SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
FORM 8-K/A
FIRST AMENDMENT TO CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
Date of Original Report: October 28, 1999
Date of Amended Report: December 27, 1999
Salient Cybertech, Inc.
(Exact name of Registrant as specified in Charter)
Delaware 0-28772 35-1990559
(State or Other Jurisdiction (Commission (IRS Employer)
of Incorporation) File Number) Identification No.)
1715 Stickney Pt. Rd. Suite A-12, Sarasota FL
(Address of Principal Executive Offices)
34231
(Zip Code)
(941) 349-6583
Registrant's Telephone Number, including Area Code
Sloan Electronics, Inc.
(Former name or former address, if changed since last report)
This Current Report on Form 8-K/A is comprised of 26 sequentially
numbered pages, including exhibits. The exhibit index is located at page 21.
<PAGE> 1
ITEM 2. Acquisition of Assets
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Discussion of Financial Information
On September 24, 1999 Salient Cybertech, Inc. (Salient) purchased 100% of
all the outstanding shares of Gemini Learning Systems, Inc. (Gemini), as
fully described in ITEM 2 of the First Amendment to the Current Report on
Form 8K, filed on October 28, 1999. As a result of the aforementioned
transaction, Salient gained the active operating company, whose historical
and current activities are fully described in ITEM 2 of the First Amendment
to the Current Report on Form 8K mentioned above.
The operating data for the parent company, and a full discussion thereof,
as well as Financial Statements for the fiscal year ended December 31, 1997,
December 31, 1998, and the first three quarters of 1999, were filed with the
SEC on Form 10-KSB for the fiscal years ended December 31, 1998, and
December 31, 1997, and Form QSB for the periods ended March 31, 199, June
30, 1999, and September 30, 1999, and are incorporated herein by reference.
Pro-Forma consolidated Statements are in ITEM 7, below.
Gemini Learning Systems, Inc,. Discussion of Financial Information
For the six months ended June 30, 1999 Gemini had revenues of $67,6923,
while in the fiscal period period ended December 31, 1998, revenues were
$35,123.
Earnings for the two periods were $55,239 and ($10,079), respectively.
This was reflective of the Scientific Tax Credit of $31,470 for the six
months ended June 30, 1999 and $94,950 for the period ended December 31,
1998. These Credits are refunded to Gemini by the Government of Canada.
Expenses were $43,923 for the 6 month period ending June 30, 1999, as
compared to the $139,852 for the year ended December 31, 1998. Overall,
the major expense in both periods were salaries, payments for development
to consultants, and Research and Development.
The cash and investment certificate position of Gemini increased from
$0 on December 31, 1998, to $3,805 on June 30, 1999. Retained earnings
grew from $369,900 on December 31, 1998 to $441,368 on June 30, 1999.
Gemini also had direct taxes recoverable of $64,122 on June 30, 1999.
Overall, liquidity increased from $39,011 on December 31, 1998 to
$88,511 on June 30, 1999.
Fiscal Periods
For the fiscal year ended December 31, 1998, Gemini had revenues of $35,123,
while in the same periods ending in 1997 and 1996, revenues were $156,180
and $155,774 respectively.
Earnings for the three periods were ($10,079) for the fiscal year ending
December 31, 1998 and $64,314 and $30,847 for the periods ending on
December 31, 1997 and 1996, respectively. Expenses were $139,852 for the
<PAGE> 2
period ending December 31, 1998 as compared to the $145,532 and $194,425,
respectively, for the previous two fiscal years. Overall, the major costs
were wages and consulting fees for software development, and amortization
of R&D expenses. Investment tax credits for the fiscal period ending
December 31, 1998 were $94,650 as compared to $53,666 and $69,489 in the
two previous fiscal years. Investment tax credits were obtained from the
Government of Canada for the R&D carried out by Gemini.
Overall liquidity was $39,011 on December 31, 1998 with a cash position of
$0, as compared to overall liquidity of $82,179 and a cash position of
$3,785 on December 31, 1997. Liquidity was $80,943 on December 31, 1996,
with a cash position of $0. Retained earnings were $369,900 on December
31, 1998, as compared to $439,409 on December 31, 1997, and, $393,247 on
December 31, 1996.
All dollar figures in this Item 2 are in U.S. dollars.
The six month Audited Financial Statements referred to are enclosed herein,
in ITEM 7, and are in U.S. dollars.
The Audited Financial Statements for the fiscal years ending December 31
for the years 1998, 1997, and 1996 are enclosed herewith in ITEM 7. All
values in this section are in U.S. Dollars.
The Pro-Forma Statements for the six month period ending June 30, 1999, and
the Pro-Forma Statements for the Fiscal years ending December 31, 1998,
December 31, 1997, and December 31, 1996 are located in ITEM 7, herein.
Material Events
Salient Cybertech, Inc., on September 24, 1999, purchased all the
outstanding shares of Gemini Learning Systems, Inc. The transaction is
fully described in the First Amendment to the Current Report on Form 8-K
filed on October 28, 1999 and incorporated in its entirety herein.
Liquidity
Management believes that Gemini has the cash funds and necessary liquidity
to meet the needs of the company over the next year, assuming sales and
development efforts conform to the standards historically set.
ITEM 7. Financial Statements of Businesses Acquired or to be Acquired
A. Financial Statements:
See following pages
<PAGE> 3
GEMINI LEARNING SYSTEMS INC.
(a Canadian Company)
Comparative Financial Statements and
Accountant's Audit Report
For the Years Ended
December 31, 1998, 1997 and 1996, and
For the Six Period Ended June 30, 1999.
SALIENT CYBERTECH, INC.
Pro-Forma Financial Statements
For the Years Ended
December 31, 1998, 1997 and 1996, and the
Six Months ended June 30, 1999
<PAGE> 4
GEMINI LEARNING SYSTEMS INC.
COMPARATIVE FINANCIAL STATEMENTS
December 31, 1998, 1997 and 1996, and
The Six Month Period Ended June 30, 1999.
TABLE OF CONTENTS
_____________________________________________________________________________
Page
Accountant's Audit Report 7
Financial Statements:
Balance Sheet 8
Statements of Operations and Retained Earning 9
Statement of Stockholder's Equity 10
Statements of Cash Flows 12
Notes to Financial Statements 17
______________________________________________________________________
<PAGE> 5
SALIENT CYBERTECH, INC.
PRO-FORMA FINANCIAL STATEMENTS
December 31, 1998, 1997 and 1996, and
The Six Month Period Ended June 30, 1999.
TABLE OF CONTENTS
PRO-FORMA STATEMENTS
______________________________________________________________________
Page
Accountant's Audit Report 7
Financial Statements:
Balance Sheet 13
Statements of Operations and Retained Earning 14
Statement of Stockholder's Equity 15
Statements of Cash Flows 16
Notes to Financial Statements 17
______________________________________________________________________
<PAGE> 6
Stan J.H. Lee & Co., CPAs tel) 201-944-7246
440 West St. Suite 300 fax) 201-944-7759
Fort Lee, N.J. 07024-5058 e-mail) [email protected]
www.dmhd-cpa.com
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and
Shareholder of
Gemini Learning Systems, Inc.
Calgary, Alberta, Canada
We have audited the accompanying comparative balance sheet of Gemini
Learning Systems Inc. as of December 31, 1998, l997, 1996, and June 30, 1999
and the related comparative statement of operations and retained earnings,
consolidated statement of stockholders' equity and consolidated statement
of cash flows for the periods then ended. 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 audits 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 audits provide
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 Gemini Learning Systems,
Inc. at December 31, 1998, l997, 1996, and the six month period ended June
30, 1999, and the results of its operations and its cash flow for the years
then ended in conformity with generally accepted accounting principles.
We have compiled pro-forma financial statements for the periods ended
December 31, 1998, 1997, 1996, and the six month period ended June 30,
1999 for Salient Cybertech, Inc. and Gemini Learning Systems, Inc., utilizing
the audited statements presented herein, and the audited financial
statements for Salient Cybertech, Inc. prepared by Bobbitt, Pittenger and
Company, P. A. In our opinion, the pro-forma financial statements referred
to above present fairly, in all material respects, the financial position
of Gemini Learning Systems, Inc. at December 31, 1998, l997 1996, and
the six month period ended June 30, 1999, and the results of its operations
and its cash flow for the periods then ended in conformity with generally
accepted accounting principles.
/s/Stan J.H. Lee & Co., CPAs/s/
December 22, 1999
Fort Lee, NJ
<PAGE> 7
GEMINI LEARNING SYSTEMS INC.
BALANCE SHEET AS OF JUNE 30, 1999,
DECEMBER 21, 1998, DECEMBER 31, 1997 AND
DECEMBER 31, 1996
6/30/99 12/31/98 12/31/97 12/31/96
ASSETS
Current Assets:
Cash $3,805 $ - $ 3,785 $ -
Accounts Receivable 18,275 36,793 23,490 1,002
Due from a shareholder - - - 5,230
Prepaid expenses and
sundry assets 2,309 2,218 2,381 5,370
Income taxes recoverable 64,122 - 52,523 69,341
88,511 39,011 82,179 80,943
Research and Development,
net of
accumulated amortization 472,959 408,435 422,857 379,485
Property and Equipment,
net of
accumulated depreciation 14,133 17,808 25,669 32,568
TOTAL ASSETS $575,603 $465,254 $530,705 $492,996
LIABILITIES
Current Liabilities:
Bank Indebtedness $5,801 $ 2,779 $ 719 61,643
Accounts payable and
accrued liabilities 56,286 42,803 25,179 20,320
Capital lease obligations 577 2,614 7,199 17,779
Other payable - - 6,023 -
62,664 48,196 39,120 99,742
Long-Term Debt:
Notes payable 35,521 33,224 48,994 -
Due to shareholders 36,025 13,927 3,175 -
TOTAL LIABILITIES 134,210 95,347 91,289 99,742
SHAREHOLDERS' EQUITY
Capital Stock
(See Notes) 7 7 7 7
Retained Earnings 441,386 369,900 439,409 393,247
441,393 369,907 439,416 393,254
$575,603 $465,254 $530,705 $492,996
See Accompanying Notes Which are an Integral Part of Financial Statements
<PAGE> 8
GEMINI LEARNING SYSTEMS INC.
STATEMENTS OF EARNINGS AND RETAINED EARNINGS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1999
AND FOR THE FISCAL YEARS ENDED DECEMBER 31, 1998,
DECEMBER 31, 1997 AND DECEMBER 31, 1996
6/30/99 12/31/98 12/31/97 12/31/96
REVENUE $ 67,692 $ 35,123 $156,180 $155,774
GENERAL AND
ADMINISTRATIVE EXPENSES
Wages and Benefits 5,827 104,736 80,846 109,803
Consulting, sub-contract
and materials 45,197 44,650 25,443 23,208
Office 4,798 22,786 14,483 76,057
Rent 7,610 19,766 14,634 13,051
Bank Charges and Interest 718 10,963 10,395 6,935
Telephone 1,953 4,410 5,964 6,369
Travel 1,609 4,906 4,248 2,178
Automotive 870 3,345 3,618 2,916
Bad debts - - 76,271 -
Amortization 47,804 75,089 85,547 80,955
Capitalization of research
& development (72,462) (150,798) (175,917) (127,047)
43,923 139,852 145,532 194,425
EARNINGS BEFORE INCOME
TAXES 23,769 (104,729) 10,648 (38,651)
RECOVERY OF SCIENTIFIC
RESEARCH
TAX CREDITS 31,470 94,650 53,666 69,498
NET INCOME (LOSS) 55,239 (10,079) 64,314 30,847
RETAINED EARNINGS,
beginning of year 369,900 439,409 393,247 362,400
NET GAIN (LOSS) FROM
CURRENCY CONVERSION 16,247 (59,430) (18,152)
RETAINED EARNINGS,
end of year 441,386 369,900 439,409 393,247
EARNINGS Per share $0.26 ($0.05) $0.32 $0.16
See Accompanying Notes Which are an Integral Part of Financial Statements
<PAGE> 9
GEMINI LEARNING SYSTEMS INC.
STATEMENT OF STOCKHOLDERS EQUITY FOR THE SIX MONTH PERIOD
ENDED JUNE 30, 1999 AND FISCAL YEARS ENDED DECEMBER 31, 1998 AND
DECEMBER 31, 1997 AND DECEMBER 31, 1996
Common Stock
Numbers of Shares Amount Retained
Earnings Total
Stockholders'
Equity
BALANCE AS OF 01/01/96
(See Notes) 20,000,000 $7 $362,400 362,407
Shares Issued in years
1996 & 1997 - - -
Net Income- year 1996 - - 30,847
BALANCE AS OF 12/31/96 20,000,000 $7 393,247 393,254
BALANCE AS OF 01/01/97 393,247
Net Income- year 1997 - - 64,314
Net gain (Loss) -
Currency conversion (18,152)
BALANCE AS OF 12/31/97 20,000,000 $7 $439,409 439,416
BALANCE AS OF 01/01/97
(See Notes) 20,000,000 $7 $393,247 $393,254
Shares Issued in 1997 - -
Net Income in 1997 - - 64,314
Net gain (Loss) -
Currency conversion (18,152)
BALANCE AS OF 12/31/97 20,000,000 $7 439,409 439,416
BALANCE AS OF 01/01/98 439,409
Net Income (Loss) in 1998 - - (10,079)
Net gain (Loss) -
Currency conversion (59,430)
BALANCE AS OF 12/31/98 20,000,000 $7 $369,900 $369,907
See Accompanying Notes Which are an Integral Part of Financial Statements
<PAGE> 10
GEMINI LEARNING SYSTEMS INC.
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE SIX MONTH PERIOD
ENDED JUNE 30, 1999 AND FISCAL YEARS ENDED DECEMBER 31, 1998 AND
DECEMBER 31, 1997 AND DECEMBER 31, 1996
BALANCE AS OF 01/01/99
(See Notes) 20,000,000 $7 $369,900 $369,907
Shares Issued between
01/01/99 AND 06/30/99 - -
Net Income(Loss) 55,239
Net gain (Loss) -
currency conversion 16,247
BALANCE AS OF 06/30/99 20,000,000 $7 $441,386 $441,393
See Accompanying Notes Which are an Integral Part of Financial Statements
<PAGE> 11
GEMINI LEARNING SYSTEMS INC.
STATEMENTS OF CASH FLOW
FOR THE SIX MONTH PERIOD ENDED
JUNE 30, 1999 AND FISCAL YEARS ENDED DECEMBER 31, 1998
AND DECEMBER 31, 1997
06/30/99 12/31/98 12/31/97
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $55,239 ($10,079) $64,314
Noncash Items Included in
Net Income 71,401 75,089 85,547
Decrease in Accounts Receivable 18,518 (13,303) (23,021)
Decrease amount due from
shareholder - 5,116
(Increase) in prepaid expenses
and sundry assets (91) - 2,820
(Increase) Decrease in income
taxes recoverable (64,122) 25,163 14,078
Increase (Decrease) in bank
indebtedness 3,022 2,185 (59,562)
Increase in accounts payable
and accrued liabilities 13,483 20,043 5,851
Decrease in capital lease
obligation (2,037) (4,240) (10,036)
Increase (Decrease) in other
payable (5,814) 6,154
$95,413 $89,044 $91,261
CASH FLOWS FROM INVESTING
ACTIVITIES:
Expenditure for property and
equipment (3,675)
Expenditure for research and
development 112,328) (91,324) (140,779)
(116,003) (91,324) (140,779)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in notes payable-
financing obtained (paid back) 2,297 (12,870) 50,059
Due to shareholders 22,098 11,365 3,244
24,395 (1,505) 53,303
Net Increase(Decrease)
in Balance of Cash 3,805 (3,785) 3,785
Cash at Beginning of Period - 3,785 -
Cash at End of Period $3,805 $ (0) $ 3,785
See Accompanying Notes Which are an Integral Part of Financial Statements
<PAGE> 12
SALIENT CYBERTECH, INC.
PRO-FORMA COMPARITIVE BALANCE SHEETS
AS OF DECEMBER 31, 1998, 1997, 1996, AND JUNE 30, 1999
6/30/99 12/31/98 12/31/97 12/31/96
ASSETS
Current Assets:
Cash $4,711 $ 19,792 $ 7,721 $ -
Accounts Receivable 32,112 48,919 113,222 1,002
Inventory 21,108 27,171 10,151 -
Due from a shareholder 33,565 33,565 33,565 5,230
Prepaid expenses and
sundry assets 1,055,112 28,640 2,381 5,370
Income taxes
recoverable 64,122 - 52,523 69,341
Deferred syndication
costs 100,000 100,000
1,310,730 258,087 219,563 80,943
Non-Current Assets:
Prepaid legal fees 328,125
Research and Development,
net of
accumulated amortization 472,959 408,435 422,857 379,485
Property and Equipment,
net of
accumulated depreciation 15,577 19,700 27,556 32,568
TOTAL ASSETS 2,127,391 686,222 669,976 492,996
LIABILITIES
Current Liabilities:
Bank Indebtedness $5,801 $ 2,779 $ 719 61,643
Accounts payable and
accrued liabilities 144,423 122,539 149,765 20,320
Accrued Expenses 186,035 117,442 21,530 -
Accrued Interest 9,775 8,650 5,950 -
Accrued Interest-Related
party 63,107 41,189 17,926 -
Capital lease obligations 577 2,614 7,199 17,779
Other payable - - 6,023 -
409,718 295,213 209,112 99,742
Long-Term Debt:
Notes payable 61,208 74,942 63,994 -
Notes payable-Related
party 242,200 210,000 160,000 -
Due to shareholders 36,025 13,927 3,175 -
TOTAL LIABILITIES 749,151 594,082 436,281 99,742
SHAREHOLDER'S EQUITY
Capital Stock
Authorized-80,000,000
Common shares, par value
0f $0.001
Issued and outstanding- 11,655 10,642 9,196 8,507
Additional Paid-in-capital 2,444,681 603,134 376,497 -
Retained Earnings
(Accumulated Deficit) (1,078,096) (521,636) (151,998) 384,747
TOTAL SHAREHOLDERS'
EQUITY 1,378,240 92,140 233,695 393,254
$2,127,391 $686,222 $669,976 $492,996
<PAGE> 13
SALIENT CYBERTECH, INC.
CONSOLIDATED PRO-FORMA COMPARATIVE
STATEMENTS OF EARNINGS AND RETAINED EARNINGS
FOR THE PERIODS ENDED
DECEMBER 31, 1998, 1997, 1996, AND JUNE 30, 1999
6/30/99 12/31/98 12/31/97 12/31/96
REVENUE $ 81,109 $119,782 $488,857 $155,774
COST OF SALES 8,621 67,929 261,412
GROSS PROFIT 72,488 51,823 227,445 155,774
GENERAL AND
ADMINISTRATIVE EXPENSES
Wages and Benefits 231,239 280,601 195,843 109,803
Consulting, sub-contract
and materials 363,178 152,204 72,805 23,208
Office 35,583 57,642 42,011 84,557
Rent 17,464 19,766 46,875 13,051
Bank Charges and Interest 24,354 39,479 36,271 6,935
Telephone 9,495 11,110 13,859 6,369
Travel 5,170 10,767 13,484 2,178
Automotive 870 9,034 12,603 2,916
Bad debts - - 96,192 -
Amortization 47,804 75,089 85,547 80,955
Depreciation - 695 747 -
Capitalization of research
& development expenditures (72,462) (150,798) (175,917) (127,047)
662,695 505,589 440,320 185,925
SELLING EXPENSES
Selling Expenses 38,970 1,277 31,921 -
TOTAL EXPENSES 701,665 506,866 472,241 185,925
INCOME (LOSS) BEFORE
OTHER INCOME AND
EXTRAORDINARY GAIN (629,177) (455,043) (244,796) (38,651)
OTHER INCOME 25,000
INCOME (LOSS) BEFORE
EXTRAORDINARY GAIN (604,177)
EXTRAORDINARY GAIN
(SEE NOTE) 31,470 144,835 53,666 69,498
NET INCOME (572,707) (310,208) (191,130) 22,347
RETAINED EARNINGS,
beginning of year (521,636) (151,998) 57,284 362,400
NET GAIN (LOSS) FROM
CURRENCY CONVERSION 16,247 (59,430) (18,152) -
RETAINED EARNINGS,
end of year (1,078,096) (521,636) (151,998) 384,747
EARNINGS per share ($0.018) ($0.010) ($0.006) $0.0007
<PAGE> 14
SALIENT CYBERTECH, INC.
CONSOLIDATED PRO-FORMA
STATEMENT OF STOCKHOLDER'S EQUITY
FOR PERIODS ENDED DECEMBER 31, 1998, 1997, 1996 AND JUNE 30, 1999
Retained
Common Stock Additional Earnings/ Total
Numbers of Paid-in- Acumulated
Stockholder's
Shares Amount capital Deficit Equity
(000's)
BALANCE AS OF 01/01/96 28,507 $8,507 $ 362,400 $ 370,907
Shares Issued in years
1996 & 1997 28,507 - -
Net Income- year 1996 - - 22,347 22,347
BALANCE AS OF 12/31/96 28,507 $8,507 $ - 384,747 393,254
BALANCE AS OF 01/01/97 28,507 8,507 - 57,284 393,254
Shares Issued in 1997 689 689 376,497 - 376,497
Net Income- year 1997 (191,130) (191,130)
Net gain (Loss) -
Currency conversion (18,152) (18,152)
BALANCE AS OF 12/31/97 29,196 $ 9,196 $ 376,497 (151,998)$ 233,695
BALANCE AS OF 01/01/98 29,196 9,196 376,497 (151,998) 233,695
Shares Issued in 1998 1,446 1,446 226,637 - 228,083
Net Income- year 1998 (310,208) (310,208)
Net gain (Loss) -
Currency conversion (59,430) (59,430)
BALANCE AS OF 12/31/98 30,642 $10,642 $ 603,134 $ (521,636)$ 92,140
BALANCE AS OF 01/01/99 30,642 10,642 603,134 (521,636) 92,140
Shares Issued 1,013 1,013 1,841,547 - 1,842,560
Net Income-6/30/98 - (572,707) (572,707)
Net gain (Loss)
currency conversion 16,247 16,247
BALANCE AS OF 06/30/99 31,655 $11,655 $2,444,681 $(1,078,096)$1,378,240
<PAGE> 15
SALIENT CYBERTECH, INC.
CONSOLIDATED PRO-FORMA
STATEMENTS OF CASH FLOWS
DECEMBER 31, 1998, 1997, AND JUNE 30, 1999
06/30/99 12/31/98 12/31/97
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income ($572,707) ($310,208) ($191,130)
Noncash Items Included in
Net Income 71,850 75,784 8,6294
Increase in Accounts Receivable 16,807 77,606 (102,342)
Increase in Inventory 6,063 (17,020) 18,014
Decrease in due from a
shareholder - (13,303) 5,116
Decrease in prepaid expenses
and sundry assets 13,268 (28,422) 2,820
Decrease in income
taxes recoverable (64,122) 25,163 14,078
Decrease in bank
indebtedness 3,022 2,185 (59,562)
Increase in accounts payable
and accrued liabilities 21,883 27,561 122,995
Increase in Accrued Expenses 91,637 95,912 21,341
Decrease in capital lease
obligation (2,037) (4,240) (10,036)
Increase in other
payable - (5,814) 6,153
Deferred syndication costs - (100,000)
Stock issued for services 464,694 11,000
Stock issued for accrued
interest - 2,083
Forgiveness of Accounts
Payable - (50,185)
Deposits - - 1,700
Customer Deposits - - (2,400)
Other Assets - - 54,841
$50,358 $(185,915) $(21,027)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Expenditure for research and
development (112,328) (91,324) (140,779)
Purchase of Equipment (3,975) (903) (1,584)
(116,003) (92,227) (142,363)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from loans 35,000 125,718 50,000
Proceeds from sale of
Common Stock 10,000 166,000 44,000
Notes payable-
financing obtained (paid back) (16,534) (12,870) 50,059
Due to shareholders 22,098 11,365 3,244
50,564 290,213 147,303
Net Increase(Decrease)
in Balance of Cash (15,081) 12,071 (16,087)
Cash at Beginning of Period 19,762 7,721 23,808
Cash at End of Period $4,711 $19,792 $ 7,721
<PAGE> 16
GEMINI LEARNING SYSTEMS INC.
NOTES TO FINANCIAL STATEMENTS and
PRO-FORMA FINANCIAL STATEMENTS
1. Incorporation and Business Activity
Gemini Learning Systems, Inc. ("Gemini"), was organized under the laws of
the Canadian Province of Alberta in June, 1990.
Gemini is a software applications development company, specializing in
distance education and training solutions. The company created and markets
software technology called SWIFT (SoftWare Intelligent Freeform Training).
The Company is emerging from its development phase, having created an entire
product line based on the SWIFT technology. The company has begun to
establish clients and a distribution network in Canada, the United States,
the United Kingdom and Europe.
2. Summary of Significant Accounting Policies
a) Principles of Consolidations
Gemini Learning Systems Inc., was purchased by Salient Cybertech, Inc. on
September 24, 1999 for 20,000,000 shares in the common stock of Salient
Cybertech, Inc. For the purposes of this audit, except for the restatement
of shareholder's equity to reflect this transaction, the statements are those
of Gemini. The pro-forma statements presented after the audited financial
statements reflect the consolidated pro-forma statements of Salient
Cybertech, Inc., and Gemini, the sole subsidiary of Salient Cybertech, Inc.
These statements were derived from the audited statements of both
companies, but were not themselves audited (See auditor's report). The
notes refer to the Gemini Statements unless otherwise indicated.
b) Revenue and Expense Recognition
The Company prepares its financial statements on the accrual accounting
basis. Consequently, certain revenue and related assets are recognized when
earned rather than when received, and certain expenses are recognized when
the obligation is incurred or the asset consumed, rather than when paid.
c) Accounting Method
The Company recognizes income and expenses on accrual basis.
d) Depreciation
Depreciation is computed by using the straight-line method for financial
reporting purposes and the modified accelerated cost recovery method for
federal income tax purposes.
See Accompanying Accountant's Audit Report, which is an Integral Part of
Financial Statements.
<PAGE> 17
GEMINI LEARNING SYSTEMS INC.
NOTES TO FINANCIAL STATEMENTS and
PRO-FORMA FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies - Continued
e) Income Taxes
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred
taxes related primarily to differences between the bases of certain assets
and liabilities for financial and tax reporting. The deferred taxes
represent the future tax return consequences of those differences, which
will either be taxable when the assets and liabilities are recovered or
settled.
f) Net Operating Loss Carry-forward
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred
taxes for operating losses that are available to offset future taxable
income.
g) Intangible Assets
Intangible assets subject to amortization include organization costs, loan
closing costs, and in-force leasehold costs. Organization costs and in-force
leasehold costs are being amortized using the interest method over the life
of the related loan.
h) Reclassifications
Certain accounts in the prior-year financial statements have been
reclassified for comparative purposes to conform with the presentation in
the current-year financial statements.
i) Property and Equipment
Property and equipment are carried at cost. Depreciation of property and
equipment is provided using the straight-line method for financial reporting
purposes at rates based on the following estimated useful lives:
Machinery and equipment 3-10
Furniture and fixtures 3-10
Engineering equipment 3-10
For federal income tax purposes, depreciation is computed using the modified
accelerated cost recovery system. Expenditures for major renewals and
betterment that extend the useful lives of property and equipment are
capitalized. Expenditures for maintenance and repairs are charged to expense
as incurred.
See Accompanying Accountant's Audit Report, which is an Integral Part of
Financial Statements
<PAGE> 18
j) Inventories
Inventories are stated at the lower of cost (determined on the first-in,
first-out basis) or market.
3. Business Combination
Pursuant to an Agreement dated September 24, 1999, and effective on that
date, Salient Cybertech, Inc. issued 20,000,000 common shares in exchange
for all outstanding shares in the capital of Gemini Learning Systems, Inc.
4. 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.
5. Research and Development
All research and development expenditures net of refundable income tax
credits (said refund issued by Revenue Canada, irrispective of the existence
of net taxable income) have been capitalized and are being amortized on a
ten year straight line basis. Costs incurred internally have been
historically charged as expenses, until technological feasibility for the
product line (the SWIFT technology) had been established, after which they
were capitalized over the expected life of the technology. (SFAS 86).
6. Property and Equipment
Property and Equipment consist of computers and furniture only, with no
inventory being kept.
7. Accounts Payable and Accrued Expenses
These amounts are due from customers for products delivered. All accounts
are considered collectible and no allowance for doubtful accounts has been
recorded.
8. Notes Payable
The notes payable are to Wayne Adolphe, husband of the sole shareholder of
Gemini. The loans have no fixed term, bear a simple interest rate of 4% per
anum on outstanding principal, and are payable upon a change in ownership.
See Accompanying Accountant's Audit Report, which is an Integral Part of
Financial Statements
<PAGE> 19
9. Shareholders Loans
These are loans advanced by the sole shareholder of Gemini. The loans bear
no interest and have no fixed term.
10. Common Stocks
The Company is authorized to issue 1,000 with no par value, and, as of
December 31, l997, 1,000 voting common shares are issued and outstanding to
the sole shareholder of the Company. These have been restated to reflect
the purchase of Gemini by Salient Cybertech, Inc.
11. Related Party Transaction
There were no significant non arm's-length basis transactions between the
Company and any related party during the Fiscal Years Ended December 31,
l996, 1997, 1998, and the six months ended June 30, 1999.
12. Description of Leasing Arrangements
Gemini currently rents approximately 2,104 square feet for its staff, at
Suite 605, 839 - 5th Avenue SW, Calgary, Alberta, Canada T2P 3C8.
13. Earnings Per Shares
Earnings (Loss) per share are calculated using the weighted-average number
of common shares outstanding and common shares equivalents. The average
number of shares outstanding under these assumptions would be 20,000,000
as of December 31, 1996, 1997, 1998, and June 30, 1999.
14. Foreign Currency Conversion
The Financial Statements are expressed in U. S. dollars.
Current assets and liabilities denominated in Canadian dollars at the year
end are translated into U.S. dollars at the rate of exchange prevailing on
that date. Transactions in foreign currencies are recorded in U.S. dollars
at the rates of exchange prevailing on the date of the transactions. Exchange
gains and losses are reflected in income.
See Accompanying Accountant's Audit Report, which is an Integral Part of
Financial Statements.
<PAGE> 20
ITEM 7 (continued) Exhibits
24.6 Consent of Auditors Page 24
27 Financial Data Schedule Page 25
ITEM 8. Change in Fiscal Year
Gemini has changed its fiscal year to twelve month periods ending on
December 31, the first such period to be the fiscal year ending on
December 31, 1999. The change was to bring the fiscal year of the
subsidiary in line with that of the parent company.
Signatures
Pursuant to the requirements of the Securities Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
December 27, 1999
Salient Cybertech, Inc.
By:/s/Larry Provost/s/
_____________________
Larry Provost, Chairman
<PAGE> 21
Blank Page
<PAGE> 22
Registration Number: 0-28772
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = == = = = = = = = = =
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = == = == = = = = = =
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = == = = = = = = = = =
EXHIBITS
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = == = = = = = = = = =
<PAGE> 23
EXHIBIT 24.6
Consent of Registrant's Auditors
December 23, 1999
Securities and Exchange Commission
Washington, D.C. 20549
RE: SALIENT CYBERTECH, INC.
Registration Number: 0-28772
Gentlemen:
We have audited the balance sheet and accompanying statements of the
Registrant, as found in the Report on Form 8K at page 4, et seq., for the 6
month period ending June 30, 1999, and for the 1996, 1997, and 1998 fiscal
years, ending on December 31, and consent to the Auditor's reports,
statements, and notes being filed with the said Report on Form 8K, and with
any amendment thereto.
This accounting firm hereby consents to the filing of this consent
as an exhibit to the said Report.
/s/Stan J.H. Lee/s/
Stan J.H. Lee, CPA
440 West St., 3rd Fl.
Fort Lee, NJ 07024-5058
<PAGE> 24
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
Financial Data Schedule
<ARTICLE> 5
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998 DEC-31-1997 DEC-31-1996
<PERIOD-END> JUN-30-1999 DEC-31-1998 DEC-31-1997 DEC-31-1996
<CASH> 4,711 19,792 7,721 0
<SECURITIES> 0 0 0 0
<RECEIVABLES> 32,112 48,919 113,222 1,002
<ALLOWANCES> 0 0 0 0
<INVENTORY> 21,108 27,171 10,151 0
<CURRENT-ASSETS> 1,310,730 258,078 219,563 80,943
<PP&E> 15,577 19,700 27,556 32,568
<DEPRECIATION> 0 0 0 0
<TOTAL-ASSETS> 2,127,391 686,222 669,976 492,996
<CURRENT-LIABILITIES> 409,718 295,213 209,112 99,742
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 11,655 10,642 9,196 8,507
<OTHER-SE> 1,366,585 81,498 224,499 384,747
<TOTAL-LIABILITY-AND-EQUITY> 2,127,391 686,222 669,976 492,996
<SALES> 81,109 119,782 488,857 155,774
<TOTAL-REVENUES> 126,109 119,782 488,857 155,774
<CGS> (8,621) (67,929) (261,412) 0
<TOTAL-COSTS> (38,970) (1,277) (31,921) 0
<OTHER-EXPENSES> (662,695) (505,589) (440,320) (185,925)
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 0 0 0 0
<INCOME-PRETAX> (629,177) (455,043) (244,796) (38,651)
<INCOME-TAX> 0 0 0 0
<INCOME-CONTINUING> 0 0 0 0
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 31,470 144,835 53,666 69,498
<CHANGES> 16,247 (59,430) (18,152) 0
<NET-INCOME> (572,707) (310,208) (191,130) 22,347
<EPS-BASIC> (0.018) (0.010) (0.006) 0.001
<EPS-DILUTED> (0.018) (0.010) (0.006) 0.001
<PAGE> 25
Blank Page
<PAGE> 26
</TABLE>
