Pro Forma Financial Information for Merger of High Speed Net Solutions, Inc. and JSJ Capital Corp.

Summary

High Speed Net Solutions, Inc. (HSNS) acquired all shares of JSJ Capital Corp. in exchange for 50,000 shares of HSNS restricted common stock and $400,000 in cash. Following the acquisition, JSJ was merged into HSNS, making HSNS the surviving company. This document provides unaudited pro forma financial statements showing the combined financial position and results as if the merger had occurred at the end of 1999. It details the impact of the acquisition, including legal fees, stock issuance, and recapitalization, to help stakeholders understand the financial effects of the merger.

EX-1.5 3 g64304a1ex1-5.txt PROFORMA FINANCIAL STATEMENTS AFTER MERGER 1 EXHIBIT 1.5 PRO FORMA FINANCIAL INFORMATION On April 21, 2000, High Speed Net Solutions, Inc., a Florida Corporation ("HSNS") acquired 100% of the issued and outstanding shares of common stock of JSJ Capital Corp., a Nevada Corporation ("JSJ"), in exchange for 50,000 shares of 144 restricted common stock of HSNS and $400,000 in cash. As a result of HSNS's 100% ownership of JSJ, the Board of Directors of HSNS approved the merger of JSJ into HSNS whereby HSNS will be the surviving corporation. The pro forma exhibits include a combining consolidated balance sheet as of December 31, 1999 that reflects the effect of the stock issued and cash paid for legal service in connection with the acquisition. The acquisition has been accounted for as an issuance of HSNS common stock in exchange for the net monetary assets of JSJ, accompanied by a recapitalization. In addition, a combining consolidated statement of operations is included which presents loss from operations for the year ended December 31, 1999. The pro forma balance sheet is presented assuming the reverse acquisition occurred as of December 31, 1999 and the pro forma statements of operations are presented assuming the reverse acquisition occurred on January 1, 1999. 2 High Speed Net Solutions, Inc. Pro Forma Combined Balance Sheet (Unaudited) December 31, 1999 10/31/99 JSJ Capital Pro Forma Pro Forma Audited Corp Adjustment Combined ------------------------------------------------------ ASSETS CURRENT ASSETS Cash and Equivalents $ 248,740 $30 $ (400,000)(a) $ -- 1,642,202 (b) 1,490,972 Other Current Assets -- -- ------------------------------------------------------ TOTAL CURRENT ASSETS 248,740 30 1,242,202 1,490,972 Fixed Assets, Net 3,720 3,720 Investment in Common Stock of Related Party 1,894,127 1,894,127 Prepaid Royalties 4,528,125 4,528,125 ------------------------------------------------------ TOTAL ASSETS $6,674,712 $30 $1,242,202 $7,916,944 ====================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable and Accrued Expenses $ 899,876 -- -- $ 899,876 Payables to Related Parties 589,815 -- -- 589,815 ------------------------------------------------------ TOTAL CURRENT LIABILITIES 1,489,691 -- -- 1,489,691 Stockholders' Equity: Series A Convertible Preferred Stock, $0.001 par value, 5,000,000 shares authorized 2,000 shares issued and outstanding on a pro forma basis -- 1,642,202 (b) 1,642,202 Common Stock, $0.001 par value, 50,000,000 shares authorized, 21,062,149 issued and outstanding at December 31, 1999 and 21,112,149, pro forma 21,062 67 (67)(c) 50 (d) 21,112 Additional Paid-in Capital 17,272,820 233 67 (c) (50)(d) (270)(e) 17,272,800 Deficit accumulated during development stage (11,881,242) (270) (400,000)(a) 270 (e) (12,281,242) Treasury Stock, at cost (227,619) -- -- (227,619) ------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY 5,185,021 30 1,242,202 (6,427,253) ------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,674,712 $30 $1,242,202 $7,916,944 ====================================================== (a) Represents $400,000 in legal fees paid in connection with the merger. As this amount exceeds the net assets of the acquired Company, this charge will be recognized in earnings upon consummation of the acquisition. (b) Reflects the issuance of 2,000 shares of preferred stock for net cash proceeds of $1.6 million in February, 2000. (c) Reflects the elimination of the historical common stock of JSJ Capital Corporation. (d) Records the issuance of 50,000 restricted common shares of HSNS to effect the recapitalization. (e) Reflects the elimination of the historical accumulated deficit of JSJ Capital Corporation. 3 High Speed Net Solutions, Inc. Pro Forma Combined Statement of Operations (Unaudited) Year ended December 31, 1999 10/31/99 JSJ Capital Pro Forma Pro Forma Audited Corp Adjustment Combined ------------------------------------------------------ Selling, general and administrative expenses $ 7,515,797 $270 $-- (b) $ 7,516,067 Interest Expense 2,655,749 -- 2,655,749 ------------------------------------------------------ Net loss $(10,171,546) $270 $-- (b) $(10,171,816) ====================================================== Per share amounts (basic and diluted) -- Net loss (0.53) -- (0.53) Weighted average shares outstanding 19,030,492 50,000 (a) 19,080,492 ====================================================== (a) The adjustment records the effect of the acquisition and merger which resulted in an increase in the weighted average shares outstanding. (b) Upon consummation of the merger, the Company will recognize $400,000 in legal expenses representing legal fees paid in connection with the merger in excess of net assets of JSJ acquired. This charge is not included as a pro forma adjustment as it is not expected to have a continuing impact on the Company.