UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
AMENDMENT NO. 1
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 31, 2000
SUNDERLAND CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
00-24803 52-210214
(Commission File Number) (IRS Employer Identification No.)
2901 El Camino Avenue, Las Vegas, Nevada 89102
(Address of Principal Executive Offices, Including Zip Code)
(702) 227-0965
Registrant's Telephone Number, Including Area Code
The undersigned hereby amends its Form 8-K dated April 14, 2000 by including the
items, financial statements and exhibits as set forth in the pages attached
hereto.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit Number Description
-------------- -----------
F-1 L.L. Bradford & Company audited financial statements as of
and for the year ended December 31, 1999
<PAGE>
Financial Statements and Report of
Independent Certified Public Accountants
L.L. BRADFORD & COMPANY
December 31, 1999
<PAGE>
L.L. Bradford & Company
INDEX TO FINANCIAL STATEMENTS
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS........................ F-2
BALANCE SHEET AT DECEMBER 31, 1999........................................ F-3
STATEMENT OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1999................ F-4
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 1999.... F-5
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999.............. F-6
NOTES TO FINANCIAL STATEMENTS............................................. F-7
<PAGE>
Report of Independent Certified Public Accountants
Stockholders
L.L. Bradford & Company
Las Vegas, Nevada
We have audited the accompanying balance sheet of L.L. Bradford & Company as of
December 31, 1999, and the related statements of earnings, stockholders' equity
and cash flows for the year 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of L.L. Bradford & Company as of
December 31, 1999, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
/S/ GRANT THORNTON LLP
Reno, Nevada
May 18, 2000
<PAGE>
L.L. Bradford & Company
BALANCE SHEET
December 31, 1999
ASSETS
CURRENT ASSETS
Cash $ 16,409
Accounts receivable, net 248,200
Other assets 6,233
--------
Total current assets 270,842
PROPERTY AND EQUIPMENT, net 72,983
OTHER ASSETS 8,241
--------
Total assets $352,066
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of equipment line of credit $ 1,994
Current portion of obligations under capital leases 5,640
Accounts payable and accrued expenses 25,278
Due to related party 25,000
--------
Total current liabilities 57,912
--------
LONG-TERM LIABILITIES
Obligations under capital leases, less current portion 18,487
Equipment line of credit, less current portion 3,570
--------
22,057
--------
Total liabilities 79,969
--------
COMMITMENTS AND CONTINGENCIES --
STOCKHOLDERS' EQUITY
Common stock, no par or stated value; 2,500
shares authorized, 2,000 issued and outstanding --
Additional paid-in capital 10,000
Retained earnings 262,097
--------
Total stockholders' equity 272,097
--------
Total liabilities and stockholders' equity $352,066
========
The accompanying notes are an intregral part of this statement.
F-3
<PAGE>
L. L. Bradford & Company
STATEMENT OF EARNINGS
Year ended December 31, 1999
Revenues
Accounting and audit fees $ 936,441
Tax advisory and preparation fees 327,654
Management advisory and consulting fees 199,790
Other income 39,506
----------
Total revenues 1,503,391
----------
Expenses
General and administrative 1,076,347
Depreciation 44,664
Interest 5,783
----------
Total expenses 1,126,794
----------
NET EARNINGS $ 376,597
==========
The accompanying notes are an intregral part of this statement.
F-4
<PAGE>
L.L. Bradford & Company
STATEMENT OF STOCKHOLDERS' EQUITY
Year ended December 31, 1999
<TABLE>
<CAPTION>
Common Stock Additional
--------------------------------------- Paid-in Retained
Shares Amount Capital Earnings Total
--------- ------ --------- -------- -------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 2,000 $-- $ 10,000 $ 236,135 $ 246,135
Distributions to stockholders -- -- -- (350,635) (350,635)
Net earnings -- -- -- 376,597 376,597
--------- ------ --------- --------- ---------
Balance at December 31, 1999 2,000 $-- $ 10,000 $ 262,097 $ 272,097
========= ====== ========= ========= =========
</TABLE>
The accompanying ntoes are an intregral part of this statement.
F-5
<PAGE>
L.L. Bradford & Company
STATEMENT OF CASH FLOWS
Year ended December 31, 1999
Cash flow from operating activities:
Net earnings $ 376,597
---------
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 44,664
Loss on disposal of asset 466
Changes in operating assets and liabilities:
Accounts receivable (30,148)
Other assets (7,908)
Accounts payable and accrued expenses (4,299)
---------
Total adjustments 2,775
---------
Net cash provided by operating activities 379,372
---------
Cash flows from investing activities:
Purchase of property and equipment (32,734)
---------
Net cash used in investing activities (32,734)
---------
Cash flows from financing activities:
Capital lease principal payments (4,742)
Equipment line of credit principal payments (1,412)
Proceeds from related party advances 25,000
Distributions to stockholders (350,635)
---------
Net cash used in financing activities (331,789)
---------
NET INCREASE IN CASH 14,849
Cash at beginning of year 1,560
---------
Cash at end of year $ 16,409
=========
Supplemental disclosures of cash flow information:
Cash paid for interest during the year $ 5,783
=========
Noncash investing activities:
Purchase of property and equipment on equipment
line of credit $ 6,976
=========
Purchase of property and equipment on capital lease $ 9,435
=========
The accompanying ntoes are an intregral part of this statement.
F-6
<PAGE>
L.L. Bradford & Company
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Organization
L.L. Bradford & Company (the "Company"), was incorporated in the State of
Nevada in April 1995. The Company operates as a certified public accounting
and consulting practice in the State of Nevada offering services in the
area of attestation, tax planning and preparation, general accounting
services, business valuation, mergers and acquisition, management advisory,
financial consulting, initial public and private offering consulting, and
internet start-up consulting.
2. Concentrations
The Company's operations are primarily derived from Southern Nevada.
Consequently, the Company's results of operations and financial condition
are affected by general trends in the Southern Nevada economy
For the twelve months ended December 31, 1999, the Company had two major
customers which contributed 12.3% and 8.8% of total revenues, respectively
(see note H).
3. Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
4. Revenue Recognition
The Company recognizes revenue when such services are rendered.
5. Property and Equipment
Property and equipment are stated at cost. Depreciation is provided
principally on the straight-line method over the estimated useful lives of
the assets of 5 and 7 years. The cost of repairs and maintenance is charged
to expense as incurred.
6. Advertising Costs
Advertising costs are expensed as incurred. Advertising costs were $26,836
for the year ended December 31, 1999.
F-7
<PAGE>
L.L. Bradford & Company
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- Continued
7. Income Taxes
The Company has elected to be taxed as a S-Corporation under sections of
the Internal Revenue Code of 1986, as amended, which provide for
shareholders to separately account for items of income, deductions, losses
and credits. Accordingly, no provisions for federal income taxes are
included in the accompanying financial statements for the year ended
December 31, 1999.
8. Impairment of Long-Lived Assets to be Disposed
The Company continually monitors events and changes in circumstances that
could indicate carrying amounts of long-lived assets may not be
recoverable. When such events or changes in circumstances are present, the
Company assesses the recoverability of long-lived assets by determining
whether the carrying value of such assets will be recovered through
undiscounted expected future cash flows. If the total of the future cash
flows is less than the carrying amount of those assets, the Company
recognizes an impairment loss based on the excess of the carrying amount
over the fair value of the assets. Assets to be disposed of are reported at
the lower of the carrying amount or the fair value less costs to sell.
NOTE B - ACCOUNTS RECEIVABLE
The following is a summary of accounts receivable at December 31, 1999:
Trade receivables $ 365,620
Allowance for doubtful accounts (117,420)
---------
$ 248,200
=========
F-8
<PAGE>
L.L. Bradford & Company
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
NOTE C - PROPERTY AND EQUIPMENT
Property and equipment at December 31, 1999 consists of:
Computers $ 43,922
Furniture and fixtures 12,411
Machinery and equipment 4,569
Tenant improvements 2,936
Computers and equipment held
under capital leases 26,446
--------
90,284
Less: Accumulated depreciation (17,301)
--------
Total property and equipment $ 72,983
========
NOTE D - EQUIPMENT LINE OF CREDIT
The Company maintains a $50,000 equipment line of credit with Wells Fargo
Bank. Principal and interest is payable on each advance over a payment
schedule of not less than 36 months or more than 96 months, as agreed by
the Company and the Bank. At the time of each advance, the Company can
elect a fixed or a variable interest rate. The fixed interest rate is
2.875% above the treasury rate in effect as of the close of the business on
the Thursday of the week preceding disbursement of the advance, rounded to
the nearest 0.05%. The variable interest rate is at 0.5% above the prime
rate. The outstanding balance as of December 31, 1999 was $5,564 and is at
the fixed interest rate (10.65% at December 31, 1999). The line of credit
is secured by the Company's equipment purchased or acquired in whole or in
part with the advance.
The following are the maturities under the equipment line of credit as of
December 31, 1999:
2000 $1,994
2001 2,464
2002 1,106
------
$5,564
======
F-9
<PAGE>
L.L. Bradford & Company
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
NOTE E - CAPITAL LEASES
The Company is the lessee of computers and equipment under capital leases
expiring through 2004. The assets and liabilities under capital leases are
recorded at the lower of the present value of the minimum lease payments or
the fair value of the assets. The assets are depreciated over the lower of
their related lease terms or their estimated productive lives. Depreciation
of capital leases is included in depreciation expense for 1999. Accumulated
depreciation on capital leases was $6,596 at December 31, 1999.
Minimum future lease payments under capital leases as of December 31, 1999
for each of the next five years and in the aggregate are:
Year ending December 31,
2000 $ 8,458
2001 8,458
2002 8,458
2003 4,629
2004 423
--------
30,426
Less amounts representing interest (6,299)
--------
24,127
Current portion of obligations under
capital leases 5,640
--------
Obligations under capital leases,
less current portion $ 18,487
========
Interest rates on capital leases vary from 6.7% to 15.5%.
NOTE F - DUE TO RELATED PARTY
As of December 31, 1999, due to related party totaling $25,000 consists of
amounts advanced by the Company's stockholders bearing no interest and due
on demand.
NOTE G - COMMITMENTS AND CONTINGENCIES
The Company leases certain equipment which are classified as operating
leases. The total rent expense for all operating leases for the year ended
December 31, 1999, was $94,000. The Company does not maintain any operating
leases with initial or remaining terms in excess of one year as of December
31, 1999.
F-10
<PAGE>
L.L. Bradford & Company
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
NOTE H - RELATED PARTY TRANSACTION
The Company received accounting and financial consulting fees of $150,000
for the year ended December 31, 1999 from Sunderland Corporation whose
officer, director and stockholder is a stockholder, director and president
of the Company. At December 31, 1999, $12,500 was included in accounts
receivable.
During the year ended December 31, 1999, the Company paid $25,250 in rent
to a related company wholly owned by stockholders of the Company.
NOTE I - SUBSEQUENT EVENTS
On March 31, 2000, the Company consummated a plan of merger agreement with
Sunderland Corporation ("Sunderland") whereby Sunderland acquired all the
outstanding capital stock of the Company, in exchange for 800,000 shares of
Sunderland's common stock pursuant to a tax-free reorganization. Sunderland
is a public company whereby Lance K. Bradford, the Company's president, is
also the Chief Financial Officer and a stockholder of Sunderland. The
acquisition of the Company has been accounted for as a pooling of
interests.
F-11
<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.
Sunderland Corporation
-----------------------------
(Registrant)
/s/ Lance K. Bradford
-----------------------------
Lance K. Bradford,
Chief Financial Officer
Dated: June 13, 2000
