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) September 14, 2000
SKINTEK LABS, INC.
(Exact name of registrant as specified in its charter)
Florida 0-23532 65-0636277
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
959 Shotgun Road, Sunrise, Florida 33326
Registrant's telephone number, including area code (954) 927-5563
===============================================================================
Item 7. Financial Statements and Exhibits.
(a) Financial Statements.
Ultimate Warlock, Inc. Financial Statements and Report of
Independent Certified Public Accountant for the Years Ended
September 30, 1999 and 1998.
(b) Proforma Financial Information.
Unaudited Combined Financial Statement.
Skintek Labs, Inc. and Ultimate Warlock, Inc. Proforma Condensed
Combined Balance Sheet of June 30, 2000. (Unaudited)
Skintek Labs, Inc. and Ultimate Warlock, Inc. Proforma Condensed
Combined Statement of Operations for the Year Ended December 31,
1999.(Unaudited)
Skintek Labs, Inc. and Ultimate Warlock, Inc. Proforma Condensed
Combined Statement of Operations for the Six Months Ended June 30,
2000.(Unaudited)
ULTIMATE WARLOCK, INC.
Financial Statements and Report of
Independent Certified Public Accountants
September 30, 1999 and 1998
<PAGE>
ULTIMATE WARLOCK, INC.
For the Years Ended September 30, 1999 and 1998
TABLE OF CONTENTS
Independent Auditors' Report
on the Financial Statements....................................................1
Financial Statements:
Balance Sheets......................................................2-3
Statements of Income..................................................4
Statements of Stockholders' Equity....................................5
Statements of Cash Flows..............................................6
Notes to Financial Statements......................................7-11
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders of
Ultimate Warlock, Inc.
We have audited the accompanying balance sheets of Ultimate Warlock, Inc. (a
California corporation) as of September 30, 1999 and 1998 and the related
statements of operations, stockholders' equity and cash flows for the years 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 Ultimate Warlock, Inc., as of
September 30, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Irvine, California
July 13, 2000
<PAGE>
See accompanying notes to financial statements
ULTIMATE WARLOCK, INC.
BALANCE SHEETS
September 30, 1999 and 1998
ASSETS
1999 1998
---- ----
Current assets
Cash and cash equivalents $ 7,764 $ 80,291
Accounts receivable, net of allowance
for doubtful accounts of $4000 and $0 316,430 165,504
Inventories
On first-in, first-out (FIFO) method
Finished goods
369,130 425,927
Work in process
507,099 214,744
Raw materials
136,512 130,573
-------------- ------------
Total inventory
1,012,741 771,244
Deposits
29,621 18,893
Prepaid expenses
- 12,513
------------- -------------
Total current assets 1,048,445 1,366,556
------------- -------------
Property and equipment
Machinery and equipment 107,794 58,380
Molds and plugs 1,024,242 726,042
Furniture and fixtures 19,899 8,126
Automobiles and trucks 67,019 67,019
Leasehold improvements
50,123 38,426
------------- -------------
Property and equipment at cost 1,269,077 897,993
Less accumulated depreciation (352,860) (234,289)
------------- -------------
Total property and equipment 916,217 663,704
------------- -------------
Trademark, net of accumulated amortization 90,438 92,938
of $9,562 and $7,062
Other assets 14,310 72,539
------------- -------------
Total assets $ 2,387,521 $ 1,877,626
============ ==============
<PAGE>
<TABLE>
<CAPTION>
ULTIMATE WARLOCK, INC.
BALANCE SHEETS
September 30, 1999 and 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
1999 1998
---- ----
<S> <C> <C>
Current liabilities
Accounts payable $ 284,969 $ 221,199
Deferred income taxes
21,194 79,608
Lines of credit 950,000 400,000
Accrued compensation 10,136 9,501
Warranty reserve 4,033 3,858
Other accrued expenses
114,329 85,976
----------------- ------------------
Total current liabilities
1,384,661 800,142
----------------- ------------------
Long-term debt
935,361 925,925
----------------- ------------------
Commitments and contingencies
- -
Stockholders' equity
Common stock - 25,000,000 shares authorized with no par value; 1,000,000
shares issued and outstanding
37,000 37,000
Retained earnings
30,499 114,559
----------------- ------------------
Total stockholders' equity
67,499 151,559
----------------- ------------------
Total liabilities and stockholders' equity $ 2,387,521 $ 1,877,626
================= ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTIMATE WARLOCK, INC.
STATEMENTS OF INCOME (LOSS)
For the years ended September 30, 1999 and 1998
1999 1998
---- ----
<S> <C> <C>
Revenues
Sales $ 4,032,987 $ 3,857,534
Service department, parts and labor 136,874 154,052
------------------- ---------------------
Total revenues 4,169,861 4,011,586
Cost of goods sold 2,944,959 3,087,178
------------------- ---------------------
Gross profit 1,224,902 924,408
Operating expenses
Research and development 265,661 95,201
Selling 257,501 221,792
General and administrative expenses 725,232 445,040
------------------- ---------------------
Total operating expenses 1,248,394 762,033
------------------- ---------------------
Operating income (loss) (23,492) 162,375
Other income (expense)
Other income 21,325 50,890
Interest expense (140,307) (114,204)
------------------- ---------------------
Total other income (expense) (118,982) (63,314)
------------------- ---------------------
Income (loss) before provision for income taxes (142,474) 99,061
Provision for income taxes (58,414) 40,615
------------------- ---------------------
Net income (loss) $ (84,060) $ 58,446
------------------- ---------------------
Earnings per share, basic and diluted (0.08) 0.06
=================== =====================
Weighted average shares outstanding,
basic and diluted 1,000,000 1,000,000
=================== =====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTIMATE WARLOCK, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the years ended September 30, 1999 and 1998
Common Retained
stock earnings Total
--------------------- --------------------- --------------------
<S> <C> <C> <C>
Balance, September 30, 1997 $ 37,000 $ 56,113 $ 93,113
Net income 58,446 58,446
--------------------- --------------------- --------------------
Balance, September 30, 1998 37,000 114,559 151,559
Net income (loss) (84,060) (84,060)
--------------------- --------------------- --------------------
Balance, September 30, 1999 $ 37,000 $ 30,499 $ 67,499
===================== ===================== ====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTIMATE WARLOCK, INC.
STATEMENTS OF CASH FLOWS
For the years ended September 30, 1999 and 1998
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ (84,060) $ 58,446
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 121,071 106,664
(Increase) decrease in accounts receivable (150,926) (145,772)
(Increase) decrease in inventories (241,497) (158,280)
(Increase) decrease in deposits (10,728) -
(Increase) decrease in prepaid expenses 12,513 (12,513)
(Increase) decrease in other assets 58,229 7,892
Increase (decrease) in deferred income taxes (58,414) 40,615
Increase (decrease) in accounts payable 63,770 (14,909)
Increase (decrease) in accrued compensation 635 9,501
Increase (decrease) in warranty reserve 175 106
Increase (decrease) in other accrued expenses 28,353 (80,830)
----------------------- ---------------------
Net cash used for operating activities (260,879) (189,080)
----------------------- ---------------------
Cash flows from investing activities
Purchases of property and equipment (371,084) (220,560)
----------------------- ---------------------
Net cash used for investing activities (371,084) (220,560)
----------------------- ---------------------
Cash flows from financing activities
Proceeds from lines of credit 550,000 300,000
Proceeds from long term debt 9,436 189,452
----------------------- ---------------------
Net cash provided by financing activities 559,436 489,452
----------------------- ---------------------
Net increase (decrease) in cash and cash equivalents (72,527) 79,812
Cash and cash equivalents - beginning 80,291 479
----------------------- ---------------------
Cash and cash equivalents - ending $ 7,764 $ 80,291
======================= =====================
</TABLE>
<PAGE>
ULTIMATE WARLOCK, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1999 and 1998
11
NOTE 1: COMPANY OPERATIONS
The operations of Ultimate Warlock, Inc. (the Company) consist primarily of
manufacturing and selling custom high performance powerboats, cats, deep V's,
sport boats, and race boats. The Company sells its products on a wholesale basis
to dealers across the United States and on a retail basis directly to individual
consumers.
The Company differentiates itself from its competitors through the
Company's racing program. The Company races portions of its product line in
international powerboating events and then takes the technological and product
refinements gained from the program and incorporates them into subsequent
production runs of its product lines. The Company adheres to a policy of selling
production high performance powerboats that are essentially identical to the
race versions with the exception of additional options available to the
consumer. The Company believes that the reputation and exposure gained by racing
its products directly translate into increased demand for its products.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the
Company.
Fiscal Year
The Company's fiscal year-end is September 30th, which is its natural
business year-end.
Inventories
Inventories consist of new and used powerboats, powerboats at various
stages of completion and raw materials and are stated at lower of cost (as
determined on a first-in first-out basis) or market.
Property and Equipment
Property and equipment are carried at cost. Maintenance, repairs and
renewals are expensed as incurred. Depreciation of property and equipment is
provided over their estimated useful lives, which range from five to ten years,
using the straight-line method. Leasehold improvements are amortized on a
straight-line basis over the lives of the respective leases or the useful lives
of the improvements, whichever is shorter.
<PAGE>
ULTIMATE WARLOCK, INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
September 30, 1999 and 1998
Construction costs of production molds for new and existing product lines
are capitalized and depreciated over an estimated useful life of eight years.
Depreciation starts when the production mold is placed in service to manufacture
the product. Capitalized construction costs include direct materials and direct
labor.
Revenue Recognition
Revenue for powerboats sold is recorded as they are shipped to authorized
dealers and to retail consumers, legal title and all other incidents of
ownership have passed from the Company to the dealer or the consumer and an
account receivable is recorded or payment is received from the dealer or from
the dealer's or retail consumer's third-party commercial lender. Credit sales
are not made to retail consumers.
Income taxes
The Company has adopted Statement of Financial Accounting Standards No. 109
("SFAS 109"), Accounting for Income Taxes. SFAS 109 is an asset and liability
approach that requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that are recognized in the
Company's financial statements in different periods from the tax returns. In
estimating future tax consequences, SFAS 109 generally considers all expected
future events other than enactment of changes in the tax law or rates. The
Company deducts all costs incurred in producing molds as incurred for income tax
purposes, and capitalizes molds at replacement cost for book purposes in
compliance with FASB 121. Deferred income taxes of $21,194 and $79,608 relate
principally to timing differences in the recognition of mold expenses for
financial reporting purposes and are included in current liabilities.
Advertising and Race Promotion Expenses
Costs incurred in connection with advertising and race promotion of the
Company's products are expensed as incurred. Such costs amounted to
approximately $145,600 and $156,000 for the years ended September 30 1999 and
1998.
Research and Development Expenses
Research and development expenses represent the difference between the
construction costs of production molds capitalized at their estimated
replacement cost as required by FASB 121 and the actual mold construction costs
incurred.
<PAGE>
Fair Value of Financial Instruments
Statement of Financial Accounting Standards (SFAS) No. 107, Disclosures
About Fair Value of Financial Instruments requires management to disclose the
estimated fair value of certain assets and liabilities defined by SFAS No. 107
as financial instruments. Financial instruments are generally defined by SFAS
No. 107 as cash, evidence of ownership interest in equity, or a contractual
obligation that both conveys to one entity a right to receive cash or other
financial instruments from another entity and imposes on the other entity the
obligation to deliver cash or other financial instruments to the first entity.
As of September 30, 1999 and 1998 management believes that the carrying amount
of cash, accounts receivable, accounts payable, accrued liabilities, lines of
credit and long term debt approximate fair value because of the short maturity
value of these financial instruments.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand and in banks in addition to debt securities with original
maturities of three months or less.
Warranties
The Company warrants the deck and hull of the boats it manufactures against
defects in materials and workmanship for a period of five years. The Company has
accrued a reserve for these anticipated future warranty costs.
NOTE 3: LINES OF CREDIT
The Company has revolving lines-of-credit with three banks that provide for
total borrowings of up to $950,000. The revolving lines mature in May of 2000.
Outstanding borrowings under these lines-of-credit at September 30, 1999 and
1998 were $950,000 and $400,000 respectively.
<PAGE>
Borrowings and repayments are made on a periodic basis based on cash flow
requirements of the Company. The lines of credit are personally guaranteed by
the majority stockholder.
The bank extending the largest line of credit holds a first position lien
supported by a UCC-1 filing over the Company's accounts receivable, inventories,
contract rights, general intangibles and all of the Company's corporate assets.
Interest is payable monthly on the daily average balance outstanding of
each credit line at the prime rate plus 1.5%.
NOTE 4: LONG TERM DEBT
The Company has two notes payable to a related party with principal and
accrued interest that mature on July 19, 2003. The notes bear interest at 8% per
annum and are payable at maturity with any amounts paid under the notes being
applied against accrued interest before reducing the principal balance of the
notes. The notes are secured by a personal guarantee of the Company's majority
stockholder and by a UCC-1 statement establishing a security interest in the
Company's property and equipment, accounts receivable, claims, choses in action
and promissory notes. The notes are subordinated to the claims of the bank
extending the largest line of credit.
NOTE 5: COMMITMENTS AND CONTINGENCIES
Leases
The Company conducts its operations in leased facilities. The Company
commenced the lease for its current location, which is owned by a stockholder on
May 1, 1999. The lease expires on April 30, 2009, with approximate annual
rentals as set forth below. Total rent expense for the years ended September 30,
1998 and 1999 was approximately $162,000 and $119,000 respectively.
The future minimum rental commitments under noncancelable operating leases
as of September 30, 1999 are as follows:
<PAGE>
Year ending September 30:
2000 179,168
2001 186,335
2002 193,788
2003 201,541
2004 209,602
Thereafter 1,071,987
---------
$2,042,421
Litigation
Although the Company is involved in litigation in the normal course of its
business, management believes that no pending litigation in which the Company is
named as a defendant is likely to have a materially adverse effect on the
Company's financial position.
UNAUDITED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial
statements reflect the acquisition by the Registrant of Ultimate Warlock, Inc.
in exchange for shares of the Registrant's Common Stock. The acquisition was
accounted for as a re-capitalization. The pro forma condensed combined balance
sheet assumes the merger took place on June 30, 2000 and combines the June 30,
2000 balance sheet of the Registrant with the June 30, 2000 balance sheet of
Ultimate Warlock, Inc. The pro forma condensed combined statement of operations
for the fiscal year ended December 31, 1999 assumes the acquisition took place
as of the beginning of the fiscal year and combines the Registrant's historical
results for the fiscal year ended December 31, 1999 with pro forma adjustments.
The pro forma condensed combined statement of operations for the six months
ended June 30, 2000 assumes the acquisition took place as of the beginning of
the most recently completed fiscal year (January 1, 2000) and combines the
Registrant's historical results for the six months ended June 30, 2000 with the
historical results of Ultimate Warlock, Inc. for the same period. The pro forma
condensed combined statements of operations exclude the effect of any
nonrecurring charges directly attributable to the acquisition.
The pro forma information is presented for illustrative purposes only
and is not necessarily indicative of the operating results or financial position
that would have occurred had the acquisition of Ultimate Warlock, Inc. by the
Registrant been consummated at the beginning of the periods presented, nor is it
necessarily indicative of future operating results or financial position. These
pro forma financial statements are based on and should be read in conjunction
with the historical consolidated financial statements and the related notes
thereto of the Registrant and Ultimate Warlock, Inc.
<TABLE>
<CAPTION>
SKINTEK LABS, INC. AND ULTIMATE WARLOCK, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 2000
(UNAUDITED)
Skintek Ultimate Pro Forma Adjustments Pro Forma
Labs, Inc. Warlock, Inc. Debit Credit Balance
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents 3,447 (65,593) (62,146)
Accounts receivable, net 435,186 599,151 1,034,337
Officer Advance 72,452 2,793 75,245
Inventories 160,879 1,710,128 1,871,007
Prepaid expenses and other - 68,675 68,675
Total current assets 671,964 2,315,154 - - 2,987,118
PROPERTY AND EQUIPMENT, net 48,219 1,263,808 1,312,027
OTHER ASSETS 27,057 111,724 138,781
$ 747,240 $ 3,690,686 $ 4,437,926
============= ============== ============
============= ============== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term
obligations 2,066 582,688 584,754
Accounts Payable 129,061 444,923 573,984
Payroll Taxes Payable 1,124 77,597 78,721
Deferred Income Taxes - 21,194 21,194
Note Payable 11,654 178,410 190,064
Other accrued liablities - 1,093,434 1,093,434
Total current liabilites 143,905 2,398,246 - - 2,542,151
LONG TERM OBLIGATIONS 115,130 33,154 148,284
SHAREHOLDERS' EQUITY
Common Stock 5,921 37,000 37,000 (1) 3,400 (2) 9,321
Preferred Stock - - -
Additional paid-in capital 1,022,731 1,297,789 3,400 (2) 37,000 (1) 1,813,673
540,447 (3)
Accumulated Deficit (540,447) (75,503) 540,447 (3) (75,503)
488,205 1,259,286 1,747,491
$ 747,240 $ 3,690,686 $ 4,437,926
============ ============ ===============
============ ============ ===============
</TABLE>
(1) Entry to eliminate common stock of Ultimate Warlock, Inc.
(2) Entry to record acquisition Ultimate Warlock, Inc. by the issuance of
3,400,000 shares of the Registrants common stock.
(3) Entry to eliminate accumulated deficit in subsidiary of Registrants which
is to be spun off.
See accompanying notes to pro forma condensed combined
financial statements.
<TABLE>
<CAPTION>
SKINTEK LABS, INC. AND ULTIMATE WARLOCK, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
Skintek Ultimate Pro Forma Adjustments Pro Forma
Labs, Inc. Warlock, Inc. Debit Credit Balance
<S> <C> <C> <C> <C> <C>
NET SALES 1,014,997 4,429,411 5,444,408
COST OF SALES 584,708 3,100,365 3,685,073
GROSS PROFIT 430,289 1,329,046 1,759,335
OPERATING EXPENSES
Sales and marketing 254,960 287,349 542,309
Research and development - 199,246 199,246
General and administrative 402,568 871,908 1,274,476
Total operating expenses 657,528 1,358,503 2,016,031
INCOME (LOSS) FROM OPERATIONS (227,239) (29,457) (256,696)
OTHER INCOME (EXPENSE) , net 41,417 (113,591) (72,174)
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES (185,822) (143,048) (328,870)
(PROVISION)/BENEFIT FOR INCOME TAXES - 43,811 43,811
NET INCOME (NET LOSS) (185,822) (99,237) (285,059)
============ ============= =============
============ ============= =============
NET INCOME PER SHARE - BASIC (0.04) (0.03) (0.03)
NET INCOME PER SHARE - DILUTED (0.04) (0.03) (0.03)
=======================================
=======================================
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES - BASIC 5,123,921 3,400,000 8,523,921
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES - DILUTED 5,291,044 3,400,000 8,691,044
============= ============== ============
============= ============== ============
</TABLE>
See accompanying notes to pro forma condensed combined
financial statements.
<TABLE>
<CAPTION>
SKINTEK LABS, INC. AND ULTIMATE WARLOCK, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
Skintek Ultimate Pro Forma Adjustments Pro Forma
Labs, Inc. Warlock, Inc. Debit Credit Balance
<S> <C> <C> <C> <C> C>
NET SALES 625,724 2,604,031 3,229,755
COST OF SALES 383,430 1,783,292 2,166,722
GROSS PROFIT 242,294 820,739 1,063,033
OPERATING EXPENSES
Research and development - - -
General and administrative 207,673 655,968 863,641
Total operating expenses 300,289 844,413 1,144,702
INCOME (LOSS) FROM OPERATIONS (57,995) (23,674) (81,669)
OTHER INCOME, net 1,582 (48,709) (47,127)
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES (56,413) (72,383) (128,796)
(PROVISION)/BENEFIT FOR INCOME TAXES - - -
NET INCOME (NET LOSS) (56,413) (72,383) (128,796)
=========== ============ ==============
=========== ============ ==============
NET INCOME PER SHARE - BASIC (0.01) (0.02) (0.01)
NET INCOME PER SHARE - DILUTED (0.01) (0.02) (0.01)
============ ============ ===============
============ ============ ===============
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES - BASIC 5,921,271 3,400,000 9,321,271
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES - DILUTED 6,421,271 3,400,000 9,821,271
============= ============ ==============
============= ============ ==============
</TABLE>
See accompanying notes to pro forma condensed combined
financial statements.
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On September 13, 2000, the Registrant acquired 91% of the issued and
outstanding shares of common stock of Ultimate Warlock, Inc. in exchange for
approximately 3,400,000 of newly issued shares of the Registrant's Common Stock.
Ultimate Warlock, Inc. is engaged in the business of manufacturing and selling
custom high performance powerboats.
The acquisition was accounted for as a re-capitalization since management
intends to spin off all previous operations and the Registrant's business will
solely be based on that of Ultimate Warlock, Inc. All assets and liabilities
acquired by the Registrant were recorded at historical values in a manner
similar to that of a pooling of interests.
The pro forma condensed combined statements of operations for the fiscal
year ended December 31, 1999 and for the six months ended June 30, 2000 exclude
the impact of any nonrecurring charges associated with the acquisition.
The unaudited pro forma condensed combined financial statements give effect
to the merger of the Registrant and Ultimate Warlock, Inc. in a manner similar
to a pooling of interests accounting basis. The pro forma condensed combined
balance sheet assumes the merger took place on June 30, 2000 and combines the
June 30, 2000 balance sheet of the Registrant with the June 30, 2000 balance
sheet of Ultimate Warlock, Inc. The pro forma condensed combined statement of
operations for the fiscal year ended December 31, 1999 assumes the merger took
place as of the beginning of the fiscal year and combines the Registrant's
historical results for the fiscal year ended December 31, 1999 with pro forma
adjustments. The pro forma condensed combined statement of operations for the
six months ended June 30, 2000 assumes the merger took place as of the beginning
of the most recently completed fiscal year (January 1, 2000) and combines the
Registrant's historical results for the six months ended June 30, 2000 with the
historical results of Ultimate Warlock, Inc. for the same period
The pro forma condensed combined financial statements included herein have
been prepared by the Registrant, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. However, the Registrant believes that the disclosures are adequate
to make the information not misleading. These pro forma condensed combined
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Registrant's annual report on Form 10-K
for the fiscal year ended December 31, 1999 and the financial statements of
Ultimate Warlock, Inc. included in this filing.
Net income per share for each period is calculated by dividing net income
by the weighted average number of common and common equivalent shares
outstanding during the period plus approximately 3,400,000 shares of the
Registrant's Common Stock which was exchanged for all issued and outstanding
shares of Ultimate Warlock, Inc. Common stock.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SKINTEK LABS, INC.
By: /s/Carter Read
November 14, 2000 Carter Read
President
