Exhibit 99.1 --------------------- TRANSLATION --------------------- FINANCIAL STATEMENTS as of January 1st to December 31st 1999 (according to U.S. GAAP) of SUPER NET AG NEU-ISENBURG SUPERNET AKTIENGESELLSCHAFT NEU-ISENBURG COMMENTS TO THE FINANCIAL STATEMENTS (in conformance with U.S. GAAP) as per December 31st, 1999 Page 2 I. NATURE OF THE BUSINESS The company's activity comprises the development, the distribution, the management and sale of any products and services related to internet, particularly those concerning electronic commercial issues. Furthermore, the company is licensed to establish, to distribute, to manage and to deal with online services, telephone-services, software, hardware, data banks, federal-ranging networks, infrastructures, any transfert-issues, trading-goods, shopping-systems, call-enters and written information related to internet-services. Besides, the company is allowed to introduce as well as to follow up and to execute internet businesses. II. ACCOUNTING AND VALUATION PRINCIPLES The financial statements of SuperNet Aktiengesellschaft, Neu-Isenburg, as of December 31st, 1999 have been established for the first time in accordance with the United States Generally Accepted Accounting Principles (US GAAP). TURNOVER The sales have been realised in conformance with the Statement of Position 97-2 "Software Revenue Recognition" of the American Institute of Certified Public Accountants. The requirements allowing turnover are the existence of a legally confirmed contract, the successful delivery of software, a fixed license-fee, respectively a licence-fee to be determined as well as probable payment. These prior conditions are to be fulfilled. Payments for maintenance are to be received in proportion during contract duration. Turnover related to consulting services of projects are to be realised in accordance with SOP 97-2 and SOP 81-1. LIQUID ASSETS AND SHORT-TERM SECURITY INVESTMENTS Liquid assets are composed by cash on hand and cash in bank. Short-term security investments are valued at current value, as far as they are to be kept until maturity. RECEIVABLES AND OTHER ASSETS Receivables and other assets are valued at par value. Doubtful accounts of customers receivables have been accrued for individually. Furthermore, there has been provided a lump-sum accrual of 1 % upon the remaining liabilities (excluding VAT) for general payment risks and claims. Page 3 INTANGIBLE ASSETS The intangible assets comprise industrial property rights and EDP-software, which is to be depreciated over a useful life of 2 to 4 years. To start with the fiscal year 1999, the company takes in account the Statement of Position ("SOP") 98-1 to deal with the costing of self-developed or acquired software for internal use. In accordance with SOP 98-1, some costs related to development or acquisition of internally used software are to be activated over the useful life of the software and to be depreciated. According to the German Commercial Law Act, the activation of self-developed software is not allowed. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are valued at acquisition costs. Maintenance expenses, which do not increase the asset's value nor cause a prolongation of their useful life, are to be classified as current expenses. Profits or losses related to the disposition of assets are shown under other operating profits or expenses. Fixed assets are depreciated in the straight line and declining balance method over their expected useful life. The fixed useful lives are stated below:
Assets Depreciation method Useful life - ------ ------------------- ----------- INTANGIBLE ASSETS - - industrial property rights straight line 10 years - - EDP software straight line 2 - 4 years PROPERTY, PLANT AND EQUIPMENT, NET Computer network straight line 4 years Vehicles declining 5 years Environmental devices straight line 4 years Fixtures, Furniture and office equipment straight line 5 years PC, personal Notebooks etc. straight line 4 years Office equipment straight line / declining 10 years Communication devices straight line 4 years Fittings declining 4 years Server straight line 4 years
Page 4 DECLINE IN VALUE OF LONG LIFE ASSETS The company checks the impairments of it's long life assets, whenever any occurrence or circumstance suggest that the book value of those assets possibly does not seem to be justified any more. The book-values of long life assets are controlled by means of expected (discounted) cash-flows. Whenever this control proves a insufficiency, the assets are depreciated on their market value. In case of assets whose market value is difficult to state, they are depreciated to the estimated market value by means of the expected (discounted) cash-flow. ACCOUNTS PAYABLE The accounts payable are fixed at their repayable amounts. OTHER ACCRUALS The other accruals take into account any recognisable risks and uncertain commitments. DEFERRED TAXES With respect to the tax consequences and differences between assets and liabilities valuations on the US-GAAP-balance sheet and the relevant fiscal basis of assessment, deferred taxes are yearly accrued for; they are based on tax rates and taxable earnings in the year that probably compensates these variances. Besides, the existing deferred taxes from tax carry forward as per US-GAAP are to be taken into account. Activated ? deferred taxes are to be, if necessary, depreciated to the expected amount. Changes of the deferred taxes, assets or liabilities, are booked at the relevant cut-off date with effect on the result. USE OF ESTIMATIONS The establishment of the financial statements according to the US-GAAP has required estimations and suppositions by the management, which are likely to influence the amounts of the financial statements. The effective results may differ from these suppositions. Page 5 III. COMMENTS OF THE BALANCE SHEET LIQUID ASSETS AND SHORT-TERM SECURITIES
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM Cash on hand 9 1 Cash at banks 809 465 ---------------- --------------- Liquid assets 818 466 ---------------- --------------- Short term securities 1 9 ---------------- ---------------
The securities are common stock of Massa Aktiengesellschaft amounting to KDM 1. RECEIVABLES AND OTHER ASSETS a) TRADE RECEIVABLES
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM Trade receivables 283 0 ---------------- --------------- 283 0 ./. Individual depreciations 55 0 Lump-sum depreciations 2 0 ---------------- --------------- Trade receivables net 226 0 ---------------- ---------------
b) OTHER ASSETS The other assets essentially are VAT claims due to the tax administration. Page 6 TANGIBLE ASSETS
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM ACQUISITION COSTS: Other plant, factory and office equipment 518 90 Prepayments on tangible assets and construction in progress 0 5 ---------------- --------------- 518 95 ./. Accumulated depreciations 129 3 ---------------- --------------- Tangible assets, net 389 92 ---------------- ---------------
INTANGIBLE ASSETS
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM ACQUISITION COSTS: Concessions, patents, licenses, trade marks and similar rights and assets 441 1 ./. Accumulated depreciation 134 0 ---------------- --------------- Concessions, patents, licenses, trade marks and similar rights and assets 307 1 ---------------- ---------------
LONG-TERM LIABILITIES a) LIABILITIES DUE TO BANKS
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM Liabilities due to banks 37 41 ./. Discount 1 1 ---------------- --------------- Long-term liabilities due to banks 36 40 ./. Thereof due at short term 17 12 ---------------- --------------- 19 28 ---------------- ---------------
Page 7 b) ACCOUNTS PAYABLE, TRADE
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM Long term accounts payable 93 0 ./. Thereof due at short term 58 0 ---------------- --------------- 35 0 ---------------- ---------------
c) MATURITY The due dates of the long term accounts payable are listed on the table below:
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM 1999 0 12 2000 75 14 2001 52 14 2002 3 1 ---------------- --------------- 128 41 ---------------- ---------------
d) LOAN CONDITIONS The long term accounts payable against banks are composed by several loans with a duration up to 3 years. Amortizations are monthly done. The interest rates are 1,9%. All of the loans are guaranteed by the financed vehicles pledged as security. The long term trade payables have a duration up to 2 years. Amortizations are monthly done. The interest rate is of 7,9%. e) CREDIT LINES At present, the company has not been granted any credit line for its current accounts nor any short term credits. Page 8 OTHER ACCRUALS
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM Accruals for year end closing and auditing fees 40 12 Accruals for vacation pay 21 0 Accruals for expected invoices 15 0 Other accruals 11 0 ---------------- --------------- Total amount 87 12 ---------------- ---------------
The other accruals essentially concern court and legal costs of KDM 10. During the business year 1999, the SuperNet AG had filed a claim against a former customer who filed a cross action. The management believe that there is no utilisation threatening from this counterclaim. OTHER LIABILITIES
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM Payable due to shareholders 6 2 Others 458 8 ---------------- --------------- 464 10 ---------------- ---------------
The other liabilities essentially contain a short term loan of KDM 413. SUBSCRIBED CAPITAL The capital increase decided during the period from January 1st to December 31, 1999 and the evolution of the subscribed capital of the company are presented below:
31.12.1998 --------------- KDM As per January 1, 1999 100 Capital increase 400 --------------- As per December 31, 1999 500 ---------------
The subscribed capital had been fully paid in at balance date. At December 31, 1999, 100.000 shares at book-value of DM 5 had been subscribed for. Page 9 By shareholders' resolution dated 24.9.1999, the capital of [Euro] 255.645,94 had been increased by [Euro] 23.008,13 to [Euro] 278.654,07, divided into 109.000 shares issued at a price of [Euro] 102,26 (total amount of shares [Euro] 920.340,00). The new shares are profitable to start from January 1, 2000. At balance date, the capital increase has not yet been registered at the trade register. The payments received for the capital increase therefore have been presented under the balance position "payments received for the execution of the decided capital increase". The capital stock of the company has been conditionally increased by resolution of the shareholders' assembly of September 24, 1999 by up to [Euro] 13.932,70 issuing at up to 5.450 new shares. The conditioned increase is meant to grant rights to employees and members of the management of SuperNet AG, respectively the shareholder Pegasus Beteiligung AG, respectively it's succession in title being entitled to hold certificates of participation, the issuance of which the shareholders' assembly dated 24.09.1999 of SuperNet AG has granted. The newly acquired shares take part at the benefices, which they are entitled to receive by option. At closing date, no certificates of participation have been attributed. By additional resolution of the shareholders' assembly dated 10.12.1998, an authorised capital of KDM 250 has been created up to 1.12.2003. OTHER FINANCIAL COMMITMENTS AND LEGAL LIABILITY At December 31, 1999, the company has the following commitments which are spread as follows:
maturity 2000 maturity 2001 maturity 2005 OPERATING LEASES to 2004 and later -------------------- ------------------- ------------------ KDM KDM KDM Vehicle leasing 14 15 0 Soft- and Hardware Leasing 77 121 0 -------------------- ------------------- ------------------ 91 136 0 -------------------- ------------------- ------------------
maturity 2000 maturity 2001 maturity 2005 CONTRACT OF PREMISES to 2004 and later -------------------- ------------------- ------------------ KDM KDM KDM Building 139 427 0 -------------------- ------------------- ------------------ 139 427 0 -------------------- ------------------- ------------------
Page 10 SALES REVENUES The turnover of 1999 has developed as follows:
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM Turnover: SuperConnect 359 0 Hardware 68 0 Web-Sites 134 0 Other sales 65 0 ---------------- --------------- Total amount 626 0 ---------------- ---------------
TAX ON INCOME Due to the loss situation, no taxes on income have occurred. As a consequence, a cut-off for taxes only has been operated for the loss carry forward of the year. The deferred taxes to be activated upon the loss carry forward are as follows:
31.12.1999 31.12.1998 ---------------- --------------- KDM KDM : Carry-forward of taxes 1.656 50 Deferred taxes 841 25 Depreciation 336 25 ---------------- --------------- 505 0 ---------------- ---------------
Due to uncertainties regarding the future utilisation of the loss carry-forwards, the position concerning deferred taxes has been depreciated at 40 %. INCOME BY THE SHARE The key number for the income by the share is computed as follows: 1.1. to 31.12.1999 DM Income of the period after taxes -859.787 Weighed Average of the shares circulating during the period 80.000 Per Share -10,75
Page 11 STAFF NUMBER During the business year 1999, 8 employees (except management) have been employed. At the end of the business year 1999, a total of 9 employees have been employed. EVENTS OCCURRING AFTER CLOSING DATE By resolution of the management and with the approval of the supervisory board dated 22.02.2000, the authorised capital has been increased by DM 54.500, split in 10.900 shares and with an issue price of DM 91,92 a share. MANAGEMENT OF THE COMPANY Members of the management board are: Mr. Florian Zgunea, Neu-Isenburg (since December 1 1998) According to par. 95 AktG (as well as to par. 6 of the corporate articles), the company has a supervisory board, which consists of 6 members; they are: Mr. Alexander Menche, Frankfurt, Prof. Dr. Klaus Steiner, Heidelberg Mr. Gerhard A. Koning, Kelkheim Dr. Michael Pesch, Weisbaden (since 24.09.1999) Mr. Volkmar Kruspig, Munich (since 24.09.1999) Mr. Heinz Beldi, Genf/Switzerland (since 24.09.1999) Neu-Isenburg, March 2000 .............. Florian Zgunea