<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
[X] Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [Fee Required]
For the fiscal year ended May 31, 1995
----------------------------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the transition period from to
---------------- ---------------
Commission File Number 0-10571
------------------------------------------
TOP AIR MANUFACTURING, INC.
------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Iowa 42-1155462
------------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organiza- Identification No.)
tion)
406 Highway 20, Parkersburg, Iowa 50665
----------------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (319) 346-1788
--------------
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
------------------------------------------------------------------
(Title of class)
Check whether the registrant (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
X Yes No
--- ---
<PAGE> 2
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and will not be
contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. /-/
The Registrant's revenues for the fiscal year ended May 31, 1995
were $6,215,866.
The aggregate market value of the voting stock held by
non-affiliates is $2,246,174 as of August 21, 1995. (The
exclusion from such amount of the market value of the shares owned
by any person shall not be deemed an admission by the registrant
that such person is an affiliate of the registrant.)
APPLICABLE ONLY TO CORPORATE REGISTRANTS
----------------------------------------
The number of shares outstanding of each of the Registrant's
classes of common stock as of August 21, 1995 is as follows:
Class Number of Shares
----- ----------------
Common, no par value 4,012,099
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Part III: Portions of the definitive proxy statement of the
Registrant for the Registrant's 1995 annual meeting of
shareholders, which definitive proxy statement will be
filed with the Securities and Exchange Commission not
later than September 28, 1995 (120 days after the end of
the Company's most recently completed fiscal year), are
incorporated by reference into Items 9, 10, 11 and 12
hereof.
-2-
<PAGE> 3
THIS AMENDMENT IS FILED FOR THE PURPOSE OF AMENDING NOTE 3 TO THE
FINANCIAL STATEMENTS UNDER ITEM 7. IN ACCORDANCE WITH RULE 12b-15 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, THE COMPLETE TEXT OF ITEM 7 IS
SET FORTH.
Item 7 - Financial Statements
The following financial statements of the Company are included in
this report.
1. FINANCIAL STATEMENTS
Independent Auditor's report
Balance sheets, May 31, 1995
and 1994
Statements of income, years
ended May 31, 1995, 1994,
and 1993
Statements of stockholders'
equity, years ended May 31,
1995, 1994 and 1993
Statements of cash flows, years
ended May 31, 1995, 1994
and 1993
Notes to financial statements
<PAGE> 4
<TABLE>
Item 13 - Exhibits and Reports on Form 8-K
(a) Exhibits
--------
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
23 Consent of auditors, filed herewith.
</TABLE>
-16-
<PAGE> 5
<TABLE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
<CAPTION>
Description Page
----------- ----
<S> <C>
Independent Auditor's report . . . . . . . . . . . . . F-1
Balance sheets, May 31, 1995 and 1994. . . . . . . . . F-2 and F-3
Statements of income, years ended May 31,
1995, 1994, and 1993 . . . . . . . . . . . . . . . . F-4
Statements of stockholders' equity,
years ended May 31, 1995, 1994 and 1993. . . . . . . F-5
Statements of cash flows, years ended
May 31, 1995, 1994 and 1993. . . . . . . . . . . . . F-6 and F-7
Notes to financial statements. . . . . . . . . . . . . F-8 to F-13
</TABLE>
<PAGE> 6
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Top Air Manufacturing, Inc.
Parkersburg, Iowa
We have audited the accompanying balance sheets of Top Air Manufacturing, Inc.
as of May 31, 1995 and 1994, and the related statements of income,
stockholders' equity, and cash flows for the years ended May 31, 1995, 1994
and 1993. 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 Top Air Manufacturing, Inc.
as of May 31, 1995 and 1994, and the results of its operations and its cash
flows for the years ended May 31, 1995, 1994 and 1993 in conformity with
generally accepted accounting principles.
/s/ McGladrey & Pullen, LLP
Waterloo, Iowa
July 5, 1995
F-1
<PAGE> 7
TOP AIR MANUFACTURING, INC.
<TABLE>
BALANCE SHEETS
MAY 31, 1995 AND 1994
<CAPTION>
ASSETS (NOTE 3) 1995 1994
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 414,748 $ 440,241
Trade receivables, less allowance for doubtful
accounts 1995 $59,000; 1994 $47,000 1,276,544 1,069,360
Current portion of long-term notes receivable (Note 4) 15,690 26,271
Inventories (Note 2) 1,553,830 1,218,985
Prepaid expenses 52,959 49,153
Deferred income taxes (Note 5) 28,000 20,500
----------------------------------
TOTAL CURRENT ASSETS 3,341,771 2,824,510
----------------------------------
Long-Term Receivables and Other Assets
Notes receivable, net of current portion (Note 4) 54,711 67,401
Other assets (Note 10) 73,734 1,144
----------------------------------
128,445 68,545
----------------------------------
Property and Equipment
Land and improvements 74,750 72,740
Buildings 454,933 450,075
Machinery and equipment 559,049 509,568
Transportation equipment 361,444 274,642
Office equipment 159,901 132,101
----------------------------------
1,610,077 1,439,126
Less accumulated depreciation 831,371 773,595
----------------------------------
778,706 665,531
----------------------------------
$ 4,248,922 $ 3,558,586
==================================
See Notes to Financial Statements.
F-2
<PAGE> 8
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Liabilities
Current maturities of long-term debt (Note 3) $ 69,385 $ 35,813
Accounts payable 435,172 398,595
Accrued salaries and bonuses, including amounts
due to officers 1995 $75,878; 1994 $71,570 156,913 134,047
Accrued commissions payable 126,715 104,122
Other accrued expenses, including amounts due to
officers and related party 1995 $6,948; 1994 $6,827 47,008 47,381
Income taxes payable (Note 5) 190,062 138,634
----------------------------------
TOTAL CURRENT LIABILITIES 1,025,255 858,592
----------------------------------
Long-Term Debt (Note 3) 270,207 154,544
----------------------------------
Deferred Income Taxes (Note 5) 79,000 42,200
----------------------------------
Commitments (Notes 6 and 10)
Stockholders' Equity (Note 3)
Capital stock, common, no par value; stated value $.0625
per share; authorized 20,000,000 shares; issued 1995
3,174,433 shares; 1994 3,174,100 shares (Note 6) 198,402 198,381
Additional paid-in capital 840,877 840,700
Retained earnings 1,835,181 1,464,169
----------------------------------
2,874,460 2,503,250
----------------------------------
$ 4,248,922 $ 3,558,586
==================================
See Notes to Financial Statements.
</TABLE>
F-3
<PAGE> 9
TOP AIR MANUFACTURING, INC.
<TABLE>
STATEMENTS OF INCOME
YEARS ENDED MAY 31, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 6,215,866 $ 5,554,182 $ 4,856,907
Cost of goods sold 4,042,058 3,725,139 3,461,556
-------------------------------------------
GROSS PROFIT 2,173,808 1,829,043 1,395,351
-------------------------------------------
Operating expenses:
Selling 869,373 772,980 728,291
Provision for doubtful accounts 11,039 9,156 11,035
Other general and administrative, including
amounts paid to related parties 1995 $48,000;
1994 $45,500; 1993 $35,000 (Note 7) 593,516 589,291 533,428
-------------------------------------------
1,473,928 1,371,427 1,272,754
-------------------------------------------
OPERATING INCOME 699,880 457,616 122,597
-------------------------------------------
Financial income (expense):
Interest income, including amounts
from stockholders 1995 none;
1994 $1,040; 1994 $5,106 8,281 6,507 14,034
Interest expense, including amounts paid to
related party and former officer 1995 $1,710;
1994 $2,403; 1993 $3,108 (Note 3) (100,584) (61,432) (66,085)
-------------------------------------------
(92,303) (54,925) (52,051)
-------------------------------------------
INCOME BEFORE INCOME TAXES 607,577 402,691 70,546
Federal and state income taxes (Note 5) 236,565 159,181 14,002
-------------------------------------------
NET INCOME $ 371,012 $ 243,510 $ 56,544
===========================================
Earnings per common and common
equivalent share (Note 9) $ 0.12 $ 0.08 $ 0.02
===========================================
See Notes to Financial Statements.
</TABLE>
F-4
<PAGE> 10
TOP AIR MANUFACTURING, INC.
<TABLE>
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED MAY 31, 1995, 1994 AND 1993
----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Capital Additional
Stock, Paid-In Retained
Issued Capital Earnings Total
---------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, May 31, 1992 $ 198,381 $ 840,700 $ 1,164,115 $ 2,203,196
Net income - - 56,544 56,544
---------------------------------------------------------
Balance, May 31, 1993 198,381 840,700 1,220,659 2,259,740
Net income - - 243,510 243,510
---------------------------------------------------------
Balance, May 31, 1994 198,381 840,700 1,464,169 2,503,250
Net income - - 371,012 371,012
Issuance of 333 shares of
common stock upon the
exercise of options 21 177 - 198
---------------------------------------------------------
Balance, May 31, 1995 $ 198,402 $ 840,877 $ 1,835,181 $ 2,874,460
=========================================================
See Notes to Financial Statements.
</TABLE>
F-5
<PAGE> 11
TOP AIR MANUFACTURING, INC.
<TABLE>
STATEMENTS OF CASH FLOWS
YEARS ENDED MAY 31, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income $ 371,012 $ 243,510 $ 56,544
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 159,379 135,220 128,733
Amortization 112 112 112
Deferred income taxes 29,300 (5,100) (4,150)
(Gain) on sale of equipment (17,431) (11,466) (4,684)
Change in assets and liabilities:
(Increase) decrease in:
Trade receivables (207,184) (187,778) 259,716
Inventories (334,845) (105,636) 58,629
Prepaid expenses (3,806) 212 31,035
Increase (decrease) in:
Accounts payable and accrued expenses 81,663 300,470 52,342
Income taxes payable 51,428 135,126 (21,946)
----------------------------------------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 129,628 504,670 556,331
----------------------------------------------
Cash Flows From Investing Activities
Proceeds from sale of equipment 70,050 41,093 16,575
Purchase of property and equipment (325,173) (264,197) (123,929)
Payments received on long-term
notes receivable 23,271 28,000 16,614
Increase in intangible and other assets (72,702) (50,000) -
----------------------------------------------
NET CASH (USED IN)
INVESTING ACTIVITIES (304,554) (245,104) (90,740)
----------------------------------------------
Cash Flows from Financing Activities
Proceeds from short-term borrowings 3,310,000 2,915,000 3,075,000
Principal payments on short-term borrowings (3,310,000) (2,915,000) (3,329,000)
Proceeds from long-term borrowings 360,000 - -
Principal payments on long-term borrowings (210,765) (35,336) (46,929)
Proceeds from issuance of common stock
1995 333 shares; 1994 and 1993 none 198 - -
----------------------------------------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 149,433 (35,336) (300,929)
----------------------------------------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (25,493) 224,230 164,662
Cash and Cash Equivalents
Beginning 440,241 216,011 51,349
----------------------------------------------
Ending $ 414,748 $ 440,241 $ 216,011
==============================================
F-6
<PAGE> 12
<CAPTION>
TOP AIR MANUFACTURING, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED MAY 31, 1995, 1994 AND 1993
1995 1994 1993
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Supplemental Disclosures of Cash Flow
Information
Cash payments for:
Interest $ 99,341 $ 61,750 $ 69,761
==============================================
Income Taxes $ 155,837 $ 29,155 $ 40,098
==============================================
Supplemental Schedule of Noncash Investing
and Financing Activities
Long-term note receivable received in
payment for sale of intangible asset (Note 4) $ 50,000
==============
See Notes to Financial Statements.
</TABLE>
F-7
<PAGE> 13
TOP AIR MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of business: The Company's operations consist of the design,
-------------------
manufacture and sale of agricultural equipment and sprayer repair and
replacement parts to dealers located primarily in twelve midwestern states on
credit terms that the Company establishes for individual customers.
Significant accounting policies:
--------------------------------
Revenue recognition: Sales of all products are recognized as goods are
--------------------
shipped.
Cash and cash equivalents: For purposes of reporting cash flows, the
--------------------------
Company considers all money market funds and savings accounts to be cash
equivalents.
Inventories: Inventories are valued at the lower of cost (first-in,
------------
first-out method) or market.
Property and equipment and depreciation: Property and equipment is carried
----------------------------------------
at cost. Depreciation on property and equipment is computed by the straight-
line method over the estimated useful lives of the assets.
Income taxes: Deferred taxes are provided on a liability method whereby
-------------
deferred tax assets are recognized for deductible temporary differences
and operating loss carryforwards and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences are
the differences between the reported amounts of assets and liabilities and
their tax bases. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax
laws and rates on the date of enactment.
Research and development: Research and development costs are charged to
-------------------------
operations as they are incurred.
NOTE 2. COMPOSITION OF INVENTORIES
<TABLE>
Inventories at May 31, 1995 and 1994 consisted of the following:
<CAPTION>
1995 1994
-----------------------------
<S> <C> <C>
Raw materials $ 47,053 $ 31,491
Work in process 36,095 40,720
Finished goods 1,470,682 1,146,774
-----------------------------
$ 1,553,830 $ 1,218,985
=============================
</TABLE>
F-8
<PAGE> 14
TOP AIR MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 3. PLEDGED ASSETS AND RELATED DEBT
The Company has a line of credit agreement with a bank which expires October
1, 1995, under which they may borrow up to $3,000,000 in current notes
payable based on a percentage of inventory and trade receivables. Based on
the levels of inventory and trade receivables, approximately $1,855,000 could
be borrowed under this agreement at May 31, 1995. The interest rate on
advances under this agreement is the bank's prime rate (effective rate of 9%
at May 31, 1995). There were no amounts borrowed on the line of credit as of
May 31, 1995 and 1994. <Fa>
<TABLE>
Long-term debt at May 31, 1995 and 1994 consisted of the following:
<CAPTION>
Amount Owed
-----------------------------
1995 1994
-----------------------------
<S> <C> <C>
Note payable, bank, due in monthly installments of $7,375,
including interest at 8.75%, through October 3, 1999. <Fa> $ 326,592 $ -
Contract payable, stockholder and former officer, due in annual
installments of $7,000, plus interest at 10%, through January 1,
1997, collateralized by a warehouse with a depreciated cost
at May 31, 1995 of $68,421. 13,000 20,000
Note payable, bank, due in monthly installments of $3,450,
including interest at .75% over the bank's prime rate. <Fa> - 170,357
-----------------------------
339,592 190,357
Less current maturities 69,385 35,813
-----------------------------
$ 270,207 $ 154,544
=============================
<FN>
<Fa> These borrowings are collateralized by substantially all of the assets of
the Company except land and buildings. The agreements contain various
restrictive covenants including, among others, ones which require the Company
to maintain certain amounts of working capital and equity and financial
ratios. All covenants have been complied with at May 31, 1995.
</TABLE>
<TABLE>
The following is a schedule by years of the maturities of the long-term debt
as of May 31, 1995:
<CAPTION>
Year ending May 31:
<S> <C>
1996 $ 69,385
1997 74,069
1998 74,270
1999 81,035
2000 40,833
------------
$ 339,592
============
</TABLE>
F-9
<PAGE> 15
TOP AIR MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 4. NOTE RECEIVABLE
<TABLE>
Notes receivable as of May 31, 1995 consist of the following:
<S> <C>
8% note, to be received $3,310 quarterly, including interest, through
November 1997. $ 29,729
Stockholder, noninterest bearing, to be received three payments of $1,500
a year through January 2004. 40,672
----------
70,401
Less current portion 15,690
----------
$ 54,711
==========
</TABLE>
NOTE 5. INCOME TAXES
<TABLE>
Net deferred tax liabilities consist of the following components as of May 31,
1995 and 1994:
<CAPTION>
1995 1994
-----------------------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts $ 20,975 $ 16,450
Inventory allowances 6,500 3,525
Warranty reserve 525 525
-----------------------
28,000 20,500
Deferred tax liabilities, equipment 79,000 42,200
-----------------------
$ 51,000 $ 21,700
=======================
</TABLE>
<TABLE>
The deferred tax amounts mentioned above have been classified on the
accompanying balance sheets as of May 31, 1995 and 1994 as follows:
<CAPTION>
1995 1994
-----------------------
<S> <C> <C>
Current assets $(28,000) $(20,500)
Noncurrent liabilities 79,000 42,200
-----------------------
$ 51,000 $ 21,700
=======================
</TABLE>
<TABLE>
Income tax expense is made up of the following components:
<CAPTION>
Year Ended May 31,
-------------------------------------
1995 1994 1993
-------------------------------------
<S> <C> <C> <C>
Current tax expense:
Federal $ 185,500 $ 150,237 $ 15,000
State 21,765 14,044 3,152
-------------------------------------
207,265 164,281 18,152
Deferred tax expense (credit) 29,300 (5,100) (4,150)
-------------------------------------
$ 236,565 $ 159,181 $ 14,002
=====================================
</TABLE>
F-10
<PAGE> 16
TOP AIR MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
<TABLE>
Total reported tax expense applicable to the Company's operations varies from
the amount that would have resulted by applying the federal income tax rate
(1995 and 1994 35%, 1993 34%) to income before income taxes for the following
reasons:
<CAPTION>
Year Ended May 31,
-------------------------------------
1995 1994 1993
-------------------------------------
<S> <C> <C> <C>
Income tax expense at statutory federal
income tax rate $ 212,652 $ 140,942 $ 20,926
State tax expense, net of federal
income tax benefit 14,147 9,129 2,554
Benefit of income taxed at lower rates (6,076) (3,350) (10,540)
Other 15,842 12,460 1,062
-------------------------------------
$ 236,565 $ 159,181 $ 14,002
=====================================
</TABLE>
NOTE 6. STOCK OPTION PLANS
The Company has a stock option plan adopted in 1993 which provides for the
issuance of a maximum of 250,000 shares of common stock to officers, directors
and key employees at a price per share of not less than 100% of the market
price at the date of grant. The options granted under this plan become
exercisable over three years.
The Company had an incentive stock option plan adopted in 1983 which expired
during the year ended May 31, 1993, which provided for the issuance of a
maximum of 500,000 shares of common stock to officers and key employees at a
price per share of not less than 100% of the market price at the date of
grant.
<TABLE>
The following table summarizes the options to purchase shares of the Company's
common stock:
<CAPTION>
Stock Options
------------------------------------------------
Outstanding Exercisable Price Range
------------------------------------------------
<S> <C> <C> <C>
Balance at May 31, 1993 53,950 14,950 $.6250 - $.8125
Granted 41,000 - $.8438
Became exercisable - 12,665 $.5938
Exercised - -
Cancelled (13,950) (12,950) $.6250 - $.8125
------------------------------------------------
Balance at May 31, 1994 81,000 14,665 $.5938 - $.8438
Granted 59,500 - $.7500 - $1.000
Became exercisable - 25,664 $.5938 - $.8438
Exercised (333) (333) $.5938
Cancelled (3,000) (1,333) $.5938 - $.8438
------------------------------------------------
Balance at May 31, 1995 137,167 38,663 $.5938 $1.000
================================================
</TABLE>
F-11
<PAGE> 17
TOP AIR MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 7. RESEARCH AND DEVELOPMENT
Research and development costs included in the statements of income as part of
other general and administrative expenses totaled $173,791, $150,242 and
$90,846 for the years ended May 31, 1995, 1994 and 1993, respectively.
NOTE 8. EMPLOYEE BENEFIT PLAN
The Company has a 401(k) defined contribution plan covering substantially all
employees. The plan provides for a matching employer contribution based on
the employee's contributions up to 10% of compensation. Additional
discretionary contributions to the plan may also be made. Employer
contributions for the years ended May 31, 1995, 1994 and 1993 were $21,620,
$15,519 and $15,221, respectively.
NOTE 9. EARNINGS PER COMMON AND COMMON EQUIVALENT SHARES
Earnings per common and common equivalent shares, assuming no dilution, have
been computed on the weighted average number of common shares outstanding
during the period using the treasury stock method of accounting for the
dilutive common equivalent shares discussed in Note 6. The weighted average
number of shares of common stock outstanding for the years ended May 31, 1995,
1994 and 1993 were 3,204,285, 3,195,054 and 3,177,614, respectively.
Earnings per common and common equivalent shares, assuming full dilution, for
the years ended May 31, 1995, 1994 and 1993 are the same as the earnings per
common and common equivalent shares, assuming no dilution.
NOTE 10. SUBSEQUENT EVENT AND ACQUISITION
On June 26, 1995 the Company acquired certain assets of Clay Equipment
Corporation ("Clay") of Cedar Falls, Iowa in exchange for the assumption of
approximately $2,500,000 of liabilities and 837,666 shares of the Company's
no par value common stock with a value of approximately $628,000. Clay
designs, manufacturers, and distributes livestock equipment and other
agricultural related products, primarily manure spreader wagons and milking
equipment. The Company has plans to move the combined operations to Cedar
Falls, Iowa where the Company has entered into a 15 year lease for a 85,000
square foot building to be constructed by the City of Cedar Falls, Iowa. The
lease will require monthly payments of $16,722, plus insurance, utilities,
and other expenses with an option to purchase at the end of the lease for
$1,285,955 plus all reasonable costs and expenses incurred by the lessor for
the sale. The classification of the lease has not yet been determined by the
Company.
F-12
<PAGE> 18
TOP AIR MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
The acquisition will be accounted for by the purchase method. Costs incurred
through May 31, 1995 of approximately $73,000 which are directly associated
with the acquisition have been classified as other assets on the balance sheet
as of May 31, 1995. Subsequent to year end, the Company refinanced the debt
of Clay with the Company's primary lender. The financing agreement is made up
of two long-term debt agreements bearing interest at 0.5% over the bank's
prime rate (effective rate of 9.5% at July 5, 1995), collateralized by
substantially all assets of the Company, terms are as follows:
<TABLE>
<S> <C>
Note payable, requiring monthly payments of $19,410 through June 2000 at which
time outstanding balance is due. $ 1,500,000
Note payable, requiring monthly payments of interest only and annual principal
payments of $250,000 through May 1997. 400,000
-------------
$ 1,900,000
=============
</TABLE>
F-13
<PAGE> 19
SIGNATURES
----------
In accordance with Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment to its
Report on Form 10-KSB for fiscal year ended May 31, 1995 to be
signed on its behalf by the undersigned, thereunto duly authorized:
(Registrant) Top Air Manufacturing, Inc.
--------------------------------------------------------
By (Signature and Title) /s/ Steven F. Bahlmann
---------------------------------------------
Steven F. Bahlmann, Principal Financial
Officer (Duly Authorized Officer)
Date: September 1, 1995
<PAGE> 20
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Exhibit
Number Description
------ -----------
<C> <S>
23 Consent of auditors, filed herewith.
</TABLE>
<PAGE> 1
TOP AIR MANUFACTURING, INC.
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
<PAGE> 2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference into the
registration statement of Top Air Manufacturing, Inc. on Form S-8
(Registration No 33-74378) of our report dated July 5, 1995 with
respect to the financial statements of Top Air Manufacturing,
Inc. included in its Annual Report on Form 10-KSB, as amended, for
the fiscal year ended May 31, 1995.
/s/ McGladrey & Pullen, LLP
Waterloo, Iowa
September 1, 1995
