8-K/A 1 f8ka.txt FORM 8-K/A AMENDMENT WITH FINANCIALS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 8-K/A Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 7, 2001 iJOIN SYSTEMS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 0-26901 65-0869393 -------- ------- ---------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File No.) Identification No.) 2505 Second Avenue, Suite 500, Seattle, Washington 98121 -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (206) 374-8600 -------------------------------------------------- Registrant's telephone number, including area code -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of the Business Acquired. --------------------------------------------- Historical financial statements for iJoin, Systems Inc. consisting financial statements and notes relating to Right! Systems, Inc. and consolidated financial statements and notes relating to iJoin.com, Inc., are provided herein on pages F-3 through F-36 of this Report. (b) Pro Forma Financial Information and Exhibits. -------------------------------------------- Pro Forma financial information relating to iJoin Systems, Inc. and giving effect to the acquisition is provided herein on pages F-37 through F-40. (c) Exhibits -------- None 2 INDEX TO FINANCIAL STATEMENTS INDEX TO HISTORICAL FINANCIAL STATEMENTS OF IJOIN SYSTEMS, INC.

F-2 Financial Statements and Report of Independent Certified Public Accountants Right! Systems, Inc. Boise, Idaho Technology Resale Business September 30, 2000 C O N T E N T S Page Report of Independent Certified Public Accountants 3 FINANCIAL STATEMENTS BALANCE SHEET 4 STATEMENTS OF OPERATIONS AND CHANGES IN PARENT COMPANY EQUITY (DEFICIT) 5 STATEMENTS OF CASH FLOWS 6 NOTES TO FINANCIAL STATEMENTS 7 F-3 Report of Independent Certified Public Accountants -------------------------------------------------- Board of Directors Right! Systems, Inc. Boise, Idaho Technology Resale Business We have audited the accompanying balance sheet of Right! Systems, Inc. Boise, Idaho Technology Resale Business (Company) as of September 30, 2000, and the related statements of operations and changes in parent company equity (deficit), and cash flows for the two 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 of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Right! Systems, Inc. Boise, Idaho Technology Resale Business as of September 30, 2000, and the results of its operations and its cash flows for the two years then ended, in conformity with accounting principles generally accepted in the Unites States of America. GRANT THORNTON LLP Seattle, Washington July 13, 2001 F-4 Right! Systems, Inc. Boise, Idaho Technology Resale Business BALANCE SHEET September 30, 2000 ASSETS Current assets Accounts receivable $ 977,254 Inventories 176,382 Other current assets 19,735 ----------- Total current assets 1,173,371 Property and equipment, net 216,331 Intangible asset, net 165,508 ----------- Total assets $ 1,555,210 =========== LIABILITIES AND PARENT COMPANY DEFICIT Current liabilities Lines of credit $ 842,132 Accounts payable 337,748 Accrued liabilities 77,434 Deferred revenue 20,424 Shareholder loans 285,357 ----------- Total current liabilities 1,563,095 Commitments -- Parent company deficit (7,885) ----------- Total liabilities and parent company deficit $ 1,555,210 =========== The accompanying notes are an integral part of this financial statement. F-5 Right! Systems, Inc. Boise, Idaho Technology Resale Business STATEMENTS OF OPERATIONS AND CHANGES IN PARENT COMPANY EQUITY (DEFICIT) Years ended September 30, 2000 1999 ------------ ------------ Net sales $ 10,065,919 $ 9,389,489 Cost of sales 8,855,749 8,204,810 ------------ ------------ Gross profit 1,210,170 1,184,679 Operating expenses Selling and marketing 469,255 504,727 General and administrative 1,234,131 1,228,428 ------------ ------------ Total operating expenses 1,703,386 1,733,155 ------------ ------------ Loss from operations (493,216) (548,476) Other expenses Interest (60,684) (40,002) Other (23,690) (13,696) ------------ ------------ Net loss (577,590) (602,174) Parent company equity, beginning balance 241,736 505,122 Advances to Boise TRB by parent company 327,969 338,788 ------------ ------------ Parent company equity (deficit), ending balance $ (7,885) $ 241,736 ============ ============ The accompanying notes are an integral part of these financial statements. F-6 Right! Systems, Inc. Boise, Idaho Technology Resale Business STATEMENTS OF CASH FLOWS Years ended September 30, 2000 1999 ----------- ----------- Increase (decrease) in cash Cash flows from operating activities Net loss $ (577,590) $ (602,174) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 127,577 190,428 Loss on sale and disposal of equipment 16,683 2,678 Changes in operating assets and liabilities: Accounts receivable 637,595 (1,283,944) Inventories 143,434 (259,263) Other current assets 25,559 (45,294) Accounts payable (288,333) 480,936 Accrued liabilities (9,980) 18,753 Deferred revenue (2,235) 7,632 ----------- ----------- Net cash provided by (used in) operating activities 72,710 (1,490,248) Cash flows from investing activities Purchases of property and equipment (36,945) (79,158) Proceeds from sale of equipment 31,534 22,882 ----------- ----------- Net cash used in investing activities (5,411) (56,276) Cash flows from financing activities Payments on shareholder loans (162,500) (11,344) Proceeds from shareholder loans 220,876 213,325 Advances from Parent Company 202,969 338,788 Proceeds from lines of credit, net (328,644) 1,005,755 ----------- ----------- Net cash provided by (used in) financing activities (67,299) 1,546,524 ----------- ----------- Net change in cash -- -- Cash at beginning of period -- -- ----------- ----------- Cash at end of period $ -- $ -- =========== =========== Supplemental cash flow information and non-cash financing activities: Interest paid $ 65,590 $ 28,175 Forgiveness of shareholder loan increasing parent company equity $ 125,000 $ -- The accompanying notes are an integral part of these financial statements. F-7 Right! Systems, Inc. Boise, Idaho Technology Resale Business NOTES TO FINANCIAL STATEMENTS September 30, 2000 NOTE A - BACKGROUND AND BASIS OF PRESENTATION Effective February 6, 2001, iJoin.com, Inc. and iJoin RSI Acquisition LLC (herein collectively referred to as "iJoin") acquired certain assets and assumed certain liabilities of Right! Systems, Inc. Boise, Idaho Technology Resale Business (Boise TRB or Company). Boise TRB is a division of Right! Systems, Inc. and is not a separate legal entity. Boise TRB's primary business is the resale of computer hardware, installation, configuration, network consulting and computer training, primarily to customers located in Idaho. Following the acquisition, Right! Systems, Inc. retained the right to sell the same and similar products under its existing Olympia, Washington operations. Right! Systems, Inc. also retained the outstanding accounts receivable, payables, debt and a portion of the accrued liabilities of the Boise TRB assets and liabilities as presented in the financial statements as of September 30, 2000. iJoin purchased the inventory, other current assets, property and equipment and a portion of the accrued liabilities for $312,307 and 1,300,000 shares of iJoin's Series C convertible preferred stock. The balance sheet as of September 30, 2000, and statements of operations and changes in parent company equity (deficit) and cash flows of Boise TRB for the years ended September 30, 2000 and 1999 include the accounts related to Boise TRB within Right! Systems, Inc., on a carved-out basis, and exclude the customers to be retained by Right! Systems, Inc. Accordingly, the statements include sales and related expenses of Boise TRB. Excluded from the accompanying statements are the effects of sales and related expenses of Right! Systems, Inc.'s Olympia, Washington operations. Boise TRB does not maintain certain stand-alone corporate support functions. Therefore, corporate general and administrative expenses, and certain other expenses have been allocated to Boise TRB for the purpose of these financial statements as set forth in note F. Allocations are based on the assumptions that the Company's management believes are reasonable. It is impracticable to determine whether such costs are comparable to those that would have been incurred on a stand-alone basis. All cash transactions were funded directly by Right! Systems, Inc. Remittances from sales to customers were collected by Right! Systems, Inc. Accordingly, Boise TRB has no cash on a stand-alone basis. Trade accounts receivable represent the amounts due from specified customers of Boise TRB as of September 30, 2000. Accounts payable and the balance due on the lines of credit represents an estimate of the liability to suppliers and financial institutions for purchases that relate to Boise TRB customer receivables and inventory as of September 30, 2000. Shareholder loans as of September 30, 2000 represent advances made to Boise TRB to support operations. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows. 1. Revenue Recognition ------------------- Revenue is derived from the resale of computer hardware, installation and configuration of systems to end-users. Revenue from the sale of each system is recognized upon delivery of the product if remaining vendor obligations are insignificant and collection of the resulting receivable is probable, otherwise revenue from such systems is deferred until such time as vendor obligations are met and collection is reasonably assured. F-8 Right! Systems, Inc. Boise, Idaho Technology Resale Business NOTES TO FINANCIAL STATEMENTS September 30, 2000 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES - Continued Revenue also includes service revenue, primarily for training and consulting. Advance payments made for service revenue is deferred and recognized as services are performed. 2. Accounts Receivable ------------------- Boise TRB considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is provided. Should amounts become uncollectible, they will be charged to operations when that determination is made. 3. Inventories ----------- Inventories are valued at the lower of cost or market utilizing the first-in, first-out (FIFO) cost basis. Inventories consist primarily of computer hardware and parts. 4. Property and Equipment ---------------------- Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is charged to operations over the estimated useful service period of the assets ranging from three to seven years using the double declining balance method. Leasehold improvements are amortized over the lives of the respective leases or the service lives of the improvements, whichever is shorter. 5. Intangible Asset ---------------- Goodwill is the excess of cost over the fair value of net assets acquired. Accumulated amortization is computed on the straight-line method over fifteen years and totaled $26,694 at September 30, 2000. Impairment is recognized in operating results if expected future operating undiscounted cash flows of the acquired assets is less than the carrying value of the goodwill. 6. Pro Forma Income Taxes (unaudited) ---------------------------------- Federal and state income taxes are accounted for in accordance with Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Under the liability method specified by SFAS No. 109, a deferred tax asset or liability is determined based on the difference between the financial statement and tax bases of assets and liabilities, as measured by the enacted tax rates assumed to be in effect when these differences reverse. Boise TRB is not a separate legal or taxable entity; accordingly its results are included in Right! Systems, Inc.'s corporate income tax returns. If Boise TRB were a separate taxable entity, it would have recorded a deferred tax asset of approximately $500,000 at September 30, 2000, which is based primarily on its net operating losses during the two years then ended. However, a full valuation allowance eliminating this amount would also have to been recorded, because of the uncertainty surrounding the future realization of the asset. 7. Advertising ----------- Advertising costs are expensed as incurred and totaled approximately $22,000 and $16,000 for the years ended September 30, 2000 and 1999, respectively. F-9 Right! Systems, Inc. Boise, Idaho Technology Resale Business NOTES TO FINANCIAL STATEMENTS September 30, 2000 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES - Continued 8. Use of Estimates ---------------- In preparing the Company's financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses, including allocations necessary to present the Boise operations on a carve-out basis, during the reporting period. Actual results could differ from those estimates. 9. Concentrations of Credit Risk ----------------------------- Boise TRB's customers are located primarily in Idaho and two customers accounted for approximately 21% and 13% of Boise TRB's revenues for the year ended September 30, 2000. For the year ended September 30, 1999, two customers accounted for approximately 14% each of Boise TRB's revenues. Additionally, the Company does not require its receivables to be collateralized, as such the Company's receivables are unsecured. As of September 30, 2000 and 1999, 98% and 89%, respectively, of the Company's purchases were made directly through the flooring line of credit described in note D. NOTE C - PROPERTY AND EQUIPMENT Property and equipment consists of the following at September 30, 2000: Office furniture and equipment $ 466,418 Vehicle 7,054 Software 6,325 Leasehold improvements 1,881 ---------- 481,678 Less accumulated depreciation 265,347 ---------- $ 216,331 ========== NOTE D - LINES OF CREDIT Right! Systems, Inc. has a flooring line of credit with Transamerica Commercial Finance Company, which provides borrowing up to $6,000,000, guaranteed by a stockholder. The line bears interest on balances outstanding over 40 days at prime rate (9.5% at September 30, 2000) plus 2% and is collateralized by accounts receivable and general intangibles of Right! Systems, Inc. The agreement requires Right! Systems, Inc. to maintain minimum levels of tangible net worth and minimum debt coverage. As of September 30, 2000 Right! Systems, Inc. was in compliance with these financial covenants. As of September 30, 2000, the outstanding balance allocated to Boise TRB totaled $452,132. F-10 Right! Systems, Inc. Boise, Idaho Technology Resale Business NOTES TO FINANCIAL STATEMENTS September 30, 2000 NOTE D - LINES OF CREDIT - Continued Right! Systems, Inc. also has a line of credit agreement with a bank, which provides borrowing up to $700,000. The line bears interest at prime rate plus .75% and matures February 15, 2001. The line is collateralized by inventory, accounts receivable, equipment and general intangibles of Right! Systems, Inc. As of September 30, 2000, the outstanding balance allocated to Boise TRB totaled $390,000. NOTE E - SHAREHOLDER LOANS Right! Systems, Inc. at times borrows funds from its stockholders to support operations. The loans are unsecured and provide for yearly payments of interest at a rate of 12% per annum. At September 30, 2000, shareholder loans allocated to Boise TRB totaled $285,357. NOTE F - DIRECT AND ALLOCATED EXPENSES The accompanying statements of operations are allocated based on the physical location of personnel and related costs. The statement of operations includes an allocation of various shared costs based upon the aggregate of direct expenses compared to the total of such costs and expense for Right! Systems, Inc. as a whole. Interest expense was allocated based on Boise TRB debt as a percentage of total Right! Systems, Inc. debt. NOTE G - COMMITMENTS 1. Operating Lease Obligations --------------------------- Boise TRB conducts a portion of its operations utilizing a leased facility classified as an operating lease, which expires in August 2002. The following is a schedule of approximate future minimum lease payments under such operating lease. Year ending September 30, -------------------------- 2001 $ 159,000 2002 136,000 --------- $ 295,000 ========= Rent expense for the leased facility totaled approximately $167,000 for each of the years ended September 30, 2000 and 1999. F-11 Right! Systems, Inc. Boise, Idaho Technology Resale Business NOTES TO FINANCIAL STATEMENTS September 30, 2000 NOTE H - PROFIT SHARING PLAN Right! Systems, Inc. has a qualified profit sharing plan (401(k)), which covers substantially all full-time employees meeting certain eligibility requirements. The annual contribution is determined by the Board of Directors and is limited to amounts allowed under the provisions of the Internal Revenue Code. Right! Systems, Inc. made no contributions to the plan for the years ended September 30, 2000 and 1999. F-12 Right! Systems, Inc. Boise, Idaho Technology Resale Business BALANCE SHEET December 31, 2000 (unaudited) ASSETS Current assets Accounts receivable $1,020,844 Inventories 174,022 Other current assets 10,665 ---------- Total current assets 1,205,531 Property and equipment, net 188,180 Intangible assets, net 162,304 ----------- Total assets $ 1,556,015 =========== LIABILITIES AND PARENT COMPANY EQUITY Current liabilities Lines of credit $ 876,479 Accounts payable 194,191 Accrued liabilities 67,274 Deferred revenue 18,919 Shareholder loans 285,357 ----------- Total current liabilities 1,442,220 Commitments -- Parent company equity 113,795 ----------- Total liabilities and parent company equity $ 1,556,015 =========== The accompanying notes are an integral part of this financial statement. F-13 Right! Systems, Inc. Boise, Idaho Technology Resale Business STATEMENTS OF OPERATIONS AND CHANGES IN PARENT COMPANY EQUITY Three month period ended December 31, (unaudited) 2000 1999 ----------- ----------- Net sales $ 1,847,762 $ 2,397,302 Cost of sales 1,601,409 2,090,771 ----------- ----------- Gross profit 246,353 306,531 Operating expenses Selling and marketing 97,227 118,899 General and administrative 277,724 299,039 ----------- ----------- Total operating expenses 374,951 417,938 Loss from operations (128,598) (111,407) Other expenses Interest (20,710) (15,585) Other (2,353) (5,595) ----------- ----------- Net loss $ (151,661) $ (132,587) Parent company equity (deficit), beginning balance (7,885) 241,736 Advances to Boise TRB by parent company 273,341 289,675 ----------- ----------- Parent company equity, ending balance $ 113,795 $ 398,824 =========== =========== The accompanying notes are an integral part of these financial statements. F-14 RIGHT! SYSTEMS, INC. BOISE, IDAHO TECHNOLOGY RESALE BUSINESS STATEMENTS OF CASH FLOWS Three month period ended December 31, (unaudited) 2000 1999 Increase (decrease) in cash Cash flows from operating activities Net loss $(151,661) $(132,587) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 31,895 47,608 Changes in operating assets and liabilities: Accounts receivable (43,590) 585,423 Inventories 2,360 24,239 Other current assets 9,070 28,028 Accounts payable (143,557) (507,775) Accrued liabilities (10,160) (11,995) Deferred revenue (1,505) 18,988 --------- --------- Net cash provided by (used in) operating activities (307,148) 51,929 Cash flows from investing activities Purchases of property and equipment (540) (16,263) Net cash used in investing activities (540) (16,263) --------- --------- Cash flows from financing activities Advances from Parent Company 273,341 289,675 Proceeds from lines of credit, net 34,347 (517,796) Proceeds from shareholder loans -- 200,000 Payments on shareholder loans -- (7,545) --------- --------- Net cash provided by (used in) financing activities 307,688 (35,666) --------- --------- Net change in cash -- -- Cash at beginning of period -- -- --------- --------- Cash at end of period $ -- $ -- ========= ========= The accompanying notes are an integral part of these financial statements. F-15 Right! Systems, Inc. Boise, Idaho Technology Resale Business NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS December 31, 2000 The unaudited interim financial statements of Right! Systems, Inc. Boise, Idaho Technology Resale Business (Boise TRB) as of December 31, 2000, and for each of the three month periods ended December 31, 2000 and 1999, are prepared on a basis consistent with the audited financial statements of Boise TRB as of September 30, 2000 and for each of the two years then ended. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year ending September 31, 2001. The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements of Boise TRB, included herein, as of September 30, 2000. F-16 Report of Independent Certified Public Accountants -------------------------------------------------- Board of Directors iJoin Systems, Inc. We have audited the accompanying balance sheet of iJoin Systems, Inc. (a development stage company) as of December 31, 2000 and the related statements of operations, stockholders' equity, and cash flows for the period from inception (January 6, 2000) through December 31, 2000. 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 audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 iJoin Systems, Inc. as of December 31, 2000 and the results of its operations and its cash flows for the period from inception (January 6, 2000) through December 31, 2000, 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 shown in the financial statements, the Company incurred a net loss of $2,677,103 during the period ended December 31, 2000. This factor, among others, as discussed in note D to the financial statements, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in note D. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. GRANT THORNTON LLP Seattle, Washington July 13, 2001 F-17

The accompany notes are an integral part of this financial statement. F-18 iJoin Systems, Inc. (a development stage company) STATEMENT OF OPERATIONS Inception (January 6, 2000) through December 31, 2000 Revenue $ - Operating expenses Selling and marketing expense 123,179 Research and development 82,105 General and administrative 2,367,760 ----------- Total operating expenses 2,573,044 ----------- Loss from operations (2,573,044) Other income (expense) Interest (134,852) Other 30,793 ----------- Net loss $(2,677,103) ===========+ Net loss per share-basic and dilutive $ (0.52) =========== The accompanying notes are an integral part of this financial statement. F-19 iJoin Systems, Inc. (a development stage company) STATEMENT OF STOCKHOLDERS' EQUITY Inception (January 6, 2000) through December 31, 2000

The accompanying notes are an integral part of this financial statement. F-20

The accompanying notes are an integral part of this financial statement. F-21 iJoin Systems, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE A - NATURE OF BUSINESS iJoin Systems, Inc. (Company or iJoin), a development stage company, was incorporated on January 6, 2000, as iJoin.com, Inc. for the purpose of developing an "intelligent business Web" to streamline information technology (IT) processes and automatically integrate disparate vendors into a single source. A single source provider enables IT professionals to procure, deploy, and maintain custom solutions and lower their total cost of technology ownership. As of December 31, 2000, the intelligent business Web development has not yet been completed and planned principal operations have not commenced. Accordingly, the Company is considered to be a development stage company. In April 2001, the Company became iJoin, Inc. and in May 2001, in conjunction with the reverse acquisition described in note B, the Company became a wholly-owned subsidiary of iJoin Systems, Inc. NOTE B - BASIS OF PRESENTATION Effective May 7, 2001, iJoin entered into an Agreement and Plan of Merger (Acquisition) with Tech Creations, Inc. (Tech), a non-operating public company, and a wholly-owned subsidiary of Tech formed for purposes of the Acquisition. As a result of the Acquisition, all of iJoin's issued and outstanding shares of common and preferred stock, with the exception of Series B preferred stock, were exchanged for Tech's common stock at a 5 to 1 ratio and Tech's name was changed to iJoin Systems, Inc. In conjunction with the Acquisition, the then shareholders of iJoin, Inc. appointed all three members of the Company's and the Company's Board of Directors. The new Board of Directors and former management of iJoin also assumed control of the operations and management of the Company. The Acquisition resulted in the owners and management of iJoin having effective operating control of the combined entity. Under accounting principles generally accepted in the United States of America, the Acquisition is considered to be a capital transaction in substance, rather than a business combination. That is, the Acquisition is equivalent to the issuance of stock by iJoin for the net monetary assets of Tech accompanied by a recapitalization, and is accounted for as a change in capital structure. Accordingly, the accounting for the Acquisition is identical to that resulting from a reverse acquisition, except that no goodwill is recorded. Under reverse takeover accounting, the post-reverse-acquisition financial statements of the "legal acquirer" Tech, are those of the "legal acquiree" (iJoin), (i.e. the accounting acquirer). Accordingly, the financial statements of Tech as of and for the year ended December 31, 2000, are the historical financial statements of iJoin and have been adjusted for the share exchange contained in the Agreement and Plan of Merger as follows: 1. Every five shares of iJoin common and preferred stock, excluding 1,500,000 shares of Series B preferred stock, issued and outstanding was automatically converted into the right to receive one share of Tech common stock. The 1,500,000 shares of Series B preferred stock were exchanged for 300,000 shares of preferred stock of Tech. The common stock and preferred stock exchanged, in addition to the existing Tech shares outstanding, collectively resulted in the recapitalization of the Company. 2. Loss per share calculations include the Company's change in capital structure for all periods presented. F-22 iJoin Systems, Inc. (a development stage company) NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the financial statements is as follows. 1. Research and Development ------------------------ Research and development costs are expensed as incurred. 2. Receivables ----------- During 2000, the Company entered into an agreement to purchase the assets of another company for approximately $338,000. The agreement was subsequently terminated in 2000, which resulted in the Company recording a loss of $150,000 for a portion of the non-refundable purchase price. In addition, the Company issued equity exchangeable into 150,000 common shares with a fair value of $90,000 as a settlement fee. As of December 31, 2000, the Company's refundable purchase price totaling approximately $188,000 is included in receivables in the accompanying financial statements. This balance was collected in 2001. Also included in receivables is $127,000 due from an attorney, of which approximately $72,000 was colleted in 2001 and the remaining amount was used to offset subsequent legal costs. 3. Property and Equipment ---------------------- Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of the assets ranging from three to seven years. Leasehold improvements are depreciated over the lesser of the useful lives of the improvements or the term of the lease. The Company accounts for software development costs in accordance with Statement of Position (SOP) 98-1, Accounting for the Cost of Computer Software Developed or Obtained for Internal Use. SOP 98-1 requires all costs related to the development of internal use software, other than those incurred during the application development stage, to be expensed as incurred. Costs incurred during the application development stage are required to be capitalized and amortized over the estimated useful life of the software. The Company capitalized $254,478 of internally developed software costs incurred during 2000. Capitalized software costs are amortized on a straight-line basis over a useful life of three years. There was no amortization related to capitalized software for the period ended December 31, 2000, because the assets were put into service in 2001. 4. Valuation of Long-Lived Assets ------------------------------ The Company periodically evaluates the carrying amount of its long-lived assets, including, but not limited to, property and equipment and other assets. The carrying amount of a long-lived asset is considered impaired when the undiscounted net cash flow from such asset is estimated to be less than its carrying amount. Management does not believe that there were any long-lived assets that were subject to impairment at December 31, 2000. F-23 iJoin Systems, Inc. (a development stage company) NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 5. Prepaid Expenses ---------------- Prepaid expenses include a $350,000 deposit paid to a consultant for services to be performed during a period of two years. As of December 31, 2000, $30,000 of the deposit has been amortized. In conjunction with the Acquisition of Tech on May 7, 2001, as described in note B, the Company determined that the services were complete and will recognize the unamortized amount of $260,000 as an expense at that date. 6. Credit Risk ----------- The Company maintains cash balances with financial institutions that exceed federally insured limits, which potentially subject the Company to concentration of credit risk. The Company has not experienced any losses related to these balances and believes that there is minimal credit risk. 7. Fair Value of Financial Instruments ----------------------------------- At December 31, 2000, the carrying amount of cash, receivables, accounts payable and accrued expenses approximate fair value because of the short-term nature of these assets and liabilities. The carrying amounts of current obligations approximate the fair market value due to either the short-term maturity of the obligation or the variable nature of the interest rate, which is indexed to market interest rates. The carrying amount of long-term obligations approximate the fair market value based upon rates available for similar loans. 8. Loss Per Share -------------- Basic loss per share is based on the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding was 5,171,972 for the period from inception (January 6, 2000) through December 31, 2000. Diluted loss per share includes the effect of all potentially dilutive common stock issuances. Diluted loss per share is not presented because the effect would be anti-dilutive. At December 31, 2000, there were 721,440 shares of potentially issueable common stock. 9. New Authoritative Accounting Pronouncements ------------------------------------------- In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial Statements. SAB 101 provides guidance on applying accounting principles generally accepted in the United States to revenue recognition in financial statements and is effective in the fourth quarter of all fiscal years beginning after December 15, 1999. During 2000, the Company currently did not have revenues, so the implementation of SAB 101 did not have an impact on the Company's operating results. In April 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44 (FIN 44), Accounting for Certain Transactions Involving Stock Compensation, an interpretation of APB Opinion No. 25. FIN 44 is effective for transactions occurring after July 1, 2000. The application of FIN 44 did not have an impact on the Company's financial statements. F-24 iJoin Systems, Inc. (a development stage company) NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 10. Use of Estimates ---------------- The preparation of financial statements in conformity 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE D - MANAGEMENT PLANS The Company is a development stage company as defined under Statement of Financial Accounting Standards No. 7. The Company is devoting substantially all of its present efforts to establishing a new business and its planned operations have not commenced and, accordingly, no operating revenues have been derived to date. The Company has incurred recurring losses from operations and has a total accumulated development stage deficit of $2,677,103 at December 31, 2000. The development of the Company's technology and products will not require a commitment of substantial funds, but will require some capital for new versions of the technology as new partners are introduced. As of December 31, 2000, the Company raised a total of $ 4,064,100 in equity and debt financings. The entire amount of the debt financings were subsequently converted into equity. However, the rate at which the Company expends its resources is variable, may be accelerated, and will depend on many factors. The Company will need to raise substantial additional capital to fund its operations and may seek such additional funding through public or private equity or debt financing. There can be no assurance that such additional funding will be available on acceptable terms, if at all. The Company's continued existence as a going concern is ultimately dependent upon its ability to secure additional funding for completing and marketing its technology and the success of its future operations. Additionally, the Company plans to raise the capital required to sustain operations and seek potential acquisitions to complement its business strategy. The Company is currently in discussions with several groups regarding funding, and expects to close one or more transactions in the near future. In addition to sustaining its operations, the Company intends to raise additional capital required to acquire business operations and assets consistent with its business strategy. It is the Company's strategy to acquire systems integrators perceived as profitable or as producing sufficient revenues, which acquisition would enable the Company to capitalize on the long-standing, entrenched customer relationships of the acquired business as well as increased geographic diversification. Management believes that most of these systems integrators typically only supply a portion of the IT solutions required by their customers. By leveraging these acquisitions, and taking advantage of synergies and perceived cost savings, it is the Company's intention to use its existing technology and strategic partnerships to capture a share of the remaining IT solution needs of such customers and realize increased gross margins. In February 2001, the Company completed an acquisition of the assets of Right! Systems, Inc. Boise, Idaho Technology Resale Business. F-25 iJoin Systems, Inc. (a development stage company) NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE E - PROPERTY AND EQUIPMENT Property and equipment at December 31, 2000, consists of the following: Computer and office equipment $ 206,614 Internally developed software 254,478 Leasehold improvements 23,177 Office furniture 14,958 ------------ Total property and equipment 499,227 Less accumulated depreciation and 20,250 amortization ------------ $ 478,977 ============ NOTE F - CONVERTIBLE NOTE PAYABLE On June 5, 2000, the Company entered into a convertible loan agreement with V.C. Advantage Limited Partnership and Thomson Kernaghan & Co. Limited (Holder) collateralized by substantially all of the Company's assets in the amount of $1,000,000. The note, which is convertible into shares of common stock at $1.00 per share, was due on September 5, 2000, and bears an interest rate of 10% per year. In connection with the note payable, the Holder of the note received 60,000 warrants to purchase common stock at $1.00 per share. The fair value of the warrants were determined using the Black Scholes option pricing model resulting in a discount on the note of $77,908, which was fully amortized in 2000. The warrants may be exercised at any time until payment in full of the principal amount of the note plus accrued interest. As of December 31, 2000, the Company owed the principal amount plus accrued interest of $56,944. On February 6, 2001, the Holder converted the entire amount of principal and accrued interest, totaling $1,065,602, into 213,121 shares of common stock; accordingly, the note is presented as long-term in the financial statements as of December 31, 2000. As an incentive to convert, the Company gave the Holder 40,000 additional shares of common stock which will result in $254,000 of additional interest expense, which represents the fair value of the common stock issued. F-26 iJoin Systems, Inc. (a development stage company) NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE G - COMMITMENTS The Company currently leases office space and equipment for its operations under three noncancelable operating leases. The office space lease includes an amendment that decreases the price to exclude utilities and maintenance beginning in May 2001. The leases expire at various times through April 2005. Rent expense for the period ended December 31, 2000, totaled approximately $75,000. As of December 31, 2000, the minimum future rental payments under the lease agreements are as follows: Year ending December 31, ------------------------ 2001 $135,400 2002 139,700 2003 62,600 2004 3,000 2005 100 ---------- $340,800 ========== NOTE H - INCOME TAXES The Company accounts for income taxes using the asset and liability method under which deferred tax assets, including the tax benefit from net operating loss carryforwards, and liabilities are determined based on temporary differences between the book and tax bases of assets and liabilities. A valuation allowance has been established for the full amount of the deferred tax assets due to the uncertainty of realizing the benefits of the net deferred tax assets. At December 31, 2000, the Company had net operating loss carryforwards of approximately $2,550,000, which may be used to offset future taxable income. Should certain changes in the Company's ownership occur, there could be a limitation on the utilization of its net operating loss carryforwards as defined under section 382 of the Internal Revenue Code. The Company's net operating carryforward expires in 2020. The effective rate differs from the federal statutory rate due to the provision of a valuation allowance and certain nondeductible entertainment expenses. F-27 iJoin Systems, Inc. (a development stage company) NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE H - INCOME TAXES - Continued The Company's net deferred tax assets (liabilities) consist of the following at December 31, 2000: Net operating loss carryforwards $ 841,000 Stock-based compensation 24,000 Accrued vacation 6,000 Depreciation (5,000) ------------ Net deferred tax assets 866,000 Less valuation allowance (866,000) ------------ Net deferred tax asset $ - ============ NOTE I - STOCK OPTIONS Effective January 6, 2000, the Board of Directors (Board) adopted a combined stock option plan (Plan) which provides for the issuance of incentive and nonstatutory common stock options to employees, directors and consultants of the Company. While options totaling 772,000 were committed to under employment plans, no shares were granted to under the Plan. Additionally, as of December 31, 2000, 115,000 options were granted to non-employees outside of the Plan. The stock options were valued using the Black-Scholes option pricing model with the following weighted average assumptions for options granted during the period ended December 31, 2000: risk-free interest rates ranging from 5.85% to 6.77%; an expected life of three years for non-employees; 80% stock price volatility for non-employees; and no dividends over the expected life. Stock compensation expense for professional fees and consulting services totaled $71,458 for 2000. F-28 iJoin Systems, Inc. (a development stage company) NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE J - STOCKHOLDERS' EQUITY Convertible Preferred Stock --------------------------- The Company had issued three series of convertible preferred stock (Series A, Series B, and Series C, collectively referred to as preferred stock) through three private offerings. In January 2000, the Company issued 4,000,000 shares of Series A convertible preferred stock at a price of $.01 per share. In February 2000, the Company issued 1,500,000 shares of Series B convertible preferred stock at a price of $.50 per share. In June 2000, the Company issued 2,274,000 shares of Series C convertible preferred stock at a price of $1.00 per share. In conjunction with the recapitalization as discussed in note B, (i) Series A and C preferred stock were converted into comon shares of iJoin and then exchanged for common stock of Tech and (ii) Series B preferred stock was exchanged for Tech's preferred stock. Common Stock Warrants --------------------- During 2000, the Company issued warrants in conjunction with the sale of preferred stock for 586,440 shares of common stock at a weighted average exercise price of $0.60 per share to various existing shareholders and officers. The warrants expire one to five years from date of issuance, beginning in June 2001. No warrants were exercised during 2000. F-29 iJoin Systems, Inc. (a development stage company) NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE K - RELATED PARTY TRANSACTIONS As of December 31, 2000, the Company accrued $113,367 for financing and consulting services rendered by a shareholder, which was expensed in 2000. On June 28, 2000, the Company entered into a promissory note with an officer of the Company totaling $99,900 for the sale and purchase of shares of Series C preferred stock. The promissory note was due in December 2000 and is included in subscription receivable in the financial statements as of December 31, 2000. In July 2001, the Company rescinded the sale and purchase whereby the note was forgiven and the shares reversed back to the Company. In addition, accounts payable at December 31, 2000, included $11,254 payable to an officer of the Company. NOTE L - SUBSEQUENT EVENTS Promissory Notes ---------------- On February 1, 2001, the Company signed a promissory note with a third party in the amount of $200,000. Also on February 1, 2001, the Company signed a promissory note with a shareholder in the amount of $150,000. The notes have no stated interest rate and mature on December 31, 2002. Acquisition of Right! Systems Boise Technology Resale Business -------------------------------------------------------------- On February 7, 2001, the Company acquired certain assets and assumed certain liabilities of the Idaho operations of Right! Systems, Inc. for a purchase price of $1,012,307. Consideration paid included $312,307 in cash and 1,300,000 shares of the Company's Series C convertible preferred stock. Net assets acquired consisted primarily of inventory, other current assets, property and equipment and accrued liabilities. The transaction was accounted for under the purchase method of accounting. The following table reflects the pro forma consolidated results of operations of the acquisition of the Right! Systems assets if it had occurred January 1, 2000. Revenues $ 10,065,919 Net loss $ (3,254,693) Loss per share $ (0.63) Stock Options Plan ------------------ Stock Options Plan In connection with the Tech Acquisition, the Company granted options to employees with exercise prices below the market value of the Company's stock. Accordingly, the Company will recognize a stock compensation expense of approximately $840,000 and deferred compensation of approximately $1,830,000 to be recognized in future service periods. F-30 iJoin Systems, Inc. CONSOLIDATED BALANCE SHEET March 31, 2001 (unaudited) ASSETS Current assets Cash $ 14,760 Accounts receivable 363,458 Related party receivable 76,671 Finished goods inventory 117,707 Prepaid expenses 302,166 Other current assets 7,526 ------------ Total current assets 882,288 Property and equipment, net 640,918 Other assets Goodwill, net 731,304 Other 42,201 ------------ Total assets $ 2,296,711 ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 667,926 Accrued liabilities 120,847 Deferred revenue 14,269 Shareholder loans 150,000 Note payable 200,000 ------------ Total current liabilities 1,153,042 Stockholders' equity Preferred stock, $0.0001 par value - authorized, 10,000,000 shares, liquidation value $750,000 30 Common stock, $0.0001 par value - authorized, 40,000,000 shares 589 Additional paid-in capital 5,230,043 Subscription receivable (139,900) Accumulated deficit (3,947,093) ------------ Total stockholders' equity 1,143,669 ------------ Total liabilities and stockholders' equity $ 2,296,711 ============== The accompanying notes are an integral part of this financial statement. F-31 iJoin Systems, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS Three month period ended March 31, (unaudited) 2001 2000 ------------ ----------- (Development Stage Company) Net sales $ 484,044 $ - Cost of sales 316,209 - ------------ ----------- Gross profit 167,835 - Operating expenses Selling and marketing 110,971 700 Research and development 1,910 32,521 General and administrative 1,065,659 11,645 ------------ ----------- Total operating expenses 1,178,540 44,866 ------------ ----------- Loss from operations (1,010,705) (44,866) Other income (expense) Interest (262,944) - Other 3,659 1,248 ------------ ----------- Net loss $(1,269,990) $ (43,618) ============ =========== Net loss per share - basic and dilutive $ (0.22) $ (0.01) ============ =========== The accompanying notes are an integral part of these financial statements. F-32

The accompanying notes are an integral part of this financial statement. F-33

The accompanying notes are an integral part of this financial statement. F-34 iJoin Systems, Inc. NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 (unaudited) The unaudited interim financial statements of iJoin Systems, Inc. (Company) as of March 31, 2001, and for each of the three-month periods ended March 31, 2001 and 2000, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2001. The accompanying unaudited financial statements and related notes should be read in conjunction with the audited financial statements of the iJoin Systems, Inc., enclosed herein, as of December 31, 2000, and the audited carved-out financials of Right! Systems, Inc. Boise, Idaho Technology Resale Business. Presentation ------------ Effective May 7, 2001, iJoin entered into an Agreement and Plan of Merger (Acquisition) with Tech Creations, Inc. (Tech), a non-operating public company and a wholly-owned subsidiary of Tech. As a result of the Acquisition, all of iJoin's issued and outstanding shares of common and preferred stock, with the exception of Series B preferred stock, were exchanged for Tech's common stock at a 5 to 1 ratio and Tech's name was changed to iJoin Systems, Inc. (Parent). In conjunction with the Acquisition, the then shareholders of iJoin, Inc. appointed all three of the members of the Board of Directors of the Company and the Parent. The new Board of Directors and former management of iJoin, Inc. also assumed control of the operations and management of the resulting company, iJoin Systems, Inc. The Acquisition resulted in the owners and management of iJoin having effective operating control of the combined entity. Under accounting principles generally accepted in the United States of America, the Acquisition is considered to be a capital transaction in substance, rather than a business combination. That is, the Acquisition is equivalent to the issuance of stock by iJoin for the net monetary assets of Tech accompanied by a recapitalization, and is accounted for as a change in capital structure. Accordingly, the accounting for the Acquisition is identical to that resulting from a reverse acquisition, except that no goodwill is recorded. Under reverse takeover accounting, the post-reverse-acquisition financial statements of the "legal acquirer" Tech, are those of the "legal acquiree" (iJoin), meaning the accounting acquirer. Accordingly, the financial statements of Tech as of and for the three-months ended March 31, 2001, are the historical financial statements of iJoin and have been adjusted for the share exchange contained in the Agreement and Plan of Merger as follows: 1. Every five shares of iJoin common and preferred stock, excluding 1,500,000 shares of Series B preferred stock, issued and outstanding was automatically converted into the right to receive one share of Tech common stock. The 1,500,000 shares of Series B preferred stock were exchanged for 300,000 shares of preferred stock of Tech. The common stock and preferred stock exchanged, in addition to the existing Tech shares outstanding, collectively resulted in the recapitalization of the Company. 2. Loss per share calculations include the Company's change in capital structure for all periods presented. F-35 iJoin Systems, Inc. NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 (unaudited) On February 7, 2001, the Company acquired certain assets and assumed certain liabilities of the Idaho operations of Right! Systems, Inc. (Boise TRB) for a purchase price of $1,012,307. Consideration paid included $312,307 in cash and 1,300,000 shares of the Company's Series C convertible preferred stock. Net assets acquired consisted primarily of inventory, other current assets, property and equipment and accrued liabilities. The transaction was accounted for under the purchase method of accounting. The accompanying statement of operations for the three-month period ended March 31, 2001 includes the results of operations of Boise TRB as of February 6, 2001. As a result of the acquisition of the assets of Right! Systems, Inc. Boise, Idaho Technology Resale Business, the Company is no longer considered a development stage company. The Statement of Operations for the three months ended March 31, 2001 includes the operations of Right! Systems, Inc. Boise, Idaho Technology Resale Business beginning on the acquisition date of February 6, 2001. Goodwill representing the excess of cost over the fair value of net assets acquired is being amortized over its estimated useful life of 10 years. 2. Revenue Recognition ------------------------- Revenue is derived from the resale of computer hardware, installation and configuration of systems to end-users. Revenue from the sale of each system is recognized upon delivery of the product if remaining vendor obligations are insignificant and collection of the resulting receivable is probable, otherwise revenue from such systems is deferred until such time as vendor obligations are met and collection is reasonably assured. In conjunction with the acquisition, the Company entered into an agreement with Right! Systems, Inc. of Olympia, Washington (Right! Systems), whereby Right! Systems is processing a portion of the Company's sales and purchases of inventory for resale on behalf of the Company. Upon completion of the transaction by Right! Systems, the gross margin of the transaction, less a percentage kept by Right! Systems, is remitted to the Company and recorded as revenue. 3. Accounts Receivable ---------------------- The Company considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is provided. Should amounts become uncollectible, they will be charged to operations when that determination is made. 4. Inventories ----------------- Inventory is valued at the lower of cost or market utilizing the first-in, first-out (FIFO) cost basis. Inventory consists primarily of computer hardware and parts. 5. Loss Per Share -------------------- Basic loss per share is based on the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding for the three-month periods ended March 31, 2001 and 2000 was 5,686,991 and 4,846,686, respectively. Diluted loss per share includes the effect of all potentially dilutive common stock issuances. Diluted loss per share is not presented because the effect would be anti-dilutive. At March 31, 2001 and 2000, there were 780,440 and 220,000, respectively, shares of potentially issueable common stock. F-36 iJoin Systems, Inc. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)

The accompanying notes are an integral part of this financial statement. F-37 iJoin Systems, Inc. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)

The accompanying notes are an integral part of this financial statement. F-38 iJoin Systems, Inc. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (unaudited) The following unaudited pro forma condensed consolidated financial information for iJoin Systems, Inc., (Company) gives effect to the acquisition of Right! Systems, Inc.'s Boise, Idaho Technology Resale Business (Boise TRB) on February 6, 2001 by the Company's wholly-owned subsidiary, iJoin, Inc. (iJoin). On May 7, 2001, iJoin also completed a reverse merger transaction with Tech Creations, Inc. (Tech). The results of operations of Tech have been omitted from the pro forma financial information as its assets and net loss are less than $1,000. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2000, give pro forma effect to the acquisition of Boise TRB by iJoin as if the acquisition and related transactions had occurred on January 1, 2000. The pro forma consolidated balance sheet as of March 31, 2001 has been omitted as the acquisition of Boise TRB is reflected in the unaudited interim balance sheet of iJoin Systems, Inc. as of March 31, 2001. The adjustments relating to the acquisition, and other adjustments are described in the pro forma adjustments note below. iJoin Systems, Inc.'s fiscal year comprises nearly twelve calendar months beginning on January 6, 2000 (inception) and concluding on December 31, 2000. Boise TRB's fiscal year end began on October 1, 1999 and concluded on September 30, 2000. iJoin Systems. Inc.'s interim period comprises of three months beginning January 1, 2001 and concluding on March 31, 2001 and Boise TRB's interim period comprises of three months beginning October 1, 2000 and concluding on December 31, 2000. This unaudited pro forma condensed consolidated financial information combines similar periods for the purposes of this filing. Basic loss per share is based on the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding as of December 31, 2000 and March 31, 2001 was 5,171,972 and 5,686,991, respectively. Diluted loss per share includes the effect of all potentially dilutive common stock issuances. Diluted loss per share is not presented because the effect would be anti-dilutive. At December 31, 2000 and March 31, 2001, there were 1,327,740 and 1,386,740, respectively, shares of potentially issueable common stock. The unaudited pro forma condensed consolidated financial information does not purport to represent the results of operations or the financial position of the Company that would have resulted had the acquisition been consummated as of the date or for the period indicated. The historical financial information set forth below has been derived from, and is qualified by reference to, the financial statements of iJoin Systems, Inc. and the financial statements of Boise TRB and should be read in conjunction with those financial statements and notes thereto. The pro forma adjustments are based on purchase accounting adjustments that were determined in accordance with the purchase accounting provisions of Accounting Principles Board Opinion (APB) No. 16, Business Combinations, and related pronouncements. The unaudited pro forma adjustments do not include certain material charges or credits and related tax effects, which result directly from the foregoing acquisition and reverse merger transactions and will be included in the operations of the Company during the year subsequent to these transactions. These charges or credits include, but are not limited to, the following: o A portion of revenue generated from the Boise TRB operations will be recorded at the net amount to be received from Right! Systems, Inc. on certain sales transactions rather than the gross amount, as reflected in the accompanying pro forma condensed consolidated financial statements. The estimated amount of the difference in revenues cannot be estimated at this time. F-39 iJoin Systems, Inc. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (unaudited) o In connection with the Tech Acquisition, the Company granted options to employees with exercise prices below the market value of the Company's stock. Accordingly, the Company will recognize a stock compensation expense of approximately $840,000 and deferred compensation of approximately $1,830,000 to be recognized in future service periods. o In connection with the reverse acquisition, the Company charged to expense $260,000 representing the remaining unamortized amount of the prepaid consulting expense. The Company determined that the consulting company had fulfilled its service obligation upon the completion of the reverse acquisition transaction. PRO FORMA ADJUSTMENTS Pro forma adjustments for the unaudited pro forma condensed statements of operations for the year ended December 31, 2000 and three-month period ended March 31, 2001, are as follows: (a) Represents the amortization of three months of goodwill capitalized with an estimated life of ten years, less amortization of goodwill totaling approximately $3,200 recorded on Boise TRB prior to the acquisition. Amounts shown represent the fair value of intangible assets acquired at the date of acquisition that are capitalized in accordance with APB 16 and related pronouncements. (b) Represents the amortization of twelve months of goodwill capitalized with an estimated life of ten years, less amortization of goodwill totaling approximately $12,800 recorded on Boise TRB prior to the acquisition. Amounts shown represent the estimated fair value of intangible assets acquired at the date of acquisition that are capitalized in accordance with APB 16 and related pronouncements. F-40 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this amended report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: July 20, 2001 iJoin Systems, Inc. By: _/s/ Raj Kapoor_________ Name: Raj Kapoor Title: Vice President, Finance and Operations (duly authorized officer)

I JOIN SYSTEMS INC 8-K/A