EX-99.1 2 ex99-1.txt EXHIBIT 99.1 1 EXHIBIT 99.1 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) FINANCIAL STATEMENTS FOR THE PERIOD FROM MARCH 1, 1999 (INCEPTION) THROUGH SEPTEMBER 30, 1999 (WITH UNAUDITED INFORMATION AS OF DECEMBER 31, 1999 AND FOR THE THREE MONTHS ENDED DECEMBER 31, 1999) 2 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) FINANCIAL STATEMENTS FOR THE PERIOD FROM MARCH 1, 1999 (INCEPTION) THROUGH SEPTEMBER 30, 1999 (WITH UNAUDITED INFORMATION AS OF DECEMBER 31, 1999 AND FOR THE THREE MONTHS ENDED DECEMBER 31, 1999) 3 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) CONTENTS INDEPENDENT AUDITORS' REPORT 3 FINANCIAL STATEMENTS Balance Sheets 4 Statements of Operations 5 Statements of Members' Equity and Stockholders' Deficit 6 Statements of Cash Flows 7 Summary of Accounting Policies 8 - 10 Notes to Financial Statements 11 - 13 4 INDEPENDENT AUDITORS' REPORT To The Board of Directors and Stockholders of MonsterBook.com Inc. (fka: MonsterBook.com, L.L.C., a California Limited-Liability Company) We have audited the accompanying balance sheet of MonsterBook.com, Inc. (fka: MonsterBook.com, L.L.C., a California Limited-Liability Company) as of September 30, 1999 and the related statement of operations, members' equity, and cash flows for the period from March 1, 1999 (Inception) through September 30, 1999. 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 generally accepted auditing standards. 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 MonsterBook.com, Inc. (fka: MonsterBook.com, L.L.C., a California Limited-Liability Company) as of September 30, 1999, and the results of its operations and its cash flows for the period from March 1, 1999 (Inception) through September 30, 1999, in conformity with generally accepted accounting principles. BDO Seidman, LLP San Francisco, California May 17, 2000 5

6 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) BALANCE SHEETS

7 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) STATEMENTS OF OPERATION

8 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) STATEMENTS OF MEMBERS' EQUITY / STOCKHOLDERS' DEFICIT

9 MONSTERBOOK.COM INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) STATEMENTS OF CASH FLOWS

10 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) SUMMARY OF ACCOUNTING POLICIES (INFORMATION FOR DECEMBER 31, 1999 IS UNAUDITED) THE COMPANY MonsterBook.com, Inc. (fka: MonsterBook.com, L.L.C., a California Limited-Liability Company) (the "Company") was formed on March 1, 1999 for the purpose of developing an online and offline e-business directory. On December 2, 1999 the Company merged with and into MonsterBook.com, Inc. ("MonsterBook"), a newly organized Delaware corporation. On April 13, 2000 Transmedia Asia Pacific, Inc. ("Transmedia"), Asia Merger Sub II, Inc. ("Merger Sub"), a wholly owned subsidiary of Transmedia and MonsterBook consummated a merger agreement ("Merger Agreement") pursuant to which Merger Sub merged with and into MonsterBook and accordingly MonsterBook became a wholly owned subsidiary of Transmedia. EQUIPMENT AND Equipment is stated at cost. Depreciation is computed DEPRECIATION for financial reporting purposes using the straight-line method over estimated useful lives of three years. Replacements and improvements that significantly extend asset lives are capitalized. Maintenance and repairs are charged to expense as incurred. REVENUE RECOGNITION The Company sells business advertising space on their website and in a hardbound directory distributed periodically for free to subscribers. The price charged to advertisers includes a listing on the website for one year and inclusion in a predetermined amount of hardbound directories. The Company allocates 80% of this type of advertising revenue to the value of the hardbound directory because it is an advertising concept unique to the Company. Once the directory is distributed and collection is likely, revenue is recognized on the 80% portion ratably over the distribution period; generally three months. The remaining 20% of revenue is allocated to the website listing. The Company recognizes revenue on the remaining 20% ratably as the one-year website listing lapses. The Company sold advertising described above with terms that extended the payment due until actual distribution of the directories. Since the first distribution had not occurred by September 30, 1999, revenue was only recognized on that portion of sales which represented website listings for which time had elapsed and payment was received from advertisers. 11 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) SUMMARY OF ACCOUNTING POLICIES (INFORMATION FOR DECEMBER 31, 1999 IS UNAUDITED) During the three months ended December 31, 1999, the Company gave away free advertising space relating to the website and hardbound directory in order to generate interest in the directory and attract well known companies. Discounted sales are recognized in accordance with Company policy as stated above. Revenue related to discounted sales is not recognized until delivery (i.e., address is listed on the website or directory is distributed). The Company has entered into agreements with other businesses to receive referral fees from sales initiated through the MonsterBook website. WEBSITE DEVELOPMENT The Company capitalizes a portion of the labor costs associated with substantive website development and improvement activities. Labor costs associated with maintenance and routine changes are expensed in the period incurred. Amortization is recorded using the straight-line method over five years. INCOME TAXES For the period from March 1, 1999 (Inception) through September 30, 1999, no provision has been made for income tax expense or benefit arising from Company operations as the Members report their respective share of the Company's income or loss on their federal and state tax returns. Commencing with its change to regular corporation status on December 2, 1999, the Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. Under SFAS No. 109, deferred income tax liabilities and assets are determined based on the difference between the financial reporting amounts and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates in effect for the years in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. ADVERTISING EXPENSE The cost of advertising is expensed as incurred. The Company incurred $29,095 in advertising costs for the period from March 1, 1999 (Inception) through September 30, 1999. USE OF ESTIMATES The Company's financial statements are prepared in conformity with generally accepted accounting principles which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date 12 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) SUMMARY OF ACCOUNTING POLICIES (INFORMATION FOR DECEMBER 31, 1999 IS UNAUDITED) of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NEW ACCOUNTING In June 1998, the Financial Accounting Standards PRONOUNCEMENTS Board issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities. SFAS 133, as amended, is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. As the Company historically has not invested in derivatives, it does not expect adoption of SFAS No. 133 to have a material effect, if any, on its financial position or results of operations. 13 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) SUMMARY OF ACCOUNTING POLICIES (INFORMATION FOR DECEMBER 31, 1999 IS UNAUDITED) 1. RELATED PARTY The Company received a non-interest-bearing advance TRANSACTIONS during the three months ended December 31, 1999 from an Officer, totaling $17,000 to be repaid within one year. The Company received funds from relatives of Officers' during the three months ended December 31, 1999 under a short term convertible subordinated note totaling $40,000 bearing interest at 8%, due within six months. The Company received a non-interest-bearing advance of $10,000 during the three months ended December 31, 1999 from an individual employee with an entity that subsequently merged with the Company (Transmedia). The advance term is six months. The company advanced funds to an officer to be repaid within one year. The balance was $7,392 at September 30, 1999. 2. CAPITAL AND The Company leases office space under a one-year OPERATING LEASES operating lease which expires in May 2000. Rent included in general and administrative expenses totaled $6,000 for the period from March 1, 1999 (Inception) to September 30, 1999. The Company leases equipment (classified as "Equipment" on the balance sheet) under long-term agreements, which are classified as capital leases. The lease terms are for three years and expire in 2002. Future minimum lease payments, by year and in the aggregate, under capital leases with one year or more are as follows:

14 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) SUMMARY OF ACCOUNTING POLICIES (INFORMATION FOR DECEMBER 31, 1999 IS UNAUDITED) 3. CONTINGENCIES In January 2000, Monster Cable Products, Inc. filed a complaint against the company alleging, inter alia, that the Company (a) infringes plaintiff's trademark rights in and to the mark MONSTER and the Monster family of marks, (b) dilutes plaintiff's trademark rights under the Lanham Act and (c) is engaging in unfair competition under both federal and California law by use in commerce of said marks. The suit seeks injunctive and monetary relief in excess of $300,000. In February 2000, the Company filed its answer, denying all of the material allegations in the complaint and asserting that there can be no likelihood of confusion because, among other reasons, plaintiff's purported marks are weak and the differences in the products and services of the parties make confusion highly unlikely. In February 2000, the parties served their initial discovery disclosures pursuant to federal and local court rules and have selected mediation of the dispute. No amount of potential loss has been accrued as of December 31, 1999 and September 30, 1999 as the likelihood of an unfavorable outcome cannot be determined. Subsequent to September 30, 1999 two former employees filed claims against the Company for termination benefits. At December 31, 1999 and September 30, 1999, the Company had accrued $95,000 and $21,280, respectively, based on the Company's estimate of the most likely amount of losses that it believed would be incurred. 4. YEAR 2000 The Company could be adversely affected if the (UNAUDITED) computer systems its suppliers or customers use do not properly process and calculate date-related information and data from the period surrounding and including January 1, 2000. This is commonly known as the "Year 2000" issue. Additionally, this issue could impact non-computer systems and devices such as production equipment, elevators, etc. While the Company's project to assess and correct Y2K related issues regarding the year 2000 has been completed, and the Company has not experienced any significant Y2K related events, interactions with other companies' systems make it difficult to conclude there will not be future effects. Consequently, at this time, management cannot provide assurances that the year 2000 issue will not have an impact on the Company's operations. 5. SUBSEQUENT The Company may issue stock options pursuant to its EVENTS 1999 Stock Option Plan (the "Plan") adopted in (UNAUDITED) November 1999. Employees, directors and consultants can receive options to purchase shares of the Company's Common Stock at a price generally not less than 110% of the fair value of the Common Stock on the date of grant. The Plan allows for issuance of a maximum of 8,000,000 shares of the Company's Common Stock. The 15 MONSTERBOOK.COM, INC. (FKA: MONSTERBOOK.COM, L.L.C., A CALIFORNIA LIMITED-LIABILITY COMPANY) SUMMARY OF ACCOUNTING POLICIES (INFORMATION FOR DECEMBER 31, 1999 IS UNAUDITED) options granted under the Plan are exercisable over a maximum of ten years. The options generally vest over a five-year period. Shares sold under the Plan are subject to various restrictions as to resale and right of repurchase by the Company. For the three months ended December 31, 1999, the Company granted 4,715,000 options. Options cancelled during the three months ended December 31, 1999 totaled 62,500. At December 31, 1999 there were 3,347,500 remaining options available for grant pursuant to the Plan. On April 13, 2000, the Company consummated a merger agreement with Asia Merger Sub II, Inc., a wholly owned subsidiary of Transmedia Asia Pacific, Inc. 16 TRANSMEDIA ASIA PACIFIC, INC. PRO-FORMA FINANCIAL INFORMATION 17 TRANSMEDIA ASIA PACIFIC, INC PRO-FORMA CONSOLIDATED STATEMENT OF OPERATIONS 3 MONTHS ENDED DECEMBER 31, 1999

18 TRANSMEDIA ASIA PACIFIC, INC PRO-FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1999

19 TRANSMEDIA ASIA PACIFIC, INC PRO-FORMA CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1999

20 TRANSMEDIA ASIA PACIFIC, INC PRO-FORMA CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1999

21 TRANSMEDIA ASIA PACIFIC, INC PRO-FORMA CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1999

22 TRANSMEDIA ASIA PACIFIC, INC PRO-FORMA CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1999

23 TRANSMEDIA ASIA PACIFIC, INC MONSTERBOOK - PRO-FORMA ADJUSTMENTS (1) NOTE 1: TO RECORD THE COST OF ACQUIRING THE COMMON STOCK OF MONSTERBOOK

24 TRANSMEDIA ASIA PACIFIC, INC MONSTERBOOK - PRO-FORMA ADJUSTMENTS (2) NOTE 3: TO RECORD AMORTIZATION OF GOODWILL

TRANSMEDIA ASIA PACIFIC INC 8-K/A