust bank. The SunTrust liability was an open-ended revolving line of
credit in the amount of $150,000, principle due on demand and interest charged
at a rate of prime rate index plus 2.00%. The prime rate index shall be Sun
Trust Bank's Prime Rate, which is established from time to time by the Bank as a
reference for fixing the lending rate on commercial loans. The Company's
accounts receivable is collateral for the note.
Note 6 - STOCKHOLDERS' EQUITY
The Company is authorized to issue 100,000 shares of its no par value Common
Stock, with such designations, rights and preferences as may be determined from
time to time by the Board of Directors. Upon inception, the
page 10
Company issued 40,000 shares. In May 2003, 3,000 of those shares were forfeited,
when the Chief Operating Officer was laid off from the company. In March 2004,
those 3,000 shares were re-issued to certain current employees. On May 12, 2004
there were 40,000 shares outstanding.
Note 7 - SHAREHOLDER DISTRIBUTION
During the course of the year ended December 31, 2002, the Company distributed
cash to its shareholders. These distributions were based on the current
performance of the Company.
Note 8 - UNAUDITED SUBSEQUENT EVENTS
On October 4, 2001, the Company entered into a lease for office space located at
11600 Sunrise Valley Drive in Reston, VA. This was a five year lease that
commenced on October 9, 2001 and expired on October 31, 2006. The base rent
started at $12,927 per month and was increased annually. In addition to the base
rent there were fees for parking spaces, network connections, operating
expenses, and a miscellaneous category. The original lease was signed with
Spalding and Slye, but the building was sold in 2003 to Bernstein management.
In June 2004 the Company vacated its office lease at 11600 Sunrise Valley Drive.
As of May 12, 2004 the Company has accrued $439,183 in connection with this
lease abandonment.
Note 9 - OPERATING LEASES
The company entered into four lease agreements with Dell Financial for computers
purchased from Dell. There was also one lease with GE Capital for the office
copy and fax machines. All of these were 36 month leases. The total remaining
liability at December 31, 2002 and 2003 was approximately $6,700 and $6,900,
respectively. The total liability on May 12, 2004 was approximately $24,000. The
large increase is due to the fourth Dell lease which was signed in April 2004.
This was for Dell equipment totaling $14,042. This was a 36 month lease with a
monthly payment of $466.
The following schedule shows the minimum lease liability by year:
Minimum Lease Payments
----------------------
1/01/04 - 12/31/04 .............. $9,037
1/01/05 - 12/31/05 .............. 7,908
1/01/06 - 12/31/06 .............. 5,596
Thereafter ...................... 1,399
-------
$23,940
=======
Note 10 - CONCENTRATION
Approximately 80% of the Company's total revenues are derived from one customer,
Drake Beam Morin, for whom they provide a variety of IT consulting work.
Approximately 90% of the outstanding accounts receivable balance is due from
this same customer.
Note 11 - PROFIT SHARING PLAN
On March 15, 2004, the Company put into effect a profit sharing plan for the
employees. The plan was based on reaching certain revenue and profit levels,
which were never realized. Nothing was ever earned or paid out under this plan.
page 11
Note 12 - GOING CONCERN
For the years ended December 31, 2003 and 2002, the Company incurred losses of
$168,622 and $27,721, respectively. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classification of liabilities that might be necessary
in the event the Company cannot continue in existence.
Due to the fact that the majority of our revenues come from one source and those
revenues have decreased over the last two years it is imperative that the
revenue stream become diversified. Management is focusing on business
development efforts in order to contract with new customers and develop a
horizontal revenue stream. However, no assurance can be given that the Company
will be able to secure these new customers.
Note 13 - SUBSEQUENT EVENTS
On May 13th, 2004, substantially all of the assets of the Company were acquired
by IceWeb, Inc., through its wholly owned subsidiary Propster, Inc. IceWeb, Inc.
provides integrated security solutions, content delivery software and
professional consulting services to both public and private enterprises. The
assets that were acquired included, software licenses, source code, potential
patents and trademarks, cash, hardware, and equipment for a combined stock and
cash value of approximately $1,290,000. The Company was issued 1,500,000 shares
of IceWeb, Inc. common stock and options to purchase 1,500,000 shares of IceWeb,
Inc. common stock exercisable at a price of $0.34 per share and expiring May 13,
2009. In addition, the $150,000 note payable to SunTrust Bank was assumed by
IceWeb in lieu of a cash payment to DevElements, Inc. The SunTrust liability was
an open-ended revolving line of credit in the amount of $150,000, principle due
on demand and interest charged at a rate of prime plus 2.00%.
(b) Pro Forma Financial Statements of Business Acquired
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Combined Financial Statements of IceWeb, Inc.
and DevElements, Inc. gives effect to the acquisition of assets of DevElements,
Inc., under the purchase method of accounting prescribed by Accounting
Principles Board Opinion No. 16, Business Combinations. These pro forma
statements are presented for illustrative purposes only. The pro forma
adjustments are based upon available information and assumptions that management
believes are reasonable. The Unaudited Pro Forma Combined Financial Statements
do not purport to represent what the results of operations or financial position
of IceWeb would actually have been if the acquisition had in fact occurred on
January 1, 2003 nor do they purport to project the results of operations or
financial position of IceWeb for any future period or as of any date,
respectively.
These Unaudited Pro Forma Combined Financial Statements do not give effect to
any restructuring costs or to any potential cost savings or other operating
efficiencies that could result from the merger between IceWeb and DevElements.
You should read the financial information in this section along with IceWeb's
historical financial statements and accompanying notes in prior Securities and
Exchange Commission filings and in this amended Current Report on Form 8-K.
page 12
ICEWEB, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
MAY 12, 2004
Pro Forma Adjustments
--------------------------
DevElements IceWeb Debit Credit Pro Forma
----------- ----------- ---------- --------- -----------
Current assets:
Cash ........................... $ 102,706 $ 93,432 $ $ $ 196,138
Accounts receivable, net ....... 60,287 847,907 908,194
Other current assets ........... 7,164 - 7,164
---------- ----------- ---------- --------- -----------
Total current assets ........... 170,157 941,339 1,111,496
Property and equipment .............. 128,042 382,851 510,893
Less: Accumulated depreciation ...... (125,459) (279,911) (405,370)
---------- ----------- ---------- --------- -----------
Property and equipment, net ......... 2,583 102,940 105,523
Intangible assets ................... - 718,353 (a) 1,267,260 1,985,613
Deposits ............................ - 18,585 18,585
Due from related party .............. - 21,260 21,260
---------- ----------- ---------- --------- -----------
Total assets ........................ $ 172,740 $ 1,802,477 $ 3,242,477
---------- ----------- ---------- --------- -----------
Liabilities and stockholders' equity
Current liabilities:
Accounts payable ............... $ 79,771 $ 774,363 (a) $ 79,771 $ 774,363
Accrued Expense ................ 13,530 85,584 (a) 13,530 85,584
Accrued lease liability ........ 439,183 - (a) 439,183 0
Deferred income ................ - 31,716 31,716
Notes payable - related parties 13,000 425,411 (a) 13,000 425,411
Note payable ................... 150,000 - 150,000
---------- ----------- ---------- --------- -----------
Total current liabilities ........... 695,484 1,317,074 1,467,074
---------- ----------- ---------- --------- -----------
Stockholders' equity:
Common Stock ........................ 10,398 39,772 (a) 10,398 (a) 1,500 41,272
Additional paid in capital .......... - 3,199,900 (a) 1,288,500 4,488,400
Accumulated deficit ................. (533,142) (2,754,269) (a) 533,142 (2,754,269)
---------- ----------- ---------- --------- -----------
Total stockholders' equity .......... (522,744) 485,403 1,775,403
---------- ----------- ---------- --------- -----------
Total liabilities and stockholders'
equity ............................ $ 172,740 $ 1,802,477 $ 3,242,477
---------- ----------- ---------- --------- -----------
page 13
ICEWEB, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
Pro Forma Adjustments
---------------------
DevElements IceWeb Debit Credit Pro Forma
----------- ----------- --------- ---------- ------------
Revenues ................................... $ 2,852,664 $ 3,187,052 $ 6,039,716
Direct Costs ............................... 1,991,178 2,258,999 4,250,177
----------- ----------- ------------
Gross Profit ............................... 861,486 928,053 1,789,539
Selling, general and administrative expenses 1,017,502 1,037,422 2,054,924
----------- ----------- ------------
Income from operations ..................... (156,016) (109,369) (265,385)
Other income (expense):
Other income ............................... - 183,320 183,320
Interest expense ........................... (12,606) (41,720) (54,326)
----------- ----------- ------------
Net Income ................................. $ (168,622) $ 32,231 $ (136,391)
----------- ----------- ------------
Basic & Diluted Loss per common share ...... $ (0.00)
Weighted average common shares outstanding . 38,190,000
page 14
ICEWEB, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED MAY 12, 2004
Pro Forma Adjustments
---------------------
DevElements IceWeb Debit Credit Pro Forma
----------- ----------- --------- ---------- ------------
Revenues ................................... $ 681,615 $ 2,748,141 $ 3,429,756
Direct Costs ............................... 453,948 1,986,873 2,440,821
----------- ----------- ------------
Gross Profit ............................... 227,667 761,268 988,935
Selling, general and administrative expenses 723,042 938,627 1,661,669
----------- ----------- ------------
Income from operations ..................... (495,375) (177,359) (672,734)
Other income (expense):
Other income ............................... - 38,652 38,652
Interest expense ........................... (3,998) (18,563) (22,561)
----------- ----------- ------------
Net Income ................................. $ (499,373) $ (157,270) ($656,643)
----------- ----------- ------------
Basic & Diluted Loss per common share ...... $ (0.00)
Weighted average common shares outstanding . 39,983,000
Pro Forma Adjustments:
(a) To give effect to the acquisition of DevElements as of May 12, 2004,
for $1,290,000, a summary of the transaction is as follows:
Purchase price .................................................... $1,290,000
Fair market value of the assets acquired .......................... (172,740)
Liabilities assumed ............................................... 150,000
----------
Goodwill .......................................................... 1,267,260
The $439,183 lease liability was not assumed by IceWeb, Inc.
page 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ICEWEB Inc.
Dated: October 27, 2004 By: /s/ John R. Signorello
---------------- ----------------------
John R. Signorello,
Chairman and CEO
page 16