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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) June 2, 1998
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ENTER TECH CORP.
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(Exact name of registrant as specified in its charter)
Nevada 0-21275 84-1349553
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State or other jurisdiction Commission (I.R.S. Employer
of incorporation File Number Identification No.)
430 East 6th Street, Loveland, Colorado 80537
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (970) 669-5292
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Walnut Capital, Inc.
5770 South Beach Court, Greenwood Village, CO 80121
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(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant
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On June 2, 1998, Enter Tech Corp. (formerly Walnut Capital, Inc.) (the
"Company") completed a merger of the Company and Links, Ltd., a Wyoming
corporation, whereby the Company was the survivor. Pursuant to the Articles
of Merger filed in the respective States of Nevada and Wyoming, the Company's
name was changed from Walnut Capital, Inc. to Enter Tech Corp. to more
accurately describe the proposed business of the Company. Pursuant to the
Agreement and Plan of Merger, the Company issued 3,235,000 shares of its
common stock to the sole shareholder of Links, Ltd., Mach One Corporation, 430
East 6th Street, Loveland, Colorado. Prior to the merger transaction the
Company had 1,250,000 shares of its common stock issued and outstanding, of
which 835,000 shares were cancelled as part of the merger transaction. On the
effective date of the merger transaction the Company had 3,650,000 shares of
its common stock issued and outstanding. Thus, Mach One Corporation currently
owns 72.1% of the issued and outstanding common stock of the Company and it is
essentially a majority-owned subsidiary of Mach One Corporation.
As part of the merger transaction officers of the Company resigned, a
new board of directors was appointed and new officers were elected. The
Company's officers and directors are as follows:
Name and Address Position
---------------- --------
Josh Foss President
1800 South State Street
Orem, Utah 84097
Mike Handy Secretary
1947 South Columbia Lane
Orem, Utah 84097
David Matus Director
8854 Coneflower Place
Parker, Colorado 80134
A. W. Hogan Director
705 West 2nd Street
Gordon, Nebraska 69343
Gene Gregory Director
561 Red Deer Road
Franktown, Colorado 80116
Mach One Corporation is a Nevada corporation with offices at 430 East
6th Street, Loveland, Colorado 80337, Telephone No. (970) 669-5292. Its
officers and directors are as follows:
Name and Address Position
---------------- --------
D. William Thomas President/Chief Executive Officer/
Director
George Beros Secretary/Chief Financial Officer
Tom Montano Director
Cliff Pettee Director
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Mach One Corporation ("Mach One") has 6,144,225 shares of its common
stock issued and outstanding with a total of approximately 400 shareholders of
record. Mach One is not a reporting company under the Securities Exchange Act
of 1934.
The Company is informed that there are no beneficial holders of 5% or
more of the outstanding common stock of Mach One.
Item 2. Acquisition on Disposition of Assets
- ---------------------------------------------
Pursuant to the Agreement and Plan of Merger the Company was the
survivor of a merger with Links, Ltd. whereby 72.1% of the Company's
outstanding common stock was issued to the parent, Links, Ltd. The
acquisition of Links, Ltd. by the Company is a capital transaction accounted
for as a reverse acquisition. The fiscal year of Links, Ltd. is December 31,
1998. The Company intends to continue to use December 31 as its fiscal year
end for reporting purposes. Prior to the merger transaction the Company was a
non-operating shell.
Description of Links, Ltd. and its Proposed Business
----------------------------------------------------
Until its merger into the Company, Links, Ltd., a Wyoming corporation,
incorporated on August 18, 1997, was a wholly-owned subsidiary of Mach One and
was a development stage company for accounting purposes. It had no revenues
from operations from its inception. Links, Ltd. was incorporated for the
purpose of developing kiosks, or vending machines, through which to market
computer software, music and possibly digital video products. As conceived,
each kiosk vending machine would have software, music and eventually digital
video stored on disks or hard drives and potential customers would place an
order into the machine to purchase software, music and eventually digital
television from a menu, triggering the machine to imprint the product on a
compact disk ("CD"). As conceived, the CD imprint time is expected to take
approximately 3 to 4 minutes, at which time the CD would be ejected from the
kiosk to the waiting customer. Purchases would be made by use of credit cards
or so-called smart cards read by the kiosk. As conceived, each kiosk would be
linked by telephone line and computer modem to the Company's administrative
offices to permit monitoring, performance analysis, addition and subtraction
of software and music selections and eventually digital television selections.
Further the telephone and computer modem would permit confirmation of credit
card and smart card purchases.
Links, Ltd. had, through outside vendors and some in-house expertise,
constructed a prototype of a proposed kiosk at the time of the merger
transaction. Since that time the prototype has undergone further refinement
and modification. At this time additional modification and testing is being
undertaken by an outside vendor/engineering firm located at Broomfield,
Colorado. The Company has no firm date as to when it will be able to begin
mass producing the kiosk; however, management is hopeful such production will
commence in the next few months. It currently has orders for the purchase of
thirty units at $50,000 per unit from Dr. A. W. Hogan, who is also a member of
the Company's board of directors. The Company, as a successor to Links, Ltd.,
has a contract with Dr. Hogan for the marketing and administration of sales
through certain identified locations and the division of profits after Dr.
hogan has recovered his cost. Obviously there is no assurance that the kiosks
will function as planned, be manufactured at a unit cost as anticipated nor be
ready for delivery within the next few months. All of these factors will bear
on the Company's ability to generate revenues from any projected sales.
The Company is currently seeking funding in the form of equity and debt
financing from independent sources. The initial funding is for $500,000 which
is expected to be utilized over a period of six months for research and
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development, manufacturing, if appropriate, marketing and administration. The
company has not finalized the terms of such funding nor located purchasers
committed to such funding.
The area of business in which the Company intends to engage is crowded
with many vendors and marketers, ranging from small to some of the largest
retail companies. The Company is not aware of any entity which is currently
marketing computer software, music or digital television in the manner in
which the Company is proposing, through kiosks.
Employees
---------
As of July 1, 1998 the Company had one full time employee, of which one
was an officer.
Item 7. Financial Statements and Exhibits
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(a) Financial Statements of Business Acquired.
The financial statements of Links, Ltd. at June 2, 1998 and for
the period August 18, 1997 (inception) through June 2, 1998 are
attached.
(b) Pro Forma Financial Information.
Subsuquent to the initial filing of this Form 8K/A the Company has
filed financial statements reflecting the combined business of
Links, Ltd. and the Company at June 30, 1998 and for the quarter
ended June 30, 1998 thus obviating the need to submit pro forma
financial information required by Article ll of Regulation S-X.
(c) Exhibits.
Exhibit 10-A - Agreement and Plan of Merger of May 28, 1998
between Links, Ltd. and Walnut Capital, Inc.
Exhibit 10-B - Joint Venture Agreement between Links, Ltd. and
A.W. Hogan dated September 1, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
(Registrant) ENTER TECH CORP.
(Date) September 14, 1998
BY(Signature) /s/ Josh Foss
(Name and Title) Josh Foss, President
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INDEX TO FINANCIAL STATEMENTS
LINKS, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
June 2, 1998
Report of Independent Certified Public Accountants F-2
Financial Statements:
Balance Sheet F-3
Statement of Operations F-4
Statement of Changes in Stockholder's
(Deficit) F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
F-1
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Links, Ltd.
(A Development Stage Company)
Loveland, CO 80537
We have audited the accompanying balance sheet of Links, Ltd. (A
Development Stage Company) as of June 2, 1998, and the related
statements of operations, stockholder's (deficit) and cash flows
for the period from August 18, 1997 (date of inception) through
June 2, 1998. 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 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 Links, Ltd. (A Development Stage Company) as of June 2, 1998,
and the results of its operations, changes in its stockholder's
(deficit) and its cash flows for the period from August 18, 1997
(date of inception) through June 2, 1998, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As described
in Note 2 to the financial statements, the Company has suffered
losses from operations and has a net capital deficiency that
raise substantial doubts about its ability to continue as a going
concern. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Schumacher & Associates, Inc.
Certified Public Accountants
12835 E. Arapahoe Road
Tower II, Suite 110
Englewood, Colorado 80112
August 30, 1998
F-2
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LINKS, LTD.
(A Development Stage Company)
BALANCE SHEET
June 2, 1998
ASSETS
Current Assets:
Cash $ 999
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Total Current Assets 999
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License and other intangible assets,
net of valuation allowance of $227,943 -
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Total Assets $ 999
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LIABILITIES AND STOCKHOLDER'S (DEFICIT)
Current Liabilities:
Customer deposits $ 60,000
Payable, related party 30,000
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Total Current Liabilities 90,000
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Stockholder's (Deficit):
Common Stock no par value
100,000 shares authorized
10,000 shares issued and
outstanding 10,000
Additional paid-in capital 210,003
Accumulated (deficit) during
development stage (309,004)
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Total Stockholder's (Deficit) (89,001)
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Total Liabilities and Stockholder's (Deficit) $ 999
===========
The accompanying notes are an integral part of the financial
statements.
F-3
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LINKS, LTD.
STATEMENT OF OPERATIONS
From August 18, 1997 (date of inception) through
June 2, 1998
Revenues $ -
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Operating Expenses:
Management fees 30,000
Supplies 1,387
Professional fees 34,770
Rent 6,645
Travel 5,199
Telephone 3,060
Write down of carrying value of
Technology and License Agreement 227,943
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309,004
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Net (Loss) $ (309,004)
============
(Loss) Per Share $ (3,090)
============
Weighted Average Shares
Outstanding 10,000
============
The accompanying notes are an integral part of the financial
statements.
F-4
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LINKS, LTD.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From August 18, 1997 (date of inception) through June 2, 1998
Common Stock Additional
Number of Paid-in Deficit
Shares Amount Capital Accumulated Total
---------- -------- ---------- ----------- --------
Balance at
August 18, 1997 - $ - $ - $ - $ -
Common stock
issued for
Technology
and License
contributed
at $22 per
share 10,000 10,000 210,003 - 220,003
Net loss for
the period from
August 18, 1997
(date ofinception)
through June 2,
1998 - - - (309,004) (309,004)
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Balance at
June 2, 1998 10,000 $ 10,000 $ 210,003 $ (309,004) $ (89,001)
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The accompanying notes are an integral part of the financial statements.
F-5
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LINKS, LTD.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
From August 18, 1997 (date of inception) through June 2, 1998
Cash Flows Operating Activities:
Net (loss) $ (309,004)
Increase in customer deposits 60,000
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Net Cash (Used in) Operating
Activities (249,004)
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Cash Flows from Investing Activities -
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Cash Flows from Financing Activities
Common stock issued and additional
paid-in capital 220,003
Increase in payable, related party 30,000
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Net Cash Provided by Financing
Activities 250,003
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Increase in Cash 999
Cash, Beginning of Period -
--------
Cash, End of Period $ 999
========
Interest Paid $ -
========
Income Taxes Paid $ -
========
The accompanying notes are an integral part of the financial statements.
F-6
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LINKS, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 2, 1998
(1) Summary of Accounting Policies
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This summary of significant accounting policies of Links,
Ltd. (A Development Stage Company)(Company) is presented to
assist in understanding the Company's financial statements.
The financial statements and notes are representations of
the Company's management who is responsible for their
integrity and objectivity. These accounting policies
conform to generally accepted accounting principles and have
been consistently applied in the preparation of the
financial statements.
(a) Organization and Principles of Consolidation
-------------------------------------------------
The Company was incorporated under the laws of Wyoming
on August 18, 1997. The Company was formed for the
purpose of developing kiosks, or vending machines,
through which to market computer software, music and
possibly digital video products. The Company is a
development-stage company since planned principal
operations have not yet commenced.
(b) Use of Estimates in the Preparation of Financial
Statements
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The preparation of financial statements in conformity
with generally accepted accounting principles 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 revenue and expenses during the reporting
period. Actual results could differ from those
estimates.
(c) Wholly-owned Subsidiary
----------------------------
The Company was a wholly-owned subsidiary of an entity
until June 2, 1998, the date of the business
combination described in Note 3. Expenses of the
Company were allocated to the Company by its parent
company. Had the Company not been a wholly-owned
subsidiary, operating expenses could have been
different and the differences may have been material.
F-7
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LINKS, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 2, 1998
(1) Summary of Accounting Policies
------------------------------
(d) Income Taxes
- -----------------
As of June 2, 1998, the Company had net operating losses
available for carryover to future years of approximately
$309,004, expiring in various years through 2012.
Utilization of these carryovers may be limited if there is a
change in control of the Company. As of June 2, 1998, the
Company has total deferred tax assets of approximately
$61,801 due to operating loss carryforwards. However,
because of the uncertainty of potential realization of these
tax assets, the Company has provided a valuation allowance
for the entire $61,801. Thus, no tax assets have been
recorded in the financial statements as of June 2, 1998.
(2) Basis of Presentation - Going Concern
-------------------------------------
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles,
which contemplates continuation of the Company as a going
concern. However, the Company has sustained operating
losses and has a net capital deficiency. These matters
raise substantial doubt about the Company's ability to
continue as a going concern. Management is attempting to
raise additional capital.
In view of these matters, continuing as a going concern is
dependent upon the Company's ability to meet its financing
requirements, raise additional capital, and the success of
its future operations or completion of a successful business
combination. Management believes that actions planned and
presently being taken to revise the Company's operating and
financial requirements provide the opportunity for the
Company to continue as a going concern.
(3) Business Combination
--------------------
Effective June 2, 1998, the Company was merged into Enter
Tech Corp. (formerly Walnut Capital, Inc.). Since the
former controlling shareholders of the Company own
controlling interest in Enter Tech Corp. after the business
combination, the transaction was accounted for as a reverse
acquisition whereby, the equity accounts of the Company were
carried over into Enter Tech Corp.'s financial statements.
F-8
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LINKS, LTD.
NOTES TO FINANCIAL STATEMENTS
June 2, 1998 and 1996
(4) Payable, Related Party
----------------------
As of June 2, 1998, the Company owed $30,000 to an officer
for management fees pursuant to an agreement which commenced
in August 1997 and terminated June 30, 1998.
(5) License and Other Intangible Assets
-----------------------------------
The former parent company of the Company acquired certain
technology and license rights from an unrelated third party
for $227,943. These intangible assets were contributed to
the Company. Management of the Company reviewed the
intangible assets for impairment and provided a valuation
allowance for the total $227,943.
(6) Marketing and Administration of Sales Agreement
-----------------------------------------------
The Company has entered into an agreement with a director of
the Company for the marketing and administration of sales
through certain identified locations and the division of
profits after the director has recovered related costs. The
Company currently has orders for the purchase of thirty
units of $50,000 per unit from the director. The Company
received $60,000 of deposits related to these orders.
F-6
