<PAGE>
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) March 9, 1998
Sloan Electronics, Inc.
(Exact name of Registrant as specified in charter)
Delaware 0-28772 35-1990559
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2527 Monterey St., Sararota, Florida 34231
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (941) 925-2286
MAS Acquisition I Corp.
1922 North Bedford Ave.
Evansville, Indiana 47711
(Former name or former address, if changed, since last report)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
A change in control of the registrant occurred on December 5, 1997
pursuant to the terms and conditions of an Agreement of Merger (the
"Agreement") dated November 18, 1997 between MAS Acquisition I Corp.,
a Delaware corporation (the "Company") and Sloan Electronics, Inc.,
a Florida corporation ("Sloan"), which provided for the merger of
Sloan with and into the Company as the surviving entity, pursuant to
a tax-free reorganization in accordance with Section 354 and 368 of
the Internal Revenue Code of 1986, as amended.
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS.
MAS Acquisition I Corp., (the "Company") entered into an Agreement of
Merger (the "Agreement") with Sloan Electronics, Inc. ("Sloan") on
November 18, 1997, whereby Sloan has merged into the Company and the
Company has changed its name to Sloan Electronics, Inc. Pursuant to the
terms of the Agreement, each common share of Sloan was converted
into 2.31 common shares of the Company. A total of 3,561,500 shares of
common share of Sloan was converted into 8,227,070 restricted common
shares of the Company. In addition the Company has accepted the return,
and cancelled, 7,680,083 shares of Common Stock issued to MAS Financial Corp.
The Company has issued 91,102 restricted common shares as finder's fee.
<PAGE>
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
As result of the merger, S. M. Ward Co., 225 West 34th St., New York, NY
10122 is the new certifying accountant of the Company. S. M. Ward Co.
has been the certifying accountant of Sloan Electronics, Inc. prior to
the merger with and into the Company.
1) The former certifying accountant of the Company, Winter, Scheifley &
Associates, P.C. was not retained by the Company during 1997.
2) The decision to change accountants was approved by the board of directors.
3) The former accountant's reports on th financial statements since inception
on July 31, 1996 to December 31, 1996 did not contain an adverse opinion or
a disclaimer of opinion, nor was qualified nor modified as to uncertainty,
audit scope, or accounting principles.
4) Since inception on July 31, 1996 to December 18, 1997, there was no
disagreement nor "reportable event" with the former accountant.
ITEM 5. OTHER EVENT.
Not applicable.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
Pursuant to the terms of the Agreement, the Company has accepted the
resignation of the Board of Directors and Officers, as of December 5, 1997,
consisiting of Aaron Tsai, John Tsai, and Chia-Lun Tsai and appointed
Larry Provost, Paul Sloan, Lester Cohen, Michael Solomon and James Vondra.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements.
(i) Audited financial statements of Sloan Electronics, Inc. for the
year ended December 31, 1995.
(ii) Audited financial statements of Sloan Electronics, Inc. for the
year ended December 31, 1996.
(iii) Unaudited financial statements of Sloan Electronics, Inc. for the
period ended September 30, 1997.
(iV) Unaudited combined financial statements of Sloan Electronics, Inc.
and MAS Acquisition I Corp. for the year ended December 31, 1996.
(V) Unaudited combined financial statements of Sloan Electronics, Inc.
and MAS Acquisition I Corp. for the period ended September 30,
1997.
<PAGE>
SLOAN ELECTRONICS, INC.
-----------------------
FINANCIAL STATEMENTS
--------------------
AT DECEMBER 31, 1995
--------------------
<PAGE>
S.M. WARD CO.
ACCOUNTANTS AND AUDITORS
225 WEST 34th. STREET
NEW YORK, NEW YORK 10122
____
(212) 967-6765
FAX (212) 967-6488
REPORT OF INDEPENDENT AUDITORS
------------------------------
Sloan Electronics, Inc.
Board of Directors
Sarasota, Florida
Chairman, Board of Directors,
We have audited the accompanying balance sheet of Sloan Electronics, Inc. as of
December 31, 1995, and the related Statements of Income and Stockholder's
Equity. 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 balance sheet is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as, evaluating the overall balance
sheet presentation. We believe that our audit of the balance sheet
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 Sloan Electronics, Inc.
as of December 31, 1995, in conformity with generally accepted accounting
principles.
S.M. Ward Co. /s/ S.M. Ward Co.
New York, NY
January 31, 1998
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
As of December 31, 1995
ASSETS
Current Assets:
Cash in bank $22,634
Accounts Receivable - Note 3 4,757
Inventory (at cost) - Note 4 7,960
_____
Total Current Assets 35,351
Fixed Assets:
Computer Equipment (net of Accumulated
Depreciation of $304)- Note 2 1,765
Other Assets:
Due from officer $27,065
Deferred Research and corporate
development costs 71,050
Deferred costs of stock offering (IPO)
and Prepaid Advertising 71,282
-------
Total Other Assets 169,397
Total Assets $206,513
========
See accountant's report
-----------------------
Page 3
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
As of December 31, 1995
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable $9,606
Total Current Liabilities 9,606
Other Liabilities
Accrued Interest - Note 5 $2,424
Due to Stockholders - Note 5 110,000
Due - Other 20,000
_______
Total Other Liabilities 132,424
_______
Total Liabilities 142,030
Stockholders' Equity (deficit)
Common Stock - Note 6 $34,792
Paid-In-Capital 165,942
Accumulated Adjustments
Account (Deficit) ( 88,420 )
Accumulated Deficit During
Development Stage ( 47,831 )
Total Stockholders' Equity (Deficit) 64,483
______
Total Liabilities and Stockholders' Equity (Deficit) $206,513
========
See accountant's report
-----------------------
Page 4
<PAGE>
SLOAN ELECTRONICS INC.
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1995
Income:
Sales 14,505
Sales Returns ( $2,450 )
_________
Net Sales 12,055
Cost of goods sold:
Purchases 15,843
Less: Ending Inventory ( 7,960 )
_____
Cost of goods sold 7,883
_____
Gross Profit $4,172
Expenses:
Selling expenses (Schedule 1) $46,379
General and administrative
Expenses (Schedule 2) 41,591
Interest of Notes - Note 5 4,668
_____
Total Expenses: 92,638
______
Net Income/ (loss) from Operations ( $88,466 )
=======
Other Income - Interest 46
Net Income/ (loss) ( $88,420 )
=======
See accountant's report
-----------------------
Page 5
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 1 - SELLING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
Advertising and Promotion $33,588
Sales Advances & Commissions 7,582
Shipping & Delivery 3,922
Other Selling Expenses 1,287
Total Selling Expenses $46,379
=======
See accountant's report
-----------------------
Page 6
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 2 - GENERAL AND ADMINSTRATIVE EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
Rent $ 800
Office Expenses 11,044
Telephone 8,798
Legal & Accounting Services 2,775
Other Contract Services & Supplies 11,272
Facilities & Equipment Rental & Lease Costs 1,658
Travel, Transportation & Entertainment 4,734
Licenses & Permits 230
Depreciation 280
___
Total General and Administrative Expenses $41,591
=======
See accountant's report
-----------------------
Page 7
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
CASH FLOWS FROM OPERATION ACTIVITIES:
Net loss: ( $88,420 )
Add: Non cash items
Depreciation 280
___
( 88,140 )
Adjustments to reconcile net loss to net
cash used in operating activities:
(Increase) in Accounts Receivable ( 4,757 )
(Increase) in Inventory ( 7,960 )
Decrease in Stock Subscription Receivable 15,000
Increase in Accounts Payable 9,101
Increase in Accrued Interest 2,424
_____
Total Adjustments 13,808
Net cash used in operations ( $74,332 )
_______
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of computer ( $2,069 )
Research and corporate development costs ( 23,064 )
Initial Stock Offering
Cost and prepaid advertising ( 71,282 )
______
Net cash used in investing activities ( 96,415 )
______
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan to officer ( $26,555 )
Loans Payable 119,000
Sale of Common Stock
and additional Paid-in Capital 101,100
_______
Net cash provided from financing activities 193,545
_______
Net increase in cash 22,798
Opening cash ( 164 )
___
Closing cash $22,634
=======
Page 8
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1995
Common Stock
------------
Shares
------
Shares Issued At Inception
Through December 31, 1995 3,000,000
Page 9
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
12/31/95
1. Organization:
------------
Sloan Electronics was incorporated in the state of Florida in July, 1993.
The Corporation designs, manufactures and markets electronic monitoring
equipment primarily for the criminal justice industry and the long term
health care industry.
On November 18, 1997 an agreement of merger between MAS Acquisition I Corp.,
a Delaware Corporation, and Sloan Electronics, Inc., a Florida Corporation
was made and entered into. The two corporations merged into a single
corporation, in which the Florida corporation ceased to exist, however the
name of Sloan Electronics, Inc. will remain for the merge. The outstanding
shares of the Florida corporation were converted as follows:
One (1) share of Florida corporation into 2.31 shares of the Delaware
corporation.
2. Summary of Significant Accounting Policies:
-------------------------------------------
Method of Accounting
- --------------------
The corporation uses the accrual method of accounting for both financial
statement and tax purposes.
Depreciation
- ------------
All assets are recorded at cost. Depreciation is calculated using straight-
line and accelerated methods for both book and tax purposes based on the
estimated useful lives of the assets. The company expenses maintenance and
repairs as the costs are incurred.
Depreciation has been computed based on three year estimated lives.
Amortization
- ------------
In November, 1995 the Corporation entered into a private placement
arrangement. The costs of the IPO were capitalized and are being amortized
over a five year period.
The Corporation capitalized research and development costs which are also
being amortized over a five year period.
Income Taxes
- ------------
When Sloan Electronics was incorporated, it was formed as a subchapter "S"
Corporation; passing through all income or loss directly to the shareholders.
No provision for income taxes was needed. As of 7/1/96, the Corporation's
board of directors voted to rescind its "S" election and become a regular "C"
Corporaton.
3. Accounts Receivable
These amounts are due from customers for products delivered. All accounts are
considered collectible and no allowance for doubtful accounts has been recorded.
4. Inventory
Inventory is recorded at cost.
5.Due to stockholders and accrued interest.
This represents unsecured loans made by various stockholders. The interest
on the notes ranges from 10% simple interest to 18% simple interest.
Interest was accrued at December 31, 1995.
6. Common Stock
At the period ended 12/31/95 there was 4,000,000 shares authorized, 3,000,000
shares issued and outstanding.
7. Commitments and Contingencies
Lawsuits
- --------
There are no liens, judgements or claims against the Corporation.
<PAGE>
SLOAN ELECTRONICS, INC.
-----------------------
FINANCIAL STATEMENTS
--------------------
AT DECEMBER 31, 1996
--------------------
<PAGE>
S.M. WARD CO.
ACCOUNTANTS AND AUDITORS
225 WEST 34th. STREET
NEW YORK, NEW YORK 10122
_______
(212) 967-6765
FAX (212) 967-6488
REPORT OF INDEPENDENT AUDITORS
------------------------------
Sloan Electronics, Inc.
Board of Directors
Sarasota, Florida
Chairman, Board of Directors,
We have audited the accompanying balance sheet of Sloan Electronics, Inc. as
of December 31, 1996, and the related Statements of Income, Cash Flows, and
Stockholder's Equity. 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 balance sheet is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as, evaluating the overall balance
sheet presentation. We believe that our audit of the balance sheet
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 Sloan Electronics, Inc.
as of December 31, 1996, in conformity with generally accepted accounting
principles.
S.M. WARD CO. /s/ S.M. Ward Co.
New York, NY
January 31, 1998
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
As of December 31, 1996
ASSETS
Current Assets:
Cash in bank $25,808
Accounts Receivable - Note 3 10,411
Inventory (at cost) - Note 4 26,165
Deposits on Equipment 700
_______
Total Current Assets 63,084
Fixed Assets:
Computer Equipment (net of Accumulated
Depreciation of $994) - Note 2 1,075
Other Assets:
Due from officer $33,565
Security Deposit 1,000
Deferred Research and corporate
development costs (net of Accumulated
Amortization of $14,210) - Note 2 56,840
Deferred costs of stock offering (IPO)
and Prepaid Advertisement (net of Accumulated
Amortization of $14,256) - Note 2 57,026
______
Total Other Assets 148,431
_______
Total Assets $212,590
========
See accountant's report
-----------------------
Page 3
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
As of December 31, 1996
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable $7,442
Payroll Taxes Payable 189
______
Total current liabilities 7,631
Other Liabilities
Accrued Interest - Note 5 $12,786
Due to Stockholders - Note 5 110,000
Due - Other 15,000
Customer Deposits 2,400
_______
Total Other Liabilities 140,186
_______
Total Liabilities 147,817
Stockholders' Equity (deficit)
Common Stock - Note 6 $234,792
Paid-In-Capital 165,942
Accumulated Adjustments
Account (Deficit) ( 259,804 )
Accumulated Deficit During
Development Stage ( 76,157 )
Total Stockholders' Equity (Deficit) 64,773
______
Total Liabilities and Stockholders' Equity (Deficit) $212,590
========
See accountant's report
-----------------------
Page 4
<PAGE>
SLOAN ELECTRONICS INC.
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1996
Income:
Sales $231,843
Cost of goods sold:
Beginning Inventory 7,960
Purchases 155,863
Freight-in 6,254
Less: Ending Inventory ( 26,165 )
-------
Cost of goods sold 143,912
-------
Gross Profit $87,931
Expenses:
Selling expenses (Schedule 1) $60,452
General and administrative
Expenses (Schedule 2) 214,146
Interest on Notes - Note 4 13,043
______
Total expenses: 287,641
_______
Net Income/ (loss) ( $199,710 )
========
See accountant's report
-----------------------
Page 5
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 1 - SELLING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
Advertising and Promotion $23,977
Sales Commissions 31,000
Other Selling Expenses 5,475
_____
Total Selling Expenses $60,452
=======
See accountant's report
-----------------------
Page 6
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 2 - GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED DECEMBER 31,1996
Payroll $56,600
Payroll Taxes 4,016
Rent 11,679
Office Expenses 12,519
Telephone 5,869
Legal & Accounting Services 8,769
Other Contract Services 61,583
Facilities & Equipment Rental & Lease Costs 4,431
Travel, Transportation & Entertainment 5,719
Depreciation and amortization 29,156
Insurance 13,805
______
Total General and Administrative Expenses $214,146
========
See accountant's report
-----------------------
Page 7
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
CASH FLOWS FROM OPERATION ACTIVITIES:
Net loss: ( $199,710 )
Add: Non cash items
Depreciation 690
Amortization 28,466
______
( 170,554 )
Adjustments to reconcile net loss to net
cash used in operating activities:
(Increase) in Accounts Receivable ( 5,654 )
(Increase) in Inventory ( 18,205 )
(Increase) in Deposits ( 1,700 )
Decrease in Accounts Payable ( 1,975 )
Increase in Accrued Interest 10,362
Increase in Customer Deposits 2,400
_____
Total Adjustments ( 14,772 )
Net cash used in operations ( $185,326 )
________
CASH FLOWS FROM INVESTING ACTIVITES:
Net cash provided/ (used) in investing activities - 0 -
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan to officer ( $6,500 )
Payment of loan ( $5,000 )
Sale of Common Stock 200,000
_______
Net cash provided from financing activities 188,500
_______
Net increase in cash 3,174
Opening cash 22,634
Closing cash $25,808
=======
See accountant's report
-----------------------
Page 8
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1996
Common Stock
------------
Shares Amount
------ ------
Shares Issued At Inception
Through December 31, 1995 3,000,000 $ 34,792
Shares Issued in 1996
@ $1 Par Value 200,000 $200,000
________ ________
Total 3,200,000 $234,792
========= ========
Page 9
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
12/31/96
1. Organization:
------------
Sloan Electronics was incorporated in the state of Florida in July, 1993.
The Corporation designs, manufactures and markets electronics monitoring
equipment primarily for the criminal justice industry and the long term
health care industry.
On November 18, 1997 an agreement of merger between MAS Acquisition I Corp.,
a Delaware corporation, and Sloan Electronics, Inc., a Florida corporation
was made and entered into. The two corporations merged into a single
corporation, in which the Florida corporation ceased to exist, however the
name of Sloan Electronics, Inc. will remain for the merge. The outstanding
shares of the Florida corporation were converted as follows:
One (1) share of Florida corporation into 2.31 shares of the Delaware
corporation.
2. Summary of Significant Accounting Policies:
-------------------------------------------
Method of Accounting
- --------------------
The corporation uses the accrual method of accounting for both financial
statement and tax purposes.
Depreciation
- ------------
All assets are recorded at cost. Depreciation is calculated using straight-
line and accelerated methods for both book and tax purposes based on the
estimated useful lives of the assets. The company expenses maintenance and
repairs as the costs are incurred.
Depreciation has been computed based on three year estimated lives.
Amortization
- ------------
In November, 1995 the Corporation entered into a private placement
arrangement. The costs of the IPO were capitalized and are being amortized
over a five year period.
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
12/31/96
The Corporation capitalized research and development costs which are also
being amortized over a five year period.
Income Tax
- ----------
When Sloan Electronics was incorporated, it was formed as a subchapter "S"
Corporation; passing through all income or loss directly to the shareholders.
No provision for income taxes was needed. As of 7/1/96, the Corporation's
board of directors voted to rescind its "S" election and become a regular "C"
Corporation.
3. Accounts Receivable
These amounts are due from customers for products delivered. All accounts
are considered collectible and no allowance for doubtful accounts has been
recorded.
4. Inventory
Inventory is recorded at cost.
5. Due to Stockholders and accrued interest.
This represents unsecured loans made by various stockholders. The interest
on the notes ranges from 10% simple interest to 18% simple interest.
Interest was accrued at December 31, 1996.
6. Common Stock
At the period ended 12/31/96 there was 4,000,000 shares authorized, 3,200,000
shares issued and outstanding.
7. Commitments and Contingencies
Lawsuits
- --------
There are no liens, judgements or claims against the Corporation.
<PAGE>
SLOAN ELECTRONICS, INC.
-----------------------
FINANCIAL STATEMENTS
--------------------
AT SEPTEMBER 30, 1997
---------------------
<PAGE>
S.M. WARD CO.
ACCOUNTANTS AND AUDITORS
225 WEST 34th. STREET
NEW YORK, NEW YORK 10122
_______
(212) 967-6765
FAX (212) 967-6488
Sloan Electronics, Inc.
Board of Directors
Sarasota, Florida
Chairman, Board of Directors,
We have Compiled the accompanying balance sheet of Sloan Electronics, Inc. as
of September 30, 1997, and the related Statements of Income, Cash Flows and
Stockholder's Equity for the nine months then ended in accordance with
standards established by the American Institute of Certified Public
Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and accordingly, do not express
an opinion or any other form of assurance on them.
S.M. Ward Co.
New York, NY
January 31, 1998
<PAGE>
SLOAN ELECTRONICS, INC.
BALANCE SHEET
As of September 30, 1997
ASSETS
Current Assets:
Cash in bank $2,284
Accounts Receivable - Note 3 27,958
Inventory (at cost) - Note 4 11,677
______
Total Current Assets 41,919
Fixed Assets:
Computer equipment (net of Accumulated
Depreciation of $1,593) - Note 2 476
Other Assets:
Due from officer $33,565
Security Deposit 1,000
Deferred Research and corporate
development costs (net of Accumulated
Amortization of $19,540) - Note 2 51,510
Deferred costs of stock offering (IPO)
and Prepaid Advertising (net of Accumulated
Amortization of $19,601) - note 2 51,681
______
Total Other Assets 137,756
_______
Total Assets $180,151
========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 3
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
As of September 30, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable $90,621
Accrued Expenses 15,557
______
Total current liabilities 106,178
Other Liabilities:
Accrued Interest - Note 5 $18,420
Due to Stockholders Note 5 110,000
Due - Others 65,000
-------
Total Other Liabilities 193,420
_______
Total Liabilities 299,598
Stockholders' Equity (deficit)
Common Stock - Note 6 $254,792
Paid-In-Capital 165,942
Accumulated Adjustments
Account (Deficit) ( 259,804 )
Retained Earnings (Deficit) ( 280,377 )
_______
Total Stockholders' Equity (Deficit) ( 119,447 )
___________
Total Liabilities and Stockholders' Equity (Deficit) $180,151
========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 4
<PAGE>
SLOAN ELECTRONICS INC.
INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Income:
Sales $124,120
Cost of goods sold:
Beginning Inventory 26,165
Purchases 86,827
Freight-in 3,349
Less: Ending Inventory ( 11,677 )
______
Cost of goods sold 104,664
_______
Gross Profit $19,456
Expenses:
Selling expenses (Schedule 1) $30,079
General and administrative
Expenses (Schedule 2) 180,182
Interest on Notes - Note 5 13,415
______
Total Expenses: 223,676
Net Income/ (loss) ( $204,220 )
========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 5
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Advertising and Promotion $16,079
Sales Commissions 9,000
Other Selling Expenses 5,000
_____
Total Selling Expenses $30,079
=======
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 6
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 2 - GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Payroll $50,000
Payroll Taxes 3,291
Rent 9,104
Office Expenses 1,318
Telephone 3,911
Legal & Accounting Services 12,355
Other Contract Services 64,974
Facilities & Equipment Rental & Lease Costs 880
Travel, Transportation & Entertainment 5,585
Depreciation and amortization 11,274
Insurance 17,490
______
Total General and Administrative Expenses $180,182
========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 7
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
CASH FLOWS FROM OPERATION ACTIVITIES:
Net Loss: ( $204,220 )
Add: Non cash items
Depreciation 599
Amortization 10,675
______
( 192,946 )
Adjustments to reconcile net loss to net
cash used in operating activities:
(Increase) in Accounts Receivable ( 17,547 )
Decrease in Inventory 14,488
Decrease in Deposits 700
Increase in Accounts Payable 83,179
Increase in Accrued Expenses 21,002
(Decrease) in Customer Deposits ( 2,400 )
_____
Total Adjustments 99,422
Net cash used in operations ( $93,524 )
_______
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided/ (used) in investing activities - 0 -
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan Proceeds $50,000
Sale of Common Stock 20,000
______
Net cash provided from financing activities 70,000
______
Net increase in cash ( 23,524 )
Opening cash 25,808
Closing cash $2,284
======
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 8
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Common Stock
------------
Shares Amount
------ ------
Shares Issued at Inception
Through December 31, 1995 3,000,000 $ 34,792
Shares Issued in 1996
@ $1 Par Value 200,000 $200,000
Shares Issued for
the Nine Months Ended
September 30, 1997 @ $1 Par Value 20,000 $ 20,000
______ ________
Total 3,220,000 $254,792
========= ========
Page 9
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
9/30/97
1. Organization:
------------
Sloan Electronics was incorporated in the State of Florida in July, 1993.
The Corporation designs, manufactures and markets electronics monitoring
equipment primarily for the criminal justice industry and the long term
health care industry.
On November 18, 1997 an agreement of merger between MAS Acquisition I Corp.,
a Delaware corporation, and Sloan Electronics, Inc., a Florida corporation
was made and entered into. The two corporations merged into a single
corporation, in which the Florida corporation ceased to exist, however the
name of Sloan Electronics, Inc. will remain for the merge. The outstanding
shares of the Florida corporation were converted as follows:
One (1) share Florida corporation into 2.31 shares of the Delaware
corporation.
2. Summary of Significant Accounting Policies:
------------------------------------------
Method of Accounting
- --------------------
The corporation uses the accrual method of accounting for both financial
statements and tax purposes.
Depreciation
- ------------
All assets are recorded at cost. Depreciation is calculated using straight
- -line and accelerated methods for both book and tax purposes based on the
estimated useful lives of the assets. The company expenses maintenance and
repairs as the costs are incurred.
Depreciation has been computed based on three year estimated lives.
Amortization
- ------------
In November, 1995 the corporation entered into a private placement
arrangement. The costs of the IPO were capitalized and are being amortized
over a five year period.
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
9/30/97
The Corporation capitalized research and development costs which are also
being amortized over a five year period.
Income Taxes
- ------------
When Sloan Electronics was incorporated, it was formed as a subchapter "S"
Corporation; passing through all income or loss directly to the shareholders.
No provision for income tax was needed. As of 7/1/96, the Corporation's board
of directors voted to rescind its "S" election and is now a regular
Corporation.
3. Accounts Receivable
These amounts are due from customers for products delivered. All accounts are
considered collectible and no allowance for doubtful accounts has been
recorded.
4. Inventory
Inventory is recorded at cost.
5. Due to Stockholders and accrues interest.
This represents unsecured loans made by various stockholders. The interest on
the notes ranges from 10% simple interest to 18% simple interest. Interest was
accrued at September 30, 1997.
6. Common Stock
At the period ended 9/30/97 there was 4,000,000 shares authorized, 3,220,000
shares issued and outstanding.
<PAGE>
SLOAN ELECTRONICS, INC.
-----------------------
MAS ACQUISITION I CORP.
-----------------------
(COMBINED)
----------
FINANCIAL STATEMENTS
--------------------
AT DECEMBER 31, 1996
--------------------
<PAGE>
S.M. WARD CO.
ACCOUNTANTS AND AUDITORS
225 WEST 34TH. STREET
NEW YORK, NEW YORK 10122
-----
(212) 967-6765
FAX (812) 967-6488
Sloan Electronics, Inc.
Board of Directors
Sarasota, Florida
Chairman, Board of Directors,
We have Compiled the accompanying combined Balance Sheets of Sloan
Electronics, Inc. and MAS Acquisition I Corp. as of December 31, 1996, and
the related Statements of Income, Cash Flows, and Stockholder's Equity for
the year then ended in accordance with standards established by the American
Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and accordingly, do not express
an opinion or any form of assurance on them.
S.M. Ward Co.
/s/S.M. Ward Co.
New York, NY
February 15, 1998
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
AS OF December 31, 1996
ASSETS
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
Current Assets:
Cash in bank $ 25,808 $ 25,808
Accounts Receivable-Note 3 10,411 10,411
Inventory (at cost)-Note 4 26,165 26,165
Deposits on Equipment 700 700
___________ _______________ ____________ ________
Total Current Assets 63,084 - - 63,084
Fixed Assets
Computer Equipment (net of
Accumulated Depreciation of
$994)- Note 2 1,075 1,075
Other Assets:
Due from officer $ 33,565 - - 33,565
Security Deposit 1,000 1,000
Deferred Research and
corporate development
costs (net of
Accumulated Amortization
of $14,210)-Note 2 56,640 56,640
Deferred costs of stock
offering (IPO) and Prepaid
Advertising (net of
Accumulated Amortization of
$14,256)-Note 2 57,026 - - 57,026
___________ _______________ ____________ ________
Total Other Assets 148,431 _ _ 148,431
___________ _______________ ____________ ________
Total Assets $ 212,590 $ _ $ _ $212,590
=========== =============== ============ ========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 3
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
AS OF December 31, 1996
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
_________________ _______________ ____________ ________
Current Liabilities:
Accounts Payable $ 7,442 $ 7,442
Payroll Taxes Payable 189 - - 189
___________ _______________ ____________ ________
Total current liabilities 7,631 - - 7,631
Other Liabilities:
Accrued Interest - Note 5 12,786 12,786
Due to Stockholders-Note 5 110,000 110,000
Due - Other 15,000 15,000
Customer Deposits 2,400 2,400
Total Other Liabilities 140,186 - - 140,186
Total Liabilities 147,817 - - 147,817
Stockholders' Equity (deficit)
Common Stock - Note 6 234,792 8,500 243,292
Paid-in-Capital 165,942 165,942
Accumulated Adjustments
Account (Deficit) (259,804) (259,804)
Accumulated Deficit During
Development Stage (76,157) (8,500) - (84,657)
___________ _______________ ____________ ________
Total Stockholders'
Equity (Deficit) 64,773 - - 64,773
___________ _______________ ____________ ________
Total Liabilities and
Stockholders'
Equity (Deficit) $ 212,590 $ - $ - $212,590
=========== =============== ============ ========
See Accountants' Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 4
<PAGE>
SLOAN ELECTRONICS INC.
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1996
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
Income:
Sales $ 231,843 $ - $ - $231,843
Cost of goods sold:
Beginning Inventory 7,960 7,960
Purchases 155,863 155,863
Freight-in 6,254 6,254
Less: Ending Inventory (26,165) - - (26,165)
___________ _______________ ____________ ________
Cost of goods sold 143,912 - - 143,912
___________ _______________ ____________ ________
Gross Profit $ 87,931 - - $ 87,931
Expenses:
Selling expenses
(Schedule 1) $ 60,452 $ - $ - $ 60,452
General and administrative
Expenses (Schedule 2) 214,146 8,500 - 222,646
Interest on Notes - Note 5 13,043 - - 13,043
___________ _______________ ____________ ________
Total expenses: 287,641 8,500 - 296,141
___________ _______________ ____________ ________
Net Income / (loss) $ (199,710)$ (8,500)$ - $(208,210)
=========== =============== ============ ========
See Accountant's Compilation Report &
------------------------------------
Notes To Financial Statements
-----------------------------
Page 5
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 1 - SELLING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
Sloan MAS Acquisition
Electronics, Inc, I Corp. Eliminations Combined
----------------- --------------- ------------ --------
Selling Expenses:
Advertising and Promotion $ 23,977 - - 23,977
Sales Commissions 31,000 - - 31,000
Other Selling Expenses 5,475 - - 5,475
___________ _______________ ____________ ________
Total Selling Expenses $ 60,452 $ - $ - $ 60,452
=========== =============== ============ ========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 6
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 2 - GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
General and Administrative
Expenses
Payroll $ 56,600 $ - $ - $ 56,600
Payroll Taxes 4,016 4,016
Rent 11,679 11,679
Office Expenses 12,519 12,519
Telephone 5,869 5,869
Legal & Accounting Services 8,769 8,769
Other Contract Services 61,583 61,583
Facilities & Equipment
Rental & Lease Costs 4,431 4,431
Travel, Transportation
& Entertainment 5,719 5,719
Depreciation & amortization 29,156 29,156
Insurance 13,805 13,805
Other General and
Administrative Expenses - 8,500 - 8,500
___________ _______________ ____________ ________
Total General and
Administrative Expenses $ 214,146 $ 8,500 $ - 222,648
=========== =============== ============ ========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 7
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
CASH FLOWS FROM
OPERATION ACTIVITIES:
Net Loss: $ (199,710) $ (8,500) $ - $(208,210)
Add: Non cash items
Depreciation 690 - 690
Amortization 28,466 - - 28,466
__________ ______________ ___________ _________
(170,554) (8,500) - (179,054)
Adjustments to reconcile
net loss to net cash used
in operating activities:
(Increase) in Accounts
Receivable (5,654) (5,654)
(Increase) in Inventory (18,205) (18,205)
(Increase) in Deposits (1,700) (1,700)
Decrease in Accounts Payable (1,975) (1,975)
Increase in Accrued Interest 10,362 10,362
Increase in Customer Deposits 2,400 - - 2,400
________ ______________ ___________ _________
Total Adjustments (14,772) - - (14,772)
Net cash used in
operations $ (185,326) $ (8,500) $ - $(193,826)
__________ ______________ ___________ _________
CASH FLOWS FROM
INVESTING ACTIVITIES:
Net cash provided/(used)
in investing activities - - - -
CASH FLOWS FROM
FINANCING ACTIVITIES:
Loan to officer $ (6,500) (6,500)
Payment of loan (5,000) (5,000)
Sale of Common Stock 200,000 8,500 - 208,500
__________ ______________ ___________ _________
Net cash provided from
financing activities 188,500 8,500 - 197,000
__________ ______________ ___________ _________
Net increase in cash 3,174 - - 3,174
Opening cash 22,634 - - 22,634
__________ ______________ ___________ _________
Closing cash $ 25,808 $ - $ - $ 25,808
========== ============== =========== =========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 8
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1996
Sloan Electronics Inc. MAS Acquisition I Corp. Combined
Common Stock Common Stock
------------ ------------
Shares Amount Shares Amount
------ ------ ------ ------
Shares Issued At
Inception Through
December 31,1995 3,000,000 $ 34,792 - - $ 34,792
Shares Issued in
1996 @ $1 Par Value 200,000 $ 200,000 - - $ 200,000
Shares Issued in
1996 @ $.001 Par Value - - 8,500,000 $ 8,500 $ 8,500
Total 3,200,000 $ 234,792 8,500,000 $ 8,500 $ 243,292
========= ========= ========= ========= =========
Page 9
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
12/31/96
1. Organization:
------------
Sloan Electronics was incorporated in the state of Florida in July, 1993.
The Corporation designs, manufactures and markets electronic monitoring
equipment primarily for the criminal justice and the long term health care
industry.
On November 18, 1997 an agreement of merger between MAS Acquisition I Corp.,
a Delaware corporation, and Sloan Electronics, Inc., a Florida corporation
was made and entered into. The two corporations merged into a single
corporation, in which the Florida corporation ceased to exist, however the
name of Sloan Electronics, Inc. will remain for the merge. The outstanding
shares of the Florida corporation were converted as follows:
One (1) share of Florida corporation into 2.31 shares of the Delaware
corporation.
2. Summary of Significant Accounting Policies:
-----------------------------------------
Method of Accounting
- --------------------
The corporation uses the accrual method of accounting for both financial
statement and tax purposes.
Depreciation
- ------------
All assets are recorded at cost. Depreciation is calculated using
straight-line and accelerated methods for both book and tax purposes based on
the estimated useful lives of the assets. The Company expenses maintenance
and repairs as the costs are incurred.
Depreciation has been computed based on three year estimated lives.
Amortization
- ------------
In November, 1995 the Corporation entered into a private placement arrangement.
The costs of the IPO were capitalized and are being amortized over a five year
period. The Corporation capitalized research and development costs which are
also being amortized over a five year period.
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
12/31/96
Income Tax
- ----------
When Sloan Electronics was incorporated, it was formed as a subchapter "S"
Corporation; passing through all income or loss directly to the shareholders.
No provision for income taxes was needed. As of 7/1/96, the Corporation's
board of directors voted to rescind its "S" election and is now a regular
Corporation.
3. Accounts Receivable
These amounts are due from customers for products delivered. All accounts are
considered collectible and no allowance for doubtful accounts has been
recorded.
4. Inventory
Inventory is recorded at cost.
5. Due to stockholders and accrued interest.
This represents unsecured loans made by various stockholders. The interest on
the notes ranges from 10% simple interest to 18% simple interest. Interest was
accrued at December 31, 1996.
6. Common Stock
At the period ended 12/31/96 there was 4,000,000 shares authorized, 3,200,000
shares issued and outstanding, for Sloan Electronics, Inc. At the period
ended 12/31/96 there was 100,000,000 shares authorized, 8,500,000 shares
issued and outstanding, for MAS Acquisition I Corp.
<PAGE>
SLOAN ELECTRONICS, INC.
-----------------------
MAS ACQUISITION I CORP.
-----------------------
(COMBINED)
----------
FINANCIAL STATEMENTS
--------------------
AT SEPTEMBER 30, 1997
---------------------
<PAGE>
S.M. WARD CO.
ACCOUNTANTS AND AUDITORS
225 WEST 34TH. STREET
NEW YORK, NEW YORK 10122
-----
(212) 967-6765
FAX (212) 967-6488
Sloan Electronics, Inc.
Board of Directors
Sarasota, Florida
Chairman, Board of Directors,
We have Compiled the accompanying combined Balance Sheets of Sloan
Electronics, Inc. and MAS Acquisition I Corp. as of September 30, 1997, and
the related Statements of Income, Cash Flows, and Stockholder's Equity for
the nine months then ended in accordance with standards established by the
American Institute of Certified Public Accountants,
A compilation is limited to presenting in the form of financial statements
information that is the representation of the management. We have not
audited or reviewed the accompanying financial statements and accordingly,
do not express an opinion or any form of assurance on them.
S.M. Ward Co.
/s/S.M. Ward Co.
New York, NY
February 15, 1998
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
AS OF September 30, 1997
ASSETS
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
Current Assets:
Cash in Bank $ 2,284 $ 2,284
Accounts Receivable-Note 3 27,958 27,958
Inventory (at cost)-Note 4 11,677 - - 11,677
___________ _______________ ____________ ________
Total Current Assets 41,919 - - 41,919
Fixed Assets:
Computer Equipment (net of
Accumulated Depreciation of
$1,593) - Note 2 476 476
Other Assets:
Due from officer $ 33,565 - - $ 33,565
Security Deposit 1,000 1,000
Deferred Research and
corporate development
costs (net of Accumulated
Amortization of $19,540)
- Note 2 51,510 51,510
Deferred costs of stock
offering (IPO) and Prepaid
Advertising (net of
Accumulated Amortization
of $19,601) - Note 2 51,681 - - 51,681
___________ _______________ ____________ ________
Total Other Assets 137,756 - - 137,756
___________ _______________ ____________ ________
Total Assets $ 180,151 $ - - $180,151
=========== =============== ============ ========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 3
<PAGE>
SLOAN ELECTRONICS INC.
BALANCE SHEET
AS OF September 30,1997
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
Current Liabilities:
Accounts Payable $ 90,621 $ 90,621
Accrued Expenses 15,557 - - 15,557
___________ _______________ ____________ ________
Total current liabilities 106,178 - - 106,178
Other Liabilities:
Accrued Interest - Note 5 18,420 18,420
Due to Stockholders-Note 5 110,000 110,000
Due - Other 65,000 - - 65,000
___________ _______________ ____________ ________
Total Other Liabilities 193,420 - - 193,420
___________ _______________ ____________ ________
Total Liabilities 299,598 - - 299,598
Stockholders' Equity (deficit)
Common Stock - Note 6 254,792 8,500 263,292
Paid-in-Capital 165,942 165,942
Accumulated Adjustments
Account (Deficit) (259,804) (259,804)
Retained Earnings (Deficit) (280,377) (8,500) - (288,877)
___________ _______________ _____________ _______
Total Stockholders'
Equity (Deficit) (119,447) - - (119,447)
___________ _______________ _____________ _______
Total Liabilities and
Stockholders' Equity
(Deficit) $ 180,151 $ - $ - $180,151
=========== =============== ============= ========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 4
<PAGE>
SLOAN ELECTRONICS INC.
INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
Income:
Sales $ 124,120 $ - $ - $124,120
Cost of goods sold:
Beginning inventory 26,165 26,165
Purchases 86,827 86,827
Freight-in 3,349 3,349
Less: Ending Inventory (11,677) - - (11,677)
___________ _______________ _____________ _______
Cost of goods sold 104,664 - - 104,664
___________ _______________ _____________ _______
Gross Profit $ 19,456 - - $19,456
Expenses:
Selling expenses
(Schedule 1) $ 30,079 $ - $ - $30,079
General and administrative
Expenses (Schedule 2) 180,182 - - 180,182
Interest on Notes - Note 5 13,415 - - 13,415
___________ _______________ _____________ _______
Total expenses: 223,676 - - 223,676
___________ _______________ _____________ _______
Net Income / (loss) $ (204,220)$ - $ - $(204,220)
=========== =============== ============= =======
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 5
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 1 - SELLING EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
Selling Expenses:
Advertising and Promotion $ 16,079 - - 16,079
Sales Commissions 9,000 9,000
Other Selling Expenses 5,000 - - 5,000
___________ _______________ ____________ ________
Total Selling Expenses $ 30,079 $ - $ - $ 30,079
=========== =============== ============ ========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 6
<PAGE>
SUPPLEMENTAL INFORMATION
SLOAN ELECTRONICS, INC.
SCHEDULE 2 - GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
General and Administrative
Expenses
Payroll $ 50,000 $ - $ - $ 50,000
Payroll Taxes 3,291 3,291
Rent 9,104 9,104
Office Expenses 1,318 1,318
Telephone 3,911 3,911
Legal & Accounting Services 12,355 12,355
Other Contract Services 64,974 64,974
Facilities & Equipment
Rental & Lease Costs 880 880
Travel, Transportation
& Entertainment 5,585 5,585
Depreciation and amortization 11,274 11,274
Insurance 17,490 - - 17,490
___________ _______________ ____________ ________
Total General and
Administrative Expenses $ 180,182 $ - $ - 180,182
=========== =============== ============= =======
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 7
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Sloan MAS Acquisition
Electronics, Inc. I Corp. Eliminations Combined
----------------- --------------- ------------ --------
CASH FLOWS FROM
OPERATION ACTIVITIES:
Net loss: $ (204,220) $ - $ - $(204,220)
Add: Non cash items
Depreciation 599 - 599
Amortization 10,675 - - 10,675
___________ ______________ ___________ _________
(192,946) - - (192,946)
Adjustments to reconcile
net loss to net cash used
in operating activities:
(Increase) in Accounts
Receivable (17,547) (17,547)
Decrease in Inventory 14,488 14,488
Decrease in Deposits 700 700
Increase in Accounts Payable 83,179 83,179
Increase in Accrued Interest 21,002 21,002
(Decrease) in Customer
Deposits (2,400) - - (2,400)
___________ _______________ ____________ ________
Total Adjustments 99,422 - - 99,422
Net cash used
in operations $ (93,524) $ - $ - $(93,524)
___________ ______________ ____________ ________
CASH FLOWS FROM
INVESTING ACTIVITIES:
Net cash provided/(used)
in investing activities - - - -
CASH FLOWS FROM
FINANCING ACTIVITIES:
Loan Proceeds $ 50,000 50,000
Payment of loan - -
Sale of Common Stock 20,000 - - 20,000
___________ ______________ ____________ ________
Net cash provided from
financing activities 70,000 - - 70,000
___________ ______________ ____________ ________
Net increase in cash (23,524) - - (23,524)
Opening cash 25,808 - - 25,808
___________ ______________ ____________ ________
Closing cash $ 2,284 $ - $ - $ 2,284
=========== ============== ============ ========
See Accountant's Compilation Report &
-------------------------------------
Notes To Financial Statements
-----------------------------
Page 8
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Sloan Electronics Inc. MAS Acquisition I Corp Combined
Common Stock Common Stock
------------ ------------
Shares Amount Shares Amount
------ ------ ------ ------
Shares issued At
Inception Through
December 31,1995 3,000,000 $ 34,792 - - $ 34,792
Shares Issued in
1996 @ $1 Par
Value 200,000 $ 200,000 - $ - $ 200,000
Shares issued for
the Nine Months
Ended September
30, 1997 @ $1
Par Value 20,000 $ 20,000 - - $ 20,000
Shares Issued in
1996 @ $.001
Par Value - $ - 8,500,000 $ 8,500 $ 8,500
_________ _________ _________ _______ _________
Total 3,220,000 $ 254,792 8,500,000 $ 8,500 $ 263,292
========= ========= ========= ======= =========
Page 9
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
9/30/97
1. Organization:
------------
Sloan Electronics was incorporated in the state of Florida in July, 1993.
The Corporation designs, manufactures and markets electronics monitoring
equipment primarily for the criminal justice industry and the long term
health care industry.
On November 18, 1997 an agreement of merger between MAS Acquisition I Corp.,
a Delaware corporation, and Sloan Electronics, Inc., a Florida corporation
was made and entered into. The two corporations merged into a single
corporation, in which the Florida corporation ceased to exist, however
the name of Sloan Electronics, Inc. will remain for the merge. The
outstanding shares of the Florida corporation were converted as follows:
One (1) share of Florida corporation into 2.31 shares of the Delaware
corporation.
2. Summary of Significant Accounting Policies:
-------------------------------------------
Method of Accounting
- --------------------
The corporation uses the accrual method of accounting for both financial
statement and tax purposes.
Depreciation
- ------------
All assets are recorded at cost. Depreciation is calculated using straight
- -line and accelerated methods for both book and tax purposes based on the
estimated useful lives of the assets. The company expenses maintenance and
repair as the costs are incurred.
Depreciation has been computed based on three year estimated lives.
Amortization
- ------------
In November, 1995 the Corporation entered into a private placement
arrangement. The costs of the IPO were capitalized and are being amortized
over a five year period. The Corporation capitalized research and
development costs which are also being amortized over a five year period.
<PAGE>
SLOAN ELECTRONICS, INC.
NOTES TO FINANCIAL STATEMENTS
9/30/97
Income Taxes
- ------------
When Sloan Electronics was incorporated, it was formed as a subchapter "S"
Corporation; passing through all income or loss directly to the shareholders.
No provision for income tax was needed. As of 7/1/96, the Corporation's
board of directors voted to rescind its "S" election and is now a regular
Corporation.
3. Accounts Receivable
These amounts are due from customers for products delivered. All accounts
are considered collectible and no allowance for doubtful accounts has been
recorded.
4. Inventory
Inventory is recorded at cost.
5. Due to stockholders and accrued interest.
This represents unsecured loans made by various stockholders. The interest
on the notes ranges from 10% simple interest to 18% simple interest.
Interest was accrued at September 30, 1997.
6. Common Stock
At the period ended 9/30/97 there was 4,000,000 shares authorized, 3,220,000
shares issued and outstanding, for Sloan Electronics, Inc. At the period
ended 9/30/97 there was 100,000,000 shares authorized, 8,500,000 shares
issued and outstanding for MAS Acquisition I Corp.
<PAGE>
Exhibit Number Description
2.0 Agreement of Merger
2.1 Article of Amendment
16.0 Letter from Former Certifying Accountant
99.1 Form of Offshore Securities
Subscription Agreement
99.2 Offshore Securities
Subscription Agreement
<PAGE>
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
On December 18, 1997, the Company began an offshore distribution of up to
5,000 shares of common stock. David Guevara and Ash Mathur are acting as
placement agents. The offshore offering is being made pursuant to
Regulation S of the Securities Act of 1933. The Company and the placement
agents will distribute 50 shares of common stock each to no more than
100 non-U.S. persons.
On February 25, 1998, the Company completed a private placement for
225,000 shares of common stock at $0.288 per share for a total of $65,000
to Mr. Frederick N. Griffiths. Baxter, Banks & Smith Ltd. acted as
placement agent and received a 10% cash compensation. The offshore offering
is made pursuant to Regulation S of the Securities Act of 1933.
The Company will escrow the shares of common stock during the 40 days
restriction period from the completion date of this offering and will
not send stock certificate or register any trasfer of shares until the
end of the restriction period.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 18, 1998
Sloan Electronics, Inc.
By: /s/Paul Sloan
--------------------------------
Paul Sloan, President
and Director
<PAGE>
EXHIBIT 2.0
STATE OF DELAWARE
AGREEMENT OF MERGER
AGREEMENT OF MERGER
BETWEEN
(A Delaware Domestic Corporation)
AND
(A Foreign Corporation)
(State of Incorporation)
This Plan and Agreement of Merger made and entered into on the 18th day
of November, 1997, by and between MAS Acquisition I Corp., a Delaware
Corporation, and Sloan Electronics, Inc., a Florida Corporation.
WITNESSETH:
WHEREAS, the Delaware Corporation is a Corporation organized and
existing under the laws of the State of Delaware, its Certificate of
Incorporation having been filed in the Office of the Secretary of State of the
State of Delaware on July 31, 1996; and
WHEREAS, the Florida Corporation is a corporation organized and existing
under the laws of the State of Florida; and
WHEREAS, the aggregate number of shares which the Delaware Corporation
has authority to issue is 100,000,000; and
WHEREAS, the Board of Directors of each of the constituent corporations
deems it advisable that the Florida Corporation be merged into the Delaware
Corporation on the terms and conditions hereinafter set forth, in accordance
with the applicable provisions of the statutes of the States of Delaware and
Florida respectively, which permit such merger;
NOW, THEREFORE, in consideration of the premises and of the agreements,
covenants and provisions hereinafter contained, the Delaware Corporation and
the Florida Corporation, by their respective Boards of Directors, have agreed
and do hereby agree, each with the other as follows:
ARTICLE I
The Florida Corporation and the Delaware Corporation shall be merged
into a single corporation, in accordance with applicable provisions of the
laws of the State of Florida and of the State of Delaware, by the Florida
Corporation merging into the Delaware Corporation, which shall be the surviving
Corporation.
ARTICLE II
Upon the merger becoming effecive as provided in the applicable laws of
the State of Florida and of the State of Delaware (the time when the merger
shall so become effective being sometimes herein referred to as the "EFFECTIVE
DATE OF THE MERGER"):
1. The two Constituent Corporations shall be a single corporation,
which shall be the Delaware Corporation as the Surviving Corporation, and the
separate existence of the Florida Corporation shall cease except to the extent
provided by the laws of the State of Florida in the case of a corporation after
its merger into another corporation.
ARTICLE III
The Certificate of Incorporation of the Delaware Corporation shall not
be amended in any respect by reason of this Agreement of Merger.
ARTICLE IV
The manner of converting the outstanding shares of each of the
Constituent Corporations shall be as follows:
One share of Florida corporation into 2.31 shares of the Delaware
corporation.
IN WITNESS WHEREOF, the Delaware Corporation and the Florida
Corporation, pursuant to the approval and authority duly given by resolutions
adopted by their respective Boards of Directors have caused this Plan and
Agreement of Merger to be executed by an authorized officer of each party
thereto.
(A Delaware Corporation)
BY: /s/ Aaron Tsai
--------------------------
TITLE OF OFFICER: Aaron Tsai, President
--------------------------
(A Florida Corporation)
BY: /s/ Paul Sloan
__________________________
Authorized Officer
TITLE OF OFFICER: Paul Sloan, President
--------------------------
<PAGE>
EXHIBIT 2.1
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
MAS Acquisition I Corp. a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of November 18, 1997
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to
be advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thereof numbered "FIRST" so that, as amended, said
Article shall be and read as follows:
The name of the Corporation is Sloan Electronics, Inc.
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: That the said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said MAS Acquisition I Corp. has caused this certificate to
be signed by Aaron Tsai, an Authorized Officer, this 18th. day of November, 1997
BY: /s/ Aaron Tsai
____________________
TITLE OF OFFICER: President
--------------------
<PAGE>
EXHIBIT 16.0
JAMES E. SCHEIFLEY & ASSOCIATES, P.C.
Certified Public Accountants
- -------------------------------------------------------------------
December 30, 1997
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
Re: MAS Acquisition I Corp.
Dear Sir/Madam:
Pursuant to the request of the above named company, we affirm that:
(1) We have read the Company's response to Item 4 of Form 8-K dated
December 18, 1997.
(2) We agree with the response.
(3) There have been no disagreements on matters of accounting and
auditing between our firm and the Company.
Sincerely,
/s/ James E. Scheifley & Associates, P.C.
James E. Scheifley & Associates, P.C.
- -------------------------------------------------------------------
5299 DTC Boulevard Phone (303) 290-0101
Suite 300 Fax (303) 694-6761
Englewood, Colorado 80111 E-mail JES @henge.com
<PAGE>
EXHIBIT 99.1
Sloan Electronics, Inc.
2527 Monterey St., Sarasota, FL 34231
SUBSCRIPTION AGREEMENT
THE UNDERSIGNED hereby subscribes to receive 50 Shares of Common Stock (the
"Shares") of Sloan Electronics, Inc. (the "Company"), a Delaware corporation,
as a gift. In this regard, the total Shares is valued at an undetermined
amount.
REPRESENTATION BY THE SUBSCRIBER:
1. The Subscriber / Purchaser hereby certify that he or she is not a U.S.
person and is not acquiring the Securities for the account or benefit of a
U.S. person other than persons who purchased Securities in transactions
exempt from the registration requirements of the Securities Act;
2. The Subscriber / Purchaser also agrees only to sell the Securities in
accordance with the registration provisions of the Securities Act or an
exemption therefrom, or in accordance with the provisions of the Regulation;
3. The Securities being acquired are "Restricted Securities" as that term
is defined in Rule 144 of the Rules and Regulations adopted by the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and not with a view to the distribution thereof by public sale or
other disposition. The Subscriber does not intend to subdivide Subscriber's
acquisition with anyone;
4. The Subscriber understands and acknowledges that the restriction period
for the Shares is 40 days from the completion date of the offering and the
Company did not make any determination as to the value of the Shares;
5. The Subscriber understands that it must bear the economic risk of the
investment for an indefinite period of time because the Securities have
not been registered under the Securities Act of 1933, as amended, or any
state securities laws, and therefore, cannot be sold unless it is
subsequently registered under the Act and any state securities laws, or
unless exemption from such registrations are available;
6. The Subscriber understands that the Company will refuse to register
any transfer of Securities not made in accordance with the provisions of
the Regulation. The Subscriber agrees that all certificates representing
Securities will contain the following legend or a substantial equivalent:
"THE SECURITIES REPRESENTED BY THE CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED
SECURITIES" AS THAT ITEM IS DEFINED IN RULE 144 UNDER THE ACT. THE
SHARE(S) MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
AN EXEMPTION FROM REGISTRATION, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY";
7. The Subscriber agrees that a stop transfer order prohibiting the
transfer of the Securities will be placed by the Company with its
transfer agent, when and if the shares are issued;
<PAGE>
8. The Subscriber acknowledges and hereby agrees that the Company is
under no obligation to register or qualify the Securities under the
Securities Act of 1933, as amended, and the rules and regulations adopted
thereunder;
9. The Subscriber understands and hereby agrees that the Company will comply
with all valid, applicable Federal and State securities regulations which
may require, among other things, that the Subscriber escrow the Securities;
10. The Subscriber represents and warrants that in connection with the
acquisition of the Securities, the Subscriber has had made available or
accessible to (it)(his)(her), by the Company and its officers and directors,
all information which it has deemed material to making an informed
investment decision to acquire the Securities prior to (its)(his)(her)
subscription in the Securities;
11. The Subscriber represents and warrants that it has not acted as a
Purchaser Representative for any person in connection with this purchase
of Securities by the Subscriber;
12. Indemnification
The Subscriber recognizes that the sale and distribution of the Securities
to him will be based upon his representations and warranties set forth
above and on other written information supplied by the Subscriber to the
Company. The Subscriber agrees to indemnify and to hold harmless the
Company, and its affiliates from and against any and all loss, damage,
liability or expense, including costs and reasonable attorney's fees,
arising out of or based upon any false representation or warranty made
by the Subscriber in this Subscription Agreement and/or any failure by
the Subscriber to fulfill any covenants or agreements set forth herein
or in the other document executed and delivered by him in connection
with this transaction.
The Undersigned requests that the Securities be registered in the name of
the Undersigned at the address below,
Please type or print the following information:
Name:
______________________________________________________________________
Full name of Subscriber as it should appear on schedule of Corporation
Address:_____________________________________
_____________________________________
_________________ _________________ __________________
City Country Zip Code
Intending to be legally bound, the parties hereto have set their hands on
this ___ day of _____, 1997.
____________________________________ _____________________________
Paul Sloan (Signature of Subscriber)
President of Sloan Electronics, Inc.
_____________________________
(Print Name of Subscriber)
<PAGE>
EXHIBIT 99.2
Sloan Electronics, Inc.
2527 Monterey St., Sarasota, FL 34231
- ------------------------------------------------------------------------
SUBSCRIPTION AGREEMENT
THE UNDERSIGNED hereby subscribes to purchase 225000 shares of Common Stock
(the "Shares") of Sloan Electronics, Inc. (the "Company"), a Delaware
corporation. In this regard, each Shares is valued at $.288 for a total
consideration of $65,000.00.
REPRESENTATION BY THE SUBSCRIBER:
1. The Subscriber / Purchaser hereby certify that he or she is not a U.S.
person and is not acquiring the Securities for the account or benefit of
a U.S. person other than persons who purchased Securities in transactions
exempt from the registration requirements of the Securities Act;
2. The Subscriber / Purchaser also agrees only to sell the Securities in
accordance with the registration provisions of the Securities Act or an
exemption therefrom, or in accordance with the provisions of the Regulation;
3. The Securities being acquired are "Restricted Securities" as that term
is defined in Rule 144 of the Rules and Regulations adopted by the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and not with a view to the distribution thereof by public sale or
other disposition. The Subscriber does not intend to subdivide Subscriber's
acquisition with anyone;
4. The Subscriber understands and acknowledges that the restriction period
for the Shares is 40 days from the completion date of the offering;
5. The Subscriber understands that it must bear the economic risk of the
investment for an indefinite period of time because the Securities have
not been registered under the Securities Act of 1933, as amended, or any
state securities laws, and therefore, cannot be sold unless it is
subsequently registered under the Act and any state securities laws, or
unless exemption from such registrations are available;
6. The Subscriber understands that the Company will refuse to register
any transfer of Securities not made in accordance with the provisions
of the Regulation. The Subscriber agrees that all certificates
representing Securities will contain the following legend or a substantial
equivalent:
"THE SECURITIES REPRESENTED BY THE CERTIFICATE HAVE NOT BEING REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED
SECURITIES" AS THAT ITEM IS DEFINED IN RULE 144 UNDER THE ACT. THE SHARE(S)
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY";
7. The Subscriber agrees that a stop transfer order prohibiting the transfer
of the Securities will be placed by the Company with its transfer agent, when
and if the shares are issued.
8. The Subscriber acknowledges and hereby agrees that the Company is under
no obligation to register or qualify the Securities under the Securities
Act of 1933, as amended, and the rules and regulations adopted thereunder;
9. The Subscriber understands and hereby agrees that the Company will comply
with all valid applicable Federal and State securities regulations which
may require, among other things, that the Subscriber escrow the Securities;
10. The Subscriber represents and warrants that in connection with the
acquisition of the Securities, the Subscriber has had made available or
accessible to (it)(his)(her), by the Company and its officers and directors,
all information which it has deemed material to making an informed
investment decision to acquire the Securities prior to (its)(his)(her)
subscription in the Securities;
11. The Subscriber represents and warrants that it has not acted as a
Purchaser Representative for any person in connection with this purchase
of Securities by the Subscriber.
12. Indemnification
The Subscriber recognizes that the sale and distribution of the Securities
to him will be based upon his representations and warranties set forth
above and on other written information supplied by the Subscriber to the
Company. The Subscriber agrees to indemnify and to hold harmless the
Company, and its affiliates from and against any and all loss, damage,
liability or expense, including costs and reasonable attorney's fees,
arising out of or based upon any false representation or warranty made
by the Subscriber in this Subscription Agreement and/or any failure by
the Subscriber to fulfill any covenants or agreements set forth herein
or in the other documents executed and delivered by him in connection
with this transaction.
The Undersigned requests that the Securities be registered in the name
of the Undersigned at the address below,
Please type or print the following information:
Name: Frederick N. Griffiths
- ----------------------------------------------------------------------
Full name of Subscriber as it should appear on schedule of Corporation
Address: 6 Holly Court
-----------------------
Holly Lane
-----------------------
Bazsall Common England CV77EB
--------------- ---------- -----------
City Country Zip Code
Intending to be legally bound, the parties hereto have set their hands on
this 25 day of Feb, 1998.
-- ---
/s/ Paul Sloan /s/ Frederick N. Griffiths
- -------------------------- --------------------------
Paul Sloan (Signature of Subscriber)
President of Sloan Electronics, Inc.
Frederick N. Griffiths
--------------------------
(Print Name of Subscriber)
